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

EXHIBIT 99.1

Colony Bankcorp, Inc. Announces Third Quarter Results

FITZGERALD, Ga., Oct. 20, 2016 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $1,880,000, or $0.22 per diluted share for the third quarter of 2016 compared to $1,606,000, or $0.19 per diluted share for the comparable 2015 period, while net income available to shareholders for the nine month period ended September 30, 2016 was $5,297,000, or $0.62 per diluted share compared to $4,414,000, or $0.52 per share for the comparable 2015 period.    This increase of 20.00 percent in net income for the comparable nine month period was primarily driven by an increase in net interest income and a reduction in preferred stock dividends.  “In addition to solid earnings, we also redeemed $3,661,000 of preferred stock that on an annual basis reduces our dividend payment by $329,490.  Also of significance during the quarter was total loan growth of $11.91 million and a reduction in substandard assets of $1.07 million,” said Ed Loomis, President and Chief Executive Officer.  “We have positioned the company to seek regulatory approval to redeem $5,000,000 of preferred stock during the fourth quarter.  This will reduce the preferred stock to $9,360,000 and result in dividend savings of $450,000 on an annual basis.  As we look to 2017, 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 September 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 10.85 percent, 15.79 percent, 16.95 percent and 11.01 percent, respectively, compared to 10.94 percent, 16.13 percent, 17.32 percent  and 10.84 percent, respectively, at June 30, 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 third quarter of 2016, the Company reported net interest income of $9.56 million and a net interest margin of 3.56 percent compared to $9.50 million and 3.58 percent, respectively, for third quarter 2015, while net interest income for nine months ended September 30, 2016 was $28.54 million and a net interest margin of 3.52 percent compared to $27.95 million and 3.48 percent, respectively, for the comparable 2015 period.  Net interest margin improvement resulted in the Company posting an increase in net interest income of approximately $591 thousand over the comparable 2015 period.  While we have been in a historical low interest rate environment for some time, recent Federal Reserve discussion suggests a modest move toward a “tightening” interest rate policy in December.

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 $41.49 million at September 30, 2016 compared to $41.24 million and $43.02 million, respectively, at December 31, 2015 and September 30, 2015.  Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 31.34 percent, 31.36 percent and 31.73 percent, respectively, at September 30, 2016, December 31, 2015 and September 30, 2015.  Non-performing assets increased slightly from the previous quarter end to $23.80 million or 3.03 percent of total loans and other real estate owned as of September 30, 2016.  This compares to $23.26 million or 3.03 percent and $24.57 million or 3.17 percent, respectively, as of December 31, 2015 and September 30, 2015.       

Other real estate (“OREO”) totaled $9.81 million at September 30, 2016 compared to $8.84 million and $11.00 million, respectively, at December 31, 2015 and September 30, 2015. Though these levels remain at an elevated level, we continue to work diligently to dispose these properties at fair value.   We have approximately $2.5 million currently under contract and scheduled to close during fourth quarter. 

In the third quarter of 2016 net charge-offs were $541 thousand, or 0.07 percent of average loans as compared to net charge-offs of $328 thousand, or 0.04 percent of average loans in third quarter 2015, while year to date 2016 net charge-offs were $463 thousand, or 0.06 percent of average loans compared to $1.14 million, or 0.15 percent of average loans for the comparable 2015 period.  The loan loss reserve was $9.20 million or 1.19 percent of total loans on September 30, 2016 compared to $8.60 million or 1.13 percent and $8.40 million or 1.10 percent, respectively, at December 31, 2015 and September 30, 2015.  Loan loss reserve methodology resulted in three months ended September 30, 2016 provision for loan losses of $354 thousand compared to $250 thousand for the comparable 2015 period, while year to date 2016 provision for loan losses was $1.06 million compared to $741 thousand for the comparable 2015 period.

Noninterest Income

Total noninterest income increased in the comparable periods as noninterest income for nine months ended September 30, 2016 was $7.16 million compared to $6.80 million in the comparable 2015 period, or an increase of 5.26 percent.  Gain on sale of securities totaled $385 thousand compared to $12 thousand in the comparable 2015 period to primarily account for the increase.  Our initiative to increase secondary market mortgage fee income has resulted in an increase of $122 thousand, or 31.69 percent over the comparable 2015 period.      

