<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
(FEE REQUIRED)
For the Fiscal Year Ended December 31, 1995
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[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
(NO FEE REQUIRED)
For the Transition Period from to
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Commission File Number 0-12436
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COLONY BANKCORP, INC.
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(Name of Small Business Issuer in its Charter)
GEORGIA 58-1492391
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State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
302 SOUTH MAIN STREET, FITZGERALD, GEORGIA 31750
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(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number (912) 423-5446
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Securities Registered Under Section 12(b) of the Exchange Act:
Title of Each Class
Name of Each Exchange on Which Registered
NONE
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Securities Registered Under Section 12(g) of the Exchange Act:
COMMON STOCK, $10.00 PAR VALUE
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(Title of Class)
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(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. X Yes No
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Check if there is no disclosure of delinquent filers in response to Items 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $26,141,000 for year
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ended December 31, 1995.
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There is no established market for the common stock of the registrant;
therefore, the aggregate market value of the voting stock held by nonaffiliates
of the registrant is not known.
NOTE: If determining whether a person is an affiliate with involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by nonaffiliates on the basis of reasonable
assumptions, if the assumptions are stated.
<PAGE>
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
1,291,110 shares of $10.00 par value common stock as of March 3, 1996.
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DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant
to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The
listed documents should be clearly described for identification purposes (e.g.,
annual report to security holders for fiscal year ended December 24, 1990).
See Attached
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Transitional Small Business Disclosure Format (Check one): Yes X No
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<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
LOCATION IN FORM 10-KSB INCORPORATED DOCUMENT
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<S> <C>
PART I
Item 3 - Legal Proceedings Page 5 of the Company's Definitive Proxy
Statement dated April 3, 1996, in connection
with its Annual Meeting to be held on April 23,
1996.
PART III
Item 9 - Directors, Executive Officers, Pages 3 and 4 of the Company's Definitive
Promoters and Control Persons; Compliance Proxy Statement dated April 3, 1996, in
with Section 16(a) of the Exchange Act connection with its Annual Meeting to be held
on April 23, 1996.
Item 10 - Executive Compensation Pages 6 and 7 of the Company's Definitive
Proxy Statement dated April 3, 1996, in
connection with its Annual Meeting to be held
on April 23, 1996.
Item 11 - Security Ownership of Certain Pages 1 and 2 of the Company's Definitive
Beneficial Owners and Management Proxy Statement dated April 3, 1996, in
connection with its Annual Meeting to be held
on April 23, 1996.
Item 12 - Certain Relationships and Related Page 4 of the Company's Definitive Proxy
Transactions Statement dated April 3, 1996, in connection
with its Annual Meeting to be held on April 23,
1996.
</TABLE>
<PAGE>
PART I
Item 1
BUSINESS OF THE COMPANY AND SUBSIDIARY BANKS
COLONY BANKCORP, INC.
Colony Bankcorp, Inc. (the "Company" or "Colony") is a Georgia business
corporation which was incorporated on November 8, 1982. The Company was
organized for the purpose of operating as a bank-holding company under the
Federal Bank-Holding Company Act of 1956, as amended, and the bank-holding
company laws of Georgia (Georgia Laws 1976, p. 168, et. seq.). On July 22,
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1983, the Company, after obtaining the requisite regulatory approvals, acquired
100 percent of the issued and outstanding common stock of The Bank of
Fitzgerald, Fitzgerald, Georgia, through the merger of the Bank with a
subsidiary of the Company which was created for the purpose of organizing the
Bank into a one-bank holding company. Since that time, The Bank of Fitzgerald
has operated as a wholly-owned subsidiary of the Company.
On April 30, 1984, Colony, with the prior approval of the Federal Reserve Bank
of Atlanta and the Georgia Department of Banking and Finance, acquired 100
percent of the issued and outstanding common stock of Community Bank of Wilcox
(formerly Pitts Banking Company), Pitts, Wilcox County, Georgia. As part of
that transaction, Colony issued an additional 17,872 shares of its $10.00 par
value common stock, all of which was exchanged with the holders of shares of
common stock of Pitts Banking Company for 100 percent of the 250 issued and
outstanding shares of common stock of Pitts Banking Company. Since the date of
acquisition, the Bank has operated as a wholly-owned subsidiary of the Company.
On November 1, 1984, after obtaining the requisite regulatory approvals, Colony
acquired 100 percent of the issued and outstanding common stock of Ashburn Bank,
Ashburn, Turner County, Georgia, for a combination of cash and interest-bearing
promissory notes. Since the date of acquisition, Ashburn Bank has operated as a
wholly-owned subsidiary of the Company.
On September 30, 1985, after obtaining the requisite regulatory approvals, the
Company acquired 100 percent of the issued and outstanding common stock of The
Bank of Dodge County, Chester, Dodge County, Georgia. The stock was acquired in
exchange for the issuance of 3,500 shares of common stock of Colony. Since the
date of its acquisition, The Bank of Dodge County has operated as a wholly-owned
subsidiary of the Company.
Effective July 31, 1991, the Company acquired all of the outstanding common
stock of The Bank of Worth (formerly Worth Federal Savings and Loan Association)
in exchange for cash and 7,661 of the Company's common stock for an aggregate
purchase price of approximately $718,000. The Bank of Worth has operated as a
wholly-owned subsidiary of the Company.
The Company conducts all of its operations through its bank subsidiaries. A
brief description of each Bank's history and business operations is discussed
below.
THE BANK OF FITZGERALD
HISTORY AND BUSINESS OF THE BANK
The Bank of Fitzgerald is a state banking institution chartered under the laws
of Georgia on November 10, 1975. Since opening on April 15, 1976, the Bank has
continued a general banking business and presently serves its customers from two
locations, the main office in Fitzgerald, Georgia at 302 South Main Street and a
full-service branch located on the South Dixie Highway.
1
<PAGE>
PART I (CONTINUED)
Item 1
The Bank operates a full-service banking business and engages in a broad range
of commercial banking activities, including accepting customary types of demand
and time deposits; making individual, consumer, commercial and installment
loans; money transfers; safe deposit services; and making investment in United
States Government and municipal securities. The Bank does not offer trust
services other than acting as custodian of individual retirement accounts.
The data processing work of the Bank is processed with an inhouse Burroughs
computer at the Bank. The Bank of Fitzgerald also processes accounting and
financial data for all the other subsidiary banks.
The Bank of Fitzgerald acts as an agent for Visa Card and MasterCard through The
Bankers Bank which allows merchants to accept Visa Card and MasterCard and
deposit the charge tickets in their accounts with the Bank.
The Bank also offers its customers a variety of checking and savings accounts.
The installment loan department makes both direct consumer loans and also
purchases retail installment contracts from local automobile dealers and other
sellers of consumer goods.
The Bank serves the residents of Fitzgerald and surrounding areas of Ben Hill
County which has a population of approximately 16,000 people. Manufacturing
facilities located in Ben Hill County employ many people and are the most
significant part of the local economy. Ben Hill County also has a large
agricultural industry producing timber and row crops. Major row crops are
peanuts, tobacco, soybeans and corn.
A history of the Bank's financial position for fiscal years ended 1995, 1994 and
1993 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
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<S> <C> <C> <C>
Total Assets $100,087,536 $89,813,598 $86,098,082
Total Deposits 91,843,089 83,288,306 79,772,981
Total Stockholders' Equity 7,570,010 6,002,033 5,810,662
Net Income (Loss) (106,370) 544,178 (357,174)
Number of Issued and Outstanding
Shares 90,000 90,000 90,000
Book Value Per Share $84.11 $66.69 $64.56
Net Income (Loss) Per Share (1.18) 6.05 (3.97)
</TABLE>
The Bank's main offices are housed in a building located in Fitzgerald, Georgia.
The main offices, which are owned by the Bank, consist of approximately 13,000
square fee, three drive-in windows and an adjacent parking lot. Banking
operations also are conducted from the south side branch which is located at
South Dixie Highway, Fitzgerald, Georgia. This branch is owned by the Bank and
has been in continuous operation since it opened in December 1977. The branch
is a single story building with approximately 850 square feet and is operated
with three drive-in windows.
2
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PART I (CONTINUED)
Item 1
COMPETITION
The banking business in Ben Hill County is highly competitive. The Bank
competes primarily with three other commercial banks operating in Ben Hill
County. Additionally, the Bank competes with one credit union located in the
area and, to a lesser extent, insurance companies and governmental agencies.
The banking industry is also experiencing increasing competition for deposits
from less traditional sources such as money market funds. The Bank also offers
"NOW" accounts, individual retirement accounts, simplified pension plans, KEOGH
plans and custodial accounts for minors.
CORRESPONDENTS
As of December 31, 1995, the Bank had correspondent relationships with four
other banks. The Bank's principal correspondent is The Bankers Bank located in
Atlanta, Georgia. These correspondent banks provide certain services to the
Bank such as investing its excess funds, processing checks and other items,
buying and selling federal funds, handling money fund transfers and exchanges,
shipping coins and currency, providing security and safekeeping of funds and
other valuable items, handling loan participations and furnishing management
investment advice on the Bank's securities portfolio.
ASHBURN BANK
HISTORY AND BUSINESS OF THE BANK
Ashburn Bank was chartered as a state commercial bank in 1900 and currently
operates under the Financial Institutions Code of Georgia. The Bank's deposits
are insured up to $100,000 per account by the Federal Deposit Insurance
Corporation. The Bank conducts business at the offices located at 515 East
Washington, 416 East Washington and 250 East Washington Streets in Ashburn,
Turner County, Georgia. The Bank's business consists of (1) the acceptance of
demand, savings and time deposits; (2) the making of loans to consumers,
business and other institutions; (3) investment of excess funds and sale of
federal funds, U.S. Treasury obligations and state, county and municipal bonds;
and (4) certain other miscellaneous financial services usually handled for
customers by commercial banks. The Bank does little mortgage lending and it
does not offer trust services. It acts as an agent for Visa Card and MasterCard
through The Bankers Bank.
A history of the Bank's financial position for fiscal years ended 1995, 1994 and
1993 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
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<S> <C> <C> <C>
Total Assets $83,122,966 $75,754,843 $74,282,799
Total Deposits 74,665,649 68,556,245 67,422,965
Total Stockholders' Equity 7,794,194 6,751,901 6,522,822
Net Income 1,404,897 1,078,555 756,850
Number of Issued and Outstanding
Shares 50,000 50,000 50,000
Book Value Per Share $155.88 $135.04 $130.46
Net Income Per Share 28.10 21.57 15.14
</TABLE>
3
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PART I (CONTINUED)
Item 1
BANKING FACILITIES
The Bank's main office is located at 515 East Washington Street in Ashburn and
consists of a building of approximately 13,000 square feet of office and banking
space with an adjacent parking lot. One branch facility is located across the
street from the main office and consists of a single story building with
approximately 850 square feet and is operated with three drive-in windows. The
other branch facility is located at 250 East Washington Street and consists of a
single story building of approximately 3,000 square feet. The Bank owns all of
the premises which it occupies.
COMPETITION
The banking business is highly competitive. The Bank competes in Turner County
primarily with Community National Bank which operates out of one facility in
Ashburn, Georgia. Ashburn Bank is the larger of the two banks. Community
National Bank, a national bank chartered by the Office of the Comptroller of the
Currency, opened for business during 1991. The Bank also competes with other
financial institutions, including credit unions and finance companies and, to a
lesser extent, with insurance companies and certain governmental agencies. The
banking industry is also experiencing increased competition for deposits from
less traditional sources such as money market mutual funds.
CORRESPONDENTS
Ashburn Bank has correspondent relationships with the following banks: The
Bankers Bank in Atlanta, Georgia; SouthTrust Bank of Georgia in Atlanta,
Georgia; First National Bank of Gainesville; and The Bank of Fitzgerald in
Fitzgerald, Georgia. The correspondent relationships facilitate the
transactions of business by means of loans, letters of credit, acceptances,
collections, exchange services and data processing. As compensation for these
services, the Bank maintains balances with its correspondents in noninterest-
bearing accounts.
COMMUNITY BANK OF WILCOX
HISTORY AND BUSINESS OF THE BANK
The Bank was chartered on June 2, 1906 under the name "Pitts Banking Company."
The name of the Bank subsequently was changed to Community Bank of Wilcox on
June 1, 1991 and currently operates under the Financial Institutions Code of
Georgia. The Bank's deposits are insured to $100,000 per account by the Federal
Deposit Insurance Corporation. The Bank conducts business at locations in Pitts
and Rochelle in Wilcox County, Georgia. The Bank's business consists of: (1)
the acceptance of demand, savings and time deposits; (2) the making of loans to
consumers, business and other institutions; (3) investment of excess funds and
sale of federal funds, U.S. Treasury obligations and state, county and municipal
bonds; and (4) certain other miscellaneous financial services usually handled
for customers by commercial banks. The Bank does little mortgage lending and it
does not offer trust services.
4
<PAGE>
PART I (CONTINUED)
Item 1
A history of the Bank's financial position for fiscal years ended 1995, 1994 and
1993 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Total Assets $23,824,695 $22,354,033 $20,590,977
Total Deposits 21,749,447 19,765,264 18,698,578
Total Stockholders' Equity 1,959,859 1,728,373 1,773,913
Net Income 402,013 392,042 237,270
Number of Issued and Outstanding
Shares 250 250 250
Book Value Per Share $7,839.44 $6,913.49 $7,095.65
Net Income Per Share 1,608.05 1,568.17 949.08
</TABLE>
BANKING FACILITIES
The Bank operates out of two locations at 105 South Eighth Street, Pitts,
Georgia and at Highway 280, Rochelle, Georgia, both of which are in Wilcox
County. The Pitts office consists of a building of approximately 2,200 square
feet of usable office and banking space which it owns. The facility contains
one drive-in window and three teller windows. The Rochelle office, which opened
in August 1989, consists of a building of approximately 5,000 square feet of
usable office and banking space, which is owned by the Company.
COMPETITION
The banking business is highly competitive. The Bank competes in Wilcox County
primarily with four commercial banks and one savings and loan institution. In
addition, the Bank competes with other financial institutions, including credit
unions and finance companies and, to a lesser extent, insurance companies and
certain governmental agencies. The banking industry is also experiencing
increased competition for deposits from less traditional sources such as money
market mutual funds.
CORRESPONDENTS
The Bank has correspondent relationships with the following banks: The Bankers
Bank in Atlanta, Georgia; SouthTrust Bank in Atlanta, Georgia; and The Bank of
Fitzgerald in Fitzgerald, Georgia. The correspondent relationships facilitate
the transactions of business by means of loans, letters of credit, acceptances,
collections, exchange services and data processing. As compensation for these
services, the Bank maintains balances with its correspondents in noninterest-
bearing accounts.
5
<PAGE>
PART I (CONTINUED)
Item 1
THE BANK OF DODGE COUNTY
HISTORY AND BUSINESS OF THE BANK
The Bank was chartered on June 14, 1966, under the name "Bank of Chester." The
name of the Bank subsequently was changed to The Bank of Dodge County on April
15, 1983 and currently operates under the Financial Institutions Code of
Georgia. The Bank's deposits are insured up to $100,000 per account by the
Federal Deposit Insurance Corporation. The Bank's business consists of: (1)
the acceptance of demand, savings and time deposits; (2) the making of loans to
consumers, business and other institutions; (3) investment of excess funds in
the sale of federal funds, U.S. Treasury obligations and state, county and
municipal bonds; and (4) certain other miscellaneous financial services usually
handled for customers by commercial banks. The Bank does little mortgage
lending and it does not offer trust services.
A history of the Bank's financial position for fiscal years ended 1995, 1994 and
1993 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Total Assets $34,452,835 $28,317,199 $26,126,151
Total Deposits 31,608,634 25,989,631 23,843,249
Total Stockholders' Equity 2,644,692 2,240,737 2,194,998
Net Income 241,082 219,104 135,377
Number of Issued and Outstanding
Shares 1,750 1,750 1,750
Book Value Per Share $1,511.25 $1,280.42 $1,254.28
Net Income Per Share 137.76 125.20 77.36
</TABLE>
BANKING FACILITIES
The Bank's main office is located at 210 Oak Street in Eastman, Dodge County,
Georgia and consists of a building of approximately 11,000 square feet of office
and banking space with an adjacent parking lot and is operated with three drive-
in windows. The branch facility is located in Chester, Dodge County, Georgia
and consists of a building with approximately 2,700 square feet of office and
banking space and an adjacent parking lot. The Bank owns all of the premises
which it occupies.
