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Colony Bankcorp, Inc. Announces Fourth Quarter Results
FITZGERALD, Ga., Jan. 23, 2009 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (NasdaqGM:CBAN - News), today reported a quarterly net loss of $(670,000) for the fourth quarter of 2008, down 189.10 percent from fourth quarter 2007 net income of $752,000, while net income for twelve months ended December 31, 2008 was $2,029,000, down 76.26 percent from twelve months ended December 31, 2007 of $8,547,000. 2008 has proven to be very challenging for Colony and the entire banking industry, though much progress has been made by Colony in addressing problem credits. 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 fourth quarter 2008. ``We are disappointed with the fourth quarter loss, however we strongly believe that the company's ability to manage through this difficult economic cycle and to support our long-term success, have been strengthened by the actions taken during the quarter. This past year will likely be regarded as one of the most challenging periods in the history of the banking industry. Credit quality issues and a slowing economy have created an unprecedented operating environment for financial companies. Our solid core earnings have provided strong support for loss provisions needed to cover our problem loan losses and we remain committed to aggressively taking action in addressing problem assets as we work through this 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 $48.2 million, or 4.95 percent of total loans and other real estate owned as of December 31, 2008. This compares to $34.4 million, or 3.53 percent as of September 30, 2008 and $16.3 million, or 1.73 percent as of December 31, 2007. The increase in non-performing assets ties directly to the elevated risk in our residential and land development loan portfolio and has resulted in increased loan loss provisions in 2008 compared to 2007; thus a significant negative impact on our 2008 net income. The fourth quarter 2008 provision for loan losses were $4,426,000 compared to $3,253,000 for the same period in 2007, while year to date 2008 provision for loan losses were $12,938,000 compared to $5,931,000 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 fourth quarter of 2008 net charge-offs were $5,362,000, or 0.55 percent of average loans compared to net charge-offs of $1,561,000, or 0.16 percent of average loans in fourth quarter 2007, while net charge-offs for twelve months ended December 31, 2008 were $11,435,000, or 1.19 percent of average loans compared to $2,407,000, or 0.25 percent of average loans for the same year ago period. The loan loss reserve of $17.02 million on December 31, 2008 was 1.77 percent of total loans compared to $15.51 million or 1.64 percent on December 31, 2007. 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 foreclosure activity will increase as we move non-performing loans through the collection process. The increase in charge-offs during the quarter resulted primarily from the write-down of non-performing credits to current appraised values.''
Another significant factor negatively impacting earnings has been the reduction of net interest income. Net interest income decreased to $9,242,000 in fourth quarter 2008 compared to $10,390,000 in fourth quarter 2007, while net interest income decreased to $37,375,000 in twelve months ended December 31, 2008 compared to $42,459,000 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 and another 175 basis points in October - December 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 3.18 percent in fourth quarter 2008 compared to 3.64 percent in fourth quarter 2007 and net interest margin declining to 3.30 percent in twelve months ended December 31, 2008 compared to 3.75 percent in the same year ago period. With the latest Federal Reserve action taken in late 2008 to basically move the Federal funds rate to zero percent, we expect to see margin improvement in 2009 as we reprice our liabilities in response to the current interest rate environment.
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 $1,252,782,000, gross loans of $961,036,000, total deposits of $1,006,992,000 and total equity of $83,215,000 at December 31, 2008. Shareholder equity to total assets was 6.64 percent at December 31, 2008 compared to 6.93 percent at December 31, 2007.
During the quarter the board of directors declared a quarterly cash dividend of $0.0975 per share compared to $0.0975 declared in third quarter 2008 and to $0.095 per share in fourth quarter 2007. Though earnings declined significantly in 2008 due to aggressively addressing problem loans during this economic downturn, 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 December 31, 2008, Colony remained in excess of the regulatory requirement as its total capital to risk-based assets ratio was 12.06 percent.
Also during the quarter Colony announced preliminary approval for participation in the U. S. Treasury Capital Purchase Program (``CPP''). On January 9, 2009 Colony consummated the sale of $28 million in preferred stock and related warrants to the U. S. Treasury. The Company elected to participate to take advantage of the likely one-time opportunity to receive a very low-cost source of capital. The Company's participation in the CPP strengthens its current well-capitalized position and increases liquidity. Colony's board and management believe maintenance of capital at elevated levels during the current challenging economic environment is desirable. However, the Company does anticipate using some of the capital to expand its business through careful lending, enhanced customer service and pursuing potential growth opportunities to increase shareholder value.
