FITZGERALD, Ga., July 18, 2008 (PRIME NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported quarterly net income of $292,000 for the second quarter of 2008, down 89.19 percent from second quarter 2007 net income of $2,702,000, while net income for six months ended June 30, 2008 was $2,505,000, down 51.60 percent from six months ended June 30, 2007 of $5,176,000. The first half of 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 second quarter 2008. "Problem loans are centered primarily in land development in our larger MSA markets and we will maintain an aggressive posture with these types of credits. Our core earnings, along with manageable credit exposure in real estate dependent loans, allow us to work through this difficult economic period with a strong capital structure," 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 during this economic downturn. Non-performing assets increased to $21.2 million, or 2.21 percent of total loans and other real estate owned as of June 30, 2008. This compares to $18.2 million, or 1.92 percent as of March 31, 2008, $16.3 million, or 1.73 percent as of December 31, 2007 and $6.9 million, or 0.72 percent as of June 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 first half 2008 compared to first half 2007; this resulted in a significant negative impact on our 2008 net income. The second quarter 2008 provision for loan losses were $4,071,000 compared to $914,000 for the same period in 2007, while year to date 2008 provision for loan losses were $5,142,000 compared to $1,828,000 for the same year ago period. We have been aggressive in identifying and addressing problem loans and writing them down to current values. On a positive note, during second quarter 2008 we were able to reduce our other real estate holdings at March 31, 2008 by $560,000 with minimal loss on the properties sold.
In the second quarter of 2008 net charge-offs were $1,825,000, or 0.19 percent of average loans compared to $437,000, or 0.05 percent of average loans in second quarter 2007, while net charge-offs for first half 2008 were $3,189,000, or 0.34 percent of average loans compared to $1,170,000, or 0.13 percent of average loans in first half 2007. The loan loss reserve of $17.47 million on June 30, 2008 was 1.83 percent of total loans compared to $15.51 million or 1.64 percent on December 31, 2007 and to $12.65 million on June 30, 2007, or 1.33 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.
Another significant factor negatively impacting earnings has been the reduction of net interest income. Net interest income decreased to $9,043,000 in second quarter 2008 compared to $10,825,000 in second quarter 2007, while net interest income decreased to $18,648,000 in first half 2008 compared to $21,276,000 in first half 2007. 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 sluggish loan activity resulted in Colony's net interest margin declining to 3.24 percent in second quarter 2008 compared to 3.86 percent in second quarter 2007 and net interest margin declining to 3.34 percent in first half 2008 compared to 3.78 percent in first half 2007. On a positive note, it appears that the Federal Reserve is now in a neutral position tilted toward increasing interest rates in late 2008 or early 2009; thus, Colony has weathered the almost unprecedented reduction of interest rates by the Federal Reserve and should show significant margin improvement the balance of the year. Net interest margin is projected to improve to approximately 3.65 percent in the last half of 2008 or an improvement of 41 basis points over second quarter 2008 net interest margin.
Good solid core earnings have allowed Colony to absorb the additional loan loss provisions and the reduction in net interest margin to post a slight profit for the quarter. Of significance with earnings was an increase in non-interest income to $3,034,000 in second quarter 2008 compared to $2,056,000 in the same year ago period and a reduction in non-interest expense to $7,714,000 in second quarter 2008 from $7,965,000 for the same year ago period. Non-interest income included $614,000 in gains realized from the sale of securities and a gain of $670,000 resulting from unwinding a $19 million FHLB advance position. Non-interest expense reduction has primarily been in salary and benefits as the company has seen its employee headcount reduced due to normal attrition and a reversal of incentive payout accruals during second quarter 2008.
The company expects to complete a number of operation enhancements that will improve the company's overall efficiency. The company will consolidate its seven banking subsidiaries into a single banking charter during the third quarter of 2008. The improvement plans, 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. A separate press release in the near term will further detail this company initiative.
The Company had total assets of $1,211,212,000, gross loans of $954,287,000, total deposits of $976,322,000 and total equity of $83,823,000 at June 30, 2008. Shareholder equity to total assets was 6.92 percent at June 30, 2008 compared to 6.63 percent at June 30, 2007.
During the quarter the board of directors declared a quarterly cash dividend of $0.0975 per share compared to $0.0975 declared in first quarter 2008 and to $0.09 per share in second quarter 2007. Though earnings declined significantly in the second quarter, the strong 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 June 30, 2008, Colony remained well in excess of the regulatory requirement as its total capital to risk-based assets ratio was 12.39 percent. "With this capital level, Colony has significant amounts of excess capital which, coupled with our reserves, will allow us to remain strong during this period of economic uncertainty," said Mr. Ross.