COMPETITION
The banking business is highly competitive. The Bank competes in the Dodge
County area with two other banks. In addition, the Bank competes with other
financial institutions, including credit unions and finance companies and, to a
lesser extent, insurance companies and certain governmental agencies. The
banking industry is also experiencing increased competition for deposits from
less traditional sources such as money market mutual funds.
6
<PAGE>
PART I (CONTINUED)
Item 1
THE BANK OF WORTH
The Bank of Worth operated as a savings and loan stock association until it was
acquired by the Company on July 31, 1991 at which time the association changed
its name to The Bank of Worth and became a state-chartered commercial bank. The
Bank conducts business at its offices located at 402 West Franklin Street,
Sylvester, Worth County, Georgia. The Bank's business consists of: (1) the
acceptance of demand, savings and time deposits; (2) the making of loans to
consumers, businesses and other institutions; (3) investment of excess funds and
sale of federal funds, U.S. Treasury obligations and state, county and municipal
bonds; and (4) certain other miscellaneous financial services usually handled
for customers by commercial banks. The Bank's deposits are insured up to
$100,000 per account by the Federal Deposit Insurance Corporation. The Bank's
loan portfolio is heavily concentrated in mortgage loans due to the fact that it
was previously a savings and loan. The Bank does not offer trust services. It
acts as an agent for Visa Card and MasterCard through The Bankers Bank.
A history of the Bank's financial position for fiscal years ended 1995, 1994 and
1993 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Total Assets $39,171,254 $35,726,814 $29,671,424
Total Deposits 35,865,671 33,061,690 27,197,215
Total Stockholders' Equity 3,028,498 2,491,770 2,333,718
Net Income 480,382 329,614 201,952
Number of Issued and Outstanding
Shares 95,790 95,790 95,790
Book Value Per Share $31.62 $26.01 $24.36
Net Income Per Share 5.02 3.44 2.11
</TABLE>
BANKING FACILITIES
The Bank's offices are housed in a building located in Sylvester, Georgia. The
building, which is owned by the Bank, consists of approximately 13,000 square
feet, a drive-in window and an adjacent parking lot.
COMPETITION
The banking business in Worth County is highly competitive. The Bank competes
primarily with two other commercial banks operating in Worth County.
Additionally, the Bank competes with credit unions of employers located in the
area and, to a lesser extent, insurance companies and governmental agencies.
The banking industry is also experiencing increasing competition for deposits
from less traditional sources such as money market funds.
7
<PAGE>
PART I (CONTINUED)
Item 1
CORRESPONDENTS
As of December 31, 1995, the Bank had correspondent relationships with four
other banks. The Bank's principal correspondent is The Bankers Bank located in
Atlanta, Georgia. These correspondent banks provide certain services to the
Bank such as investing its excess funds, processing checks and other items,
buying and selling federal funds, handling money fund transfers and exchanges,
shipping coins and currency, providing security and safekeeping of funds and
other valuable items, handling loan participations and furnishing management
investment advice on the Bank's securities portfolio.
EMPLOYEES
As of December 31, 1995, Colony Bankcorp, Inc. and its subsidiaries employed 124
full-time employees and 10 part-time employees. Colony considers its
relationship with its employees to be excellent.
The subsidiary banks have noncontributory profit-sharing plans covering all
employees subject to certain minimum age and service requirements. All Banks
made contributions for all eligible employees in 1995. In addition, Colony
Bankcorp, Inc. and subsidiaries maintain a comprehensive employee benefit
program providing, among other benefits, hospitalization and major medical
insurance and life insurance. Management considers these benefits to be
competitive with those offered by other financial institutions in south Georgia.
Colony's employees are not represented by any collective bargaining group.
SUPERVISION AND REGULATION OF COLONY BANKCORP, INC.
Colony is a bank holding company within the meaning of the Federal Bank Holding
Company Act of 1956, as amended (the "Bank Holding Company Act"). As a bank
holding company, Colony is required to file with the Board of Governors of the
Federal Reserve System (the "Board") an annual report and such additional
information as the Board may require pursuant to the Bank Holding Company Act.
The Board may also make examinations of Colony and each of its subsidiaries. In
addition, a bank holding company is required to obtain approval prior to
acquiring, directly or indirectly, ownership or control of a bank. A bank
holding company and its subsidiaries are also prohibited from acquiring any
voting shares of, or interest in, any banks located outside of the state in
which the operations of the bank holding company's subsidiaries are located,
unless the acquisition is specifically authorized by the statutes of the state
in which the target is located. Several southeastern states, including Georgia,
have enacted reciprocal legislation that authorizes interstate acquisitions of
banking organizations by bank holding companies within the southeastern states.
As a result of this legislation, the Company may become a candidate for
acquisition by banking organizations located in those state that have enacted
reciprocal legislation. In addition, the entry of large bank holding companies
from those states into the market areas serviced by the Company would probably
result in increased competition.
8
<PAGE>
PART I (CONTINUED)
Item 1
The Bank Holding Company Act also prohibits a bank holding company, with certain
exceptions, from acquiring more than 5 percent of the voting shares of any
company that is not a bank and from engaging in any business other than banking
or managing or controlling banks and other subsidiaries authorized by the Bank
Holding Company Act or furnishing services to, or performing services for, its
subsidiaries without the prior approval of the Board. The Board is authorized
to approve, among other things, the ownership of shares by a bank holding
company in any company the activities of which it has determined to be so
closely related to banking or to managing or controlling banks as to be a proper
incident thereto. Notice to and review by the Board of such activities would be
necessary before the Company could engage in such activities. The Board is
empowered to differentiate between activities that are initiated de novo by a
bank holding company or a subsidiary and activities commenced by acquisition of
a going concern.
The Company is also a bank holding company within the meaning of the Georgia
Bank Holding Company Act, which provides that, without the approval of the
Commissioner of the Georgia Department of Banking and Finance (the
"Commissioner"), it is unlawful (i) for any bank holding company to acquire
direct or indirect ownership or control of more than 5 percent of the voting
shares of any bank; (ii) for any bank holding company or subsidiary thereof,
other than a bank, to acquire all or substantially all of the assets of a bank;
or (iii) for any bank holding company to merge or consolidate with any other
bank holding company. It is unlawful for any bank holding company to acquire
direct or indirect ownership or control of more than 5 percent of the voting
shares of any bank unless such bank has been in existence and continuously
operating as a bank for a period of five years or more prior to the date of
application to the Commissioner for approval of such acquisition.
While the Company is not presently subject to any regulatory restrictions on
dividends, the Company's ability to pay dividends will depend to a large extent
on the amount of dividends paid by its subsidiaries. The Banks are subject to
regulatory restrictions on the payment of dividends. See Supervision and
Regulation of the Banks below.
SUPERVISION AND REGULATION OF THE BANKS
Federal banking regulations applicable to all depository financial institutions,
among other things, (i) provide federal bank regulatory agencies with powers to
prevent unsafe and unsound banking practices; (ii) restrict preferential loans
by banks to "insiders" of banks; (iii) require banks to keep information on
loans to major stockholders and executive officers; and (iv) bar certain
director and officer interlocks between financial institutions.
Colony is an affiliate of the banks under the Federal Reserve Act, which imposes
restrictions on loans to the Company by the Banks, or investments by the Banks
in securities of the Company and on the use of such securities as collateral
security for loans by the Banks to any borrower. Colony is also subject to
certain restrictions with respect to engaging in the business of issuing,
underwriting and distributing securities.
Bank holding companies may be compelled by bank regulatory authorities to invest
additional capital in the event their banks experience either significant loan
losses or rapid growth of loans or deposits. In addition, Colony may also be
required to provide additional capital to any additional banks it acquires as a
condition to obtaining the approvals and consents of regulatory authorities in
connection with such acquisitions.
9
<PAGE>
PART I (CONTINUED)
Item 1
The Banks are examined and regulated by the Department of Banking and Finance of
the Sate of Georgia. Pursuant to regulations adopted by that authority, the
Banks must each have the approval of the Commissioner to pay cash dividends,
unless at the time of such payment (i) the total classified assets at the most
recent examination of such Bank do not exceed 80 percent of the equity capital
as reflected by such examination; (ii) the aggregate amount of dividends
declared or anticipated to be declared in the calendar year does not exceed 50
percent of the net profits, after taxes but before dividends, for the previous
calendar year; and (iii) the ratio of equity capital to adjusted total assets is
not less than 6 percent.
The Banks are members of the Federal Deposit Insurance Corporation (the "FDIC"),
which currently insures the deposits of each member bank up to a maximum of
$100,000 per account. For this protection, each Bank pays a semiannual
statutory assessment and is subject to the rules and regulations of the FDIC.
The FDIC has the authority to prevent the continuance or development of unsound
and unsafe banking practices. The FDIC is also authorized to approve
conversions, mergers, consolidations and assumption of deposit liability
transactions between insured banks and uninsured banks or institutions, and to
prevent capital or surplus diminution in such transactions where the resulting,
continuing or assumed bank is an insured nonmember state bank.
MONETARY POLICY
Banking is a business that depends on interest rate differentials. In general,
the difference between the interest rates paid by the Banks on their deposits
and other borrowings and the interest rate received on loans extended to their
customers and on securities held in their portfolios comprises the major portion
of the Banks' earnings.
The earnings and growth of the Banks and of Colony are affected not only by
general economic conditions, both domestic and foreign, but also by the monetary
and fiscal policies of the United States and its agencies, particularly the
Board. The Board can and does implement national monetary policy, such as
seeking to curb inflation and combat recession, by its open market operations in
the United States government securities, limitations upon savings and time
deposit interest rates, adjustments in the amount of industry reserves that
banks and other financial institutions are required to maintain and adjustments
to the discount rates applicable to borrowings by banks from the Federal Reserve
System. In view of changing conditions in the national economy and in the money
markets, as well as the effect of actions by monetary and fiscal authorities,
including the Federal Reserve, no prediction can be made as to possible future
changes in interest rates, deposit levels, loan demand or the business and
earnings of the Banks.
RECENT REGULATORY DEVELOPMENTS
In late 1985, the Board issued a policy statement on the payment of cash
dividends by bank holding companies. In the statement, the Board expressed its
view that a bank holding company experiencing earnings weaknesses should not pay
cash dividends exceeding its net income or that can be funded only in ways that
weaken the holding company's financial health, such as by borrowing.
10
<PAGE>
PART I (CONTINUED)
Item 1
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), enacted into law on August 9, 1989, increased significantly the
annual assessment rate for insurance of domestic deposits of commercial banks
such as the subsidiaries of Colony. In 1995, the Banks paid approximately
$339,000 in deposit insurance premiums.
On September 15, 1992, the FDIC approved final regulations adopting the risk-
related deposit insurance system that was proposed in May 1992. Under the final
risk-related insurance regulations, each insured depository institution will be
assigned to one of three risk calculations: "well-capitalized," "adequately
capitalized" or "less than adequately capitalized," as defined in regulations to
be promulgated by the Federal bank regulatory agencies pursuant to FDICIA.
The Board and the FDIC approved new minimum capital requirements for banks and
bank holding companies based in part on the degrees of risk to which the
institution's assets are subject. Under the new rules, Colony and its
subsidiary banks will be required to maintain a specified minimum ratio of
"qualifying" capital to risk-weighted assets. The ratio is calculated by
dividing adjusted qualifying capital by a weighted risk asset base. At least 50
percent of the institution's qualifying capital must be "Core" or "Tier 1"
capital. The balance may be "Supplementary" or "Tier 2" capital. For purposes
of the rules, a bank holding company's Tier 1 capital is essentially equal to
common stockholders' equity, including retained earnings, plus a certain amount
of perpetual preferred stock, less intangible assets; Tier 2 capital includes
the excess of any perpetual preferred stock not included in Tier 1 capital,
mandatory convertible securities, subordinated debt and general reserves for
loan and lease losses limited to 1.25 percent of total risk-weighted assets.
The weighted risk asset base is equal to the sum of the aggregate dollar value
of assets and certain off balance sheet items (such as currency or interest rate
swaps) in each of five separate risk categories, multiplied by a weight assigned
to each specific asset category. After the items in each category have been
totaled and multiplied by the category's risk factor, the total of the adjusted
qualifying capital base is divided by the weighted risk assets to derive a
ratio. A minimum ratio of 4.0 percent of Tier 1 or Core Capital is required and
a minimum ratio of 8 percent of total risk-based capital is required. The
capital regulations also require the Bank to maintain a minimum leverage ratio
of 4 percent. Colony and its subsidiary banks met all regulatory capital
requirements as of December 31, 1995 as discussed in Management's Discussion and
Analysis of Financial Condition and Results of Operations.
Each Bank also met its individual regulatory capital requirements as of December
31, 1995. Under terms of a Memorandum of Understanding dated October 20, 1992
and revised October 24, 1995, The Bank of Fitzgerald is required to maintain a
Tier 1 capital/average total assets ratio of not less than 7.25 percent. Under
terms of a Memorandum of Understanding dated September 16, 1992 and revised
September 12, 1994, The Bank of Dodge County is required to maintain a Tier 1
capital ratio of at least 6 percent.
The United States Congress and the Georgia General Assembly have periodically
considered and adopted legislation that has resulted in, and could further
result in, and could further result in, deregulation of both banks and other
financial institutions. Such legislation could modify or eliminate geographic
restrictions on banks and bank holding companies and current prohibitions
against banks engaging in certain nonbanking activities. Such legislative
changes could place the Company in more direct competition with other financial
institutions, including mutual funds, securities brokerage firms, insurance
companies and investment banking firms. The effect of any such legislation on
the business of the Company cannot be accurately predicted. The Company cannot
predict what other legislation might be enacted or what other regulations might
be adopted, or if enacted or adopted, the effect thereof.
11
<PAGE>
PART I (CONTINUED)
Item 1
EXECUTIVE OFFICER
The following table sets forth certain information with respect to the executive
officer of the Registrant.
<TABLE>
<CAPTION>
NAME (AGE) POSITION WITH THE REGISTRANT OFFICER SINCE
- ------------------- -------------------------------------------------- -------------
<S> <C> <C>
James D. Minix (53) President and Chief Executive Officer and Director 1994
</TABLE>
The officer serves at the discretion of the board of directors.
Prior to 1994, Mr. Minix served as president of The Bank of Fitzgerald from
January 1993 through June 1994 and prior to that time, Mr. Minix served as
president of Ashburn Bank from February 1990 through December 1992.
Item 2
DESCRIPTION OF PROPERTY
The principal properties of the Registrant consist of the properties of the
Banks. For a description of the properties of the Banks, see "Item 1 - Business
of the Company and Subsidiary Banks" included elsewhere in this Annual Report.
Item 3
LEGAL PROCEEDINGS
Incorporated herein by reference to page 5 of the Company's Definitive Proxy
Statement for Annual Meeting of Stockholders to be Held April 23, 1996, which is
included as Exhibit 99(a) of this annual report on Form 10-KSB.
Item 4
SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
No matters were submitted to a vote of the Registrant's stockholders during the
fourth quarter of 1995.
PART II
Item 5
MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
(a) There currently is no public market for the common stock of the Registrant.
(b) As of March 3, 1996, there were approximately 808 holders of record of the
Registrant's common stock.
(c) The Registrant paid an annual dividend on its common stock of $.30 per share
for a total of $370,457 for fiscal 1995.
12
<PAGE>
PART II
Item 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Liquidity represents the ability to provide adequate sources of funds for
funding loan commitments and investment activities as well as the ability to
provide sufficient funds to cover deposit withdrawals, payment of debt and
financing of operations. These funds are obtained by converting assets to cash
(representing primarily proceeds from collections on loans and maturities of
investment securities) or by attracting and obtaining new deposits. During
1995, the Company was successful in obtaining deposits as evidenced by the fact
that average deposits increased by 4.91 percent to $236,899,000 in 1995 from
average deposits of $225,807,000 in 1994.