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 12/31/08 12/31/07 12/31/08 12/31/07
-------- -------- -------- --------
Net Interest Income $9,242 $10,390 $37,375 $42,459
Provision for
Loan Losses 4,426 3,253 12,938 5,931
Non-interest
Income 1,820 1,805 9,005 7,817
Non-interest
Expense 7,572 7,950 30,856 31,580
Income Taxes (266) 240 557 4,218
Net Income (670) 752 2,029 8,547
Operating Income (670) 752 1,240 8,426
QUARTER ENDED YEAR-TO-DATE
PER SHARE SUMMARY 12/31/08 12/31/07 12/31/08 12/31/07
-------- -------- -------- --------
Common Shares
Outstanding 7,212,313 7,200,913 7,212,313 7,200,913
Weighted Average
Diluted Shares 7,205,436 7,194,514 7,199,121 7,197,331
Net Income Per
Weighted Average
Diluted Shares $(0.09) $0.10 $0.28 $1.19
Operating Income
Per Weighted
Average Diluted
Shares $(0.09) $0.10 $0.17 $1.17
Dividends Declared
Per Share $0.0975 $0.095 $0.39 $0.365
QUARTER ENDED YEAR-TO-DATE
OPERATING RATIOS (1) 12/31/08 12/31/07 12/31/08 12/31/07
-------- -------- -------- --------
Net Interest
Margin (a) 3.18% 3.64% 3.30% 3.75%
Return on Average
Assets Based on
Net Income (0.22%) 0.25% 0.17% 0.71%
Return on Average
Assets Based on
Operating Income (0.22%) 0.25% 0.10% 0.69%
Return on Average
Equity Based on
Net Income (3.25%) 3.58% 2.40% 10.60%
Return on Average
Equity Based on
Operating Income (3.25%) 3.58% 1.47% 10.45%
Efficiency (b) 67.82% 64.68% 67.74% 62.59%
QUARTER ENDED
ENDING BALANCES 12/31/08 12/31/07
-------- --------
Total Assets $1,252,782 $1,208,776
Loans, Net of
Reserves 943,841 929,465
Allowance for
Loan Losses 17,016 15,513
Goodwill 2,412 2,412
Intangible Assets 367 402
Deposits 1,006,992 1,018,602
Stockholders'
Equity 83,215 83,743
Book Value Per
Share $11.54 $11.63
Tangible Book
Value Per Share $11.15 $11.24
Shareholders'
Equity to Total
Assets 6.64% 6.93%
QUARTER ENDED YEAR-TO-DATE
AVERAGE BALANCES 12/31/08 12/31/07 12/31/08 12/31/07
-------- -------- -------- --------
Total Assets $1,237,287 $1,214,481 $1,204,846 $1,204,165
Loans, Net of
Reserves 953,628 945,891 941,575 934,083
Deposits 992,646 1,018,526 986,501 1,021,537
Stockholders'
Equity 82,586 83,999 84,372 80,638
QUARTER ENDED YEAR-TO-DATE
ASSET QUALITY 12/31/08 12/31/07 12/31/08 12/31/07
-------- -------- -------- --------
Nonperforming
Loans $35,374 $15,016 $35,374 $15,016
Nonperforming
Assets 48,186 16,348 48,186 16,348
Net Loan Chg-offs
(Recoveries) 5,362 1,561 11,435 2,407
Reserve for Loan
Loss to Gross
Loans 1.77% 1.64% 1.77% 1.64%
Reserve for Loan
Loss to Non-
performing Loans 48.10% 103.31% 48.10% 103.31%
Reserve for Loan
Loss to Non-
performing Assets 35.31% 94.89% 35.31% 94.89%
Net Loan Chg-offs
(Recoveries) to
Avg. Gross Loans 0.55% 0.16% 1.19% 0.25%
Nonperforming
Loans to Gross
Loans 3.68% 1.59% 3.68% 1.59%
Nonperforming
Assets to Total
Assets 3.85% 1.35% 3.85% 1.35%
Nonperforming
Assets to Gross
Loans And Other
Real Estate 4.95% 1.73% 4.95% 1.73%
(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)
4Q2008 3Q2008 2Q2008 1Q2008 4Q2007
Assets $1,252,782 $1,215,330 $1,211,212 $1,185,226 $1,208,776
Loans 943,841 952,504 936,608 927,958 929,465
Deposits 1,006,992 977,752 976,322 993,556 1,018,602
Equity 83,215 82,806 83,823 86,014 83,743
Net
Income (670) 194 292 2,213 752
Net Income
Per Share (0.09) 0.03 0.04 0.31 0.10
Dividends
Declared
Per
Share 0.0975 0.0975 0.0975 0.0975 0.095
Key
Performance
Ratios 4Q2008 3Q2008 2Q2008 1Q2008 4Q2007
Return on
Assets (0.22%) 0.06% 0.10% 0.74% 0.25%
Return on
Equity (3.25%) 0.93% 1.36% 10.38% 3.58%
Equity/
Assets 6.64% 6.81% 6.92% 7.26% 6.93%
Net
Interest
Margin 3.18% 3.34% 3.24% 3.44% 3.64%
Consolidated Balance Sheets Colony Bankcorp, Inc.