Colony Bankcorp, Inc. is a multi-bank holding company headquartered in Fitzgerald, Georgia that consists of the following subsidiaries: Colony Bank of Fitzgerald, Colony Bank Wilcox, Colony Bank Ashburn, Colony Bank of Dodge County, Colony Bank Worth, Colony Bank Southeast, Colony Bank Quitman, FSB, Georgia First Mortgage Company and Colony Management Services, Inc. The Company conducts a general full service commercial, consumer and mortgage banking business through twenty-nine 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 06/30/08 06/30/07 06/30/08 06/30/07
-------- -------- -------- --------
Net Interest Income $9,043 $10,825 $18,648 $21,276
Provision for Loan Losses 4,071 914 5,142 1,828
Non-interest Income 3,034 2,056 5,405 4,166
Non-interest Expense 7,714 7,965 15,471 15,874
Income Taxes -- 1,300 935 2,564
Net Income 292 2,702 2,505 5,176
Operating Income (113) 2,701 1,724 5,053
QUARTER ENDED YEAR-TO-DATE
PER SHARE SUMMARY 06/30/08 06/30/07 06/30/08 06/30/07
-------- -------- -------- --------
Common Shares Outstanding 7,215,463 7,204,775 7,215,463 7,204,775
Weighted Average Diluted
Shares 7,197,607 7,197,645 7,194,734 7,196,193
Net Income Per Weighted
Average Diluted Shares $0.04 $0.38 $0.35 $0.72
Operating Income Per
Weighted Average Diluted
Shares $(0.02) $0.38 $0.24 $0.70
Dividends Declared Per Share $0.0975 $0.09 $0.195 $0.1775
QUARTER ENDED YEAR-TO-DATE
OPERATING RATIOS (1) 06/30/08 06/30/07 06/30/08 06/30/07
-------- -------- -------- --------
Net Interest Margin (a) 3.24% 3.86% 3.34% 3.78%
Return on Average Assets
Based on Net Income 0.10% 0.91% 0.42% 0.86%
Return on Average Assets
Based on Operating Income (0.04)% 0.91% 0.29% 0.84%
Return on Average Equity
Based on Net Income 1.36% 13.58% 5.86% 13.17%
Return on Average Equity
Based on Operating Income (0.53)% 13.57% 4.03% 12.86%
Efficiency (b) 66.85% 61.42% 67.15% 62.43%
QUARTER ENDED
ENDING BALANCES 06/30/08 06/30/07
-------- --------
Total Assets $1,211,212 $1,203,777
Loans Held for Sale -- 380
Loans, Net of Reserves 936,608 940,406
Allowance for Loan Losses 17,466 12,647
Goodwill 2,412 2,412
Intangible Assets 384 420
Deposits 976,322 1,021,743
Stockholders' Equity 83,823 79,858
Book Value Per Share $11.62 $11.08
Tangible Book Value Per Share $11.23 $10.69
Shareholders' Equity to
Total Assets 6.92% 6.63%
QUARTER ENDED YEAR-TO-DATE
AVERAGE BALANCES 06/30/08 06/30/07 06/30/08 06/30/07
-------- -------- -------- --------
Total Assets $1,185,944 $1,192,780 $1,188,001 $1,198,792
Loans, Net of Reserves 937,686 929,996 932,589 922,854
Deposits 978,477 1,019,149 989,790 1,026,235
Stockholders' Equity 85,659 79,599 85,483 78,580
QUARTER ENDED YEAR-TO-DATE
ASSET QUALITY 06/30/08 06/30/07 06/30/08 06/30/07
-------- -------- -------- --------
Nonperforming Loans $17,953 $5,431 $17,953 $5,431
Nonperforming Assets 21,151 6,865 21,151 6,865
Net Loan Chg-offs
(Recoveries) 1,825 437 3,189 1,170
Reserve for Loan Loss to
Gross Loans 1.83% 1.33% 1.83% 1.33%
Reserve for Loan Loss to
Non-performing Loans 97.29% 232.87% 97.29% 232.87%
Reserve for Loan Loss to
Non-performing Assets 82.58% 184.22% 82.58% 184.22%
Net Loan Chg-offs
(Recoveries)to Avg. Gross
Loans 0.19% 0.05% 0.34% 0.13%
Nonperforming Loans to
Gross Loans 1.88% 0.57% 1.88% 0.57%
Nonperforming Assets to
Total Assets 1.75% 0.57% 1.75% 0.57%
Nonperforming Assets to
Gross Loans And Other
Real Estate 2.21% 0.72% 2.21% 0.72%
(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)
2Q2008 1Q2008 4Q2007 3Q2007 2Q2007
Assets $1,211,212 $1,185,226 $1,208,776 $1,213,270 $1,203,777
Loans 936,608 927,958 929,465 954,066 940,786
Deposits 976,322 993,556 1,018,602 1,018,755 1,021,743
Equity 83,823 86,014 83,743 82,921 79,858
Net Income 292 2,213 752 2,619 2,702
Net Income Per Share 0.04 0.31 0.10 0.36 0.38
Dividends Declared
Per Share 0.0975 0.0975 0.095 0.0925 0.09
Key Performance
Ratios 2Q2008 1Q2008 4Q2007 3Q2007 2Q2007
Return on Assets 0.10% 0.74% 0.25% 0.87% 0.91%
Return on Equity 1.36% 10.38% 3.58% 12.87% 13.58%
Equity/Assets 6.92% 7.26% 6.94% 6.83% 6.63%
Net Interest Margin 3.24% 3.44% 3.64% 3.81% 3.86
Consolidated Balance Sheets Colony Bankcorp, Inc.