The Company's liquidity position remained acceptable in 1995. Average liquid
assets (cash and amounts due from banks, interest-bearing deposits in other
banks, funds sold and investment securities) represented 26.82 percent of
average deposits in 1995 as compared to 25.83 percent in 1994. Average loans
represented 79.09 percent of average deposits in 1995 as compared to 79.56
percent in 1994. Average interest-bearing deposits were 87.91 percent of
average earning assets in 1995 as compared to 88.74 percent in 1994.
The Company satisfies most of its capital requirements through retained
earnings. During 1995, retained earnings provided $1,770,000 of increase in
equity. Additionally, equity had an increase of $1,035,000 resulting from the
change during the year in unrealized losses on securities available for sale,
net of taxes and an increase of $1,500,000 resulting from proceeds realized from
a stock offering in 1995. Thus, total equity increased by a net amount of
$4,305,000 in 1995. In 1994, growth in equity was provided by retained earnings
of $1,903,000.
As of December 31, 1995, total capital of Colony amounted to approximately
$21,055,000. As of December 31, 1995, there were no outstanding commitments for
any major capital expenditures.
The Federal Reserve Board and the FDIC have issued risk-based capital guidelines
for U.S. banking organizations. The objective of these efforts was to provide a
more uniform capital framework that is sensitive to differences in risk assets
among banking organizations. The guidelines define a two-tier capital
framework. Tier 1 capital consists of common stock and qualifying preferred
stockholders' equity less goodwill. Tier 2 capital consists of certain
convertible, subordinated and other qualifying term debt and the allowance for
loan losses up to 1.25 percent of risk-weighted assets. The Company has no Tier
2 capital other than the allowance for loan losses.
Using the capital requirements in effect at the end of 1995, the Tier I ratio as
of December 31, 1995 was 9.96 percent and total Tier 1 and 2 risk-based capital
was 11.22 percent. Both of these measures compare favorably with the regulatory
minimums of 4 percent for Tier 1 and 8 percent for total risk-based capital.
The Company's leverage ratio was 7.50 percent as of December 31, 1995 which
exceeds the required leverage ratio standard of 4 percent.
In 1995, the Company paid annual dividends of $.30 per share. The dividend
payout ratio, defined as dividends per share divided by net income per share,
was 17.14 percent in 1995 as compared with 14.25 percent for 1994.
13
<PAGE>
PART II (CONTINUED)
Item 6
As of December 31, 1995, management was not aware of any recommendations by
regulatory authorities which, if they were to be implemented, would have a
material effect on the Company's liquidity, capital resources or operations.
However, it is possible that examinations by regulatory authorities in the
future could precipitate additional loss charge-offs which could materially
impact the Company's liquidity, capital resources and operations.
RESULTS OF OPERATIONS
The Company's results of operations are determined by its ability to effectively
manage interest income and expense, to minimize loan and investment losses, to
generate noninterest income and to control noninterest expense. Since interest
rates are determined by market forces and economic conditions beyond the control
of the Company, the ability to generate net interest income is dependent upon
the Banks' ability to obtain an adequate spread between the rate earned on
earning assets and the rate paid on interest-bearing liabilities. Thus, the key
performance measure for net interest income is the interest margin or net yield,
which is taxable-equivalent net interest income divided by average earning
assets.
INTEREST RATE SENSITIVITY
The following table represents the Company's interest sensitivity gap between
interest-earning assets and interest-bearing liabilities as of December 31,
1995.
<TABLE>
<CAPTION>
ASSETS AND LIABILITIES REPRICING WITHIN
--------------------------------------------------------------------------------
3 MONTHS 4 TO 6 7 TO 12 1 TO 5 OVER 5
($ in thousands) OR LESS MONTHS MONTHS 1 YEAR YEARS YEARS TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Interest-bearing deposits $ 99 $ 99 $ 99
Investment securities 1,498 $ 203 $ 6,045 7,746 $ 17,311 $ 20,966 46,023
Funds sold 24,325 0 0 24,325 0 0 24,325
Loans, net of unearned income 89,724 30,713 22,458 142,895 42,888 2,602 188,385
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing assets 115,646 30,916 28,503 175,065 60,199 23,568 258,832
- ------------------------------------------------------------------------------------------------------------------------------------
Interest-bearing liabilities
Interest-bearing Demand and Savings deposits(1) 60,296 0 0 60,296 0 0 60,296
Other time deposits 50,034 28,748 33,796 112,578 55,211 6 167,795
Short-term borrowings(2) 2,504 0 0 2,504 0 0 2,504
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 112,834 28,748 33,796 175,378 55,211 6 230,595
- ------------------------------------------------------------------------------------------------------------------------------------
Interest-sensitivity gap 2,812 2,168 (5,293) (313) 4,988 23,562 28,237
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative interest-sensitivity gap $ 2,812 $ 4,980 $ (313) $ (313) $ 4,675 $ 28,237 $ 28,237
====================================================================================================================================
</TABLE>
(1) Interest-bearing Demand and Savings Accounts for repricing purposes are
considered to reprice within 3 months or less.
(2) Short-term borrowings for repricing purposes are considered to reprice
within 3 months or less.
14
<PAGE>
PART II (CONTINUED)
Item 6
The net interest margin remained constant at 5.24 percent in 1995 as compared to
5.24 percent in 1994. Net interest income increased by 5.28 percent to
$12,772,000 in 1995 from $12,131,000 in 1994 on an increase in average earning
assets to $243,648,000 in 1995 from $231,420,000 in 1994 with an interest spread
of 4.69 percent in 1995 as compared to 4.85 percent in 1994. Average loans
increased by $7,711,000 or 4.29 percent, average funds sold increased by
$4,121,000 or 68.24 percent, average investment securities increased by $769,000
or 1.72 percent and average interest-bearing deposits in other banks decreased
by $373,000 or 39.55 percent, resulting in a net increase in average earning
assets of $12,228,000 or 5.28 percent.
The net increase in average earning assets was funded by a net increase in
average deposits of 4.91 percent to $236,899,000 in 1995 from $225,807,000 in
1994. Average interest-bearing deposits increased by 4.30 percent to
$214,181,000 in 1995 from $205,352,000 in 1994 while average noninterest-bearing
deposits increased by 11.06 percent to $22,718,000 in 1995 from $20,455,000 in
1994. Noninterest-bearing deposits represented 9.59 percent of total deposits
in 1995 as compared to 9.06 percent in 1994.
The net interest margin increased by 42 basis points to 5.24 percent in 1994 as
compared to 4.82 percent in 1993. Net interest income increased by 9.80 percent
to $12,131,000 in 1994 from $11,048,000 in 1993 on a nominal increase in average
earning assets to $231,420,000 in 1994 from $229,279,000 in 1993 with an
interest spread of 4.85 percent in 1994 as compared to 4.47 percent in 1993.
Average loans increased by $7,649,000 or 4.45 percent, average funds sold
decreased by $3,328,000 or 35.53 percent, average investment securities
increased by $2,073,000 of 4.85 percent and average interest-bearing deposits in
other banks decreased by $4,253,000 or 81.85 percent, resulting in a net
increase in average earning assets of $2,141,000 or 0.93 percent.
The net increase in average earning assets was funded by a net increase in
average deposits of 1.25 percent to $225,807,000 in 1994 from $223,024,000 in
1993. Average interest-bearing deposits decreased by 0.87 percent to
$205,352,000 in 1994 from $207,156,000 in 1993 while average noninterest-bearing
deposits increased by 28.91 percent to $20,455,000 in 1994 from $15,868,000 in
1993. Noninterest-bearing deposits represented 9.06 percent of total deposits
in 1994 as compared to 7.11 percent in 1993.
The allowance for loan losses represents a reserve for potential losses in the
loan portfolio. The adequacy of the allowance for loan losses is evaluated
periodically based on a review of all significant loans, with a particular
emphasis on nonaccruing, past due and other loans that management believes
require attention.
15
<PAGE>
PART II (CONTINUED)
Item 6
The provision for loan losses is a charge to earnings in the current period to
replenish the allowance for loan losses and maintain it at a level management
has determined to be adequate. The provision for loan losses was $3,216,050 in
1995 as compared to a provision of $2,080,500 in 1994 representing an increase
in the provision of $1,135,550 or 54.58 percent. Net loan charge-offs
represented 73.38 percent of the provision for loan losses in 1995 as compared
to 81.10 percent in 1994. The increase in loan charge-offs in 1995 resulted
from the deterioration of the quality of the collateral held as security on
loans and the ability of the creditors to service their debt. During 1995, it
became evident that the collateral value of one commercial line and one
agricultural line had deteriorated to the point that management determined it
prudent to charge off a considerable portion of the line. The charge-off on
these two lines represented 47.57 percent of the net charge-offs for 1995. Net
loan charge-offs for 1995 represented 1.26 percent of average loans outstanding
as compared to 0.94 percent for 1994. As of December 31, 1995, the allowance
for loan losses was 2.06 percent of total loans outstanding as compared to an
allowance for loan losses of 1.75 percent of total loans outstanding as of
December 31, 1994. The determination of the reserve rests upon management's
judgment about factors affecting loan quality and assumptions about the economy.
Management considers the year-end allowance for loan losses adequate to cover
potential losses in the loan portfolio.
Noninterest income consists principally of service charges on deposit accounts.
Service charges on deposit accounts amounted to $1,457,000 in 1995 as compared
to $1,427,000 in 1994 or an increase of 2.10 percent. The increase in 1995 is
compared to an increase of 9.52 percent in 1994 when service charges increased
to $1,427,000 in 1994 from $1,303,000 in 1993. All other noninterest income
increased by $259,000 to $596,000 in 1995 from $337,000 in 1994 as compared to
an increase of $32,000 to $337,000 in 1994 as compared to $305,000 in 1993. The
significant increase in noninterest income of $259,000 in 1995 is attributable
to recovery of embezzled funds by a former employee of $74,000, an increase in
securities gains of $34,000 and an increase in other commissions, fees and other
income of $151,000. There was no significant change in all other noninterest
income for 1994 compared to 1993.
Noninterest expense decreased by 0.24 percent to $8,420,000 in 1995 from
$8,441,000 in 1994. The significant decrease in noninterest expense was a
decrease of $237,000 in FDIC premiums which was offset by an increase in
salaries and employee benefits of $130,000 and an increase in other real estate
expenses of $137,000 resulting from losses and other expenses incurred in the
disposition of other real estate owned. All other expenses in the aggregate
remained virtually unchanged.
Noninterest expense increased by 9.38 percent to $8,441,000 in 1994 from
$7,717,000 in 1993. Salaries and employee benefits increased by 13.45 percent
to $4,066,000 in 1994 from $3,584,000 in 1993, due primarily to an increase in
the number of full-time employees from 104 in 1993 to 124 in 1994. All other
noninterest expense increased by 5.86 percent to $4,375,000 in 1994 from
$4,133,000 in 1993. The only significant increase in noninterest expense other
than salaries and employee benefits was an increase of $215,000 in other real
estate expense resulting from losses and other expenses incurred in the
disposition of other real estate owned.
Income before taxes decreased by $177,000 to $3,064,000 in 1995 from $3,241,000
with significant changes being an increase in provision for loan losses of
$1,135,000 in 1995 as compared to 1994, an increase in net interest income of
$650,000 in 1995 as compared to 1994 and a decrease in noninterest expenses net
of noninterest income of $309,000 in 1995 as compared to 1994. Income taxes as
a percentage of income before taxes decreased by 4.44 percent to 30.13 percent
in 1995 from 31.53 percent in 1994.
16
<PAGE>
PART II (CONTINUED)
Item 6
The Bank of Fitzgerald is operating under a Memorandum of Understanding
originated on October 20, 1992 and revised on October 24, 1995, which requires
that the Bank maintain specified minimum capital ratios and minimum reserve for
loan losses. The Bank of Fitzgerald was in substantial compliance with the
provisions of the Memorandum of Understanding as of December 31, 1995.
COLONY BANKCORP, INC.
AVERAGE BALANCE SHEETS
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------------------------------------------------------------------------
AVERAGE INCOME/ YIELDS/ AVERAGE INCOME/ YIELDS/ AVERAGE INCOME/ YIELDS/
($ IN THOUSANDS) BALANCES EXPENSE RATES BALANCES EXPENSE RATES BALANCES EXPENSE RATES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning Assets
Loans, Net of Unearned
Income
Taxable(1) $187,366 $20,763 11.08% $179,655 $18,323 10.14% $172,006 $17,265 10.04%
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Securities
Taxable 40,680 2,472 6.08% 39,887 2,216 5.56% 38,663 2,075 5.37%
Tax-exempt(2) 4,872 367 7.53% 4,896 392 8.01% 4,047 390 9.64%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment
Securities 45,582 2,839 6.23% 44,783 2,608 5.82% 42,710 2,465 5.77%
- ------------------------------------------------------------------------------------------------------------------------------------
Interest-bearing Deposits in
Other Banks 570 31 5.44% 943 43 4.56% 5,196 194 3.73%
- ------------------------------------------------------------------------------------------------------------------------------------
Funds Sold 10,160 580 5.71% 6,039 252 4.17% 9,367 281 3.00%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-earning
Assets 243,648 24,213 9.94% 231,420 21,126 9.13% 229,279 20,205 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest-earning Assets
Cash 7,260 6,555 5,322
Allowance for Loan Losses (3,465) (2,846) (2,564)
Other Assets 14,039 12,911 12,838
- ------------------------------------------------------------------------------------------------------------------------------------
Total Noninterest-earning
Assets 17,843 16,620 15,596
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets $261,491 $248,040 $224,875
===================================================================================================================================
Liabilities and Stockholders'
Equity
Interest-bearing Liabilities
Interest-bearing Deposits
Interest-bearing Demand
and Savings $ 54,691 $ 1,735 3.17% $ 59,639 $ 1,853 3.11% $ 52,789 $ 1,709 3.24%
Other Time 159,490 9,370 5.87% 145,713 6,819 4.68% 154,367 7,189 4.66%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-bearing
Deposits 214,181 11,105 5.18% 205,352 8,672 4.22% 207,156 8,898 4.30%
- ------------------------------------------------------------------------------------------------------------------------------------
Other Interest-bearing
Liabilities
Debt 3,351 303 9.04% 3,087 235 7.61% 3,136 227 7.24%
Funds Purchased and
Securities
Under Agreement to
Repurchase 538 33 6.13% 1,830 88 4.81% 910 32 3.52%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Other Interest-
bearing Liabilities 3,889 336 8.64% 4,917 323 6.57% 4,046 259 6.40%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-bearing
Liabilities 218,070 11,441 5.25% 210,269 8,995 4.28% 211,202 9,157 4.34%
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing Liabilities
and Stockholders' Equity
Demand Deposits 22,718 20,455 15,568
Other Liabilities 1,972 1,645 1,536
Stockholders' Equity 18,731 15,671 16,269
- ------------------------------------------------------------------------------------------------------------------------------------
Total Interest-bearing
Liabilities and
Stockholders' Equity 43,421 37,771 33,673
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $261,491 $248,040 $244,875
====================================================================================================================================
Interest Rate Spread 4.69% 4.85% 4.48%
====================================================================================================================================
Net Interest Income $12,772 $12,131 $11,048
====================================================================================================================================
Net Interest Margin 5.24% 5.24% 4.82%
====================================================================================================================================
</TABLE>
(1) The average balance of loans includes the average balance of nonaccrual
loans. Income on such loans is recognized and recorded on the cash basis.
(2) Taxable-equivalent adjustments totaling $124,744, $133,462 and $132,553 for
1995, 1994 and 1993, respectively, are included in tax-exempt interest on
investment securities. The adjustments are based on a federal tax rate of 34
percent with appropriate reductions for the effect of disallowed interest
expense incurred in carrying tax-exempt obligations.
17
<PAGE>
PART II (CONTINUED)
Item 6
COLONY BANKCORP, INC.
RATE/VOLUME ANALYSIS
The rate/volume analysis presented hereafter illustrates the change from year to
year for each component of the taxable equivalent net interest income separated
into the amount generated through volume changes and the amount generated by
changes in the yields/rates.
