<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1997 COMMISSION FILE NUMBER 0-12436
COLONY BANKCORP, INC.
---------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
GEORGIA 58-1492391
------- ----------
(STATE OF OTHER JURISDICTION) (I.R.S. EMPLOYER)
OF INCORPORATION OR ORGANIZATION IDENTIFICATION NUMBER
115 SOUTH GRANT STREET, FITZGERALD, GEORGIA 31750
-------------------------------------------------
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES
912/426-6000
------------
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED REPORTS REQUIRED TO
BE FILED BY SECTIONS 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 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.
YES X NO
--- ---
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE CLOSE OF THE PERIOD COVERED BY THIS REPORT.
CLASS OUTSTANDING AT JUNE 30, 1997
----- ----------------------------
COMMON STOCK, $10 PAR VALUE 1,448,842
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
THE FOLLOWING FINANCIAL STATEMENTS ARE PROVIDED FOR COLONY BANKCORP, INC. AND
SUBSIDIARIES: THE BANK OF FITZGERALD, ASHBURN BANK, COMMUNITY BANK OF WILCOX,
THE BANK OF DODGE COUNTY, THE BANK OF WORTH, BROXTON STATE BANK AND COLONY
MANAGEMENT SERVICES, INC.
A. CONSOLIDATED BALANCE SHEETS - JUNE 30, 1997 AND DECEMBER 31, 1996.
B. CONSOLIDATED STATEMENTS OF INCOME - FOR THE THREE MONTHS ENDED JUNE
30, 1997 AND 1996 AND FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996.
C. CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION - FOR THE SIX
MONTHS ENDED JUNE 30, 1997 AND 1996.
THE CONSOLIDATED FINANCIAL STATEMENTS FURNISHED HAVE NOT BEEN EXAMINED BY
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, BUT REFLECT, IN THE OPINION OF
MANAGEMENT, ALL ADJUSTMENTS NECESSARY FOR A FAIR PRESENTATION OF THE RESULTS OF
OPERATIONS FOR THE PERIODS PRESENTED.
THE RESULTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1997 ARE NOT
NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED FOR THE FULL YEAR.
2
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
Cash and Balance Due from Depository
Institutions (Note 2) $ 12,751 $ 13,444
Federal Funds Sold 11,240 22,740
Investment Securities (Aggregate Fair Value
of $60,954 and $63,328 Respectively) (Note 3) 60,983 63,377
Loans (Notes 4 and 5) 232,812 206,876
Allowance for Loan Losses (4,682) (4,435)
Unearned Interest and Fees (10) (13)
-------- --------
Total Loans 228,120 202,428
Premises and Equipment (Note 6) 7,825 6,953
Other Real Estate 1,601 2,803
Other Assets 7,984 7,795
-------- --------
Total Assets $330,504 $319,540
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-Bearing $ 27,681 $ 28,723
Interest-Bearing (Note 8) 258,083 256,953
-------- --------
Total Deposits 285,764 285,676
Borrowed Money:
Federal Funds Purchased -0- 160
Other Borrowed Money (Note 9) 15,008 5,496
-------- --------
Total Borrowed Money 15,008 5,656
Other Liabilities 2,496 2,617
Commitments and Contingencies (Note 11)
Stockholders' Equity:
Common Stock, Par Value $10 a Share; Authorized
5,000,000 shares, Issued 1,448,842 shares as of
June 30, 1997 and December 31, 1996 Respectively 14,488 14,488
Paid-In Capital 1,137 1,137
Retained Earnings 11,966 10,145
Net Unrealized Loss on Securities Available for Sale,
Net of Tax Benefit of $166 in 1997 and $3 in 1996 (355) (179)
-------- --------
Total Stockholders' Equity 27,236 25,591
-------- --------
Total Liabilities and Stockholders' Equity $330,504 $319,540
======== ========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
6/30/97 6/30/96 6/30/97 6/30/96
------- ------- ------- -------
<S> <C> <C> <C> <C>
Interest Income:
Loans, including fees $5,990 $5,516 $11,716 $10,936
Federal Funds Sold 174 177 387 448
Deposits with Other Banks 12 2 26 5
Investment Securities:
U.S. Treasury & Federal Agencies 852 722 1,731 1,366
State, County and Municipal 75 76 151 152
Other Investments 20 22 49 50
------ ------ ------- -------
Total Interest Income 7,123 6,515 14,060 12,957
------ ------ ------- -------
Interest Expense:
Deposits 3,262 3,144 6,455 6,293
Federal Funds Purchased 17 1 22 3
Other Borrowed Money 129 74 221 145
------ ------ ------- -------
Total Interest Expense 3,408 3,219 6,698 6,441
------ ------ ------- -------
Net Interest Income 3,715 3,296 7,362 6,516
Provision for Loan Losses 468 501 753 1,145
------ ------ ------- -------
Net Interest Income After Provision 3,247 2,795 6,609 5,371
------ ------ ------- -------
Noninterest Income:
Service Charge on Deposits 454 445 909 870
Other Service Charges, Commissions & Fees 88 164 223 315
Security Gains, net 2 0 9 3
Other Income 116 60 213 156
------ ------ ------- -------
Total Noninterest Income 660 669 1,354 1,344
------ ------ ------- -------
Noninterest Expense:
Salaries and Employee Benefits 1,480 1,295 2,746 2,474
Occupancy and Equipment 350 291 687 563
Other Operating Expenses 757 813 1,571 1,520
------ ------ ------- -------
Total Noninterest Expense 2,587 2,399 5,004 4,557
------ ------ ------- -------
Income Before Income Taxes $1,320 1,065 2,959 2,158
Income Taxes 402 334 920 664
------ ------ ------- -------
Net Income $ 918 $ 731 $ 2,039 $ 1,494
====== ====== ======= =======
Net Income Per Share of Common Stock $0.63 $0.50 $1.41 $ 1.03
===== ===== ===== =======
