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Colony Bankcorp, Inc. Announces Third Quarter Results FITZGERALD, Ga., Oct. 24, 2008 (GLOBE NEWSWIRE) -- Colony
Bankcorp, Inc. (NasdaqGM:CBAN - News), today reported quarterly net
income of $194,000 for the third quarter of 2008, down 92.59
percent from third quarter 2007 net income of $2,619,000,
while net income for nine months ended September 30, 2008
was $2,699,000, down 65.38 percent from nine months ended
September 30, 2007 of $7,795,000. 2008 has proven to be
very challenging for Colony and the entire banking industry.
The continued downturn of the housing and real estate market
that began in 2007 and the economy in general has contributed
to financial results well below our historic standards.
Real estate loans originally extended for land development,
construction, and resale required additional loan loss provisions
during third quarter 2008. ``Problem loans are centered primarily
in land development in our larger MSA markets. We have maintained
consistent standards to identify, measure, and assess loan
quality while continuing to react aggressively to move these
problem assets off our books as quickly as possible. Our
solid core earnings have provided strong support for loss
provisions needed to cover our problem loan losses and we
are committed to maintaining strong capital levels as we
navigate through this extended economic cycle,'' said Al
D. Ross, President and Chief Executive Officer. The Company continues to closely monitor our real estate dependent loans and focus on asset quality. Non-performing assets increased to $34.4 million, or 3.53 percent of total loans and other real estate owned as of September 30, 2008. This compares to $21.2 million, or 2.21 percent as of June 30, 2008, $16.3 million, or 1.73 percent as of December 31, 2007 and $7.4 million, or 0.76 percent as of September 30, 2007. The increase in non-performing assets ties directly to the elevated risk in our residential and land development loan portfolio given the economic turndown and has resulted in increased loan loss provisions in 2008 compared to 2007; this resulted in a significant negative impact on our 2008 net income. The third quarter 2008 provision for loan losses were $3,370,000 compared to $850,000 for the same period in 2007, while year to date 2008 provision for loan losses were $8,512,000 compared to $2,678,000 for the same year ago period. Unusually high levels of loan loss provision have been required as company management addresses asset quality deterioration associated with the continued economic downturn. In the third quarter of 2008 net charge-offs were $2,884,000, or 0.30 percent of average loans compared to a net recovery of $(324,000), or (0.03) percent of average loans in third quarter 2007, while net charge-offs for nine months ended September 30, 2008 were $6,073,000, or 0.64 percent of average loans compared to $846,000, or 0.09 percent of average loans for the same year ago period. The loan loss reserve of $17.95 million on September 30, 2008 was 1.85 percent of total loans compared to $15.51 million or 1.64 percent on December 31, 2007 and to $13.82 million on September 30, 2007, or 1.43 percent. Management believes that recent contributions to Allowance for Loan Losses adequately address the increase in non-performing assets and the related increase in classified assets. ``Our charge-offs are primarily the result of declining collateral real estate values that secure land development, construction, and speculative real estate loans in our larger MSA markets,'' said Ross. ``With the higher level of non-performing loans we expect foreclosure activity to increase as we move non-performing loans through the collection process. We expect charge-offs to increase as a result.'' Another significant factor negatively impacting earnings has been the reduction of net interest income. Net interest income decreased to $9,485,000 in third quarter 2008 compared to $10,793,000 in third quarter 2007, while net interest income decreased to $28,133,000 in nine months ended September 30, 2008 compared to $32,069,000 in the same year ago period. This reduction ties directly to the aggressive posture taken by Federal Reserve to combat the downturn in the real estate market and recessionary fears as they lowered interest rates 225 basis points in January 2008 - April 2008. The significant rate reduction along with the impact of loans being placed on non-accrual status in which interest receivable is reversed and interest accrual discontinued resulted in Colony's net interest margin declining to 3.34 percent in third quarter 2008 compared to 3.81 percent in third quarter 2007 and net interest margin declining to 3.34 percent in nine months ended September 30, 2008 compared to 3.79 percent in the same year ago period. With recessionary fears rising again, we expect further margin compression as the Federal Reserve has now tilted toward an interest rate easing posture. Ross said, ``We are in an unprecedented economic period as reflected by recent legislation enacted by Congress and ongoing reports by the media. We are exploring what benefits may be available to Colony from the financial support legislation package T.A.R.P. to help us deal with current market conditions while helping plan for future opportunities. We will continue to make adjustments needed to meet the challenges that develop during this difficult financial period.'' The Company merged all of its operations into one sole operating subsidiary, Colony Bank effective August 1, 2008. This consolidation effort, which began in 2006, will enable the company to align products, pricing, and marketing efforts while re-allocating resources to support management's future growth strategies. Future earnings should benefit positively beginning in 2009 as we implement operation enhancements - both in revenue enhancements and cost reduction efforts. The Company had total assets of $1,215,330,000, gross loans of $970,682,000, total deposits of $977,752,000 and total equity of $82,806,000 at September 30, 2008. Shareholder equity to total assets was 6.81 percent at September 30, 2008 compared to 6.83 percent at September 30, 2007. During third quarter 2008, the Company began offering CDARS product that provides customers the opportunity to place uninsured deposits into the CDARS network and receive full FDIC insurance coverage. This has proven to be a valuable product that has offered a viable solution to customer concerns with uninsured deposits and allows the company to retain deposits and provide FDIC coverage for customer deposits up to $50 million. In these challenging economic times Colony's ability to offer additional FDIC insurance coverage through CDARS exhibits our commitment to promote safety, soundness and security in its operations. During the quarter the board of directors declared a quarterly cash dividend of $0.0975 per share compared to $0.0975 declared in second quarter 2008 and to $0.0925 per share in third quarter 2007. Though earnings declined significantly in the third quarter, the capital position of Colony allowed the board to remain comfortable holding the dividend payout at its current level. To be categorized as ``well-capitalized'' by regulatory requirements, a company must maintain a 10 percent total capital to risk-based assets ratio. At September 30, 2008, Colony remained in excess of the regulatory requirement as its total capital to risk-based assets ratio was 12.15 percent. 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 thirty offices located in the middle and south Georgia cities of Fitzgerald, Warner Robins, Centerville, Ashburn, Leesburg, Cordele, Albany, Thomaston, Columbus, Sylvester, Tifton, Moultrie, Douglas, Broxton, Savannah, Eastman, Chester, Soperton, Rochelle, Pitts, Quitman and Valdosta, Georgia. Colony Bankcorp, Inc. Common Stock is quoted on the Nasdaq National 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 09/30/08 09/30/07 09/30/08 09/30/07