<TABLE>
<CAPTION>
CHANGE FROM 1994 TO 1995(1) CHANGES FROM 1993 TO 1994(1)
--------------------------- ----------------------------
($ IN THOUSANDS) VOLUME RATE TOTAL VOLUME RATE TOTAL
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest Income
Loans, Net - Taxable $ 782 $1,758 $2,540 $ 768 $190 $ 958
- --------------------------------------------------------------------------------------------------
Investment Securities
Taxable 44 212 256 66 75 141
Tax-exempt (2) (23) (25) 82 (80) 2
- --------------------------------------------------------------------------------------------------
Total Investment Securities 42 189 231 148 (5) 143
- --------------------------------------------------------------------------------------------------
Interest-bearing Deposits in
Other Banks (17) 5 (12) (159) 8 (151)
- --------------------------------------------------------------------------------------------------
Funds Sold 172 156 328 (100) 71 (29)
- --------------------------------------------------------------------------------------------------
Total Interest Income 979 2,108 3,087 657 264 921
- --------------------------------------------------------------------------------------------------
Interest Expense
Interest-bearing Demand and
Savings Deposits (154) 36 (118) 222 (78) 144
Time Deposits 645 1,906 2,551 (403) 33 (370)
- --------------------------------------------------------------------------------------------------
Other Interest-bearing Liabilities
Funds Purchased and Securities
Under Agreement to Repurchase (62) 7 (55) 32 24 56
Other Debt 20 48 68 (4) 12 8
- --------------------------------------------------------------------------------------------------
Total Interest Expense 449 1,997 2,446 (153) (9) (162)
- --------------------------------------------------------------------------------------------------
Net Interest Income $ 530 $ 111 $ 641 $ 810 $273 $1,083
==================================================================================================
</TABLE>
(1) Changes in net interest income for the periods, based on either changes in
average balances or changes in average rates for interest-earning assets and
interest-bearing liabilities, are shown on this table. During each year,
there are numerous and simultaneous balance and rate changes; therefore, it
is not possible to precisely allocate the changes between balances and
rates. For the purpose of this table, changes that are not exclusively due
to balance changes or rate changes have been attributed to rates.
INVESTMENT PORTFOLIO
The following table presents carrying values of investment securities held by
the Company as of December 31, 1995, 1994 and 1993.
<TABLE>
<CAPTION>
($ in thousands) 1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
U.S. Treasuries and Government Agencies $17,630 $15,386 $ 6,364
Obligations of States and Political Subdivisions 5,064 5,013 4,771
Other Securities 1,293 917 1,029
------- ------- -------
Investment Securities 23,987 21,316 12,164
Mortgaged-Backed Securities 22,036 25,465 33,172
------- ------- -------
TOTAL INVESTMENT SECURITIES AND
MORTGAGED-BACKED SECURITIES $46,023 $46,781 $45,336
======= ======= =======
</TABLE>
18
<PAGE>
PART II (CONTINUED)
Item 6
COLONY BANKCORP, INC.
INVESTMENT PORTFOLIO (CONTINUED)
The following table represents maturities and weighted-average yields of
investment securities held by the Company as of December 31, 1995.
<TABLE>
<CAPTION>
AFTER 1 AFTER 5
YEARS BUT YEARS BUT
WITHIN WITHIN WITHIN AFTER
($ in thousands: yields on a tax-equivalent basis) 1 YEAR 5 YEARS 10 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------------------
Amount Yield Amount Yield Amount Yield Amount Yield
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasuries $ 0 0.00% $ 989 5.85% $ 0 0.00% $ 0 0.00%
U.S. Govenment Agencies 6,236 5.78 10,405 5.84 0 0.00 0 0.00
Mortgage-Backed Securities 523 7.27 2,368 6.42 5,840 6.01 13,305 5.87
Obligations of States and Political Subdivisions 306 7.08 3,467 6.73 631 6.50 660 7.67
Other Securities 1,293 7.50 0 0.00 0 0.00 0 0.00
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio $8,358 6.19% $17,229 6.10% 6,471 6.03% $13,965 5.96%
==============================================================================================================================
</TABLE>
LOANS
The following table presents the composition of the Company's loan portfolio as
of December 31 for the past five years.
<TABLE>
<CAPTION>
($ in thousands) 1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Commercial, Financial and Agricultural $ 31,151 $ 35,357 $ 32,299 $ 34,384 $ 31,192
Real Estate
Construction 371 439
Mortgage, Farmland 23,441 25,285 24,488 23,035 20,250
Mortgage, Other 89,797 75,551 69,153 65,864 61,067
Consumer 36,393 32,252 30,455 30,000 29,314
Other 7,243 4,494 8,252 10,850 6,815
-------- -------- -------- -------- --------
188,396 173,378 164,647 164,133 148,638
Unearned Discount (11) (19) (32) (103) (124)
Allowance for Loan Losses (3,885) (3,029) (2,636) (2,471) (1,801)
-------- -------- -------- -------- --------
LOANS, NET $184,500 $170,330 $161,979 $161,559 $146,713
======== ======== ======== ======== ========
</TABLE>
The following table presents total loans as of December 31, 1995 according to
maturity distribution.
<TABLE>
<CAPTION>
Maturity $ in thousands
--------------
<S> <C>
One Year or Less $142,895
After One Year through Five Years 42,888
After Five Years 2,602
--------
$188,385
========
</TABLE>
19
<PAGE>
PART II (CONTINUED)
Item 6
COLONY BANKCORP, INC.
LOANS (CONTINUED)
The following table presents an interest rate sensitivity analysis of the
Company's loan portfolio as of December 31, 1995.
<TABLE>
<CAPTION>
WITHIN 1-5 AFTER 5
($ in thousands) 1 YEAR YEARS YEARS TOTAL
-------- ------- ------- --------
<S> <C> <C> <C> <C>
Loans with
Predetermined Interest Rates $ 72,330 $40,641 $2,601 $115,572
Floating or Adjustable Rates 70,566 2,247 72,813
-------- ------- ------ --------
LOANS, NET OF UNEARNED INCOME $142,896 $42,888 $2,601 $188,385
======== ======= ====== ========
</TABLE>
NONPERFORMING LOANS
A loan is placed on nonaccrual status when, in management's judgment, the
collection of interest income appears doubtful. Interest receivable that has
been accrued in prior years and is subsequently determined to have doubtful
collectibility is charged to the allowance for possible loan losses. Interest
on loans that are classified as nonaccrual is recognized when received. Past
due loans are loans whose principal or interest is past due 90 days or more. In
some cases, where borrowers are experiencing financial difficulties, loans may
be restructured to provide terms significantly different from the original
contractual terms.
The following table presents, at the dates indicated, the aggregate of
nonperforming loans for the categories indicated.
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
($ IN THOUSANDS)
------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans Accounted for on a Nonaccrual Basis $5,229 $2,092 $2,490 $3,647 $1,772
Installment Loans and Term Loans
Contractually Past Due 90 Days or
More as to Interest or Principal
Payments and Still Accruing 153 220 368 216 595
Loans, the Terms of Which Have Been
Renegotiated to Provide a Reduction
or Deferral of Interest or Principal
Because of Deterioration in the Financial
Position of the Borrower 597 23 38 - -
Loans Now Current About Which There are
Serious Doubts as to the Ability of the
Borrower to Comply with Present Loan
Repayment Terms - - - - -
</TABLE>
20
<PAGE>
PART II (CONTINUED)
Item 6
COLONY BANKCORP, INC.
NONPERFORMING LOANS (CONTINUED)
During the year ended December 31, 1995, approximately $2,886,000 of loans was
charged off and approximately $526,000 was recovered on charged-off loans. All
loans classified by regulatory authorities as loss during regular examinations
in 1995 have been charged off. As of December 31, 1995, the allowance for loan
losses was adequate to cover all loans classified by regulatory authorities as
doubtful or substandard.
COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, the Banks have entered into off balance
sheet financial instruments which are not reflected in the consolidated
financial statements. These instruments include commitments to extend credit,
standby letters of credit, guarantees and liability for assets held in trust.
Such financial instruments are recorded in the financial statements when funds
are disbursed or the instruments become payable. The Banks use the same credit
policies for these off balance sheet financial instruments as they do for
instruments that are recorded in the consolidated financial statements.
Following is an analysis of the significant off balance sheet financial
instruments as of December 31, 1995 and 1994.
<TABLE>
<CAPTION>
1995 1994
------- -------
($ IN THOUSANDS)
-----------------
<S> <C> <C>
Commitments to Extend Credit $17,753 $12,468
Standby Letters of Credit 3,581 2,908
------- -------
$21,334 $15,376
======= =======
</TABLE>
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitment amounts expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The credit risk involved in issuing these
financial instruments is essentially the same as that involved in extending
loans to customers.
The Company does not anticipate any material losses as a result of the
commitments and contingent liabilities.
The nature of the business of the Company is such that it ordinarily results in
a certain amount of litigation. In the opinion of management and counsel for
the Company and the Banks, there is no litigation in which the outcome will have
a material effect on the consolidated financial statements.
21
<PAGE>
PART II (CONTINUED)
Item 6
SUMMARY OF LOAN LOSS EXPERIENCE
The provision for possible loan losses is created by direct charges to
operations. Losses on loans are charged against the allowance in the period in
which such loans, in management's opinion, become uncollectible. Recoveries
during the period are credited to this allowance. The factors that influence
management's judgment in determining the amount charged to operating expense are
past loan experience, composition of the loan portfolio, evaluation of possible
future losses, current economic conditions and other relevant factors. The
Company's allowance for loan losses was approximately $3,885,000 as of December
31, 1995, representing 2.06 percent of year-end total loans outstanding,
compared with $3,029,000 as of December 31, 1994, which represented 1.75 percent
of year-end total loans outstanding. The allowance for loan losses is reviewed
continuously based on management's evaluation of current risk characteristics of
the loan portfolio as well as the impact of prevailing and expected economic
business conditions. Management considers the allowance for loan losses
adequate to cover possible loan losses on the loans outstanding.
Management has not allocated the Company's allowance for loan losses to specific
categories of loans. Based on management's best estimate, approximately 10
percent of the allowance should be allocated to real estate loans, 50 percent to
commercial, financial and agricultural loans and 40 percent to
consumer/installment loans as of December 31, 1995.
The following table presents an analysis of the Company's loan loss experience
for the periods indicated.
<TABLE>
<CAPTION>
($ in thousands) 1995 1994 1993 1992 1991
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Allowance for Loan Losses at Beginning of Year $ 3,029 $ 2,636 $ 2,471 $ 1,801 $1,398
------- ------- ------- ------- ------
Charge-Offs
Commercial, Financial and Agricultural 2,027 901 2,165 2,024 756
Real Estate - - 927 - -
Consumer 859 912 969 1,208 643
------- ------- ------- ------- ------
2,886 1,813 4,061 3,232 1,399
------- ------- ------- ------- ------
Recoveries
Commercial, Financial and Agricultural 77 31 35 55 381
Real Estate - - 2 - -
Consumer 449 94 99 167 104
------- ------- ------- ------- ------
526 125 136 222 485
------- ------- ------- ------- ------
Net Charge-Offs (2,360) (1,688) (3,925) (3,010) (914)
------- ------- ------- ------- ------
Provision for Loans Losses 3,216 2,081 4,090 3,680 1,245
------- ------- ------- ------- ------
Allowance for Loan Losses of Acquired
Subsidiary - - - - 72
------- ------- ------- ------- ------
Allowance for Loan Losses at End of Year $ 3,885 $ 3,029 $ 2,636 $ 2,471 $1,801
======= ======= ======= ======= ======
Ratio of Net Charge-Offs to Average Loans 1.26% 0.94% 2.28% 1.77% 0.61%
======= ======= ======= ======= ======
</TABLE>
22
<PAGE>
PART II (CONTINUED)
Item 6
COLONY BANKCORP, INC.
DEPOSITS
The following table presents the average amount outstanding and the average rate
paid on deposits by the Company for the years 1995, 1994 and 1993.
<TABLE>
<CAPTION>
1995 1994 1993
------------------- ------------------- -------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
($ in thousands) AMOUNT RATE AMOUNT RATE AMOUNT RATE
-------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Noninterest-Bearing Demand Deposits $ 22,718 $ 20,455 $15,868
Interest-Bearing Demand and Savings 54,691 3.17% 59,639 3.11% 52,789 3.24%
Time Deposits 159,490 5.87 145,713 4.68 154,367 4.66
-------- ------- -------- ------- -------- -------
$236,899 5.18% $225,807 4.22% $223,024 4.30%
======== ======= ======== ======= ======== =======
</TABLE>
The following table presents the maturities of the Company's other time deposits
as of December 31, 1995.
<TABLE>
<CAPTION>
OTHER TIME OTHER TIME
DEPOSITS DEPOSITS
$100,000 LESS THAN
($ in thousands) OR GREATER $100,000 TOTAL
<S> <C> <C> <C>
Months to Maturity
3 or Less $17,919 $ 32,115 $ 50,034
Over 3 through 6 11,395 17,353 28,748
Over 6 through 12 7,490 26,306 33,796
Over 12 Months 11,307 43,910 55,217
------- -------- --------
$48,111 $119,684 $167,795
======= ======== ========
</TABLE>
RETURN ON ASSETS AND STOCKHOLDERS' EQUITY
The following table presents selected financial ratios for each of the period
indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Return on Assets 0.82% 0.89% 0.24%
Return on Equity 11.43% 14.16% 3.67%
Dividends Payout 17.14% 14.25% 53.06%
Equity to Assets 7.16% 6.32% 6.64%
</TABLE>
23
<PAGE>
PART II (CONTINUED)
Item 7
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The following consolidated financial statements of the Registrant and its
subsidiaries are included on Exhibit 99B of this Annual Report on
Form 10-KSB:
Consolidated Balance Sheets - December 31, 1995 and 1994
Consolidated Statements of Income - Years Ended December 31, 1995 and 1994
Consolidated Statements of Stockholders' Equity - Years Ended December 31,
1995 and 1994
Consolidated Statements of Cash Flows - Years Ended December 31, 1995 and
1994
Notes to Consolidated Financial Statements
Item 8
CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
During 1994 the Registrant filed Form 8-K reflecting a change in the Company's
independent audit firm from Mauldin & Jenkins, CPAs to McNair, McLemore,
Middlebrooks & Co., CPAs. There was no accounting or disclosure disagreement or
reportable event with the former or current auditors that would have required
the filing of a report on Form 8-K.
PART III
Item 9
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference to pages 3 and 4 of the Company's Definitive
Proxy Statement for Annual Meeting of Stockholders to be held on April 23, 1996,
which is included as Exhibit 99(a) of this Annual Report on Form 10-KSB.
Item 10
EXECUTIVE COMPENSATION
Incorporated herein by reference to pages 6 and 7 of the Company's Definitive
Proxy Statement for Annual Meeting of Stockholders to be held on April 23, 1996,
which is included as Exhibit 99(a) of this Annual Report on Form 10-KSB.
Item 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to pages 1 and 2 of the Company's Definitive
Proxy Statement for Annual Meeting of Stockholders to be held on April 23,
1996, which is included as Exhibit 99(a) of this Annual Report on Form 10-KSB.
24
<PAGE>
PART III
Item 12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to page 4 of the Company's Definitive Proxy
Statement for Annual Meeting of Stockholders to be held on April 23, 1996, which
is included as Exhibit 99(a) of this Annual Report on Form 10-KSB.
PART IV
Item 13
EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS INCLUDED HEREIN:
EXHIBIT NO.
3(a) ARTICLES OF INCORPORATION
-filed as Exhibit 3(a) to the Registrant's Registration Statement
on Form 10 (File No. 0-18486), filed with the Commission on April
25, 1990 and incorporated herein by reference.
3(b) BYLAWS, AS AMENDED
-filed as Exhibit 3(b) to the Registrant's Registration Statement
on Form 10 (File No. 0-18486), filed with the Commission on April
25, 1990 and incorporated herein by reference
4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
-incorporated herein by reference to page 1 of the Company's
Definitive Proxy Statement for Annual Meeting of Stockholders to
be held on April 23, 1996, which is included as Exhibit 99(a) of
this Annual Report on Form 10-KSB.
