Colony Bankcorp, Inc. Announces Fourth Quarter Results

FITZGERALD, Ga., Jan. 23, 2015 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $1,310,000, or $0.16 per diluted share for the fourth quarter of 2014 compared to $1,241,000, or $0.15 per diluted share for the comparable 2013 period, while net income available to shareholders for twelve months ended December 31, 2014 was $4,843,000, or $0.57 per diluted share compared to $3,120,000, or $0.37 per share for the comparable 2013 period. This increase of 55.22 percent in net income for the comparable twelve 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. "Much was accomplished during 2014 as Colony had significant improvement in earnings and asset quality. Total non-performing assets were $28.74 million at December 31, 2014 which is a 27.44 percent reduction from the previous year end of $39.61 million. Substandard assets to tier one capital plus loan loss reserve now stands at 32.39 percent – down from the prior year end level of 39.22 percent," said Ed Loomis, President and Chief Executive Officer. "Of significance during the quarter, we received regulatory approval to reinstate payments on our trust preferred securities and preferred stock which had been in deferred status. As we look to 2015, we believe we are positioned to continue to improve on earnings and asset quality, which in turn will enhance shareholder value."

Capital

Colony continues to maintain a strong regulatory capital position to be categorized as "well-capitalized" by regulatory benchmarks. At December 31, 2014, the Company's tier one leverage ratio, tier one and total risk-based capital ratios were 11.18 percent, 16.73 percent and 17.89 percent, respectively, compared to 11.01 percent, 16.51 percent and 17.76 percent, respectively, at September 30, 2014 and to 10.57 percent, 15.81 percent and 17.06 percent, respectively, at December 31, 2013. The Company's capital ratios were all in excess of regulatory minimums required to be classified as "well-capitalized".

Net Interest Margin

During the fourth quarter of 2014, the Company reported net interest income of $9.50 million and a net interest margin of 3.59 percent compared to $9.69 million and 3.68 percent, respectively, for fourth quarter 2013, while net interest income for twelve months ended December 31, 2014 was $37.96 million and a net interest margin of 3.60 percent compared to $37.69 million and 3.61 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 $43.29 million at December 31, 2014 compared to $43.49 million and $53.45 million, respectively, at September 30, 2014 and December 31, 2013. Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 32.39%, 30.23% and 39.22%, respectively, at December 31, 2014, September 30, 2014 and December 31, 2013. Non-performing assets decreased significantly from the previous year end to $28.74 million or 3.80 percent of total loans and other real estate owned as of December 31, 2014. This compares to $24.01 million or 3.18 percent and $39.61 million or 5.17 percent, respectively, as of September 30, 2014 and December 31, 2013. Loan loss reserve methodology resulted in three months ended December 31, 2014 provision for loan losses of $0 compared to $285 thousand for the comparable 2013 period, while in twelve months ended December 31, 2014 the provision for loan losses was $1.31 million compared to $4.49 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 $10.40 million at December 31, 2014 compared to $10.83 million and $15.50 million, respectively, at September 30, 2014 and December 31, 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 fourth quarter of 2014 net charge-offs were $0.99 million, or 0.13 percent of average loans as compared to net charge-offs of $1.43 million, or 0.19 percent of average loans in fourth quarter 2013, while net charge-offs for twelve months ended December 31, 2014 were $4.31 million, or 0.58 percent of average loans as compared to net charge-offs of $5.42 million, or 0.73 percent of average loans for the comparable 2013 period. The loan loss reserve was $8.80 million on December 31, 2014, or 1.18 percent of total loans compared to $9.79 million, or 1.32 percent on September 30, 2014 and to $11.81 million, or 1.57 percent on December 31, 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 December 31, 2014.

Noninterest Income

Total noninterest income increased in the comparable periods as noninterest income for twelve months ended December 31, 2014 was $9.13 million compared to $8.38 million in the comparable 2013 period, or an increase of 8.93 percent. The significant increase was debit card interchange fees and ATM fees increasing $702 thousand, or 42.26 percent. Also, security gains were $24 thousand for 2014 compared to a loss of $364 thousand for 2013. Offsetting the increases were service charge fee income on deposit accounts decreasing $123 thousand, or 2.62 percent, mortgage fee income decreasing $64 thousand, or 13.22 percent and gains on the sale of SBA/USDA loans decreasing $635 thousand, or 100.00 percent.   

Noninterest Expense

Total noninterest expense remained relatively flat as noninterest expense for twelve months ended December 31, 2014 was $34.98 million compared to $34.62 million for the comparable 2013 period, or an increase of 1.05 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 $2.69 million in twelve months ended December 31, 2014 compared to $3.92  million in the comparable 2013 period, or a decrease of 31.49 percent. Salaries and employee benefit expenses increased to $17.51 million in twelve months ended December 31, 2014 compared to $16.69 million in the comparable 2013 period, or an increase of 4.89 percent. Occupancy expenses increased to $4.06 million in the twelve month period ended December 31, 2014 compared to $3.79 million in the comparable 2013 period, or an increase of 7.09 percent. Other noninterest expense decreased to $13.41 million compared to $14.13 million, or a decrease of 5.11 percent. A significant reduction in noninterest expense is FDIC insurance assessment which has decreased to $0.97 million in 2014 from $1.32 million from the comparable 2013 period, or 26.94 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.