(in thousands)
June 30, June 30,
-------- --------
2008 2007
---- ----
(unaudited) (unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks $27,478 $28,128
Federal Funds Sold 5,579 16,705
33,057 44,833
------ ------
Interest-Bearing Deposits 1,783 2,199
----- -----
Investment Securities
Available for Sale, at Fair Value 177,054 155,305
Held for Maturity, at Cost (Fair Value of
$65 and $67 as of Jun. 30, 2008 and Jun. 30,
2007, Respectively) 63 67
-- --
177,117 155,372
------- -------
Federal Home Loan Bank Stock, at Cost 6,092 5,465
----- -----
Loans Held for Sale -- 380
-- ---
Loans 954,287 953,494
Allowance for Loan Losses (17,466) (12,647)
Unearned Interest and Fees (213) (441)
----- -----
936,608 940,406
------- -------
Premises and Equipment 28,606 27,607
------ ------
Other Real Estate 3,198 1,434
----- -----
Goodwill 2,412 2,412
----- -----
Other Intangible Assets 384 420
--- ---
Other Assets 21,955 23,249
------ ------
Total Assets $1,211,212 $1,203,777
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing $75,946 $75,069
Interest-Bearing 900,376 946,674
------- -------
976,322 1,021,743
------- ---------
Borrowed Money
Federal Funds Purchased 16,465 900
Securities Sold Under Agreements to
Repurchase 20,000 --
Subordinated Debentures 24,229 24,229
Other Borrowed Money 84,600 69,500
------ ------
145,294 94,629
------- ------
Other Liabilities 5,773 7,547
----- -----
Stockholders' Equity
Common Stock, Par Value $1, Authorized
20,000,000 Shares, Issued 7,215,463 and
7,204,775 Shares as of Jun. 30, 2008 and
Jun. 30, 2007, Respectively 7,215 7,205
Paid in Capital 24,589 24,503
Retained Earnings 53,185 50,066
Restricted Stock- Unearned Compensation (346) (411)
Accumulated Other Comprehensive Loss, Net of
Tax (820) (1,505)
----- -------
83,823 79,858
------ ------
Total Liabilities and Stockholders' Equity $1,211,212 $1,203,777
========== ==========
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
Quarter Year-to-Date
Three Months Ended Six Months Ended
06/30/08 06/30/07 06/30/08 06/30/07
-------- -------- -------- --------
(unaudited) (unaudited) (unaudited) (unaudited)
Interest Income
Loans, Including Fees $16,742 $20,420 $35,091 $40,188
Federal Funds Sold 84 336 239 967
Deposits with Other
Banks 9 34 20 75
Investment Securities
U.S. Government
Agencies 1,586 1,573 3,267 3,117
State, County and
Municipal 92 137 230 271
Corporate
Obligations/
Asset-Backed Sec. 85 63 179 126
Dividends on Other
Investments 82 73 166 149
-- -- --- ---
18,680 22,636 39,192 44,893
------ ------ ------ ------
Interest Expense
Deposits 8,475 10,673 18,147 21,280
Federal Funds
Purchased and
Repurchase Agreements 24 31 52 37
Borrowed Money 1,138 1,107 2,345 2,300
----- ----- ----- -----
9,637 11,811 20,544 23,617
----- ------ ------ ------
Net Interest Income 9,043 10,825 18,648 21,276
Provision for Loan
Losses 4,071 914 5,142 1,828
----- --- ----- -----
Net Interest Income
After Provision for
Loan Losses 4,972 9,911 13,506 19,448
----- ----- ------ ------
Noninterest Income
Service Charges on
Deposits 1,173 1,214 2,338 2,332
Other Service Charges,
Commissions and Fees 241 239 495 485
Mortgage Fee Income 174 286 343 538
Securities Gains 614 2 1,184 186
Other 832 315 1,045 625
--- --- ----- ---
3,034 2,056 5,405 4,166
----- ----- ----- -----
Noninterest Expense
Salaries and Employee
Benefits 4,029 4,687 8,432 9,229
Occupancy and
Equipment 1,061 1,010 2,068 2,011
Other 2,624 2,268 4,971 4,634
----- ----- ----- -----
7,714 7,965 15,471 15,874
----- ----- ------ ------
Income Before Income
Taxes 292 4,002 3,440 7,740
Income Taxes -- 1,300 935 2,564
-- ----- ----- -----
Net Income $292 $2,702 $2,505 $5,176
==== ====== ====== ======
Net Income Per Share of
Common Stock
Basic $0.04 $0.38 $0.35 $0.72
===== ===== ===== =====
Diluted $0.04 $0.38 $0.35 $0.72
===== ===== ===== =====
Weighted Average Basic
Shares Outstanding 7,197,607 7,187,587 7,194,734 7,184,576
========= ========= ========= =========
Weighted Average
Diluted Shares
Outstanding 7,197,607 7,197,645 7,194,734 7,196,193
========= ========= ========= =========