10 MATERIAL CONTRACTS
10(a) DEFERRED COMPENSATION PLAN AND SAMPLE DIRECTOR AGREEMENT
-filed as Exhibit 10(a) to the Registrant's Registration
Statement on Form 10 (File No. 0-18486), filed with the
Commission on April 25, 1990 and incorporated herein by reference
10(b) PROFIT-SHARING PLAN DATED JANUARY 1, 1979
-filed as Exhibit 10(b) to the Registrant's Registration
Statement on Form 10 (File No. 0-18486), filed with the
Commission on April 25, 1990 and incorporated herein by reference
25
<PAGE>
PART IV (CONTINUED)
Item 13
(A) EXHIBITS INCLUDED HEREIN:
EXHIBIT NO.
11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
-incorporated herein by reference to page 4 of the consolidated
financial statements included as Exhibit 99(b) of this Annual
Report on Form 10-KSB.
21 SUBSIDIARIES OF THE COMPANY
-filed as Exhibit 22.1 to the Registrant's Annual Report on Form
10-K (File No. 0-12436), filed with the Commission on March 30,
1993 and incorporated herein by reference
99 ADDITIONAL EXHIBITS
99(a) DEFINITIVE PROXY STATEMENT, INCORPORATED BY REFERENCE
99(b) CONSOLIDATED FINANCIAL STATEMENTS
-Independent Auditor's Report
-Consolidated Balance Sheets - December 31, 1995 and 1994
-Consolidated Statements of Income - Years ended December 31,
1995 and 1994
-Consolidated Statements of Stockholders' Equity - Years ended
December 31, 1995 and 1994
-Consolidated Statements of Cash Flows - Years ended December 31,
1995 and 1994
-Notes to Consolidated Financial Statements
All schedules are omitted as the required information is
inapplicable or the information is presented in the financial
statements or related notes.
(B) No reports on Form 8-K have been filed by the registrant during
the last quarter of the period covered by this report.
26
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Colony Bankcorp, Inc. has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized:
COLONY BANKCORP, INC.
______________________________________
James D. Minix
President/Director/Chief Executive
Officer
Date:_________________________________
______________________________________
Terry L. Hester
Executive Vice-President/Controller/
Chief Financial Officer/Director
Date:_________________________________
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
______________________________________ Date:_________________________________
Paul Branch, Jr., Director
______________________________________ Date:_________________________________
Terry Coleman, Director
______________________________________ Date:_________________________________
L. Morris Downing, Director
______________________________________ Date:_________________________________
Milton N. Hopkins, Jr., Director
______________________________________ Date:_________________________________
Harold E. Kimball, Director
27
<PAGE>
______________________________________ Date:_________________________________
Marion H. Massee, III, Director
______________________________________ Date:_________________________________
Ben B. Mill, Jr., Director
______________________________________ Date:_________________________________
Ralph D. Roberts, M.D., Director
______________________________________ Date:_________________________________
W. B. Roberts, Jr., Director
______________________________________ Date:_________________________________
R. Sidney Ross, Director
______________________________________ Date:_________________________________
Joe K. Shiver, Director
28
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-START> JAN-01-1995 JAN-01-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<CASH> 9,418,260 8,582,830
<INT-BEARING-DEPOSITS> 99,000 1,882,000
<FED-FUNDS-SOLD> 24,325,000 6,760,000
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 41,946,991 38,034,861
<INVESTMENTS-CARRYING> 4,075,979 8,745,806
<INVESTMENTS-MARKET> 3,970,280 8,207,491
<LOANS> 188,385,296 173,359,219
<ALLOWANCE> 3,884,817 3,028,750
<TOTAL-ASSETS> 278,568,310 248,815,725
<DEPOSITS> 253,243,162 227,042,557
<SHORT-TERM> 200,000 760,000
<LIABILITIES-OTHER> 1,765,505 1,484,155
<LONG-TERM> 2,304,468 2,779,334
0 0
0 0
<COMMON> 12,911,100 6,080,550
<OTHER-SE> 8,144,075 1,669,129
<TOTAL-LIABILITIES-AND-EQUITY> 278,568,310 248,815,725
<INTEREST-LOAN> 20,762,932 18,222,699
<INTEREST-INVEST> 2,713,745 2,475,396
<INTEREST-OTHER> 611,875 295,341
<INTEREST-TOTAL> 24,088,552 20,993,436
<INTEREST-DEPOSIT> 11,104,853 8,671,610
<INTEREST-EXPENSE> 11,440,886 8,995,109
<INTEREST-INCOME-NET> 12,647,666 11,998,327
<LOAN-LOSSES> 3,216,050 2,080,500
<SECURITIES-GAINS> 41,747 8,209
<EXPENSE-OTHER> 8,420,466 8,440,910
<INCOME-PRETAX> 3,063,648 3,241,088
<INCOME-PRE-EXTRAORDINARY> 2,140,520 2,219,090
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,140,520 2,219,090
<EPS-PRIMARY> 1.75 1.82
<EPS-DILUTED> 1.75 1.82
<YIELD-ACTUAL> 5.24 5.24
<LOANS-NON> 5,228,900 2,092,500
<LOANS-PAST> 153,000 220,000
<LOANS-TROUBLED> 597,000 23,000
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 3,028,750 2,635,538
<CHARGE-OFFS> 2,886,405 1,812,437
<RECOVERIES> 526,422 125,149
<ALLOWANCE-CLOSE> 3,884,817 3,028,750
<ALLOWANCE-DOMESTIC> 3,884,817 3,028,750
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
<PAGE>
EXHIBIT 99(a)
COLONY BANKCORP, INC.
Post Office Box 989
302 South Main Street
Fitzgerald, Georgia 31750
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 23, 1996
GENERAL INFORMATION
This proxy statement and the accompanying form of proxy, which are first
sent or given to shareholders on or about April 3, 1996, are furnished to the
holders of shares of common stock of Colony Bankcorp, Inc. (the "Company") in
connection with the solicitation by management of the Company of proxies for use
at the annual meeting of shareholders of the Company to be held April 23, 1996,
at 7:00 p.m., local time, at Ben Hill-Irwin Technical Institute Conference
Center on Perry House Road, Fitzgerald, Georgia, 31750 and any adjournment or
postponement thereof.
Any proxy given pursuant to this solicitation may be revoked at any time
before it is voted by so notifying the secretary of the Company, Ben B. Mills,
Jr., Post Office Box 989, 302 South Main Street, Fitzgerald, Georgia 31750, in
writing prior to the special meeting, or by appearing at the meeting and
requesting the right to vote in person at the meeting, or by delivering to the
secretary of the Company a duly executed proxy bearing a later date, without
compliance with any other formalities. If the proxy is properly signed and
returned by the shareholder and is not revoked, it will be voted at the special
meeting in the manner specified therein. If a shareholder signs and returns the
proxy but does not specify how the proxy is to be voted, the proxy will be voted
for the election as a director of each of the nominees named herein.
On April 3, 1996 the Company had issued and outstanding 1,291,110 shares of
its $10.00 par value common stock, which constitutes its only class of voting
securities, with each share entitled to one vote. Only shareholders of record at
the close of business on April 3, 1996 are entitled to notice of and to vote at
the special meeting of shareholders or any adjournment thereof.
All expenses of this solicitation, including the cost of preparing and
mailing this proxy statement, will be paid by the Company. In addition to the
solicitation by mail, directors, officers and regular employees of the Company
may solicit proxies by telephone, telegram or personal interview for which they
will receive no compensation in addition to their regular salaries.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Principal Shareholders
- ----------------------
The following table shows all persons known to the Board of Directors of
the Company to be the beneficial owners on March 15, 1996 of more than 5% of the
outstanding common stock of the Company, the only class of the Company's voting
securities:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial Ownership Outstanding
------------------- ----------------------- ----------------
<S> <C> <C>
Robert Sidney Ross 151,736/(1)/ 11.75%
Post Office Box 666
Ocilla, Georgia 31774
</TABLE>
/(1)/ Includes 84,433 shares owned by Robert Sidney Ross, 66,803 shares
owned by Ross of Georgia, Inc. and 500 shares owned by minor child.
1
<PAGE>
Security Ownership of Directors and Executive Officers
- ------------------------------------------------------
The following tables shows the number of shares of common stock
beneficially owned by each director, director nominees and by all directors,
director nominees and officers as a group on March 15, 1996.
<TABLE>
<CAPTION>
Name of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership/(1)/ of Class
- ---------------- ------------------------- ----------
<S> <C> <C>
Paul Branch, Jr. 22,368 1.73%
Terry Coleman 26,226 2.03%
L. Morris Downing, Jr. 41,694 3.23%
Terry L. Hester 24,808/(2)/ 1.92%
Milton N. Hopkins, Jr. 19,662 1.52%
Edwin W. Hortman, Jr. 4,251/(2)/ 0.33%
Harold E. Kimball 26,552 2.06%
Marion H. Massee, III 46,736 3.62%
Ben B. Mills, Jr. 43,618 3.38%
James D. Minix 22,314/(2)/ 1.73%
Ralph D. Roberts, M.D. 25,339 1.96%
W. B. Roberts, Jr. 5,000 0.39%
R. Sidney Ross 151,736 11.75%
Joe K. Shiver 15,310 1.19%
Executive Officers
and Directors as a
Group (14 persons) 475,614 36.84%
</TABLE>
/(1)/ Includes shares owned by spouses and minor children of officers and
directors, as well as shares owned by trust or businesses in which officers and
directors have a significant interest. The information contained herein shall
not be construed as an admission that any such person is, for purposes of
Section 13 (d) or Section 13 (g) of the Securities Exchange Act of 1934, the
beneficial owner of any securities not held of record by that person or entity.
/(2)/ Includes shares held by Trustee of Colony Bankcorp, Inc., Profit Sharing
and Stock Bonus Plan, of which, Messrs. Hester, Minix and Hortman participate
and own 11,877; 4,410; and 1,013 allocated shares respectfully on December 31,
1995. Although shares are held by the Trustee, all plan participants direct the
Trustees in the manner in which they wish their allocated shares to be voted.
Unallocated shares, if any, will not be voted pursuant to the plan.
2
<PAGE>
DIRECTOR AND MANAGEMENT INFORMATION
The Company's bylaws provide that the Board of Directors shall consist of
not less than three nor more than 25 persons, with the exact number to be fixed
and determined from time to time by resolution of the Board of Directors, or by
resolution of the shareholders at any annual or special meeting of shareholders.
There are presently 13 members of the Board of Directors, and the Board of
Directors has voted that the Board consist of 13 members for the Company's
ensuing fiscal year.
Management has nominated and the Board of Directors recommends the election
of each of the nominees set forth in the following table as a director of the
Company until the next annual meeting of shareholders or until his successor is
duly elected and qualified. All of the nominees are currently directors of the
Company. If any nominee is unable to serve as director, the proxy will be voted
for a nominee named by the Board of Directors in his stead by those persons
named to vote the proxies. The Board of Directors has no reason to believe that
any of its present nominees will be unable to serve. Provided a quorum is
present at the annual meeting, directors shall be elected by a plurality of the
votes cast by the shares of common stock represented in person or by proxy at
the annual meeting.
The following table sets forth for each director and executive officer of
the Company (a) the person's name and address, (b) his age at December 31, 1995,
(c) the year he was first elected as a director or executive officer of the
Company, and (d) his principal occupation for the last five years, his positions
with the Company and with any subsidiary of the Company. All directors serve for
a term of one year, all officers serve at the direction of the board.
DIRECTOR NOMINEES
-----------------
Ages, Term, Principal Occupation for
Name and Address Last Five Years and Other Directorships
- ---------------- ---------------------------------------
Paul Branch, Jr. Age 70; Director since November 11, 1982;
493 Benjamin H. Hill Drive West Farmer and Businessman; Vice Chairman of
Fitzgerald, Georgia 31750 the Board, The Bank of Fitzgerald
Terry Coleman Age 52; Director since May, 1990; Owner of
P. O. Box 157 Eastman Travel Services & Huddle House in
Eastman, Georgia 31023 Eastman; State Representative; Director,
The Bank of Dodge County.
L. Morris Downing Age 53; Director since July, 1994;
127 Shady Lane President of Lowell Packing Company
Fitzgerald, Georgia 31750
Terry L. Hester* Age 41; Director since March, 1990;
128 Carter's Road Executive Vice President and Chief
Fitzgerald, Georgia 31750 Financial Officer of the Company since
June, 1994; Acting President and CEO from
June 1993 to June 1994; Treasurer since
1982; Vice President, The Bank of
Fitzgerald
Milton N. Hopkins, Jr. Age 69; Director since Novmeber 11, 1982;
Route 5 Osierfield Farmer and Businessman; Director, The Bank
Fitzgerald, Georgia 31750 of Fitzgerald
Harold E. Kimball Age 62, Director since November 11, 1982;
155 Pine Needle Road Vice President of Dixie Electron, Inc.;
Fitzgerald, Georgia 31750 Chairman of the Board, The Bank of
Fitzgerald
Marion H. Massee, III Age 66; Director since November 11, 1982;
226 Jeff Davis Highway Chairman of Board since February 1990;
Fitzgerald, Georgia 31750 Chairman, Massee Builders, Inc.; Director,
The Bank of Fitzgerald
3
<PAGE>
DIRECTOR NOMINEES (Continued)
Ages, Term, Principal Occupation for
Name and Address Last Five Years and Other Directorships
- ---------------- ---------------------------------------
Ben B. Mills, Jr. Age 63, Director since November 11, 1982;
Post Office Box 985 Attorney, Mills & Chasteen; Secretary of
Fitzgerald, Georgia 31750 Bankcorp since June 8, 1993; Director,
The Bank of Fitzgerald; Director, Ashburn
Bank
James D. Minix * Age 53; Director since March, 1994;
150 Lakeview Drive President and Chief Executive Officer of
Fitzgerald, Georgia 31750 the Company since June, 1994; President and
CEO of The Bank of Fitzgerald January, 1993
to June, 1994; President and CEO of
Ashburn Bank February, 1990 to December,
1992; Director, The Bank of Fitzgerald
Ralph D. Roberts, M.D. Age 71; Director since November 11, 1982;
948 West Roanoke Drive Physician; Director Emeritus, The Bank of
Fitzgerald, Georgia 31750 Fitzgerald
W. B. Roberts, Jr. Age 53; Director since March, 1990; Farmer
Route 1 Box 166 and Businessman; Chairman of the Board,
Ashburn, Georgia 31714 Asburn Bank
R. Sidney Ross Age 53; Director since November 11, 1982;
Post Office Box 666 President, Ross of Georgia, Inc.; Director,
Ocilla, Georgia 31774 The Bank of Fitzgerald
Joe K. Shiver Age 70; Director since June 1994; President
407 East Wallace Street of Shiver Tractor Company; Director, The
Sylvester, Georgia 31791 Bank of Worth
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO ELECT THE
THIRTEEN NOMINEES LISTED ABOVE TO SERVE AS DIRECTORS FOR THE FOLLOWING YEAR:
EXECUTIVE OFFICERS
------------------
Edwin W. Hortman, Jr. * Age 42; Senior Vice President of the
111 Stratford Street Company since February, 1996; Vice
Fitzgerald, Georgia 31750 President of the Company November, 1992 to
February, 1996; Executive Vice President of
United Bank of Griffin, 1985-1992
* Messrs. Minix, Hester and Hortman are the only executive officers of the
Company.
CERTAIN TRANSACTIONS
Each of the subsidiary banks of the Company has made loans in the ordinary
course of its business to officers and directors of the Company, and also to
their relatives, spouses, and entities in which they may have an interest. Each
of these loans has been made in strict compliance with state and federal
statutes and rules and regulations of the Federal Deposit Insurance Corporation
and the Georgia Department of Banking and Finance. As of December 31, 1995,
certain executive officers and directors and companies in which they are an
executive officer or partner or in which they have a 10% of more beneficial
interest, were indebted to the banks in the aggregate amount of $8,987,256.00.
Each of the loans was made in the ordinary course of business, on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons, and did not involve
more than the normal risk of collectibility or present other unfavorable
features.
