Colony Bankcorp, Inc. Announces Fourth Quarter Results

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| Source: Colony Bankcorp, Inc.

FITZGERALD, Ga., Feb. 8, 2013 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $203,000, or $0.02 per diluted share for the fourth quarter of 2012 compared to net income available to shareholders of $31,000, or $0.00 per diluted share for the comparable 2011 period, while net income available to shareholders for twelve months ended December 31, 2012 was $1,206,000, or $0.14 per diluted share compared to $1,134,000, or $0.13 per share for the comparable 2011 period. "Several of our markets are showing signs of general economic improvement. Specifically some segments of agribusiness have experienced a record year in terms of price and yield. This is reflected on our balance sheet as total loans outstanding have increased over the previous quarter end for the third 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 $46.16 million at December 31, 2012 from $51.74 million at September 30, 2012, or a decrease of 10.78 percent, while the substandard assets to tier one equity plus loan loss allowance ratio improved to 55.60% at December 31, 2012 from 63.87% at September 30, 2012. Though improvement was once again 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 committed to making incremental progress toward these goals during 2012 and we were able to again achieve that this quarter," said Ed Loomis, President and Chief Executive Officer. "Momentum carrying over from 2012 along with revenue enhancement initiatives bode well for a successful and rewarding year in 2013."    

Capital

Colony continues to maintain a strong capital position to be categorized as "well-capitalized" by regulatory benchmarks. At December 31, 2012, the Company's tier one leverage ratio, tier one and total risk-based capital ratios were 10.22 percent, 15.22 percent and 16.47 percent, respectively, compared to the previous quarter end of 10.07 percent, 15.39 percent  and 16.65 percent, respectively, at September 30, 2012 and to 9.51 percent, 15.24 percent and 16.50 percent, respectively, at December 31, 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 fourth quarter of 2012, the Company reported net interest income of $9.08 million and a net interest margin of 3.49 percent, compared to $8.84 million and 3.28 percent, respectively, for fourth quarter 2011, while net interest income for twelve months ended December 31, 2012 was $36.27 million with a net interest margin of 3.41 percent, compared to $34.99 million with a net interest margin of 3.11 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 in 2013.   

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 $74.57 million at December 31, 2012 compared to $85.04 million and $95.71 million, respectively, at September 30, 2012 and December 31, 2011. Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 55.60%, 63.87% and 75.32%, respectively, at December 31, 2012, September 30, 2012 and December 31, 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 $46.16 million or 6.05 percent of total loans and other real estate owned as of December 31, 2012. This compares to $51.74 million or 6.96 percent and $59.71 million or 8.10 percent, respectively, as of September 30, 2012 and December 31, 2011.  Loan loss reserve methodology resulted in twelve months ended December 31, 2012 provision for loan losses of $6.79 million compared to $8.25 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 $15.94 million at December 31, 2012. During this period, $9.73 million has been added to other real estate, thus a reduction from sales and/or write-downs of $14.24 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 fourth quarter of 2012 net charge-offs were $2.81 million, or 0.38 percent of average loans as compared to net charge-offs of $3.51 million, or 0.48 percent of average loans in fourth quarter 2011, while net charge-offs for twelve months ended December 31, 2012 were $9.70 million, or 1.34% of average loans as compared to net charge-offs of $20.88 million, or 2.74% of average loans for the comparable 2011 period.  The loan loss reserve was $12.74 million on December 31, 2012, or 1.70 percent of total loans compared to $15.65 million, or 2.18 percent on December 31, 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 December 31, 2012.

Noninterest Income

Total noninterest income decreased in the comparable periods as noninterest income for twelve months ended December 31, 2012 was $9.73 million compared to $9.95 million in the comparable 2011 period. Fee income from the sale of SBA loans was $306 thousand in twelve months ended December 31, 2012 compared to $947 thousand in the comparable 2011 period to primarily account for the decrease.   On a positive note, service charge on deposits increased 10.11% and mortgage fee income increased 50.38% 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 $35.38 million in twelve months ended December 31, 2012 compared to $33.05 million in the comparable 2011 period, or an increase of 7.05 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 $5.61 million in twelve months ended December 31, 2012 compared to $4.05 million in the comparable 2011 period. Salaries and employee benefit expenses increased to $15.57 million in twelve months ended December 31, 2012 compared to $14.63 million in the comparable 2011 period, or an increase of 6.43 percent. This increase is primarily attributable to an increase in headcount related to additional "back-office" regulatory compliance demands. Occupancy expenses decreased to $3.88 million in twelve months ended December 31, 2012 compared to $4.00 million in the same comparable 2011 period, or a decrease of 3.00 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  12/31/2012 12/31/2011 12/31/2012 12/31/2011
Net Interest Income  $9,076 $8,844 $36,273 $34,987
Provision for Loan Losses  1,158 2,250 6,785 8,250
Non-interest Income  2,642 2,753 9,733 9,951
Non-interest Expense  9,744 8,802 35,379 33,050
Income Taxes  248 164 1,201 1,104
Net Income  568 381 2,641 2,534
Preferred Stock Dividend  365 350 1,435 1,400
Net Income Available to         
 Common Shareholders  203 31 1,206 1,134
         