Weighted Average Shares Outstanding 1,448,842 1,448,842 1,448,842 1,448,842
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements
4
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
------ ------
CASH FLOW FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $ 2,039 $ 1,494
Adjustments to reconcile net income to net cash provided
by operating activities:
(Gain) loss on sale of investment securities (9) (3)
Depreciation 348 257
Provision for loan losses 753 1,145
Amortization of excess costs 26 24
Other prepaids, deferrals and accruals, net 471 (1,552)
-------- --------
Total Adjustments $ 1,589 $ (129)
-------- --------
Net cash provided by operating activities $ 3,628 $ 1,365
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale ($ 8,565) ($12,683)
Proceeds from sales of securities available for sale 2,998 498
Proceeds from maturities of securities available for sale 7,491 5,871
Purchase of securities held for investment -0- -0-
Proceeds from maturities of securities held for investment 191 36
Proceeds from sales of securities held for investment -0- -0-
Decrease (Increase) in interest-bearing deposits in banks 297 (317)
(Increase) in loans (25,939) (13,198)
Purchase of premises and equipment (1,220) (213)
-------- --------
Net cash (used in) investing activities ($24,747) ($20,006)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits $ 88 ($991)
Net (decrease) increase in Federal Funds Purchased (160) 1,360
Dividends paid (217) (194)
Net (decrease) increase in short term & long-term borrowings 9,512 896
-------- --------
Net cash provided by financing activities $9,223 $ 1,071
-------- --------
Net increase (decrease) in cash and cash equivalents (11,896) (17,570)
Cash and cash equivalents at beginning of period 35,293 35,368
-------- --------
Cash and cash equivalents at end of period $23,397 $17,798
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
COLONY BANKCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(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; Community Bank
of Wilcox, Pitts, Georgia,; Broxton State Bank, Broxton, Georgia (the Banks) and
Colony Management Services, Inc., Fitzgerald, Georgia. 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 records investment securities under Statement of Financial
Accounting Standards (SFAS) No. 115 Accounting for Certain Investments in Debt
and Equity Securities. 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 June 30, 1997 and December 31, 1996. Realized and unrealized gains and
losses are determined using the specific identification method. Premiums and
discounts are recognized in interest income using the interest method over the
period to maturity.
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.
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.
6
<PAGE>
(1) Summary of Significant Accounting Policies (continued)
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 collectability of the loans is largely dependent upon economic
conditions in the central and south Georgia area.
Allowance for Loans 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 judgement 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.
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.
7
<PAGE>
(1) Summary of Significant Accounting Policies (continued)
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 acquisitions 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.
(2) Cash and Balances Due from Depository Institutions
- ------------------------------------------------------
Components of cash and balances due from depository institutions at June 30,
1997 and December 31, 1996 are as follows:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Cash on Hand and Cash Items $ 2,673 $ 3,692
Noninterest-Bearing Deposits with Other Banks 9,484 8,861
Interest-Bearing Deposits with Other Banks 594 891
------- -------
$12,751 $13,444
======= =======
</TABLE>
(3) Investment Securities
- -------------------------
Investment securities as of June 30, 1997 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 $ 1,000 $ -0- $ -0- $ 1,000
U.S. Government Agencies:
Mortgage-Backed 12,937 49 (134) 12,852
Other 36,245 7 (216) 36,036
State, County & Municipal 4,968 58 (15) 5,011
The Banker's Bank Stock 50 -0- -0- 50
Federal Home Loan Bank Stock 1,334 -0- -0- 1,334
Marketable Equity Securities 1,130 -0- (189) 941
-------- ----- ------- --------
$ 57,664 $ 114 $ (554) $ 57,224
======== ===== ======= ========
Securities Held to Maturity:
U.S. Governmental Agencies $ 2,149 $ -0- $ (18) $ 2,131
State, County and Municipal 1,610 6 (17) 1,599
-------- ----- ------- --------
$ 3,759 $ 6 $ (35) $ 3,730
======== ===== ======= ========
</TABLE>
8
<PAGE>
(3) Investment Securities (continued)
- -------------------------------------
The amortized cost and fair value of investment securities as of June 30, 1997
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 $ 10,521 $ 10,511 $ 1,500 $ 1,493
Due After One Year Through Five Years 30,657 30,497 1,778 1,748
Due After Five Years Through Ten Years 732 738 0 0
Due After Ten Years 303 301 481 489
-------- -------- -------- --------
42,213 42,047 3,759 3,730
Federal Home Loan Bank Stock 1,334 1,334
The Banker's Bank Stock 50 50
Marketable Equity Securities 1,130 941