Noninterest Expense

Total noninterest expense increased in the comparable periods as noninterest expense for nine months ended September 30, 2016 was $25.24 million compared to $24.94 million for the comparable 2015 period, or an increase of 1.21 percent.  Salaries and employee benefit expenses increased 4.18 percent, occupancy expense decreased 2.27 percent and other noninterest expense decreased 2.13 percent for the comparable periods.  The efficiency ratio improved to 71.22 percent for nine months ended September 30, 2016 compared to 71.61 percent for the comparable 2015 period, or a decrease of 0.54 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)
	September 30, 2016			December 31, 2015			September 30, 2015
	(unaudited)			(audited)			(unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks	$	17,803		$	22,257		$	17,137
Interest-Bearing Deposits		13,872			38,615			15,996
Investment Securities
Available for Sale, at Fair Value		286,089			296,149			271,611
Held for Maturity, at Cost (Fair Value
of $28 as of September 30, 2015)		-			-			28
		286,089			296,149			271,639
Federal Home Loan Bank Stock, at Cost		3,010			2,731			2,731
Loans		776,117			758,636			764,204
Allowance for Loan Losses		(9,203	)		(8,604	)		(8,402	)
Unearned Interest and Fees		(382	)		(357	)		(355	)
		766,532			749,675			755,447
Premises and Equipment		27,745			26,454			24,460
Other Real Estate		9,812			8,839			10,998
Other Intangible Assets		89			116			125
Other Assets		27,865			29,313			28,787
Total Assets	$	1,152,817		$	1,174,149		$	1,127,320
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing	$	138,941		$	133,886		$	125,793
Interest-Bearing		839,649			877,668			832,241
		978,590			1,011,554			958,034
Borrowed Money
Subordinated Debentures		24,229			24,229			24,229
Other Borrowed Money		46,000			40,000			40,000
		70,229			64,229			64,229
Other Liabilities		3,263			2,909			3,983
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share;
Authorized 10,000,000 Shares, Issued 14,360 Shares
as of Sept. 30, 2016, 18,021 as of Dec. 31, 2015 and
23,167 as of Sept. 30, 2015, Respectively		14,360			18,021			23,167
Common Stock, Par Value $1 a share; Authorized
20,000,000 Shares, Issued 8,439,258 Shares as of
Sept. 30, 2016, Dec. 31, 2015 and Sept, 30, 2015,
Respectively		8,439			8,439			8,439
Paid in Capital		29,145			29,145			29,145
Retained Earnings		49,582			44,286			42,703
Accumulated Other Comprehensive Loss, Net of Tax		(791	)		(4,434	)		(2,380	)
		100,735			95,457			101,074
Total Liabilities and Stockholders' Equity	$	1,152,817		$	1,174,149		$	1,127,320

Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
	Quarter				Year-to-Date
	Three Months Ended				Nine Months Ended
	9/30/2016		9/30/2015		9/30/2016		9/30/2015
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Interest Income
Loans, Including Fees	$	9,810	$	9,981	$	29,135	$	29,563
Federal Funds Sold		-		-		-		15
Deposits with Other Banks		18		17		79		58
Investment Securities
U. S. Government Agencies		1,266		1,060		3,978		3,108
State, County and Municipal		30		28		97		78
Dividends on Other Investments		32		31		97		91
		11,156		11,117		33,386		32,913
Interest Expense
Deposits		1,187		1,210		3,580		3,648
Borrowed Money		413		410		1,269		1,319
		1,600		1,620		4,849		4,967
Net Interest Income		9,556		9,497		28,537		27,946
Provision for Loan Losses		354		250		1,062		741
Net Interest Income After Provision for Loan Losses		9,202		9,247		27,475		27,205
Noninterest Income
Service Charges on Deposits		1,128		1,133		3,185		3,184
Other Service Charges, Commissions and Fees		686		661		2,104		1,963
Mortgage Fee Income		254		138		507		385
Securities Gains (Losses)		256		9		385		12
Other		313		292		980		1,259
		2,637		2,233		7,161		6,803
Noninterest Expense
Salaries and Employee Benefits		4,726		4,395		13,825		13,270
Occupancy and Equipment		1,025		1,026		2,967		3,036
Other		2,903		2,914		8,451		8,635
		8,654		8,335		25,243		24,941
Income Before Income Taxes		3,185		3,145		9,393		9,067
Income Taxes		927		945		2,907		2,799
Net Income		2,258		2,200		6,486		6,268
Preferred Stock Dividends		378		594		1,189		1,854
Net Income Available to Common Shareholders	$	1,880	$	1,606	$	5,297	$	4,414
Net Income Per Share of Common Stock
Basic	$	0.22	$	0.19	$	0.63	$	0.52
Diluted	$	0.22	$	0.19	$	0.62	$	0.52
Weighted Average Basic Shares Outstanding		8,439,258		8,439,258		8,439,258		8,439,258
Weighted Average Diluted Shares Outstanding		8,506,268		8,466,285		8,495,752		8,449,057