-------- -------- -------- --------
Net Interest Income $ 9,485 $10,793 $28,133 $32,069
Provision for
Loan Losses 3,370 850 8,512 2,678
Non-interest Income 1,780 1,846 7,185 6,012
Non-interest Expense 7,813 7,756 23,284 23,630
Income Taxes (112) 1,414 823 3,978
Net Income 194 2,619 2,699 7,795
Operating Income 187 2,620 1,910 7,674
QUARTER ENDED YEAR-TO-DATE
PER SHARE SUMMARY 09/30/08 09/30/07 09/30/08 09/30/07
-------- -------- -------- --------
Common Shares
Outstanding 7,213,813 7,204,775 7,213,813 7,204,775
Weighted Average
Diluted Shares 7,201,580 7,202,424 7,197,016 7,198,270
Net Income Per
Weighted Average
Diluted Shares $ 0.03 $ 0.36 $ 0.38 $ 1.08
Operating Income
Per Weighted
Average Diluted
Shares $ 0.03 $ 0.36 $ 0.27 $ 1.07
Dividends Declared
Per Share $ 0.0975 $ 0.0925 $ 0.2925 $ 0.27
QUARTER ENDED YEAR-TO-DATE
OPERATING RATIOS (1) 09/30/08 09/30/07 09/30/08 09/30/07
-------- -------- -------- --------
Net Interest
Margin (a) 3.34% 3.81% 3.34% 3.79%
Return on Average
Assets Based on
Net Income 0.06% 0.87% 0.30% 0.87%
Return on Average
Assets Based on
Operating Income 0.06% 0.87% 0.21% 0.85%
Return on Average
Equity Based on
Net Income 0.93% 12.87% 4.24% 13.07%
Return on Average
Equity Based on
Operating Income 0.89% 12.88% 3.00% 12.86%
Efficiency (b) 68.86% 60.91% 67.71% 61.93%
QUARTER ENDED
ENDING BALANCES 09/30/08 09/30/07
-------- --------
Total Assets $1,215,330 $1,213,270
Loans, Net of Reserves 952,504 954,066
Allowance for Loan Losses 17,952 13,821
Goodwill 2,412 2,412
Intangible Assets 375 411
Deposits 977,752 1,018,755
Stockholders' Equity 82,806 82,921
Book Value Per Share $ 11.48 $ 11.51
Tangible Book Value Per Share $ 11.09 $ 11.12
Shareholders' Equity to Total Assets 6.81% 6.83%
QUARTER ENDED YEAR-TO-DATE
AVERAGE BALANCES 09/30/08 09/30/07 09/30/08 09/30/07
-------- -------- -------- --------
Total Assets $1,208,790 $1,204,561 $1,194,252 $1,200,717
Loans, Net of
Reserves 947,500 944,431 937,558 930,106
Deposits 973,607 1,014,957 984,493 1,022,430
Stockholders' Equity 83,834 81,392 84,967 79,518
QUARTER ENDED YEAR-TO-DATE
ASSET QUALITY 09/30/08 09/30/07 09/30/08 09/30/07
-------- -------- -------- --------
Nonperforming Loans $ 29,687 $ 6,119 $ 29,687 $ 6,119
Nonperforming Assets 34,443 7,359 34,443 7,359
Net Loan Chg-offs
(Recoveries) 2,884 (324) 6,073 846
Reserve for Loan
Loss to
Gross Loans 1.85% 1.43% 1.85% 1.43%
Reserve for Loan
Loss to
Non-performing
Loans 60.47% 225.87% 60.47% 225.87%
Reserve for Loan
Loss to
Non-performing
Assets 52.12% 187.81% 52.12% 187.81%
Net Loan Chg-offs
(Recoveries) to
Avg. Gross Loans 0.30% (0.03)% 0.64% 0.09%
Nonperforming
Loans to
Gross Loans 3.06% 0.63% 3.06% 0.63%
Nonperforming
Assets to
Total Assets 2.83% 0.61% 2.83% 0.61%
Nonperforming
Assets to Gross
Loans and Other
Real Estate 3.53% 0.76% 3.53% 0.76%
(1) Annualized.
(a) Computed using fully taxable-equivalent net income.
(b) Computed by dividing non-interest expense by the sum of fully
taxable- equivalent net interest income and non-interest income
and excluding any security gains/losses.
Quarterly Comparative Data (in thousands, except per share data)
3Q2008 2Q2008 1Q2008 4Q2007 3Q2007
Assets $1,215,330 $1,211,212 $1,185,226 $1,208,776 $1,213,270
Loans 952,504 936,608 927,958 929,465 954,066
Deposits 977,752 976,322 993,556 1,018,602 1,018,755
Equity 82,806 83,823 86,014 83,743 82,921
Net Income 194 292 2,213 752 2,619
Net Income
Per Share 0.03 0.04 0.31 0.10 0.36
Dividends
Declared
Per Share 0.0975 0.0975 0.0975 0.09 0.0925
Key
Performance
Ratios 3Q2008 2Q2008 1Q2008 4Q2007 3Q2007
Return on
Assets 0.06% 0.10% 0.74% 0.25% 0.87%
Return on
Equity 0.93% 1.36% 10.38% 3.58% 12.87%
Equity/
Assets 6.81% 6.92% 7.26% 6.94% 6.83%
Net
Interest
Margin 3.34% 3.24% 3.44% 3.64% 3.81%
Consolidated Balance Sheets Colony Bankcorp, Inc.