Mortgage-Backed Securities 12,937 12,852
-------- -------- -------- --------
$ 57,664 $ 57,224 $ 3,759 $ 3,730
======== ======== ======== ========
</TABLE>
Investment securities as of December 31, 1996 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 $ 499 $ $ $ 499
U.S. Government Agencies
Mortgage-Backed Securities 16,367 78 (94) 16,351
Other 35,702 32 (70) 35,664
State, County & Municipal 5,384 86 (23) 5,447
The Banker's Bank Stock 50 50
Federal Home Loan Bank Stock 483 483
Marketable Equity Securities 1,130 (185) 945
-------- -------- -------- --------
$ 59,615 $ 196 $ (372) $ 59,439
======== ======== ======== ========
Securities Held to Maturity:
U.S. Government and Agencies $ 2,148 $ $ (16) $ 2,132
State, County and Municipal 1,790 3 (36) 1,757
-------- -------- -------- --------
$ 3,938 $ 3 $ (52) $ 3,889
======== ======== ======== ========
</TABLE>
Investment securities having a carrying value approximating $29,797 and $27,618
as of June 30, 1997 and December 31, 1996, respectively, were pledged to secure
public deposits and for other purposes.
9
<PAGE>
(4) Loans
- ---------
The composition of loans as of June 30, 1997 and December 31, 1996 was as
follows:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Commercial, Financial and Agricultural $ 45,832 $ 38,776
Real Estate - Construction 1,904 881
Real Estate - Farmland 17,246 25,770
Real Estate - Other 113,409 88,896
Installment Loans to Individuals 46,015 44,608
All Other Loans 8,406 7,945
-------- --------
$232,812 $206,876
======== ========
</TABLE>
Nonaccrual loans are loans for which principal and interest are doubtful of
collection in accordance with original loan terms and for which accrual of
interest have been discontinued due to payment delinquency. Nonaccrual loans
totaled $6,501 and $7,396 as of June 30, 1997 and December 31, 1996,
respectively. On June 30, 1997, the Company has 90 day past due loans with
principal balances of $969 and restructured loans with principal balances of
$19.
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 June 30, 1997 and December 31, 1996 was as
follows:
<TABLE>
<S> <C>
Total Investment in Impaired Loans $1,351
Less Allowances for Impaired Loan Losses (419)
------
Net Investment, June 30, 1997 $ 932
======
Total Investment in Impaired Loans 1,351
Less Allowances for Impaired Loan Losses (419)
------
Net Investment, December 31, 1996 $ 932
======
</TABLE>
(5) Allowances for Loan Losses
- ------------------------------
Transactions in the allowance for loan losses are summarized below for six
months ended June 30, 1997 and June 30, 1996 as follows:
<TABLE>
<CAPTION>
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Balance, Beginning $4,435 $4,051
Provision Charged to Operating Expenses 753 1,145
Loans Charged Off (717) (1,480)
Loan Recoveries 211 606
------ ------
Balance, Ending $4,682 $4,322
====== ======
</TABLE>
10
<PAGE>
(6) Premises and Equipment
- --------------------------
Premises and equipment are comprised of the following as of June 30, 1997 and
December 31, 1996:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Land $1,154 $ 973
Building 6,104 5,601
Furniture, Fixtures and Equipment 5,489 5,150
Leasehold Improvements 31 31
------ ------
12,778 11,755
Accumulated Depreciation (4,953) (4,802)
------ ------
$7,825 $6,953
====== ======
</TABLE>
In 1996, the Company began leasing a supermarket bank unit with a lease period
of five years. Rent expense under this operating lease approximated $8,600 for
the year ended December 31, 1996.
Future minimum lease payments to be paid are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31 Amount
----------- ------
<S> <C>
1997 $ 39,600
1998 39,600
1999 39,600
2000 39,600
2001 33,000
--------
$191,400
========
</TABLE>
(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.
(8) Deposits
- ------------
Components of interest-bearing deposits as of June 30, 1997 and December 31,
1996 are as follows:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Interest-Bearing Demand $ 48,913 $ 55,297
Savings 11,995 11,724
Time, $100,000 and Over 58,766 54,139
Other Time 138,409 135,793
-------- --------
$258,083 $256,953
======== ========
</TABLE>
11
<PAGE>
(9) Other Borrowed Money
- ------------------------
Other borrowed money is comprised of the following as of June 30, 1997 and
December 31, 1996:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Debentures payable, due in annual payments of $267 plus
interest at variable rates, on November 1, 1997 through
November 1, 1999, collateralized by 100% of the common stock
of Ashburn Bank. Effective interest rate of 8.0% as of
June 30, 1997. $ 801 $ 801
Note payable, due in annual payments of $207 plus quarterly
interest at variable rates, 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 8.50% as of June 30, 1997. 925 1,029
Notes payable, due February 26, 1997 with interest at variable
rates. Collateralized by commercial real estate in downtown
Fitzgerald, Georgia. -0- 291
Notes payable due January 29, 2000 with interest at variable
rates. Collateralized by commercial real estate in downtown
Fitzgerald, Georgia. Effective interest rate of 8.50% as of
June 30, 1997. 867 -0-
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated December 30, 1996, payable in full on December 30, 1997.
