-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NGG0kD7RFeZ5tUI5Po0RKkN2FN85Q6fOXETGe/xDt7o2P9UqZU3b70WukJ2Sl+ZZ gpJghdMC19iZV7oAy1WyCg== /in/edgar/work/20000811/0000931763-00-001946/0000931763-00-001946.txt : 20000921 0000931763-00-001946.hdr.sgml : 20000921 ACCESSION NUMBER: 0000931763-00-001946 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONY BANKCORP INC CENTRAL INDEX KEY: 0000711669 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 581492391 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12436 FILM NUMBER: 694521 BUSINESS ADDRESS: STREET 1: 302 S MAIN ST STREET 2: PO BOX 989 CITY: FITZGERALD STATE: GA ZIP: 31750 BUSINESS PHONE: 9124235446 10-Q 1 0001.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED JUNE 30, 2000 COMMISSION FILE NUMBER 0-12436 COLONY BANKCORP, INC. ------------------------------------------------------ (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) GEORGIA 58-1492391 - ------------------------------- ---------------------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER 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, 2000 - -------------------------- ---------------------------- COMMON STOCK, $1 PAR VALUE 4,440,276 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, BANK OF WORTH, COLONY BANK SOUTHEAST AND COLONY MANAGEMENT SERVICES, INC. A. CONSOLIDATED BALANCE SHEETS - JUNE 30, 2000 AND DECEMBER 31, 1999. B. CONSOLIDATED STATEMENTS OF INCOME - FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999 AND FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999. C. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999 AND FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999. D. CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION - FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999. 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, 2000 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED FOR THE FULL YEAR. 2 COLONY BANKCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2000 AND DECEMBER 31, 1999 (UNAUDITED) (DOLLARS IN THOUSANDS) ASSETS June 30, 2000 Dec 31, 1999 ------------- ------------ Cash and Balances Due from Depository Institutions (Note 2) $ 20,145 $ 22,550 Federal Funds Sold 17,490 15,290 Investment Securities Available for Sale, at Fair Value 61,383 61,857 Held to Maturity, at Cost (Fair Value of $697 and $934 respectively) (Note 3) 710 963 Loans (Notes 4 and 5) 362,709 315,440 Allowance for Loan Losses (5,087) (4,682) Unearned Interest and Fees (5) (5) -------- -------- Total Loans 357,617 310,753 Premises and Equipment (Note 6) 13,146 12,847 Other Real Estate 353 883 Other Assets 9,520 10,129 -------- -------- Total Assets $480,364 $435,272 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-Bearing $ 37,812 $ 33,720 Interest-Bearing (Note 8) 369,117 340,730 -------- -------- Total Deposits 406,929 374,450 Borrowed Money: Federal Funds Purchased 700 0 Other Borrowed Money (Note 9) 32,269 21,967 -------- -------- Total Borrowed Money 32,969 21,967 Other Liabilities 3,410 3,844 Commitments and Contingencies (Note 11) Stockholders' Equity: Common Stock, Par Value $1, Authorized 20,000,000 shares, Issued 4,440,276 and 4,435,026 shares as of June 30, 2000 and December 31, 1999 respectively 4,440 4,435 Paid-In Capital 21,603 21,537 Retained Earnings 12,688 10,767 Accumulated Other Comprehensive Income, Net of Tax (1,675) (1,728) -------- -------- Total Stockholders' Equity 37,056 35,011 -------- -------- Total Liabilities and Stockholders' Equity $480,364 $435,272 ======== ========
The accompanying notes are an integral part of these balance sheets. 