  QUARTER ENDED  YEAR-TO-DATE
 PER COMMON SHARE SUMMARY 12/31/2012 12/31/2011 12/31/2012 12/31/2011
Common Shares Outstanding  8,439,258 8,439,258 8,439,258 8,439,258
Weighted Average Basic Shares  8,439,258 8,433,822 8,439,258 8,439,258
Weighted Average Diluted Shares  8,439,258 8,433,822 8,439,258 8,439,258
Earnings Per Basic Share (b)  $0.02 $0.00 $0.14 $0.13
Earnings Per Diluted Share (b)  $0.02 $0.00 $0.14 $0.13
Common Book Value Per Share  $8.05 $8.17 $8.05 $8.17
Tangible Common Book Value Per Share $8.02 $8.14 $8.02 $8.14
         
  QUARTER ENDED  YEAR-TO-DATE 
 OPERATING RATIOS (1)  12/31/2012 12/31/2011 12/31/2012 12/31/2011
Net Interest Margin (a)  3.49% 3.28% 3.41% 3.11%
Return on Average Assets (b)  0.07% 0.01% 0.11% 0.09%
Return on Average Total Equity (b)  0.85% 0.13% 1.25% 1.20%
Efficiency (c)  88.67% 82.47% 81.68% 78.31%
         
(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  12/31/2012 12/31/2011    
Total Assets  $1,139,397 $1,195,376    
Loans, Net of Reserves  734,079 700,614    
Allowance for Loan Losses  12,737 15,649    
Intangible Assets  224 259    
Deposits  979,685 999,985    
Common Shareholders' Equity  67,932 68,950    
Common Equity to Total Assets  5.96% 5.76%    
Total Equity  95,759 96,613    
Total Equity to Total Assets  8.40% 8.07%    
         
  QUARTER ENDED  YEAR-TO-DATE 
 AVERAGE BALANCES  12/31/2012 12/31/2011 12/31/2012 12/31/2011
Total Assets  $1,114,766 $1,163,000 $1,139,814 $1,205,891
Loans, Net of Reserves  725,672 714,472 706,091 742,423
Deposits  956,438 965,722 969,690 1,000,719
Common Shareholders' Equity  67,783 69,300 68,798 67,153
Total Equity  95,587 96,943 96,541 94,737
         
  QUARTER ENDED  YEAR-TO-DATE 
 ASSET QUALITY  12/31/2012 12/31/2011 12/31/2012 12/31/2011
Nonperforming Loans  $29,855 $38,837 $29,855 $38,837
Nonperforming Assets  46,163 59,708 46,163 59,708
Substandard Assets  74,574 95,713 74,574 95,713
Net Loan Chg-offs (Recoveries)  2,810 3,510 9,698 20,880
Reserve for Loan Loss to Gross Loans  1.70% 2.18% 1.70% 2.18%
Reserve for Loan Loss to Non--performing Loans  42.66% 40.29% 42.66% 40.29%
Reserve for Loan Loss to Non--performing Assets 27.59% 26.21% 27.59% 26.21%
Net Loan Chg-offs (Recoveries) to Avg. Gross Loans  0.38% 0.48% 1.34% 2.74%
Nonperforming Loans to Gross Loans  4.00% 5.42% 4.00% 5.42%
Nonperforming Assets to Total Assets  4.05% 4.99% 4.05% 4.99%
Nonperforming Assets to Total Loans and Other Real Estate  6.05% 8.10% 6.05% 8.10%
Substandard Assets to Tier One Capital and Allowance for Loan Losses  55.60% 75.32% 55.60% 75.32%
 
Quarterly Comparative Data (in thousands, except per share data)
   4Q2012   3Q2012   2Q2012   1Q2012   4Q2011
Assets  $1,139,397 $1,097,437 $1,133,170 $1,176,644 $1,195,376
Loans  734,079 711,971 700,917 690,533 700,614
Deposits  979,685 941,204 972,135 994,014 999,985
Common Shareholders' Equity  67,932 68,584 69,265 69,422 68,950
Total Equity  95,759 96,369 97,009 97,125 96,613
Net Income  568 772 760 541 381
Net Income Available to      
 Common Shareholders  203 411 403 189 31
 Net Income Per Share  0.02 0.05 0.05 0.02 0.00
           
