Colony Bankcorp (CBAN) 8-K Colony Bankcorp, Inc. Announces Second Quarter Results

Exhibit 99.1

NEWS RELEASE
FOR IMMEDIATE RELEASE
Date:	July 20, 2016 - 8:00 A.M. (EST)
Contact:	Terry L. Hester
	Chief Financial Officer
	(229) 426-6000 (Ext 6002)

Colony Bankcorp, Inc. Announces Second Quarter Results

FITZGERALD, GA., July 20, 2016 --- Colony Bankcorp, Inc. (Nasdaq: CBAN), today reported net income available to shareholders of $1,761,000, or $0.21 per diluted share for the second quarter of 2016 compared to $1,555,000, or $0.18 per diluted share for the comparable 2015 period, while net income available to shareholders for the six month period ended June 30, 2016 was $3,417,000, or $0.40 per diluted share compared to $2,808,000, or $0.33 per share for the comparable 2015 period.    This increase of 21.69 percent in net income for the comparable six month period was primarily driven by an increase in net interest income and a reduction in preferred stock dividends.  “We are pleased to report another solid quarter despite the continued low interest rate environment.  Of significance during the quarter was total loan growth of $9.92 million along with reduction of our substandard assets by $3.89 million,” said Ed Loomis, President and Chief Executive Officer.  “With the productive first half of 2016, we are requesting approval from regulatory authorities to redeem $3,661,000 of preferred stock during third quarter.  This will reduce the preferred stock to $14,360,000 and result in dividend savings of $329,000 on an annual basis.  We continue to explore opportunities to enhance revenue and improve efficiency.  Accordingly, we have invested in a new loan platform system that when fully implemented will provide consistency and efficiency in the loan approval process.  In addition we are revamping our vendor management process for better control and monitoring of our vendor contracts.”

Capital

Colony continues to maintain a strong regulatory capital position to be categorized as “well-capitalized” by regulatory benchmarks.  At June 30, 2016, the Company’s tier one leverage ratio, tier one ratio, total risk-based capital ratio and common equity tier one capital ratio were 10.94 percent, 16.13 percent, 17.32 percent and 10.84 percent, respectively, compared to 10.70 percent, 15.92 percent, 17.13 percent  and 10.63 percent, respectively, at March 31, 2016.  The Company’s capital ratios were all in excess of regulatory minimums required to be classified as “well-capitalized.”

Net Interest Margin

During the second quarter of 2016, the Company reported net interest income of $9.53 million and a net interest margin of 3.53 percent compared to $9.25 million and 3.44 percent, respectively, for second quarter 2015, while net interest income for first half 2016 was $18.98 million and a net interest margin of 3.50 percent compared to $18.45 million and 3.44 percent, respectively, for first half 2015.  Net interest margin improvement resulted in the Company posting an increase in net interest income of approximately $532 thousand in the comparable first half period.  The recent Brexit vote in Europe resulted in significant volatility in the markets and has likely delayed any action by Federal Reserve to move toward a “tightening” interest rate policy in the near term.

Asset Quality

The Company continues to monitor our substandard and non-performing assets and focus on problem asset resolution.  Substandard assets that include non-performing assets totaled $42.56 million at June 30, 2016 compared to $41.24 million and $39.65 million, respectively, at December 31, 2015 and June 30, 2015.  Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 31.12 percent, 31.36 percent and 28.74 percent, respectively, at June 30, 2016, December 31, 2015 and June 30, 2015.  Non-performing assets increased from the previous quarter end to $23.33 million or 3.01 percent of total loans and other real estate owned as of June 30, 2016.  This compares to $23.26 million or 3.03 percent and $26.16 million or 3.39 percent, respectively, as of December 31, 2015 and June 30, 2015.