3 COLONY BANKCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED JUNE 30, 2000 AND 1999 AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended Six Months Ended 6/30/00 6/30/99 6/30/00 6/30/99 ---------- ---------- ---------- ---------- Interest Income: Loans, including fees $ 8,737 $ 6,806 $ 16,729 $ 13,211 Federal Funds Sold 210 144 398 362 Deposits with Other Banks 147 107 325 229 Investment Securities: U.S. Treasury & Federal Agencies 773 820 1,547 1,683 State, County and Municipal 96 116 192 216 Other Investments 46 54 90 114 ---------- ---------- ---------- ---------- Total Interest Income 10,009 8,047 19,281 15,815 ---------- ---------- ---------- ---------- Interest Expense: Deposits 4,711 3,872 9,068 7,692 Federal Funds Purchased 7 5 9 6 Other Borrowed Money 446 197 868 449 ---------- ---------- ---------- ---------- Total Interest Expense 5,164 4,074 9,945 8,147 ---------- ---------- ---------- ---------- Net Interest Income 4,845 3,973 9,336 7,668 Provision for Loan Losses 605 194 1,082 443 ---------- ---------- ---------- ---------- Net Interest Income After Provision 4,240 3,779 8,254 7,225 ---------- ---------- ---------- ---------- Noninterest Income: Service Charge on Deposits 620 544 1,182 1,025 Other Service Charges, Commissions & Fees 110 102 255 246 Security Gains, net 0 (2) 0 (2) Other Income 105 180 245 292 ---------- ---------- ---------- ---------- Total Noninterest Income 835 824 1,682 1,561 ---------- ---------- ---------- ---------- Noninterest Expense: Salaries and Employee Benefits 1,841 1,658 3,576 3,083 Occupancy and Equipment 585 484 1,086 952 Other Operating Expenses 927 910 1,773 1,716 ---------- ---------- ---------- ---------- Total Noninterest Expense 3,353 3,052 6,435 5,751 ---------- ---------- ---------- ---------- Income Before Income Taxes 1,722 1,551 3,501 3,035 Income Taxes 577 478 1,143 926 ---------- ---------- ---------- ---------- Net Income $ 1,145 $ $1,073 $ 2,358 $ 2,109 ========== ========== ========== ========== Net Income Per Share of Common Stock Basic $ 0.26 $ 0.24 $ 0.53 $ 0.48 ========== ========== ========== ========== Diluted $ 0.26 $ 0.24 $ 0.53 $ 0.48 ========== ========== ========== ========== Weighted Average Shares Outstanding $4,440,276 $4,435,026 $4,440,276 $4,435,026 ========== ========== ========== ==========
The accompanying notes are an integral part of these statements. 4 COLONY BANKCORP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME THREE MONTHS ENDED JUNE 30, 2000 AND 1999 AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended Six Months Ended 6/30/00 6/30/99 6/30/00 6/30/99 ------- ------- ------- ------- Net Income $1,145 $1,073 $2,358 $2,109 Other Comprehensive Income, Net of Tax Gains (Losses) on Securities, Arising During Year 11 (633) 53 (879) Reclassification Adjustment 0 1 0 1 ------ ------ ------ ------ Unrealized Gains (Losses) on Securities 11 (632) 53 (878) ------ ------ ------ ------ Comprehensive Income $1,156 $ 441 $2,411 $1,231 ====== ====== ====== ======
5 COLONY BANKCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (UNAUDITED) (DOLLARS IN THOUSANDS)
2000 1999 ---- ---- CASH FLOW FROM OPERATING ACTIVITIES Net Income (loss) $ 2,358 $ 2,109 Adjustments to reconcile net income to net cash provided by operating activities: (Gain) loss on sale of investment securities 0 2 Depreciation 610 559 Provision for loan losses 1,082 443 Amortization of excess costs 26 24 Other prepaids, deferrals and accruals, net (14) (272) -------- -------- Total Adjustments $ 1,704 $ 756 -------- -------- Net cash provided by operating activities $ 4,062 $ 2,865 -------- -------- CASH FLOW FROM INVESTING ACTIVITIES Purchases of securities available for sale $ (1,242) $(31,948) Proceeds from sales of securities available for sale 0 2,286 Proceeds from maturities, calls, and paydowns of investment securities: Available for Sale 1,770 33,690 Held to Maturity 257 442 Decrease (Increase) in interest-bearing deposits in banks (382) (5,623) (Increase) in loans (47,269) (36,120) Purchase of premises and equipment (909) (1,195) -------- -------- Net cash (used in) investing activities $(47,775) $(38,468) -------- -------- CASH FLOW FROM FINANCING ACTIVITIES Net (decrease) increase in deposits $ 32,479 $ 16,774 Proceeds from issuance of common stock 0 0 Federal funds purchased 700 3,590 Dividends paid (355) (266) Net (decrease) increase in other borrowed money 10,302 (1,195) -------- -------- Net cash provided by financing activities 43,126 18,903 -------- -------- Net increase (decrease) in cash and cash equivalents (587) (16,700) Cash and cash equivalents at beginning of period 31,126 39,003 -------- -------- Cash and cash equivalents at end of period $ 30,539 $ 22,303