Interest rate determined under the daily rate credit program. -0- 1,000
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated September 27, 1996, payable in full on September 27, 1997.
Interest rate determined under the daily rate credit program. 2,000 2,000
Note payable, due June 13, 1997 with interest at variable rate, due
quarterly beginning March 13, 1997. Collateralized by guaranty of
Colony Bankcorp, Inc. in addition to all furniture, fixtures,
equipment and software of Colony Management Services, Inc. -0- 375
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated May 3, 1997, payable in full on May 3, 1998. Interest rate
determined under the daily rate credit program. 1,200 -0-
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated June 30, 1997, payable in full on June 30, 1998. Interest rate
determined under the daily rate credit program. 400 -0-
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated March 5, 1997, payable in full on September 3, 1997. Interest rate
determined under the daily rate credit program. 1,400 -0-
</TABLE>
12
<PAGE>
(9) Other Borrowed Money (continued)
- ------------------------
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
Advanced agreement with the Federal Home Loan Bank of Atlanta,
dated May 22, 1997, payable in full on November 24, 1997. Interest
rate determined under the daily rate credit program. 1,500 -0-
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated May 28, 1997, payable in full on May 28, 2002. Effective interest
rate of 6.98% on June 30, 1997. 1,000 -0-
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated May 30, 1997, payable in full on February 27, 1998. Interest
rate determined under the daily rate credit program. 1,000 -0-
Advance agreement with the Federal Home Loan Bank of Atlanta,
dated June 23, 1997, payable in full on February 23, 1999. Interest
rate determined under the daily rate credit program. 1,000 -0-
Note payable dated June 13, 1997, due on December 13, 1997 with
interest at various rate. Collateralized by guaranty of Colony Bankcorp,
Inc. in addition to all furniture, fixtures, equipment, software of Colony
Management Services, Inc. Effective interest rate of 8.00% on
June 30, 1997 415 -0-
Advance agreement with the Federal Reserve Bank of Atlanta,
dated June 1, 1997, payable in full on June 30, 1997. Interest
rate determined under the daily rate credit program. 2,500 -0-
----- -------
$15,008 $5,496
======= =======
</TABLE>
Maturities of borrowed money for the next five years as of June 30, 1997:
<TABLE>
<CAPTION>
Year Amount
<S> <C>
1997 $ 9,007
1998 2,963
1999 1,363
Thereafter 1,675
-------
$15,008
=======
</TABLE>
(10) Profit Sharing Plan
- ------------------------
The Company has a profit sharing plan that covers substantially all employees
who meet certain age and service requirement. It is the Company's policy to make
contributions to the plan as approved annually by the board of directors.
13
<PAGE>
(11) Commitments and Contingent Liabilities
- -------------------------------------------
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. addresses
approximating $2,083 as of June 30, 1997 and $3,128 as of December 31, 1996.
Unfulfilled loan commitments as of June 30, 1997 and December 31, 1996
approximated $30,183 and $19,696 respectively. No losses are anticipated as a
result of commitments and contingencies.
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 amount of collateral obtained, if deemed necessary by
the Banks upon extension of credit, is based on management's credit evaluation
of the borrower. Collateral held varies, but may include accounts receivable,
inventory, property, plant and equipment and income-producing commercial
properties.
The Banks do not anticipate any material losses as a result of the commitments
and contingent liabilities.
The nature of the business of the Banks 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.
(12) Earnings Per Share
- -----------------------
Earnings per share are calculated on the basis of the weighted average number of
shares outstanding.
(13) Regulatory Capital Matters
- -------------------------------
The amount of dividends payable to the parent company from the subsidiary banks
is limited by various banking regulatory agencies. The amount of cash dividends
available from subsidiaries for payment in 1997 without prior approval from the
banking regulatory agencies approximates $1,562. Upon approval by regulatory
authorities, the banks may pay cash dividends to the parent company in excess of
regulatory limitations.
The Company is subject to various regulatory capital requirements administered
by the federal banking agencies. Failure to meet minimum capital requirements
can initiate certain mandatory and, possibly, additional discretionary actions
by regulators that, if undertaken, could have a direct material effect on the
Company's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Company must meet
specific capital guidelines that involve quantitative measures of the Company's
assets, liabilities and certain off-balance sheet items as calculated under
regulatory accounting practices. The Company's capital amounts and
classifications are also subject to qualitative judgments by the regulators
about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Company to maintain minimum amounts and ratios of total and Tier 1
capital to risk-weighted assets, and of Tier 1 capital to average assets. The
amounts and ratios as defined in regulations are presented hereafter. Management
believes, as of June 30, 1997 the Company meets all capital adequacy
requirements to which it is subject and is classified as well capitalized under
the regulatory framework for prompt corrective action. In the opinion of
management, there are no conditions or events since prior notification of
capital adequacy from the regulators that have changed the institution's
category.
