FITZGERALD, Ga., July 18, 2017 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $2,433,000, or $0.28 per diluted share for the second quarter of 2017 compared to $1,761,000, or $0.21 per diluted share for the comparable 2016 period, while net income available to shareholders for the six month period ended June 30, 2017 was $4,339,000, or $0.50 per diluted share compared to $3,417,000, or $0.40 per share for the comparable 2016 period. This increase of 26.98 percent in net income for the comparable six month period was primarily driven by an increase in net interest income and noninterest income and a reduction in preferred stock dividends and loan loss provision. “We are extremely pleased to report the progress of Colony. In addition to the earnings reported, other quarterly highlights included total loan growth of $15.2 million and a reduction in nonperforming assets of $4.45 million,” said Ed Loomis, President and Chief Executive Officer. “After several years of nominal loan growth, we have realized a modest pace of loan growth for the first half of 2017. We are cautiously optimistic that the economic recovery will offer more opportunities to expand our loan portfolio and further enhance shareholder value.”
Capital
Colony continues to maintain a strong regulatory capital position to be categorized as “well-capitalized” by regulatory benchmarks. At June 30, 2017, the Company’s tier one leverage ratio, tier one ratio, total risk-based capital ratio and common equity tier one capital ratio were 9.72 percent, 14.33 percent,15.32 percent and 11.44 percent, respectively, compared to 9.47 percent, 14.28 percent, 15.39 percent and 11.34 percent, respectively, at March 31, 2017. 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 2017, the Company reported net interest income of $9.82 million and a net interest margin of 3.49 percent compared to $9.53 million and 3.53 percent, respectively, for second quarter 2016, while net interest income for first half 2017 was $19.28 million and a net interest margin of 3.42 percent compared to $18.98 million and 3.50 percent, respectively, for first half 2016. First quarter 2017 net interest margin was 3.35 percent, thus a significant increase in net interest margin this quarter. This was attributable to increased loan balances, decreased lower yielding overnight funds and bond investments and increased earning asset yields due to recent Federal Reserve rate hikes. As we shift more dollars out of lower yielding investments into higher yielding loans, we should continue to see net interest margin improvement.
Asset Quality
Asset quality reflects significant improvement as we “clean up” the balance sheet. Substandard assets that include non-performing assets totaled $30.68 million at June 30, 2017 compared to $33.23 million and $42.56 million, respectively, at December 31, 2016 and June 30, 2016. Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 23.77 percent, 25.67 percent and 31.12 percent, respectively, at June 30, 2017, December 31, 2016 and June 30, 2016. Non-performing assets declined from the previous quarter end to $12.70 million or 1.63 percent of total loans and other real estate owned as of June 30, 2017. This compares to $18.79 million or 2.47 percent and $23.33 million or 3.01 percent, respectively, as of December 31, 2016 and June 30, 2016.
Other real estate (“OREO”) totaled $4.53 million at June 30, 2017 compared to $6.44 million and $10.18 million, respectively, at December 31, 2016 and June 30, 2016. Though these levels remain at an elevated level, we continue to work diligently to dispose these properties at fair value. There are several contracts that we anticipate closing in the near future to further reduce our OREO holdings.
In the second quarter of 2017 net charge-offs were $821 thousand, or 0.11 percent of average loans as compared to net charge-offs of $513 thousand, or 0.07 percent of average loans in second quarter 2016, while first half 2017 net charge-offs (recoveries) were $1,215 thousand, or 0.16 percent of average loans compared to ($78) thousand, or (0.01) percent of average loans for the comparable 2016 period. The loan loss reserve was $8.04 million or 1.04 percent of total loans on June 30, 2017 compared to $8.92 million or 1.18 percent and $9.39 million or 1.23 percent, respectively, at December 31, 2016 and June 30, 2016. Loan loss reserve methodology resulted in no loan loss provision for three months ended June 30, 2017 compared to $354 thousand for the comparable 2016 period, while first half 2017 provision for loan losses was $335 thousand compared to $708 thousand for the comparable 2016 period.
Noninterest Income
Total noninterest income increased in the comparable periods as noninterest income for six months ended June 30, 2017 was $4.79 million compared to $4.52 million in the comparable 2016 period, or an increase of 5.97 percent. Secondary mortgage fee income increased $135 thousand or 53.36 percent, service charges on deposits increased $89 thousand or 4.33 percent and debit card interchange fees increased $102 thousand or 8.40 percent to primarily account for the increase.
Noninterest Expense
Total noninterest expense increased in the comparable periods as noninterest expense for six months ended June 30, 2017 was $17.03 million compared to $16.59 million for the comparable 2016 period, or an increase of 2.65 percent. Salaries and employee benefit expenses increased 6.22 percent, occupancy expense was relatively flat and other noninterest expense decreased 2.45 percent for the comparable periods. The efficiency ratio improved slightly at 70.52 percent for six months ended June 30, 2017 compared to 70.97 percent for the comparable 2016 period. The company continues to explore opportunities to 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, Statesboro, Sylvester, Thomaston, Tifton, Valdosta and Warner Robins, Georgia.
Colony Bankcorp, Inc. Common Stock is quoted on the Nasdaq Global Market under the symbol “CBAN”.