(in thousands)
Dec. 31, Dec. 31,
2008 2007
---------- ----------
(unaudited) (audited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks $29,427 $28,369
Federal Funds Sold 31 21,737
-- -------
29,458 50,106
------ ------
Interest-Bearing Deposits 147 1,467
--- -----
Investment Securities
Available for Sale, at Fair Value 207,645 167,123
Held for Maturity, at Cost (Fair
Value of $63 and $69 as of
Dec. 31, 2008 and Dec. 31, 2007,
Respectively) 60 68
-- --
207,705 167,191
------- -------
Federal Home Loan Bank Stock, at Cost 6,272 5,533
----- -----
Loans 961,036 945,279
Allowance for Loan Losses (17,016) (15,513)
Unearned Interest and Fees (179) (301)
---- ----
943,841 929,465
------- -------
Premises and Equipment 29,672 27,809
------ ------
Other Real Estate 12,812 1,332
------ -----
Goodwill 2,412 2,412
----- -----
Other Intangible Assets 367 402
--- ---
Other Assets 20,096 23,059
------ ------
Total Assets $1,252,782 $1,208,776
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing $77,497 $86,112
Interest-Bearing 929,495 932,490
------- -------
1,006,992 1,018,602
--------- ---------
Borrowed Money
Federal Funds Purchased 2,274 1,346
Securities Sold Under Agreements
to Repurchase 40,000 --
Subordinated Debentures 24,229 24,229
Other Borrowed Money 91,000 73,600
------ ------
157,503 99,175
------- ------
Other Liabilities 5,072 7,256
----- -----
Stockholders' Equity
Common Stock, Par Value $1,
Authorized 20,000,000 Shares,
Issued 7,212,313 and 7,200,913
Shares as of Dec. 31, 2008 and
Dec. 31, 2007, Respectively 7,212 7,201
Paid in Capital 24,536 24,420
Retained Earnings 51,302 52,087
Restricted Stock- Unearned
Compensation (211) (237)
Accumulated Other Comprehensive Loss,
Net of Tax 376 272
--- ---
83,215 83,743
------ ------
Total Liabilities and Stockholders'
Equity $1,252,782 $1,208,776
========== ==========
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
Quarter Year-to-Date
Three Months Ended Twelve Months Ended
12/31/08 12/31/07 12/31/08 12/31/07
-------- -------- -------- --------
(unaudited)(unaudited)(unaudited)(unaudited)
Interest Income
Loans, Including Fees $15,347 $20,051 $66,733 $80,974
Federal Funds Sold 10 274 274 1,478
Deposits with Other Banks -- 32 27 143
Investment Securities
U.S. Government
Agencies 2,065 1,689 7,141 6,438
State, County and
Municipal 88 142 410 549
Corporate Obligations/
Asset-Backed Sec. 122 64 414 269
Dividends on Other
Investments 45 84 298 309
-- -- --- ---
17,677 22,336 75,297 90,160
------ ------ ------ ------
Interest Expense
Deposits 7,055 10,598 32,801 42,731
Federal Funds Purchased
and Repurchase
Agreements 221 9 514 59
Borrowed Money 1,159 1,339 4,607 4,911
----- ----- ----- -----
8,435 11,946 37,922 47,701
----- ------ ------ ------
Net Interest Income 9,242 10,390 37,375 42,459
Provision for Loan Losses 4,426 3,253 12,938 5,931
----- ----- ------ -----
Net Interest Income After
Provision for Loan Losses 4,816 7,137 24,437 36,528
----- ----- ------ ------
Noninterest Income
Service Charges
on Deposits 1,129 1,215 4,700 4,771
Other Service Charges,
Commissions and Fees 246 218 981 921
Mortgage Fee Income 98 204 609 967
Securities Gains -- -- 1,195 184
Other 347 168 1,520 974
--- --- ----- ---
1,820 1,805 9,005 7,817
----- ----- ----- -----
Noninterest Expense
Salaries and Employee
Benefits 3,755 4,173 16,238 17,866
Occupancy and Equipment 1,025 1,004 4,191 4,040
Other 2,792 2,773 10,427 9,674
----- ----- ------ -----
7,572 7,950 30,856 31,580
----- ----- ------ ------
Income Before Income Taxes (936) 992 2,586 12,765
Income Taxes (266) 240 557 4,218
---- --- --- -----
Net Income $(670) $752 $2,029 $8,547
===== ==== ====== ======
Net Income Per Share
of Common Stock
Basic $(0.09) $0.10 $0.28 $1.19
====== ===== ===== =====
Diluted $(0.09) $0.10 $0.28 $1.19
====== ===== ===== =====
Weighted Average
Basic Shares
Outstanding 7,205,436 7,192,026 7,199,121 7,188,696
========= ========= ========= =========
Weighted Average
Diluted Shares
Outstanding 7,205,436 7,194,514 7,199,121 7,197,331
========= ========= ========= =========
Contact:
Colony Bankcorp, Inc.
Terry L. Hester, Chief Financial Officer
(229) 426-6002
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