(in thousands)
Sept. 30, Sept. 30,
2008 2007
-------- --------
(unaudited) (unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks $ 22,929 $ 22,405
Federal Funds Sold 199 17,129
---------- ----------
23,128 39,534
---------- ----------
Interest-Bearing Deposits 435 3,616
---------- ----------
Investment Securities
Available for Sale, at Fair Value 171,863 155,605
Held for Maturity, at Cost (Fair Value of
$67 and $69 as of Sept. 30, 2008 and
Sept. 30, 2007, Respectively) 65 69
---------- ----------
171,928 155,674
---------- ----------
Federal Home Loan Bank Stock, at Cost 6,317 5,533
---------- ----------
Loans 970,682 968,292
Allowance for Loan Losses (17,952) (13,821)
Unearned Interest and Fees (226) (405)
---------- ----------
952,504 954,066
---------- ----------
Premises and Equipment 29,399 27,541
---------- ----------
Other Real Estate 4,756 1,240
---------- ----------
Goodwill 2,412 2,412
---------- ----------
Other Intangible Assets 375 411
---------- ----------
Other Assets 24,076 23,243
---------- ----------
Total Assets $1,215,330 $1,213,270
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing $ 69,038 $ 74,158
Interest-Bearing 908,714 944,597
---------- ----------
977,752 1,018,755
---------- ----------
Borrowed Money
Federal Funds Purchased 12,664 476
Securities Sold Under Agreements
to Repurchase 20,000 --
Subordinated Debentures 24,229 29,384
Other Borrowed Money 91,000 73,600
---------- ----------
147,893 103,460
---------- ----------
Other Liabilities 6,879 8,134
---------- ----------
Stockholders' Equity
Common Stock, Par Value $1, Authorized
20,000,000 Shares, Issued 7,213,813
and 7,204,775 Shares as of Sept. 30,
2008 and Sept. 30, 2007, Respectively 7,214 7,205
Paid in Capital 24,561 24,503
Retained Earnings 52,675 52,019
Restricted Stock- Unearned Compensation (275) (343)
Accumulated Other Comprehensive Loss,
Net of Tax (1,369) (463)
---------- ----------
82,806 82,921
---------- ----------
Total Liabilities and Stockholders' Equity $1,215,330 $1,213,270
========== ==========
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
Quarter Year-to-Date
Three Months Ended Six Months Ended
09/30/08 09/30/07 09/30/08 09/30/07
(unaudited)(unaudited)(unaudited)(unaudited)
Interest Income
Loans, Including
Fees $ 16,295 $ 20,735 $ 51,386 $ 60,923
Federal Funds Sold 25 237 264 1,204
Deposits with
Other Banks 7 36 27 111
Investment
Securities
U. S. Government
Agencies 1,809 1,632 5,076 4,749
State, County
and Municipal 92 136 322 407
Corporate
Obligations/
Asset-Backed
Sec 113 79 292 205
Dividends on
Other Investments 87 76 253 225
--------- --------- --------- ---------
18,428 22,931 57,620 67,824
--------- --------- --------- ---------
Interest Expense
Deposits 7,599 10,853 25,746 32,133
Federal Funds
Purchased and
Repurchase
Agreements 241 13 293 50
Borrowed Money 1,103 1,272 3,448 3,572
--------- --------- --------- ---------
8,943 12,138 29,487 35,755
--------- --------- --------- ---------
Net Interest Income 9,485 10,793 28,133 32,069
Provision for
Loan Losses 3,370 850 8,512 2,678
--------- --------- --------- ---------
Net Interest Income
After Provision for
Loan Losses 6,115 9,943 19,621 29,391
--------- --------- --------- ---------
Noninterest Income
Service Charges
on Deposits 1,233 1,224 3,571 3,556
Other Service
Charges,
Commissions
and Fees 240 218 735 703
Mortgage Fee
Income 168 225 511 763
Securities Gains 11 (2) 1,195 184
Other 128 181 1,173 806
--------- --------- --------- ---------
1,780 1,846 7,185 6,012
--------- --------- --------- ---------
Noninterest Expense
Salaries and
Employee Benefits 4,051 4,464 12,483 13,693
Occupancy and
Equipment 1,098 1,025 3,166 3,036
Other 2,664 2,267 7,635 6,901
--------- --------- --------- ---------
7,813 7,756 23,284 23,630
--------- --------- --------- ---------
Income Before
Income Taxes 82 4,033 3,522 11,773
Income Taxes (112) 1,414 823 3,978
--------- --------- --------- ---------
Net Income $ 194 $ 2,619 $ 2,699 $ 7,795
========= ========= ========= =========
Net Income Per Share
of Common Stock
Basic $ 0.03 $ 0.36 $ 0.38 $ 1.08
========= ========= ========= =========
Diluted $ 0.03 $ 0.36 $ 0.38 $ 1.08
========= ========= ========= =========
Weighted Average
Basic Shares
Outstanding 7,201,580 7,193,603 7,197,016 7,187,586
========= ========= ========= =========
Weighted Average
Diluted Shares
Outstanding 7,201,580 7,202,424 7,197,016 7,198,270
========= ========= ========= =========
Contact: Colony Bankcorp, Inc.
Terry L. Hester, Chief Financial Officer
(229) 426-6002
Source: Colony Bankcorp, Inc.
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