4
<PAGE>
The law firm of Mills & Chasteen, of which director Ben B. Mills, Jr. is a
partner, was paid $83,0154.04 in 1995 by Colony Bankcorp, Inc. and its
subsidiaries for services rendered by that firm to those entities in the normal
course of business.
CERTAIN LITIGATION
There are presently three lawsuits involving subsidiary banks of Colony
Bancorp, Inc. as follows:
1. Civil Action Number 95V-3607, Dodge Superior Court-Pettice Lee Moore, II and
----------------------------------------------------------------------------
Edna Lee W. Moore vs. The Bank of Dodge County. This action was split off from
- ----------------------------------------------
an earlier lawsuit filed in Ben Hill County against several member banks and
involves a claim by the Moores that they were overcharged when payment was made
of their loans in 1989. The lawsuit alleges fraud, conversion, breach of
contract, and seeks actual damages, punitive damages, and attorneys' fees in
excess of one million dollars. The case was tried in November, 1995, which
resulted in a jury verdict for the Moores in the amount of $26,000.00. A motion
to vacate the judgment has been filed by the bank and hearing will be held
shortly. It is believed that at the very most the exposure of The Bank of Dodge
County would be $26,000.00.
2. Civil Action No. C16-123 - Ben Hill County Superior Court - Pettice Lee
-----------------------------------------------------------------------
Moore, II and Edna Lee W. Moore vs. Colony Bankcorp, Inc., The Bank of
- ----------------------------------------------------------------------
Fitzgerald and The Bank of Dodge County. This action was filed in September,
- ---------------------------------------
1993, and subsequently Colony Bankcorp, Inc. has dismissed on motion for summary
judgment, leaving as the named defendant The Bank of Fitzgerald. This suit
seeks to recover damages for alleged fraud, conversion, and wrongful foreclosure
concerning loans made to the plaintiffs in 1989. All the transactions with the
plaintiffs have been well documented and it is believed that the action is a
frivolous one. Discovery in the case is complete and motions for summary
judgment have been filed on behalf of the defendant banks.
3. Civil Action No. 94-CV-240 - Ben Hill County Superior Court - Sharon Moore
--------------------------------------------------------------------------
vs. The Bank of Fitzgerald. In this case, Sharon Moore, who is the wife of
- --------------------------
Pettice Lee Moore, II, filed suit against The Bank of Fitzgerald in August,
1994, seeking damages based on various allegations of wrongful disclosure,
breach of contract, etc. In many respects, the complaint is very similar to the
complaint filed by Pettice Lee Moore, II and his mother in 1993. A review of the
facts and the law would strongly support the conclusion that the lawsuit has no
foundation and is basically frivolous. A motion for summary judgment has been
filed by the bank.
DIRECTOR'S FEES, COMMITTEES AND ATTENDANCE
Directors of the Company receive $400.00 for each meeting of the Board of
Directors of Colony Bankcorp attended, and $300.00 for each meeting of the Board
of Directors at which they are not in attendance. In addition, each director of
the Company, except Terry L. Hester, W. B. Roberts, Jr., Terry Coleman, L.
Morris Downing, Jr. and Joe K. Shiver, is also a director of The Bank of
Fitzgerald, and in that capacity the directors are compensated for participation
of the Board of Directors of The Bank of Fitzgerald in the same manner as they
are compensated for their services as directors of Bankcorp.
W. B. Roberts, Jr. and Ben B. Mills, Jr. serves as director of Ashburn Bank
and receive additional compensation for service in that capacity of $300.00 for
each board meeting attended and $50.00 for each loan committee meeting. Terry
Coleman serves as director of The Bank of Dodge County and receives additional
compensation for service in that capacity of $50.00 for each loan committee
meeting and $200.00 for each board meeting attended. Joe K. Shiver serves as a
director of The Bank of Worth and receives additional compensation for those
services in that capacity of $25.00 for each loan committee meeting and $200.00
for each board meeting attended.
Under a plan, as amended, directors of The Bank of Fitzgerald were able to
defer all or a portion of director's fees in return for a deferred income
agreement under which a director agrees to serve as a director for either five
or ten years without the director's fees compensation in exchange for an
agreement for the Bank to pay the director a deferred amount of income at death,
or upon their attaining the age of 65. With the deferred compensation, the Bank
has purchased key man insurance on the participating directors to pay to the
Bank a death benefit equal in value to the projected cost of the deferred
income. Management believes the program will have no net cost to the Bank. The
Bank charged $43,865.05 in expenses to the deferred compensation arrangement
5
<PAGE>
in 1995, representing payments made to five directors who had attained the
specified age, together with a difference between premiums paid for the key man
insurance by the Bank and accrual for funding payments under the plan at
retirement and the increase in the cash value of the policies. All directors are
participating in the plan, except for new directors elected since 1990. Neither
the Company nor the other subsidiaries of the Company have a similar deferred
income arrangement. All fees covered by that deferred compensation plan have
been deferred, and all directors are now receiving directors fees. The Bank of
Fitzgerald continues to pay premiums on the insurance policy procured, and five
directors in 1995 received payments pursuant to that plan.
In 1995, the Board of Directors of the Company held 12 meetings. All
directors attended at least 75% of all meetings of the full Board of Directors
during 1995 with the exception of Terry Coleman who because of conflicts in his
capacity of serving as State Representative attended 8 of the 12 meetings.
The Board of Directors of the Company has formed the following Committees:
(a) an Audit Committee, presently consisting of Messrs. Branch, Hopkins and
Kimball, which is responsible for reviewing and evaluating the Company's
financial controls, (b) an Executive Committee, presently consisting of Messrs.
Minix, Massee, Ross, Kimball and Mills, which is responsible for assisting the
Board on the discharge of its duties and (c) an Incentive and Compensation
Committee, presently consisting of Messrs. Minix, Massee, Kimball, Downing and
Shiver, which is responsible for reviewing and setting the salaries and bonses
of the executive officers of the Company and establishing and reviewing a cash
incentive and profit sharing compensation plan for the employees of the Company
and subsidiary banks.
During the 1995 Fiscal Year, there were four meetings of the Audit
Committee, three meetings of the Executive Committee and three meetings of the
Incentive and Compensation Committee. No additional compensation was paid for
serving on these committees.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate annual compensation for each of the
Company's chief executive officers and for each of the Company's executive
officers and subsidiary bank's executive officers whose compensation exceeded
$100,000.00.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
----------------------------------------------------------
Name and Other Annual Long Term All Other
Principal Position(a) Year(b) Salary(c) Bonus(d) Compensation(e) Compensation(f) Compensation(g)
- --------------------- ------- ----------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
James D. Minix, President 1995 $116,000.04 $12,000.00 $20,347.22(1) $-0- $-0-
and Chief Executive 1994 $110,000.02 $10,000.00 $24,064.86(1) $-0- $-0-
Officer of Bankcorp 1993 $110,000.00 $ -0- $ 6,458.18(1) $-0- $-0-
Stephen C. Wood, President 1995 $ 91,000.00 $ -0- $17,124.91(1) $-0- $-0-
and Chief Executive Officer 1994 $ 82,500.00 $ 2,750.00 $18,674.75(1) $-0- $-0-
of Ashburn Bank 1993 $ 71,500.00 $ 2,750.00 $18,060.80(1) $-0- $-0-
Walter P. Patten, President 1995 $ 93,999.88 $ -0- $13,023.59(1) $-0- $-0-
and Chief Executive Officer 1994 $ 88,810.00 $ 600.00 $13,357.00(1) $-0- $-0-
of The Bank of Worth 1993 $ 83,007.28 $ 500.00 $12,648.00(1) $-0- $-0-
Thomas T. Dampier, 1995 $ 88,000.00 $ 8,800.00 $11,008.44(1) $-0- $-0-
President and Chief Executive 1994 N/A N/A N/A N/A N/A
Officer of The Bank of 1993 N/A N/A N/A N/A N/A
Fitzgerald
Joe D. Taylor, President 1995 $ 90,000.04 $ -0- $14,103.55(1) $-0- $-0-
and Chief Executive Officer 1994 N/A N/A N/A N/A N/A
of The Bank of Dodge County 1993 N/A N/A N/A N/A N/A
</TABLE>
6
<PAGE>
/(1)/ Includes dollar value of Group Term Life and company vehicle provided to
executive officers as follows:
<TABLE>
<CAPTION>
Name 1995 1994 1993
---- ---- ---- ----
<S> <C> <C> <C>
James D. Minix $ 1,472.22 $ 1,214.84 $ 1,658.18
Stephen C. Wood $ 2,024.91 $ 1,299.74 $ 1,773.31
Walter P. Patten $ 748.60 $ 228.00 $ 228.00
Thomas T. Dampier $ 1,368.44 N/A N/A
Joe D. Taylor $ 2,453.55 N/A N/A
</TABLE>
Includes contribution to the profit sharing plan of Colony Bankcorp, Inc.
and subsidiary banks as follows:
<TABLE>
<CAPTION>
Name 1995 1994 1993
---- ---- ---- ----
<S> <C> <C> <C>
James D. Minix $ 9,375.00 $14,400.02 $ -0-
Stephen C. Wood $ 9,100.00 $12,375.01 $11,287.49
Walter P. Patten $ 9,399.99 $10,729.00 $10,020.49
Thomas T. Dampier $ 4,840.00 N/A N/A
Joe D. Taylor $ 6,750.00 N/A N/A
</TABLE>
Includes director's fees paid by the Company and its subsidiaries as
follows:
<TABLE>
<CAPTION>
Name 1995 1994 1993
---- ---- ---- ----
<S> <C> <C> <C>
James D. Minix $ 9,500.00 $ 8,450.00 $ 4,800.00
Stephen C. Wood $ 6,000.00 $ 5,000.00 $ 5,000.00
Walter P. Patten $ 2,875.00 $ 2,400.00 $ 2,400.00
Thomas T. Dampier $ 4,800.00 N/A N/A
Joe D. Taylor $ 4,900.00 N/A N/A
</TABLE>
See "Certain Transactions" for additional information concerning fees
paid to directors.
/(f)/ There were no long term compensation awards for restricted stock awards
or options/SARs or long term compensation payouts for LTIP payouts for
any executive officers.
/(g)/ There was no additional compensation for any executive officers to be
reported in column (g)
Each of the subsidiary banks of the Company has adopted a profit sharing
and stock bonus plan which provides for the Board of Directors to make a
discretionary contribution to the plan in an amount out of profits not to exceed
15% of the total annual compensation of the employees eligible to participate in
the plan. Employees are eligible to participate after completion of one year of
service. The contribution by the Bank is allocated among the participants
according to the ratio of the participant's compensation to the total
compensation of all employees. The employee's interest vests over a period of 7
years; prior to 1989 an employee's interest in its individual account vested
over a period of 11 years. For the year ending December 31, 1995 the Board of
Directors of the Company and subsidiary banks voted to contribute in the
aggregate $209,745.00 of the profits of the Company to the Company's profit
sharing plans.
James D. Minix, Terry L. Hester and Edwin W. Hortman, Jr. are the only
executive officers of Colony Bankcorp, Inc. Mr. Minix has served as President
and Chief Executive Officer of the Company since June 1, 1994. Prior to being
elected President of the Company, he served as President of The Bank of
Fitzgerald from January 1, 1993 to June 1, 1994 and as President of Ashburn Bank
from February 26, 1990 to December 31, 1992. Mr. Hester has served as Executive
Vice President and Chief Financial Officer since June 1, 1994. Prior to being
elected Executive Vice President, he served as Acting President and Chief
Executive Officer of the Company from June 8, 1993 to June 1, 1994. Mr. Hester
has served as Treasurer of the Company since 1982. Mr. Hortman has served as
Senior Vice President since February 1996 and as Vice President from November,
1992 to February, 1996 and is responsible for credit review, compliance,
auditing and date processing.
7
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed McNair, McLemore, Middlebrooks & Co.
as the Company's independent public accountants for the fiscal year ending
December 31, 1996. Representatives of McNair, McLemore, Middlebrooks & Co. will
be present at the annual meeting and will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions by shareholders.
OTHER MATTERS
The Board of Directors does not contemplate bringing before the meeting any
matter other than those specified in the notice of annual meeting of
shareholders, nor does it have information that other matters will be presented
at the meeting. If other matters come before the meeting, signed proxies will be
voted upon such questions in accordance with the best judgment of the persons
acting under the proxies.
FORM 10-KSB
Upon receipt of a written request, the Company will, without charge,
furnish any owner of common stock a copy of its annual report to the Securities
and Exchange Commission on Form 10-KSB for the fiscal year ended December 31,
1995 including financial statements and the schedule thereto. Copies of exhibits
to the Form 10-KSB are also available upon specific request and payment of a
reasonable charge for reproduction. Such requests should be directed to the
secretary of the Company at the address indicated on the front of the proxy
statement.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 1996 annual
meeting of shareholders and to be included in the Company's proxy statement and
proxy for that meeting must be received by the Company, directed to the
attention of the Secretary, not later than December 5, 1996. Any such proposal
must comply with all respects with the rules and regulations of the Securities
and Exchange Commission.
By the order of the
Board of Directors
/s/ James D. Minix
JAMES D. MINIX, President
and Chief Executive Officer
Fitzgerald, Georgia
April 3, 1996
<PAGE>
EXHIBIT 99B
[LETTERHEAD OF McNAIR, McLEMORE, MIDDLEBROOKS & CO.]
January 29, 1996
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors and Stockholders
Colony Bankcorp, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheet of COLONY BANKCORP,
INC. AND SUBSIDIARIES as of December 31, 1995 and the related consolidated
statements of operations, changes in stockholders' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. The financial statements
of COLONY BANKCORP, INC. AND SUBSIDIARIES as of December 31, 1994 and for the
year then ended were audited by other auditors whose report dated February 3,
1995 expressed an unqualified opinion thereon.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of COLONY BANKCORP,
INC. AND SUBSIDIARIES as of December 31, 1995 and the results of operations and
cash flows for the year then ended in conformity with generally accepted
accounting principles.
As discussed in Note 3 to the consolidated financial statements, in 1994 COLONY
BANKCORP, INC. AND SUBSIDIARIES changed its method of accounting for investment
securities.
McNAIR, McLEMORE, MIDDLEBROOKS & CO.