14
<PAGE>
<TABLE>
<CAPTION>
To Be Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Provisions
Amount Ratio Amount Ratio Amount Ratio
<S> <C> <C> <C> <C> <C> <C>
As of June 30, 1997
Total Capital
to Risk-Weighted Assets $29,986 12.12% $19,790 8.00% $24,738 10.00%
Tier 1 Capital
to Risk-Weighted Assets 26,874 10.86% 9,895 4.00% 14,843 6.00%
Tier 1 Capital
to Average Assets 26,874 8.38% 12,823 4.00% 16,029 5.00%
As of December 31, 1996
Total Capital
to Risk-Weighted Assets $27,835 12.21% $18,238 8.00% $22,797 10.00%
Tier 1 Capital
to Risk-Weighted Assets 24,967 10.96% 9,112 4.00% 13,668 6.00%
Tier 1 Capital
to Average Assets 24,967 7.65% 13,054 4.00% 16,318 5.00%
</TABLE>
(14) Financial Information of Colony Bankcorp, Inc. (Parent Only)
- -----------------------------------------------------------------
The parent company's balance sheets as of June 30, 1997 and December 31, 1996
and the related statements of income are as follows:
COLONY BANKCORP, INC. (PARENT ONLY)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS June 30, 1997 December 31, 1996
<S> <C> <C>
Cash $ 173 $ 61
Investments in Subsidiaries at Equity 28,552 26,915
Other 1,323 979
------- -------
Total Assets $30,048 $27,955
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Dividends Payable $ 109 $ 109
Notes and Debentures Payable 2,593 2,121
Other 110 134
------- -------
2,812 2,364
Stockholders' Equity
Common Stock, Par Value $10; 5,000,000
Shares Authorized, 1,448,842 Shares
Issued and Outstanding as of June 30,
1997 and December 31, 1996 $14,488 $14,488
Paid-In-Capital 1,137 1,137
Retained Earnings 11,966 10,145
Net Unrealized Loss on Securities Available
for Sale, Net of Tax (355) (179)
------- -------
Total Stockholders' Equity 27,236 25,591
------- -------
Total Liabilities and Stockholders' Equity $30,048 $27,955
======= =======
</TABLE>
15
<PAGE>
(14) Financial Information of Colony Bankcorp, Inc. (Parent Only) (Continued)
- -----------------------------------------------------------------------------
COLONY BANKCORP, INC. (PARENT ONLY)
STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
<TABLE>
<CAPTION>
June 30, 1997 June 30, 1996
<S> <C> <C>
Income
Dividends from Subsidiaries $ 573 $ 600
Management Fees from Subsidiaries 144 253
Data Processing Fees 0 198
Other 15 7
------ ------
$ 732 $1,058
Expenses
Interest $ 94 $ 92
Salaries and Benefits 200 350
Other 159 254
------ ------
$ 453 $ 696
------ ------
Income Before Taxes and Equity in Undistributed
Earnings of Subsidiaries 279 362
Income Tax (Benefits) (109) (78)
------ ------
Income Before Equity in Undistributed Earnings
of Subsidiaries 388 440
Equity in Undistributed Earnings of Subsidiaries 1,651 1,054
------ ------
Net Income $2,039 $1,494
====== ======
</TABLE>
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
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. For the six
months ended June 30, 1997, the Company was successful in meeting its liquidity
needs by increasing deposits 0.03% to $285,764,000 from deposits of $285,676,000
on December 31, 1996 and by reducing Federal Funds 50.57% to $11,240,000 from
$22,740,000 on December 31, 1996.
The Company's liquidity position remained acceptable for the six months ended
June 30, 1997. Average liquid assets (cash and amounts due from banks,
interest-bearing deposits in other banks, funds sold and investments securities)
represented 31.16% of average deposits for six months ended June 30, 1997 as
compared to 29.78% of average deposits for six months ended June 30, 1996 and
29.96% for calendar year 1996. Average loans represented 77.36% of average
deposits for six months ended June 30, 1997 as compared to 76.82% for six months
ended June 30, 1997 and 76.89% for calendar year 1996. Average interest-bearing
deposits were 85.87% of average earning assets for six months ended June 30,
1997 as compared to 87.01% for six months ended June 30, 1996 and 87.09% for
calendar year 1996.