COLONY BANKCORP, INC
FINANCIAL HIGHLIGHTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	QUARTER ENDED						YEAR-TO-DATE
EARNINGS SUMMARY	9/30/2016			9/30/2015			9/30/2016			9/30/2015
Net Interest Income	$	9,556		$	9,497		$	28,357		$	27,946
Provision for Loan Losses		354			250			1,062			741
Non-interest Income		2,637			2,233			7,161			6,803
Non-interest Expense		8,654			8,335			25,243			24,941
Income Taxes		927			945			2,907			2,799
Net Income		2,258			2,200			6,486			6,268
Preferred Stock Dividend		378			594			1,189			1,854
Net Income Available to
Common Shareholders		1,880			1,606			5,297			4,464
	QUARTER ENDED						YEAR-TO-DATE
PER COMMON SHARE SUMMARY	9/30/2016			9/30/2015			9/30/2016			9/30/2015
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		8,506,268			8,466,285			8,495,752			8,449,057
Earnings Per Basic Share (b)	$	0.22		$	0.19		$	0.63		$	0.52
Earnings Per Diluted Share (b)	$	0.22		$	0.19		$	0.62		$	0.52
Common Book Value Per Share	$	10.23		$	9.23		$	10.23		$	9.23
Tangible Common Book Value Per Share	$	10.22		$	9.22		$	10.22		$	9.22
	QUARTER ENDED						YEAR-TO-DATE
OPERATING RATIOS (1)	9/30/2016			9/30/2015			9/30/2016			9/30/2015
Net Interest Margin (a)		3.56	%		3.58	%		3.52	%		3.48	%
Return on Average Assets (b)		0.65	%		0.57	%		0.61	%		0.51	%
Return on Average Total Equity (b)		7.35	%		6.28	%		7.03	%		5.77	%
Efficiency (c)		72.22	%		70.85	%		71.22	%		71.61	%
(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	9/30/2016			9/30/2015
Total Assets	$	1,152,817		$	1,127,320
Loans, Net of Reserves		766,532			755,447
Allowance for Loan Losses		9,203			8,402
Intangible Assets		89			125
Deposits		978,590			958,034
Common Shareholders' Equity		86,375			77,907
Common Equity to Total Assets		7.49	%		6.91	%
Total Equity		100,735			101,074
Total Equity to Total Assets		8.74	%		8.97	%

	QUARTER ENDED						YEAR-TO-DATE
AVERAGE BALANCES	9/30/2016			9/30/2015			9/30/2016			9/30/2015
Total Assets	$	1,151,458		$	1,135,920		$	1,157,816		$	1,145,711
Loans, Net of Reserves		756,776			753,340			748,960			745,609
Deposits		977,544			965,300			988,483			974,693
Common Shareholders' Equity		85,603			76,043			82,838			74,478
Total Equity		102,351			102,328			100,431			101,911
	QUARTER ENDED						YEAR-TO-DATE
ASSET QUALITY	9/30/2016			9/30/2015			9/30/2016			9/30/2015
Nonperforming Loans	$	13,987		$	13,567		$	13,987		$	13,567
Nonperforming Assets		23,799			24,565			23,799			24,565
Substandard Assets		41,485			43,021			41,485			43,021
Net Loan Chg-offs (Recoveries)		541			328			463			1,141
Reserve for Loan Loss to Total Loans		1.19	%		1.10	%		1.19	%		1.10	%
Reserve for Loan Loss to Non- performing Loans		65.80	%		61.93	%		65.80	%		61.93	%
Reserve for Loan Loss to Non-performing Assets		38.67	%		34.20	%		38.67	%		34.20	%
Net Loan Chg-offs (Recoveries)
to Avg. Total Loans		0.07	%		0.04	%		0.06	%		0.15	%
Nonperforming Loans to Total Loans		1.80	%		1.78	%		1.80	%		1.78	%
Nonperforming Assets to Total Assets		2.06	%		2.18	%		2.06	%		2.18	%
Nonperforming Assets to Total Loans
And Other Real Estate		3.03	%		3.17	%		3.03	%		3.17	%
Substandard Assets to Tier One Capital
and Allowance for Loan Losses		31.34	%		31.73	%		31.34	%		31.73	%

Quarterly Comparative Data (in thousands, except per share data)
	3Q2016			2Q2016			1Q2016			4Q2015			3Q2015
Assets	$	1,152,817		$	1,147,027		$	1,168,389		$	1,174,149		$	1,127,320
Loans		766,532			754,437			744,356			749,675			755,447
Deposits		978,590			976,567			1,000,043			1,011,554			958,034
Common Shareholders’ Equity		86,375			85,444			82,522			77,436			77,907
Total Equity		100,735			103,465			100,543			95,457			101,074
Net Income		2,258			2,167			2,061			2,105			2,200
Net Income Available to
Common Shareholders		1,880			1,761			1,656			1,584			1,606
Net Income Per Share		0.22			0.21			0.20			0.19			0.19
Key Performance Ratios	3Q2016			2Q2016			1Q2016			4Q2015			3Q2015
Return on Average Assets (1)		0.65	%		0.61	%		0.57	%		0.55	%		0.57	%
Return on Average Total Equity (1)		7.35	%		6.99	%		6.75	%		6.26	%		6.28	%
Common Equity to Total Assets		7.49	%		7.45	%		7.06	%		6.60	%		6.91	%
Total Equity to Total Assets		8.74	%		9.02	%		8.61	%		8.13	%		8.97	%
Net Interest Margin		3.56	%		3.53	%		3.47	%		3.63	%		3.58	%
(1) Computed using net income available to shareholders

Contact: Terry L. Hester
Chief Financial Officer
(229) 426-6000 (Ext 6002)