Other real estate (“OREO”) totaled $10.18 million at June 30, 2016 compared to $8.84 million and $12.03 million, respectively, at December 31, 2015 and June 30, 2015.   Though these levels remain at an elevated level, we continue to work diligently to dispose these properties at fair value. 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 second quarter of 2016 net charge-offs were $513 thousand, or 0.07 percent of average loans as compared to net charge-offs of $25 thousand, or 0.00 percent of average loans in second quarter 2015, while first half 2016 net charge-offs (recoveries) were ($78) thousand, or (0.01) percent of average loans compared to $813 thousand, or 0.11 percent of average loans for the comparable 2015 period..  The loan loss reserve was $9.39 million or 1.23 percent of total loans on June 30, 2016 compared to $8.60 million or 1.13 percent and $8.48 million or 1.12 percent, respectively, at December 31, 2015 and June 30, 2015.  Loan loss reserve methodology resulted in three months ended June 30, 2016 provision for loan losses of $354 thousand compared to $129 thousand for the comparable 2015 period, while first half 2016 provision for loan losses was $708 thousand compared to $491 thousand for the comparable 2015 period.

Noninterest Income

Total noninterest income declined modestly in the comparable periods as noninterest income for six months ended June 30, 2016 was $4.52 million compared to $4.57 million in the comparable 2016 period, or a decrease of 1.01 percent.  Service charge income on deposits increased $6 thousand or 0.29 percent while all other noninterest income categories decreased $52 thousand or 2.06 percent.

Noninterest Expense

Total noninterest expense decreased in the comparable periods as noninterest expense for six months ended June 30, 2016 was $16.59 million compared to $16.61 million for the comparable 2015 period, or a decrease of 0.10 percent.  Salaries and employee benefit expenses increased 2.52 percent, occupancy expense decreased 3.38 percent and other noninterest expense decreased 3.02 percent for the comparable periods.  The efficiency ratio improved to 70.97 percent for six months ended June 30, 2016 compared to 71.99 percent for the comparable 2015 period, or a decrease of 1.39 percent.   The company continues to explore opportunities to further improve its’ operating efficiency.

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-six offices located in the central, southern and coastal Georgia cities of Albany, Ashburn, Broxton, Centerville, Columbus, Cordele, Douglas, Eastman,

Fitzgerald, Leesburg, Moultrie, 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.

Consolidated Balance Sheets Colony Bankcorp, Inc.

(in thousands)

	June 30, 2016			Dec. 31, 2015			June 30, 2015
	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks	$	16,188		$	22,257		$	19,550
Interest-Bearing Deposits		1,464			38,615			24,323
Investment Securities
Available for Sale, at Fair Value		307,926			296,149			273,878
Held for Maturity, at Cost (Fair Value of $27 as of June 30, 2015)		-			-			27
		307,926			296,149			273,905
Federal Home Loan Bank Stock, at Cost		2,755			2,731			2,731
Loans		764,209			758,636			760,078
Allowance for Loan Losses		(9,390	)		(8,604	)		(8,480	)
Unearned Interest and Fees		(382	)		(357	)		(388	)
		754,437			749,675			751,210
Premises and Equipment		27,386			26,454			24,465
Other Real Estate		10,178			8,839			12,031
Other Intangible Assets		98			116			134
Other Assets		26,595			29,313			30,701
Total Assets	$	1,147,027		$	1,174,149		$	1,139,050

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Noninterest-Bearing	$	134,662	$	133,886		$	125,541
Interest-Bearing		841,905		877,668			843,093
		976,567		1,011,554			968,634
Borrowed Money
Subordinated Debentures		24,229		24,229			24,229
Other Borrowed Money		40,000		40,000			40,000
		64,229		64,229			64,229
Other Liabilities		2,766		2,909			3,528
Stockholders’ Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued 18,021 Shares as of June 30, 2016 and Dec. 31, 2015 and 28,000 as of June 30, 2015, Respectively		18,021		18,021			28,000
Common Stock, Par Value $1 a share; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of June 30, 2016, Dec. 31, 2015 and June 30, 2015, Respectively		8,439		8,439			8,439
Paid in Capital		29,145		29,145			29,145
Retained Earnings		47,702		44,286			41,097
Accumulated Other Comprehensive Loss, Net of Tax		158		(4,434	)		(4,022	)
		103,465		95,457			102,659
Total Liabilities and Stockholders’ Equity	$	1,147,027	$	1,174,149		$	1,139,050

Consolidated Statements of Income Colony Bankcorp, Inc.