The Company satisfies most of its capital requirements through retained
earnings. During the first quarter, 1997, retained earnings provided $1,012,000
of increase in equity and during second quarter, 1997 retained earnings provided
$809,000 of increase in equity. Additionally, equity capital decreased by
$221,000 in first quarter, 1997 and increased by $45,000 in second quarter, 1997
resulting from the change during the first two quarters in 1997 in unrealized
losses on securities available-for-sale, net of taxes. Thus, total equity
increased by a net amount of $1,645,000 for the six month period ended June 30,
1997. This compares to growth in equity of $665,000 from retained earnings and
$101,000 decrease resulting from changes in unrealized losses on securities for
first quarter 1996 and growth in equity of $635,000 from retained earnings and
$338,000 decrease resulting from changes in unrealized losses on securities for
second quarter 1996 which resulted in total increase in equity of $861,000 for
the six month period ended June 30, 1996. Total equity increased $2,523,000 for
the 1996 calendar year.
At June 30, 1997, total capital of Colony amounted to approximately $27,236,000.
At June 30, 1997, there was no outstanding commitment for any major
expenditures.
The Federal Reserve Bank Board and the FDIC have issued 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 stockholder's 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 presently in effect, the Tier 1 ratio at June 30,
1997 was 10.86% and total Tier 1 and 2 risk-based capital was 12.12%. Both of
these measures compare favorably with the regulatory minimums of 4% for Tier 1
and 8% for total risk-based capital. The Company's leverage ratio at June 30,
1997 was 8.38% which exceeds the required leverage ratio standard of 4%.
For the first two quarters of 1997, the Company paid quarterly dividends of
$0.075 per share. The dividend payout ratio, defined as dividends per share
divided by net income per share, was 10.64% for six months ended June 30, 1997
as compared to a 14.56% dividend payout ratio for the six month period ended
June 30, 1996. For the first two quarters of 1996, the Company paid quarterly
dividends of $0.075 per share.
17
<PAGE>
At June 30, 1997, 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 loan charge-offs which could materially impact the
Company's liquidity, capital resources and operations.
RESULTS OF OPERATION
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 Bank's 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.
Net income for the three months ended June 30, 1997 was $918,000 as compared
with $731,000 for the three months ended June 30, 1996, or an increase of 25.58%
and net income for the six months ended June 30, 1997 was $2,039,000 as compared
with $1,494,000 for the six months ended June 30, 1996, or an increase of
36.48%. Second quarter 1997 earnings increased significantly over the same
period in 1996 primarily due to our net interest income increasing to $3,715,000
in second quarter 1997 compared to $3,296,000 in second quarter 1996. The net
interest income was higher due to increased volume and increased net interest
margin for both quarterly periods in 1997 as compared to the same period in
1996.
The net interest margin increased by 18 basis points to 5.00% in second quarter
1997 as compared to 4.82% in second quarter 1996 and increased by 21 basis
points to 5.01% for six months ended June 30, 1997 as compared to the 4.80% for
the same period in 1996. Net interest income increased by 12.71% to $3,715,000
in second quarter 1997 from $3,296,000 for the same period in 1996 on an
increase in average earnings assets to $301,549,000 in second quarter 1997 from
$277,451,000 for the same period in 1996. Net interest income increased by
12.98% to $7,362,000 for six months ended June 30, 1997 from $6,516,000 for the
same period in 1996 on an increase in average earnings assets to $297,623,000
for six months ended June 30, 1997 from $275,925,000 for the same period in
1996. For the six months ended June 30, 1997 compared to the same period in
1996, average loans increased by $13,890,000 or 6.79%, average funds sold
decreased by $2,474,000 or 14.94%, average investment securities increased by
$9,597,000, or 17.54% and average interest bearing deposits in other banks
increased by $685,000 or 366.31%, resulting in a net increase in average
earning assets of $21,698,000 or 7.86%.
The net increase in average earning assets was funded by a net increase in
average deposits of 6.03% to $282,229,000 for six months ended June 30, 1997
from $266,170,000 for the same period in 1996. Average interest-bearing deposits
increased by 6.47% to $255,563,000 for six months ended June 30, 1997 compared
to $240,034,000 for six months ended June 30, 1996, while average
noninterest-bearing deposits represented 9.45% of average total deposits for six
months ended June 30, 1997 as compared to 9.82% for the same period in 1996 and
9.70% for calendar year 1996.
Interest expense increased for the three months ended June 30, 1997 by $189,000
compared to the same period in 1996 and increased by $257,000 for the six months
ended June 30, 1997 compared to the same period in 1996. The increase in
interest expense is primarily attributable to the increase in average
interest-bearing deposits to $255,563,000 for the six months ended June 30, 1997
compared to $240,034,000 for six months ended June 30, 1996. The combination of
an increased net interest margin and increased average earning assets resulted
in an increase in net interest income of $419,000 for second quarter 1997
compared to the same period in 1996 and an increase in net interest income of
$846,000 for six months ended June 30, 1997 compared to the same period in 1996.
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 non-accruing, past due and other loans that management believes
requires attention.