Key Performance Ratios   4Q2012   3Q2012  2Q2012   1Q2012   4Q2011 
           
Return on Average Assets (1)  0.07% 0.15% 0.14% 0.06% 0.01%
Return on Average Total Equity (1) 0.85% 1.69% 1.66% 0.78% 0.13%
Common Equity to Total Assets  5.96% 6.25% 6.11% 5.90% 5.76%
Total Equity to Total Assets  8.40% 8.78% 8.56% 8.25% 8.07%
Net Interest Margin  3.49% 3.56% 3.39% 3.23% 3.28%
   (1) Computed using net income available to shareholders               
 
Consolidated Balance Sheets Colony Bankcorp, Inc.
 (in thousands)
  Dec. 31, 2012  Dec. 31, 2011
   (unaudited)   (audited)
ASSETS    
Cash and Cash Equivalents     
 Cash and Due from Banks  $29,244 $28,380
 Federal Funds Sold  20,002 54,992
  49,246 83,372
Interest-Bearing Deposits  21,795 28,957
Investment Securities    
 Available for Sale, at Fair Value  268,300 303,891
Held for Maturity, at Cost (Fair Value of $42 and $46 as of Dec. 31, 2012 and Dec. 31, 2011, Respectively)  42 46
  268,342 303,937
Federal Home Loan Bank Stock, at Cost  3,364 5,398
Loans  747,050 716,321
 Allowance for Loan Losses  (12,737) (15,650)
 Unearned Interest and Fees  (234) (57)
  734,079 700,614
Premises and Equipment  24,916 25,750
Other Real Estate  15,941 20,445
Other Intangible Assets  224 259
Other Assets  21,490 26,644
Total Assets  $1,139,397 $1,195,376
   
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Deposits    
 Noninterest-Bearing  $123,967 $94,269
 Interest-Bearing  855,718 905,716
  979,685 999,985
     
Borrowed Money    
 Subordinated Debentures  24,229 24,229
 Other Borrowed Money  35,000 71,000
  59,229 95,229
     
Other Liabilities  4,724 3,549
     
Stockholders' Equity    
Preferred Stock, Par Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares  27,827 27,662
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 and 8,439,258 Shares as of Dec. 31, 2012 and 2011, Respectively  8,439 8,439
Paid in Capital  29,145 29,145
Retained Earnings  30,498 29,457
Accumulated Other Comprehensive Loss, Net of Tax  (150) 1,910
  95,759 96,613
Total Liabilities and Stockholders' Equity  $1,139,397 $1,195,376
 
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data
         
  Quarter  Year-to-Date 
  Three Months Ended  Twelve Months Ended
   12/31/12 12/31/2011  12/31/12 12/31/2011
  (unaudited)  (audited)  (unaudited)   (audited)
Interest Income        
 Loans, Including Fees  $10,572 $10,837 $41,963 $44,460
 Federal Funds Sold and Securities Purchased         
 Under Agreements to Resell  27 24 99 115
Deposits with Other Banks  9 9 43 46
 Investment Securities         
 U. S. Government Agencies  699 1,476 4,824 6,873
 State, County and Municipal  34 59 207 161
 Corporate Obligations/Asset-Backed Sec.  14 23 76 91
Dividends on Other Investments  22 11 77 47
  11,377 12,439 47,289 51,793
Interest Expense         
 Deposits  1,904 2,723 8,737 12,950
 Federal Funds Purchased and Securities Sold         
 Under Agreements to Repurchase   --   --   --  338
 Borrowed Money  397 872 2,279 3,518
  2,301 3,595 11,016 16,806
Net Interest Income  9,076 8,844 36,273 34,987
 Provision for Loan Losses  1,158 2,250 6,785 8,250
Net Interest Income After Provision for Loan Losses 7,918 6,594 29,488 26,737
         
Noninterest Income        
 Service Charges on Deposits  1,046 854 3,573 3,245
 Other Service Charges, Commissions and Fees  396 335 1,515 1,312
 Mortgage Fee Income  104 104 400 265
 Securities Gains  770 979 2,837 2,924
 Other  326 481 1,408 2,205
  2,642 2,753 9,733 9,951
Noninterest Expense        
 Salaries and Employee Benefits  4,079 3,855 15,565 14,633
 Occupancy and Equipment  983 914 3,884 3,998
 Other  4,682 4,033 15,930 14,419
  9,744 8,802 35,379 33,050
         
Income Before Income Taxes  816 545 3,842 3,638
Income Taxes  248 164 1,201 1,104
Net Income  568 381 2,641 2,534
         
Preferred Stock Dividends  365 350 1,435 1,400
         
Net Income Available to Common Shareholders  $203 $31 $1,206 $1,134
Net Income Per Share of Common Stock        
 Basic  $0.02 $0.00 $0.14 $0.13
 Diluted  $0.02 $0.00 $0.14 $0.13
Weighted Average Basic Shares Outstanding  8,439,258 8,433,822 8,439,258 8,439,258
Weighted Average Diluted Shares Outstanding  8,439,258 8,433,822 8,439,258 8,439,258
Terry L. Hester
Chief Financial Officer
(229) 426-6002