(in thousands except per share data)

	Quarter Three Months Ended				Year-to-Date Six Months Ended
	6/30/2016		6/30/2015		6/30/2016		6/30/2015
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Interest Income
Loans, Including Fees	$	9,693	$	9,873	$	19,325	$	19,582
Fedral Funds Sold		-		-		-		15
Deposits with Other Banks		23		24		61		41
Investment Securities
U. S. Government Agencies		1,359		979		2,712		2,048
State, County and Municipal		33		25		67		50
Dividends on Other Investments		33		30		65		60
		11,141		10,931		22,230		21,796
Interest Expense
Deposits		1,189		1,220		2,393		2,438
Borrowed Money		427		464		856		909
		1,616		1,684		3,249		3,347
Net Interest Income		9,525		9,247		18,981		18,449
Provision for Loan Losses		354		129		708		491
Net Interest Income After Provision for Loan Losses		9,171		9,118		18,273		17,958
Noninterest Income
Service Charges on Deposits		1,055		1,040		2,057		2,051
Other Service Charges, Commissions and Fees		565		664		1,269		1,302
Mortgage Fee Income		153		134		253		247
Securities Gains (Losses)		127		-		129		3
Other		452		520		816		967
		2,352		2,358		4,524		4,570
Noninterest Expense
Salaries and Employee Benefits		4,625		4,407		9,099		8,875
Occupancy and Equipment		978		1,017		1,942		2,010
Other		2,751		2,896		5,548		5,721
		8,354		8,320		16,589		16,606
Income Before Income Taxes		3,169		3,156		6,208		5,922
Income Taxes		1,002		971		1,980		1,854
Net Income		2,167		2,185		4,228		4,068
Preferred Stock Dividends		406		630		811		1,260
Net Income Available to Common Shareholders	$	1,761	$	1,555	$	3,417	$	2,808
Net Income Per Share of Common Stock
Basic	$	0.21	$	0.18	$	0.40	$	0.33
Diluted	$	0.21	$	0.18	$	0.40	$	0.33
Weighted Average Basic Shares Outstanding		8,439,258		8,439,258		8,439,258		8,439,258
Weighted Average Diluted Shares Outstanding		8,497,618		8,441,628		8,490,540		8,440,443

COLONY BANKCORP, INC

FINANCIAL HIGHLIGHTS (UNAUDITED)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

	QUARTER ENDED				YEAR-TO-DATE
EARNINGS SUMMARY	6/30/2016		6/30/2015		6/30/2016		6/30/2015
Net Interest Income	$	9,525	$	9,247	$	18,981	$	18,449
Provision for Loan Losses		354		129		708		491
Non-interest Income		2,352		2,358		4,524		4,570
Non-interest Expense		8,354		8,320		16,589		16,606
Income Taxes		1,002		971		1,980		1,854
Net Income		2,167		2,185		4,228		4,068
Preferred Stock Dividend		406		630		811		1,260
Net Income Available to Common Shareholders		1,761		1,555		3,417		2,808

	QUARTER ENDED				YEAR-TO-DATE
PER COMMON SHARE SUMMARY	6/30/2016		6/30/2015		6/30/2016		6/30/2015
Common Shares Outstanding		8,439,258		8,439,258		8,439,258		8,439,258
Weighted Average Basic Shares		8,439,258		8,439,258		8,439,258		8,439,258
Weighted Average Diluted Shares		8,497,618		8,441,628		8,490,540		8,440,443
Earnings Per Basic Share (b)	$	0.21	$	0.18	$	0.40	$	0.33
Earnings Per Diluted Share (b)	$	0.21	$	0.18	$	0.40	$	0.33
Common Book Value Per Share	$	10.12	$	8.85	$	10.12	$	8.85
Tangible Common Book Value Per Share	$	10.11	$	8.83	$	10.11	$	8.83