18
<PAGE>
The provision for loan losses was $468,000 for the three months ended June 30,
1997 as compared to $501,000 for the same period in 1996, representing a
decrease in the provision of $33,000 or 6.59%. The provision for loan losses was
$753,000 for the six months ended June 30, 1997 compared to $1,145,000 for the
same period in 1996 representing a decrease of $392,000 or 34.24%. The decrease
in the provision for loan losses during the first six months of 1997 is
attributable to a leveling off of problem loans and an adequate build-up in the
loan reserve for any future losses. Net loan charge-offs represented 76.28% of
the provision for loan losses in second quarter 1997 as compared to 20.36% in
the second quarter of 1996. Net loan charge-offs represented 67.33% of the
provision for loan losses in the six month period ended June 30, 1997 as
compared to 76.33% of the provision for loan losses in the six month period
ended June 30, 1996. During the first six months of 1997 and 1996, a net of
$507,000 and $874,000, respectively was charged-off. Net loan charge-offs for
the six months ended June 30, 1997 represented 0.23% of average loans
outstanding as compared to 0.43% for six months ended June 30, 1996. At June 30,
1997, the allowance for loan losses was 2.01% of total loans outstanding as
compared to an allowance for loan losses of 2.02% at June 30, 1996 and 2.14% at
December 31, 1996. The determination of the reserve rests upon management's
judgment about factors affecting loan quality and assumptions about the economy.
Management considers the June 30, 1997 allowance for loan losses adequate to
cover potential losses in the loan portfolio.
Non-interest income consists principally of service charges on deposit accounts.
Service charges on deposit accounts amounted to $454,000 in second quarter 1997
compared to $445,000 in second quarter 1996, or an increase of 2.02% and
amounted to $909,000 for six months ended June 30, 1997 compared to $870,000 for
six months ended June 30, 1996, or an increase of 4.48%. All other non-interest
income decreased by $18,000 to $206,000 for second quarter 1997 from $224,000
for second quarter, 1996 and all other non-interest income decreased by $29,000
to $445,000 for six months ended June 30, 1997 from $474,000 for six months
ended June 30, 1996. There were no significant variances in non-interest income
for the periods presented.
Non-interest expense increased by 7.84% to $2,587,000 in three months ended June
30, 1997 from $2,399,000 for the same period in 1996. Salaries and benefits
increased by 14.29% to $1,480,000 in second quarter 1997 from $1,295,000 in
second quarter 1996 and was attributable to an increase in employees for an
additional branch bank and increased bonus/profit sharing expenses due to
increased earnings. All other non-interest expense remained flat as second
quarter 1997 expenses totaled $1,107,000 for second quarter 1997 compared to
$1,104,000 for second quarter 1996. Non-interest expense increased by 9.81% to
$5,004,000 for six month period ended June 30, 1997 compared to $4,557,000 for
the same period in 1996. This increase was primarily due to an increase in
salaries and benefits due to increased personnel with a new branch and increased
bonus/profit sharing expenses due to increased earnings. Occupancy expenses have
also increased due to expenses associated with the new branch.
Income before taxes increased by $255,000 to $1,320,000 in second quarter 1997
from $1,065,000 in second quarter 1996 and increased by $801,000 to $2,959,000
for six months ended June 30, 1997 from $2,158,000 for the same period in 1996.
The increase for both periods is primarily attributable to the increased net
interest income. Income taxes as a percentage of income before taxes decreased
by 2.90% to 30.45% in second quarter 1997 as compared to 31.36% in second
quarter 1996 while income taxes as a percentage on income before taxes increased
by 1.04% to 31.09% for six month period ended June 30, 1997 as compared to
30.77% for the same period in 1996. Income tax expense increased 38.55% to
$920,000 for six month period ended June 30, 1997 compared to $664,000 for the
same period in 1996.
The Bank of Fitzgerald is operating under a Memorandum of Understanding dating
back to October, 1992 that was revised in October, 1995 due to portions of the
original Memorandum of Understanding not being relevent to the bank's current
situation. The current Memorandum requires that the Bank maintain specified
minimum capital ratios and minimum reserves for loan losses. The Bank of
Fitzgerald was in substantial compliance with the provisions of the Memorandum
of Understanding at June 30, 1997.
Colony is an emerging company operating in an industry filled with non-regulated
competitors and a rapid pace of consolidation. With the recent growth of our
company and the continued trend of consolidation, Colony recently moved into its
new 8,900 square feet corporate office. The move to new offices will make our
management team much more efficient and assist our expansion plans as new
opportunities present themselves in the future.
19
<PAGE>
In November, 1996 Colony organized the company support services into one single
unit subsidiary, Colony Management Services, Inc., which will allow management
of the subsidiary to focus on its primary responsibility of credit review. This
will achieve timely recognition of marginal credit, better monitoring of
industry concentrations, additional review follow-up, and development of credit
scoring models for certain product lines. In a major cost containment
initiative, the data processing section of Colony Management Services is
investing over $1,000,000 in computer up-grades and software enhancement. This
will allow the company to better serve our customers through improved customer
data resources and state-of-the-art technological services.