- 1 -
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31
ASSETS
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
CASH AND BALANCES DUE FROM DEPOSITORY
INSTITUTIONS (NOTE 2) $ 9,517,260 $ 10,464,830
FEDERAL FUNDS SOLD 24,325,000 6,760,000
INVESTMENT SECURITIES (AGGREGATE FAIR VALUE OF
$45,917,217 AND $46,242,352 AS OF DECEMBER 31,
1995 AND 1994, RESPECTIVELY) (NOTE 3) 46,022,970 46,780,667
LOANS (NOTES 4 AND 5) 188,396,380 173,377,719
Allowance for Loan Losses (3,884,817) (3,028,750)
Unearned Interest and Fees (11,084) (18,500)
------------ ------------
184,500,479 170,330,469
PREMISES AND EQUIPMENT (NOTE 6) 5,623,964 5,821,850
OTHER REAL ESTATE 1,721,221 1,824,183
OTHER ASSETS 6,857,416 6,833,726
------------ ------------
TOTAL ASSETS $278,568,310 $248,815,725
============ ============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
- 2 -
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
DEPOSITS
Noninterest-Bearing $ 25,151,984 $ 25,742,573
Interest-Bearing (Note 8) 228,091,178 201,299,984
------------ ------------
253,243,162 227,042,557
BORROWED MONEY
Federal Funds Purchased - 760,000
Other Borrowed Money (Note 9) 2,504,468 2,779,334
------------ ------------
2,504,468 3,539,334
OTHER LIABILITIES 1,765,505 1,484,155
COMMITMENTS AND CONTINGENCIES (NOTE 11)
STOCKHOLDERS' EQUITY
Common Stock, Par Value $10 a Share; Authorized
5,000,000 Shares, Issued 1,291,110 and 608,055
Shares as of December 31, 1995 and 1994,
Respectively (Note 18) 12,911,100 6,080,550
Paid-In Capital 1,117,248 1,447,798
Retained Earnings 7,202,910 10,432,847
Net Unrealized Loss on Securities Available for Sale,
Net of Tax Benefit of $19,901 in 1995 and $514,479
in 1994 (Note 7) (176,083) (1,211,516)
------------ ------------
21,055,175 16,749,679
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $278,568,310 $248,815,725
============ ============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
- 3 -
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
INTEREST INCOME
Loans, Including Fees $20,762,932 $18,222,699
Federal Funds Sold 580,442 252,105
Deposits with Other Banks 31,433 43,236
Investment Securities
U. S. Treasury 88,572 83,759
U. S. Government Agencies 2,286,145 2,057,575
State, County and Municipal 242,150 259,073
Dividends on Other Investments 96,878 74,989
----------- -----------
24,088,552 20,993,436
----------- -----------
INTEREST EXPENSE
Deposits 11,104,853 8,671,610
Federal Funds Purchased 33,012 87,970
Other Borrowed Money 303,021 235,529
----------- -----------
11,440,886 8,995,109
----------- -----------
NET INTEREST INCOME 12,647,666 11,998,327
Provision for Loan Losses (Note 5) 3,216,050 2,080,500
----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 9,431,616 9,917,827
----------- -----------
NONINTEREST INCOME
Service Charges on Deposits 1,456,928 1,427,054
Other Service Charges, Commissions and Fees 137,291 101,807
Security Gains 41,747 8,209
Other 416,532 227,101
----------- -----------
2,052,498 1,764,171
----------- -----------
NONINTEREST EXPENSES
Salaries and Employee Benefits 4,195,964 4,065,570
Occupancy and Equipment 1,032,754 1,201,764
Directors' Fees 269,450 260,700
FDIC Premiums 338,901 576,351
Legal and Professional Fees 333,766 304,766
Other Real Estate Expense 452,579 315,399
Other 1,797,052 1,716,360
----------- -----------
8,420,466 8,440,910
----------- -----------
INCOME BEFORE INCOME TAXES 3,063,648 3,241,088
INCOME TAXES (NOTE 7) 923,128 1,021,998
----------- -----------
NET INCOME $ 2,140,520 $ 2,219,090
=========== ===========
NET INCOME PER SHARE OF COMMON STOCK $ 1.75 $ 1.82
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 1,221,200 1,216,110
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
- 4 -
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
NET
UNREALIZED
GAIN (LOSS)
ON SECURITIES
COMMON PAID-IN RETAINED AVAILABLE
STOCK CAPITAL EARNINGS FOR SALE TOTAL
----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1993 $ 6,080,550 $ 1,447,798 $ 8,529,946 $ (101,725) $15,956,569
Net Unrealized Loss on Securities
Available for Sale, Net of Tax (1,109,791) (1,109,791)
Dividends Paid (316,189) (316,189)
Net Income 2,219,090 2,219,090
----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1994 6,080,550 1,447,798 10,432,847 (1,211,516) 16,749,679
Equity Transfer 5,000,000 (5,000,000) -
Issuance of Common Stock 750,000 750,000 1,500,000
100 Percent Stock Split 6,080,550 (6,080,550)
Net Unrealized Gain on Securities
Available for Sale, Net of Tax 1,035,433 1,035,433
Dividends Paid (370,457) (370,457)
Net Income 2,140,520 2,140,520
----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1995 $12,911,100 $ 1,117,248 $ 7,202,910 $ (176,083) $21,055,175
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
- 5 -
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,140,520 $ 2,219,090
Adjustments to Reconcile Net Income to Net Cash
Provided from Operating Activities
Depreciation 527,425 551,638
Amortization and Accretion 108,998 172,699
Provision for Loan Losses 3,216,050 2,080,500
Deferred Income Taxes (86,458) (67,626)
Securities Gains (41,747) (8,209)
Loss on Sale of Equipment 50,656 -
Loss on Sale of Other Real Estate 250,314 -
CHANGE IN
Interest Receivable (382,621) (554,789)
Prepaid Expenses (61,726) -
Interest Payable 324,592 39,528
Accrued Expenses and Accounts Payable (91,296) -
Other 14,978 (633,251)
------------ ------------
5,969,685 3,799,580
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Interest-Bearing Deposits in Other Banks 1,783,000 (590,000)
Purchase of Investment Securities
Available for Sale (9,895,162) (11,987,267)
Held to Maturity - (3,772,428)
Proceeds from Sale of Investment Securities
Available for Sale 6,839,403 2,296,491
Proceeds from Maturities, Calls and Paydowns
of Investment Securities
Available for Sale 4,667,539 10,059,246
Held to Maturity 654,291 404,715
Proceeds from Sale of Equipment 50,493 -
Loans to Customers (18,422,128) (10,431,468)
Purchase of Premises and Equipment (430,689) (418,183)
Other Real Estate 888,716 -
------------ ------------
(13,864,537) (14,438,894)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Interest-Bearing Customer Deposits 26,791,194 6,544,152
Noninterest-Bearing Customer Deposits (590,589) 5,990,430
Proceeds from Long-Term Borrowings - 1,445,000
Dividends Paid (370,457) (316,189)
Federal Funds Purchased (760,000) 760,000
Note to Federal Home Loan Bank 200,000 -
Principal Payments on Notes and Debentures (474,866) (1,871,283)
Proceeds from Issuance of Common Stock 1,500,000 -
------------ ------------
26,295,282 12,552,110
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 18,400,430 1,912,796
CASH AND CASH EQUIVALENTS, BEGINNING 15,342,830 13,430,034
------------ ------------
CASH AND CASH EQUIVALENTS, ENDING $ 33,743,260 $ 15,342,830
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
- 6 -
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Colony Bankcorp, Inc. is a multi-bank holding company located in Fitzgerald,
Georgia. The consolidated financial statements include the accounts of Colony
Bankcorp, Inc. and its wholly-owned subsidiaries, The Bank of Fitzgerald,
Fitzgerald, Georgia; Ashburn Bank, Ashburn, Georgia; The Bank of Worth,
Sylvester, Georgia; The Bank of Dodge County, Eastman, Georgia and Community
Bank of Wilcox, Pitts, Georgia (the Banks). All significant intercompany
accounts have been eliminated in consolidation. The accounting and reporting
policies of Colony Bankcorp, Inc. conform to generally accepted accounting
principles and practices utilized in the commercial banking industry. The
following is a description of the more significant of those policies.
BASIS OF PRESENTATION
In preparing the financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of
the balance sheet date and revenues and expenses for the period. Actual results
could differ significantly from those estimates.
Material estimates that are particularly susceptible to significant change in
the near-term relate to the determination of the allowance for loan losses, the
valuation of real estate acquired in connection with foreclosures or in
satisfaction of loans and the valuation of deferred tax assets.
INVESTMENT SECURITIES
The Company adopted Statement of Financial Accounting Standards (SFAS) No. 115,
Accounting for Certain Investments in Debt and Equity Securities, as of January
1, 1994. Under the provisions of SFAS No. 115, the Company must classify its
securities as trading, available for sale or held to maturity. Trading
securities are purchased and held for sale in the near term. Securities held to
maturity are those which the Company has the ability and intent to hold until
maturity. All other securities not classified as trading or held to maturity
are considered available for sale.
Securities available for sale are measured at fair value with unrealized gains
and losses reported net of deferred taxes as a separate component of
stockholders' equity. Fair value represents an approximation of realizable
value as of December 31, 1995 and 1994. Realized and unrealized gains and
losses are determined using the specific identification method.
LOANS
Loans are generally reported at principal amount less unearned interest and
fees. On January 1, 1995, the Company adopted SFAS No. 114, Accounting by
Creditors for Impairment of a Loan and SFAS No. 118, Accounting by Creditors for
Impairment of a Loan-Income Recognition and Disclosures. Impaired loans are
loans for which principal and interest are unlikely to be collected in
accordance with the original loan terms and, generally, represent loans
delinquent in excess of 120 days which have been placed on nonaccrual status and
for which collateral values are less than outstanding principal and interest.
Small balance, homogeneous loans are excluded from impaired loans. Generally,
interest payments received on impaired loans are applied to principal. Upon
receipt of all loan principal, additional interest payments are recognized as
interest income on the cash basis.
- 7 -
<PAGE>
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOANS (CONTINUED)
Other nonaccrual loans are loans for which payments of principal and interest
are considered doubtful of collection under original terms but collateral values
equal or exceed outstanding principal and interest.
Colony Bankcorp, Inc.'s loans consist of commercial, financial and agricultural
loans, real estate mortgage loans and consumer loans primarily to individuals
and entities located throughout central and south Georgia. Accordingly, the
ultimate collectibility of the loans is largely dependent upon economic
conditions in the central and south Georgia area.
ALLOWANCE FOR LOAN LOSSES
The allowance method is used in providing for losses on loans. Accordingly, all
loan losses decrease the allowance and all recoveries increase it. The
provision for loan losses is based on factors which, in management's judgment,
deserve current recognition in estimating possible loan losses. Such factors
considered by management include growth and composition of the loan portfolio,
economic conditions and the relationship of the allowance for loan losses to
outstanding loans.
An allowance for loan losses is maintained for all impaired loans. Provisions
are made for impaired loans upon changes in expected future cash flows or
estimated net realizable value of collateral. When determination is made that
impaired loans are wholly or partially uncollectible, the uncollectible portion
is charged off.
Management believes the allowance for possible loan losses is adequate. While
management uses available information to recognize losses on loans, future
additions to the allowance may be necessary based on changes in economic
conditions. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Company's allowance for loan
losses. Such agencies may require the Company to recognize additions to the
allowance based on their judgment about information available to them at the
time of their examination.
PREMISES AND EQUIPMENT
Premises and equipment are recorded at acquisition cost net of accumulated
depreciation.
Depreciation is charged to operations over the estimated useful lives of the
assets. The estimated useful lives and methods of depreciation are as follows:
<TABLE>
<CAPTION>
DESCRIPTION LIFE IN YEARS METHOD
- ----------------------- ------------- -----------------
<S> <C> <C>
Banking Premises 15-40 Straight-Line and
Accelerated
Furniture and Equipment 5-10 Straight-Line and
Accelerated
</TABLE>
Expenditures for major renewals and betterments are capitalized. Maintenance and
repairs are charged to operations as incurred. When property and equipment are
retired or sold, the cost and accumulated depreciation are removed from the
respective accounts and any gain or loss is reflected in other income or
expense.
- 8 -
<PAGE>
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH FLOWS
For reporting cash flows, cash and cash equivalents include cash on hand,
noninterest-bearing amounts due from banks and federal funds sold. Cash flows
from demand deposits, NOW accounts, savings accounts, loans and certificates of
deposit are reported net.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in the
consolidated financial statements and consist of taxes currently due plus
deferred taxes. Deferred taxes are recognized for differences between the basis
of assets and liabilities for financial statement and income tax purposes. The
differences relate primarily to depreciable assets (use of different
depreciation methods for financial statement and income tax purposes) and
allowance for loan losses (use of the allowance method for financial statement
purposes and the experience method for tax purposes). The deferred tax assets
and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled.
OTHER REAL ESTATE
Other real estate generally represents real estate acquired through foreclosure
and is initially recorded at the lower of cost or estimated market value at the
date of acquisition. Losses from the acquisition of property in full or partial
satisfaction of debt are recorded as loan losses. Subsequent declines in value,
routine holding costs and gains or losses upon disposition are included in other
losses.
STOCKHOLDERS' EQUITY
Banking regulations impose minimum capital levels in relation to assets. To be
considered "well capitalized," a financial institution must generally have a
leverage ratio of at least 5 percent, a tier 1 risk-based capital ratio of at
least 6 percent and a total risk-based capital ratio of at least 10 percent. As
of December 31, 1995, the Company is in compliance with its minimum regulatory
capital requirements and is considered "well capitalized" as defined by FDICIA.
Cash dividends payable to the parent company by subsidiary banks are limited by
various bank regulatory agencies. Dividends available for payment to the parent
during 1996 without prior approval approximated $1,264,187. Standard
limitations may be exceeded by specific approval of regulatory authorities.
(2) CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Components of cash and balances due from depository institutions are as follows
as of December 31:
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Cash on Hand and Cash Items $3,299,455 $ 2,307,925
Noninterest-Bearing Deposits with Other Banks 6,118,805 6,274,905
Interest-Bearing Deposits with Other Banks 99,000 1,882,000
---------- -----------
$9,517,260 $10,464,830
========== ===========
</TABLE>
- 9 -
<PAGE>
(3) INVESTMENT SECURITIES
Investment securities as of December 31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE
U.S. Treasury $ 988,704 $ 3,796 $ 992,500
U.S. Government Agencies
Mortgage-Backed 22,209,705 81,559 $(255,095) 22,036,169
Other 14,449,180 67,655 (29,227) 14,487,608
State, County and Municipal 3,065,563 80,821 (8,042) 3,138,342
The Banker's Bank Stock 50,000 50,000
Federal Home Loan Bank Stock 249,800 249,800
Marketable Equity Securities 1,130,024 (137,452) 992,572
----------- -------- --------- -----------
$42,142,976 $233,831 $(429,816) $41,946,991
=========== ======== ========= ===========
SECURITIES HELD TO MATURITY
U.S. Government Agencies $ 2,149,888 $ (23,434) $ 2,126,454
State, County and Municipal 1,926,091 (82,265) 1,843,826
----------- -------- --------- -----------
$ 4,075,979 $ - $(105,699) $ 3,970,280
=========== ======== ========= ===========
</TABLE>
The amortized cost and fair value of investment securities as of December 31,
1995, by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because issuers have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
SECURITIES
---------------------------------------------------
AVAILABLE FOR SALE HELD TO MATURITY
------------------------- -----------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
----------- ----------- ---------- ----------
<S> <C> <C> <C> C>
Due in One Year or Less $ 6,530,541 $ 6,541,544
Due After One Year Through Five Years 11,434,647 11,539,923 $3,321,442 $3,281,521
Due After Five Years Through Ten Years 330,258 332,795 298,257 286,820
Due After Ten Years 208,001 204,188 456,280 401,939
----------- ----------- ---------- ----------
18,503,447 18,618,450 4,075,979 3,970,280
Federal Home Loan Bank Stock 249,800 249,800
The Banker's Bank Stock 50,000 50,000
Marketable Equity Securities 1,130,024 992,572
Mortgaged-Backed Securities 22,209,705 22,036,169
----------- ----------- ---------- ----------
$42,142,976 $41,946,991 $4,075,979 $3,970,280
=========== =========== ========== ==========
</TABLE>
- 10 -
<PAGE>
(3) INVESTMENT SECURITIES (CONTINUED)
Investment securities as of December 31, 1994 are summarized as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE
U.S. Government and Agencies $ 9,708,445 $ 1,289 $ (231,009) $ 9,478,725
Mortgage-Backed Securities 26,771,180 25,145 (1,331,139) 25,465,186
State, County and Municipal 2,151,208 32,067 (9,525) 2,173,750
Marketable Equity Securities 1,130,022 (212,822) 917,200
----------- ------- ----------- -----------
$39,760,855 $58,501 $(1,784,495) $38,034,861
=========== ======= =========== ===========
SECURITIES HELD TO MATURITY
U.S. Government and Agencies $ 5,906,547 $ (306,047) $ 5,600,500
State, County and Municipal 2,839,259 (232,268) 2,606,991
----------- ------- ----------- -----------
$ 8,745,806 $ - $ (538,315) $ 8,207,491
=========== ======= =========== ===========
</TABLE>
Proceeds from sales of investments available for sale were $6,839,403 in 1995
and $2,296,491 in 1994. Gross realized gains totaled $41,747 and $8,209 in 1995
and 1994, respectively.
Investment securities having a carrying value approximating $29,163,000 and
$27,753,000 as of December 31, 1995 and 1994, respectively, were pledged to
secure public deposits and for other purposes.