	QUARTER ENDED						YEAR-TO-DATE
OPERATING RATIOS (1)	6/30/2016			6/30/2015			6/30/2016			6/30/2015
Net Interest Margin (a)		3.53	%		3.44	%		3.50	%		3.44	%
Return on Average Assets (b)		0.61	%		0.54	%		0.59	%		0.49	%
Return on Average Total Equity (b)		6.99	%		6.05	%		6.87	%		5.52	%
Efficiency (c)		71.10	%		71.54	%		70.97	%		71.99	%

(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	6/30/2016			6/30/2015
Total Assets	$	1,147,027		$	1,139,050
Loans, Net of Reserves		754,437			751,210
Allowance for Loan Losses		9,390			8,480
Intangible Assets		98			134
Deposits		976,567			968,634
Common Shareholders’ Equity		85,444			74,659
Common Equity to Total Assets		7.45	%		6.55	%
Total Equity		103,465			102,659
Total Equity to Total Assets		9.02	%		9.01	%

	QUARTER ENDED				YEAR-TO-DATE
AVERAGE BALANCES	6/30/2016		6/30/2015		6/30/2016		6/30/2015
Total Assets	$	1,156,944	$	1,150,811	$	1,161,051	$	1,150,725
Loans, Net of Reserves		746,780		748,648		745,008		741,680
Deposits		988,743		979,628		994,018		979,477
Common Shareholders’ Equity		82,704		74,760		81,439		73,700
Total Equity		100,725		102,760		99,460		101,700

	QUARTER ENDED						YEAR-TO-DATE
ASSET QUALITY	6/30/2016			6/30/2015			6/30/2016			6/30/2015
Nonperforming Loans	$	13,149		$	14,128		$	13,149		$	14,128
Nonperforming Assets		23,327			26,159			23,327			26,159
Substandard Assets		42,557			39,650			42,557			39,650
Net Loan Chg-offs (Recoveries)		513			25			(78	)		813
Reserve for Loan Loss to Total Loans		1.23	%		1.12	%		1.23	%		1.12	%
Reserve for Loan Loss to Non-performing Loans		71.41	%		60.02	%		71.41	%		60.02	%
Reserve for Loan Loss to Non-performing Assets		40.25	%		32.42	%		40.25	%		32.42	%
Net Loan Chg-offs (Recoveries) to Avg. Total Loans		0.07	%		0.00	%		(0.01	)%		0.11	%
Nonperforming Loans to Total Loans		1.72	%		1.86	%		1.72	%		1.86	%
Nonperforming Assets to Total Assets		2.03	%		2.30	%		2.03	%		2.30	%
Nonperforming Assets to Total Loans And Other Real Estate		3.01	%		3.39	%		3.01	%		3.39	%
Substandard Assets to Tier One Capital and Allowance for Loan Losses		31.12	%		28.74	%		31.12	%		28.74	%

Quarterly Comparative Data (in thousands, except per share data)

	2Q2016			1Q2016			4Q2015			3Q2015			2Q2015
Assets	$	1,147,027		$	1,168,389		$	1,174,149		$	1,127,320		$	1,139,050
Loans		754,437			744,356			749,675			755,447			751,210
Deposits		976,567			1,000,043			1,011,554			958,034			968,634
Common Shareholders’ Equity		85,444			82,522			77,436			77,907			74,659
Total Equity		103,465			100,543			95,457			101,074			102,659
Net Income		2,167			2,061			2,105			2,200			2,185
Net Income Available to Common Shareholders		1,761			1,656			1,584			1,606			1,555
Net Income Per Share		0.21			0.20			0.19			0.19			0.18
Key Performance Ratios	2Q2016			1Q2016			4Q2015			3Q2015			2Q2015
Return on Average Assets (1)		0.61	%		0.57	%		0.55	%		0.57	%		0.54	%
Return on Average Total Equity (1)		6.99	%		6.75	%		6.26	%		6.28	%		6.05	%
Common Equity to Total Assets		7.45	%		7.06	%		6.60	%		6.91	%		6.55	%
Total Equity to Total Assets		9.02	%		8.61	%		8.13	%		8.97	%		9.01	%
Net Interest Margin		3.53	%		3.47	%		3.63	%		3.58	%		3.44	%

(1) Computed using net income available to shareholders