Liquidity
- ---------
The Company's goals with respect to liquidity are to insure that sufficient
funds are available to meet current operating requirements, to provide reserves
against unforeseen liquidity requirements. Management continuously reviews the
Company's liquidity position, which is maintained on a basis consistent with
established internal guidelines and the tests and reviews of the various
regulatory authorities. The Company's primary liquidity sources at June 30, 1997
included cash, due from banks, federal funds and short-term investment
securities. The Company also has the ability, on a short-term basis, to borrow
funds from the Federal Reserve System and to invest in federal funds sold from
other financial institutions. The mix of asset maturities contributes to the
company's overall liquidity position.
Certain Transactions
- --------------------
In the normal course of business, officers and directors of the Banks, and
certain business organizations and individuals associated with them, maintain a
variety of banking relationships with the bank. Transactions with senior
officers and directors are made on terms comparable to those available to other
bank customers.
BUSINESS
General
- -------
The Company was organized in 1983 as a bank holding company through the merger
of The Bank of Fitzgerald with a subsidiary of the Company. Since that time, The
Bank of Fitzgerald, which was formed by principals of Colony Bankcorp, Inc. in
1976, has operated as a wholly-owned subsidiary of the Company. In April 1984,
Colony Bankcorp, Inc. acquired Community Bank of Wilcox, and in November 1984,
Ashburn Bank became a wholly-owned subsidiary of Colony Bankcorp, Inc. Colony
Bankcorp, Inc. continued its growth with the acquisition of The Bank of Dodge
County in September 1985. In August 1991, Colony Bankcorp, Inc. acquired The
Bank of Worth. In November 1996, Colony Bankcorp, Inc. acquired Broxton State
Bank and in November, 1996 formed a non-bank subsidiary, Colony Management
Services, Inc. Ashburn Bank expanded its operation by branching into Lee County,
Georgia in October, 1996.
Through its six subsidiary banks, Colony Bankcorp, Inc. operates a full-service
banking business and offers a broad range of retail and commercial banking
services including checking, savings, NOW accounts, money market and time
deposits of various types; loans for business, agriculture, real estate,
personal uses, home improvement and automobiles; credit card; letters of credit;
trust services investment, and discount brokerage services; IRA's, safe deposit
box rentals, bank money orders, and electronic funds transfer services,
including wire transfers and automated teller machines. Each of the Banks is a
state chartered institution whose customer deposits are insured up to applicable
limits by the Federal Deposit Insurance Corporation.
20
<PAGE>
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The Annual Meeting of the Shareholders of the Company was held on April 22,
1997. At the Annual Meeting of the Shareholders, proxies were solicited under
Regulation 14 of the Securities and Exchange Act of 1934. Total shares amounted
to 1,448,842. A total of 968,192 shares (66.83%) were represented by
Shareholders in attendance or by proxy. The following directors were elected by
yes votes totaling 968,146 shares and no votes totaling 46 shares to serve one
year until the next annual meeting:
Marion H. Massee, III Ben B. Mills, Jr.
Paul Branch, Jr. James D. Minix
Terry L. Coleman Ralph D. Roberts
L. Morris Downing, Jr. W.B. Roberts, Jr.
Terry L. Hester R. Sidney Ross
Milton N. Hopkins, Jr. Joe K. Shiver
Harold E. Kimball Curtis Summerlin
No other matters were voted upon by the shareholders.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
A. Exhibits - None
B. There have been no reports filed on Form 8-K for the quarter ended June 30,
1997.
21
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COLONY BANKCORP, INC.
- ----------------------------- ------------------------------------
DATE James D. Minix, President and
Chief Executive Officer
------------------------------------
Terry L. Hester, Executive Vice
President and Chief Financial
Officer
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 12,157
<INT-BEARING-DEPOSITS> 594
<FED-FUNDS-SOLD> 11,240
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 57,224
<INVESTMENTS-CARRYING> 3,759
<INVESTMENTS-MARKET> 3,730
<LOANS> 232,802
<ALLOWANCE> 4,682
<TOTAL-ASSETS> 330,504
<DEPOSITS> 285,764
<SHORT-TERM> 11,340
<LIABILITIES-OTHER> 2,496
<LONG-TERM> 3,668
0
0
<COMMON> 14,488
<OTHER-SE> 12,748
<TOTAL-LIABILITIES-AND-EQUITY> 330,504
<INTEREST-LOAN> 11,716
<INTEREST-INVEST> 1,931
<INTEREST-OTHER> 413
<INTEREST-TOTAL> 14,060
<INTEREST-DEPOSIT> 6,455
<INTEREST-EXPENSE> 6,698
<INTEREST-INCOME-NET> 7,362
<LOAN-LOSSES> 753
<SECURITIES-GAINS> 9
<EXPENSE-OTHER> 5,004
<INCOME-PRETAX> 2,959
<INCOME-PRE-EXTRAORDINARY> 2,039
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,039
<EPS-PRIMARY> 1.41
<EPS-DILUTED> 1.41
<YIELD-ACTUAL> 5.01
<LOANS-NON> 6,501
<LOANS-PAST> 969
<LOANS-TROUBLED> 19
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,435
<CHARGE-OFFS> 717
<RECOVERIES> 211
<ALLOWANCE-CLOSE> 4,682
<ALLOWANCE-DOMESTIC> 4,682
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