(4) LOANS
The composition of loans as of December 31 are:
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Loans Secured by Real Estate
Construction and Land Development $ 371,075 $ 438,979
Secured by Farmland (Including Farm Residential and
Other Improvements) 23,441,501 25,284,371
Other 89,796,616 75,550,393
Loans to Finance Agricultural Production and Other
Loans to Farmers 17,243,711 17,187,344
Commercial and Industrial Loans (U.S. Addresses) 13,907,281 18,170,133
Loans to Individuals for Household, Family and Other
Personal Expenditures 36,393,220 32,252,357
All Other Loans 7,242,976 4,494,142
------------ ------------
$188,396,380 $173,377,719
============ ============
</TABLE>
- 11 -
<PAGE>
(4) LOANS (CONTINUED)
Nonaccrual loans are loans for which principal and interest are doubtful of
collection in accordance with original loan terms and for which accruals of
interest have been discontinued due to payment delinquency. Nonaccrual loans
totaled $5,228,900 and $2,092,500 as of December 31, 1995 and 1994,
respectively. Foregone interest on nonaccrual loans approximated $462,400 in
1995 and $141,400 in 1994.
Effective January 1, 1995, Colony Bankcorp, Inc. recognized impaired loans as
nonaccrual loans delinquent in excess of 120 days for which collateral values
were insufficient to recover outstanding principal and interest under original
loan terms. Impaired loan data as of December 31, 1995 and for the year then
ended follows:
<TABLE>
<S> <C>
Total Investment in Impaired Loans $517,138
Less Allowance for Impaired Loan Losses (38,696)
--------
Net Investment, December 31, 1995 $478,442
========
Average Investment during 1995 $517,160
========
Income Recognized during 1995 $ 3,219
========
Income Collected during 1995 $ -
========
</TABLE>
(5) ALLOWANCE FOR LOAN LOSSES
Transactions in the allowance for loan losses are summarized below for the years
ended December 31:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
BALANCE, BEGINNING $ 3,028,750 $ 2,635,538
Provision Charged to Operating Expenses 3,216,050 2,080,500
Loans Charged Off (2,886,405) (1,812,437)
Loan Recoveries 526,422 125,149
----------- -----------
BALANCE, ENDING $ 3,884,817 $ 3,028,750
=========== ===========
</TABLE>
The 1995 allowance for loan losses presented above includes an allowance for
impaired loan losses which was established as of January 1, 1995. Transactions
in the allowance for impaired loan losses during 1995 were as follows:
<TABLE>
<S> <C>
BALANCE, BEGINNING $26,895
Provision Charged to Operating Expenses 11,801
Loans Charged Off -
Loan Recoveries -
-------
BALANCE, ENDING $38,696
=======
</TABLE>
- 12 -
<PAGE>
(6) PREMISES AND EQUIPMENT
Premises and equipment are comprised of the following as of December 31:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Land $ 838,346 $ 775,696
Building 4,790,760 4,772,256
Furniture, Fixtures and Equipment 4,266,973 4,564,471
Leasehold Improvements 17,332 -
----------- -----------
9,913,411 10,112,423
Accumulated Depreciation (4,289,447) (4,290,573)
----------- -----------
$ 5,623,964 $ 5,821,850
=========== ===========
</TABLE>
Depreciation charged to operations totaled $527,425 in 1995 and $551,638 in
1994.
(7) INCOME TAXES
The Company records income taxes under SFAS No. 109, Accounting for Income
Taxes, which requires an asset and liability approach to financial accounting
and reporting for income taxes. Deferred income tax assets and liabilities are
computed annually for differences between the financial statement and tax bases
of assets and liabilities that will result in taxable or deductible amounts in
the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is the tax payable or
refundable for the period plus or minus the change during the period in deferred
tax assets and liabilities.
The components of income tax expense for the years ended December 31 are as
follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Current Expense $1,009,586 $1,089,624
Deferred Tax Benefit (86,458) (67,626)
---------- ----------
$ 923,128 $1,021,998
========== ==========
</TABLE>
- 13 -
<PAGE>
(7) INCOME TAXES (CONTINUED)
The income tax expense of $923,128 in 1995 and $1,021,998 in 1994 is less than
the income taxes computed by applying the federal statutory rate of 34 percent
to income before income taxes. The reasons for the differences are as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
FEDERAL STATUTORY INCOME TAXES $1,041,640 $1,101,970
Tax-Exempt Interest (114,060) (119,210)
Interest Expense Disallowance 16,546 12,738
Premiums on Officers' Life Insurance (19,688) (11,329)
Meal and Entertainment Disallowance 2,515 5,140
Other (3,825) 32,689
---------- ----------
ACTUAL INCOME TAXES $ 923,128 $1,021,998
========== ==========
</TABLE>
Deferred taxes in the accompanying balance sheets as of December 31 include
the following:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Deferred Tax Assets
Allowance for Loan Losses $297,069 $285,455
Deferred Compensation 33,901 105,316
Other Real Estate 148,769 3,400
Other 890 -
-------- --------
480,629 394,171
Unrealized Loss on Securities Available for Sale 19,901 514,479
-------- --------
$500,530 $908,650
======== ========
</TABLE>
(8) DEPOSITS
Components of interest-bearing deposits as of December 31 are as follows:
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Interest-Bearing Demand $ 50,440,527 $ 52,274,192
Savings 9,855,540 10,542,733
Time, $100,000 and Over 48,111,114 43,188,835
Other Time 119,683,997 95,294,224
------------ ------------
$228,091,178 $201,299,984
============ ============
</TABLE>
- 14 -
<PAGE>
(9) OTHER BORROWED MONEY
Other borrowed money is comprised of the following as of December 31:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Advance agreement with Federal Home Loan Bank of
Atlanta, dated March 31, 1995, payable in full on
December 31, 1995. Interest rate determined under the
fixed rate credit program. Effective interest rate of
6.86% as of December 31, 1995. $ 200,000 $ -
Variable interest debentures payable, due in annual
payments of $266,867, plus interest, on November 1,
1996 through November 1, 1999, collateralized by
100% of the common stock of Ashburn Bank. Effective
interest rate of 8.0% as of December 31, 1995. 1,067,468 1,334,334
Variable interest at prime note payable, due in annual
payments of $207,143 plus quarterly interest, balance
due December 19, 1997. Collateralized by 100% of the
common stock of The Bank of Fitzgerald and 100% of
the common stock of The Bank of Worth. Effective
interest rate of 8.5% as of December 31, 1995. 1,237,000 1,445,000
---------- ----------
$2,504,468 $2,779,334
========== ==========
</TABLE>
Maturities of borrowed money for the next five years are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ----------
<S> <C>
1996 $ 674,010
1997 1,296,724
1998 266,867
1999 266,867
2000 -
Thereafter -
----------
$2,504,468
==========
</TABLE>
(10) PROFIT SHARING PLAN
The Company has a profit sharing plan that covers substantially all employees
who meet certain age and service requirements. It is the Company's policy to
make contributions to the plan as approved annually by the board of directors.
The total provision for contributions to the plan was $209,745 for 1995 and
$296,252 for 1994.
- 15 -
<PAGE>
(11) COMMITMENTS AND CONTINGENCIES
In the normal course of business, certain commitments and contingencies are
incurred which are not reflected in the consolidated financial statements. The
Bank had commitments under standby letters of credit to U.S. addressees
approximating $3,581,405 as of December 31, 1995 and $2,907,993 as of December
31, 1994. No losses are anticipated as a result of commitments and
contingencies.
(12) DEFERRED COMPENSATION PLAN
The Banks have deferred compensation plans covering directors choosing to
participate through individual deferred compensation contracts. In accordance
with terms of the contracts, the Banks are committed to pay the directors
deferred compensation over a period of 10 years, beginning at age 65. In the
event of a director's death before age 65, payments are made to the director's
named beneficiary over a period of 10 years, beginning on the first day of the
month following the death of the director.
Liabilities accrued under the plan totaled $350,685 and $309,753 as of December
31, 1995 and 1994, respectively. Benefit payments under the contracts were
$29,991 in 1995 and $23,520 in 1994. Provisions charged to operations totaled
$69,408 in 1995 and $62,688 in 1994.
(13) INTEREST INCOME AND EXPENSE
Interest income of $241,333 and $258,667 from state, county and municipal bonds
was exempt from regular income taxes in 1995 and 1994, respectively.
Interest on deposits includes interest expense on time certificates of $100,000
or more totaling $2,729,989 and $1,805,757 for the years ended December 31, 1995
and 1994, respectively.
(14) SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for the following were made during the years ended December 31:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Interest Expense $11,224,385 $ 8,955,581
=========== ===========
Income Taxes $ 1,111,453 $ 440,242
=========== ===========
</TABLE>
Noncash financing and investment activities for the years ended December 31 are
as follows:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Acquisitions of Real Estate Through Loan Foreclosures $ 1,047,224 $ -
=========== ===========
100 Percent Stock Split Effected as Stock Dividend $ 6,080,550 $ -
=========== ===========
Net Unrealized Gains (Losses) on Securities Available for Sale $ 1,568,838 $(1,624,270)
=========== ===========
</TABLE>
- 16 -
<PAGE>
(15) RELATED PARTY TRANSACTIONS
The aggregate balance of direct and indirect loans to directors, executive
officers or principal holders of equity securities of the Bank was $8,987,256 as
of December 31, 1995 and $5,999,531 as of December 31, 1994. All such loans
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than a normal risk of collectibility. A
summary of activity of related party loans is shown below:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
BALANCE, BEGINNING $ 5,999,531 $ 6,199,215
New Loans 8,570,264 3,310,595
Repayments (5,582,539) (2,752,815)
Transactions Due to Changes in Directors - (757,464)
----------- -----------
BALANCE, ENDING $ 8,987,256 $ 5,999,531
=========== ===========
</TABLE>
(16) FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107, Disclosures about Fair Value of Financial Instruments, requires
disclosure of fair value information about financial instruments, whether or not
recognized on the face of the balance sheet, for which it is practicable to
estimate that value. The assumptions used in the estimation of the fair value
of Colony Bankcorp, Inc. and Subsidiaries' financial instruments are detailed
below. Where quoted prices are not available, fair values are based on
estimates using discounted cash flows and other valuation techniques. The use
of discounted cash flows can be significantly affected by the assumptions used,
including the discount rate and estimates of future cash flows. The following
disclosures should not be considered a surrogate of the liquidation value of the
Company, but rather a good-faith estimate of the increase or decrease in value
of financial instruments held by the Company since purchase, origination or
issuance.
CASH AND SHORT-TERM INVESTMENTS - For cash, due from banks, bank-owned
deposits and federal funds sold, the carrying amount is a reasonable
estimate of fair value.
INVESTMENT SECURITIES - Fair values for investment securities are based on
quoted market prices.
LOANS - The fair value of fixed rate loans is estimated by discounting the
future cash flows using the current rates at which similar loans would be
made to borrowers with similar credit ratings. For variable rate loans, the
carrying amount is a reasonable estimate of fair value.
DEPOSIT LIABILITIES - The fair value of demand deposits, savings accounts
and certain money market deposits is the amount payable on demand at the
reporting date. The fair value of fixed maturity certificates of deposit is
estimated by discounting the future cash flows using the rates currently
offered for deposits of similar remaining maturities.
STANDBY LETTERS OF CREDIT - Because standby letters of credit are made
using variable rates, the contract value is a reasonable estimate of fair
value.
- 17 -
<PAGE>
(16) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
The carrying amount and estimated fair values of the Company's financial
instruments as of December 31, 1995 are as follows:
<TABLE>
<CAPTION>
CARRYING ESTIMATED
AMOUNT FAIR VALUE
-------- ----------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Cash and Short-Term Investments $ 33,842 $ 33,842
Investment Securities Available for Sale 41,947 41,947
Investment Securities Held to Maturity 4,076 3,970
Loans 188,396 188,948
LIABILITIES
Deposits 253,243 253,534
Other Borrowed Money 2,504 2,504
UNRECOGNIZED FINANCIAL INSTRUMENTS
Standby Letters of Credit 3,581 3,581
</TABLE>
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates do not reflect any premium or discount that could result from offering
for sale at one time the Company's entire holdings of a particular financial
instrument. Because no market exists for a significant portion of the Company's
financial instruments, fair value estimates are based on many judgments. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on and off-balance sheet financial
instruments without attempting to estimate the value of anticipated future
business and the value of assets and liabilities that are not considered
financial instruments. Significant assets and liabilities that are not
considered financial instruments include deferred income taxes and premises and
equipment. In addition, the tax ramifications related to the realization of the
unrealized gains and losses can have a significant effect on fair value
estimates and have not been considered in the estimates.
- 18 -
<PAGE>
(17) FINANCIAL INFORMATION OF COLONY BANKCORP, INC. (PARENT ONLY)
The parent company's balance sheets as of December 31, 1995 and 1994 and the
related statements of income and cash flows for the years then ended are as
follows:
COLONY BANKCORP, INC. (PARENT ONLY)
BALANCE SHEETS
DECEMBER 31
ASSETS
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Cash $ 95,069 $ 70,455
Investment in Subsidiary, at Equity 22,997,252 19,214,815
Other 373,493 397,002
----------- -----------
TOTAL ASSETS $23,465,814 $19,682,272
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Dividends Payable $ 96,833 $ 79,047
Notes and Debentures Payable 2,304,468 2,779,334
Other 9,338 74,212
----------- -----------
2,410,639 2,932,593
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock, Par Value $10; 5,000,000 Shares
Authorized, 1,291,110 and 608,055 Shares
Issued and Outstanding as of December 31,
1995 and 1994, Respectively 12,911,100 6,080,550
Paid-In Capital 1,117,248 1,447,798
Retained Earnings 7,202,910 10,432,847
Net Unrealized Loss on Securities Available for
Sale, Net of Tax (176,083) (1,211,516)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 21,055,175 16,749,679
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $23,465,814 $19,682,272
=========== ===========
</TABLE>
- 19 -
<PAGE>
(17) FINANCIAL INFORMATION OF COLONY BANKCORP, INC. (PARENT ONLY) (CONTINUED)
COLONY BANKCORP, INC. (PARENT ONLY)
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
INCOME
Dividends from Subsidiary $1,025,000 $ 875,000
Management Fees from Subsidiaries 600,492 554,074
Other 9,874 15,101
---------- ----------
1,635,366 1,444,175
---------- ----------
EXPENSE
Interest 221,901 235,529
Amortization 17,951 149,897
Other 772,039 631,140
---------- ----------
1,011,891 1,016,566
---------- ----------
INCOME BEFORE TAXES AND EQUITY IN UNDISTRIBUTED
EARNINGS OF SUBSIDIARY 623,475 427,609
Income Tax Benefits 120,040 102,988
---------- ----------
INCOME BEFORE EQUITY IN UNDISTRIBUTED EARNINGS
OF SUBSIDIARY 743,515 530,597
Equity in Undistributed Earnings of Subsidiary 1,397,005 1,688,493
---------- ----------
NET INCOME $2,140,520 $2,219,090
========== ==========
</TABLE>
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<PAGE>
(17) FINANCIAL INFORMATION OF COLONY BANKCORP, INC. (PARENT ONLY) (CONTINUED)
COLONY BANKCORP, INC. (PARENT ONLY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 2,140,520 $ 2,219,090
Adjustments to Reconcile Net Income to Net Cash
Provided from Operating Activities
Depreciation and Amortization 32,664 156,829
Equity in Undistributed Earnings of Subsidiary (1,397,005) (1,688,493)
Other (49,441) (134,782)
----------- -----------
726,738 552,644
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Infusion in Subsidiary (1,350,000) -
Purchases of Premises and Equipment (6,801) (45,542)
----------- -----------
(1,356,801) (45,542)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid (370,457) (316,189)
Proceeds from Issuance of Common Stock 1,500,000 -
Principal Payments on Notes and Debentures (474,866) (1,871,283)
Proceeds from Notes and Debentures - 1,445,000
----------- -----------
654,677 (742,472)
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 24,614 (235,370)
CASH AND CASH EQUIVALENTS, BEGINNING 70,455 305,825
----------- -----------
CASH AND CASH EQUIVALENTS, ENDING $ 95,069 $ 70,455
=========== ===========
</TABLE>
(18) COMMON STOCK SPLIT
On May 16, 1995, the board of directors approved a 100 percent stock split to be
effected on July 1, 1995 in the form of a dividend to stockholders of record on
June 30, 1995. Share and per share data for all periods presented in the
accompanying consolidated financial statements and related notes have been
retroactively restated to reflect the additional shares outstanding resulting
from the stock split.
(19) RECLASSIFICATIONS
Certain reclassifications have been made in the 1994 financial statements to
conform to the 1995 presentation.
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