The accompanying notes are an integral part of these statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies Basis of presentation 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; Bank of Worth, Sylvester, Georgia; The Bank of Dodge County, Eastman, Georgia; Community Bank of Wilcox, Pitts, Georgia; Colony Bank Southeast, 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. 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 foreclosure or in satisfaction of loans and the valuation of deferred tax assets. Description of Business The Banks provide a full range of retail and commercial banking services for consumers and small to medium size businesses primarily in South Georgia. Lending and investing activities are funded primarily by deposits gathered through it retail branch office network. Lending is concentrated in agricultural, commercial and real estate loans to local borrowers. In management's opinion, although the Banks have a high concentration of agricultural and real estate loans, these loans are well collateralized and do not pose an adverse credit risk. In addition, the balance of the loan portfolio is sufficiently diversified to avoid significant concentration of credit risk. Although the Banks have a diversified loan portfolio, a substantial portion of borrowers' ability to honor their contracts is dependent upon the viability of the real estate economic sector. The success of Colony is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves. No assurance can be given that the current economic conditions will continue. Adverse changes in the economic conditions in these geographic markets would likely have a material adverse effect on the Company's results of operations and financial condition The operating results of Colony depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment. 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, 2000 and December 31, 1999. 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. Impaired loans are recorded under SFAS 114, Accounting by Creditors for Impairment of a Loan and SFAS 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. 7 (1) Summary of Significant Accounting Policies (continued) 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 accumulate 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: Description Life in Years Method - ----------- ------------- ------ Banking Premises 15-40 Straight-Line and Accelerated Furniture and Equipment 5-10 Straight-Line and Accelerated 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. 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. Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on securities available for sale, represent equity changes from economic events of the period other than transactions with owners and are not reported in the consolidated statement of income but as a separate component of the equity section of the consolidated balance sheets. Such items are considered components of other comprehensive income. Statement of Financial Accounting Standards 130 requires the presentation in the financial statements of net income and all items of other comprehensive income as total comprehensive income. 8 (2) Cash and Balances Due from Depository Institutions Components of cash and balances due from depository institutions at June 30, 2000 and December 31, 1999 are as follows:
June 30, 2000 December 31, 1999 ------------- ----------------- Cash on Hand and Cash Items $ 3,785 $ 7,502 Noninterest-Bearing Deposits with Other Banks 9,264 8,334 Interest-Bearing Deposits with Other Banks 7,096 6,714 ------- ------- $20,145 $22,550 ======= =======
(3) Investment Securities Investment securities as of June 30, 2000 are summarized as follows:
Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Securities Available for Sale U.S. Government Agencies: Mortgage-Backed $ 4,128 $0 $ (142) $ 3,986 Other 48,285 0 (1,843) 46,442 State, County & Municipal 8,594 3 (192) 8,405 The Banker's Bank Stock 50 0 0 50 Federal Home Loan Bank Stock 1,610 0 0 1,610 Marketable Equity Securities 1,130 0 (240) 890 ------- -- ------- ------- $63,797 $3 $(2,417) $61,383 ======= == ======= ======= Securities Held to Maturity: State, County and Municipal $ 710 $1 $ (14) $ 697 ======= == ======= =======
The amortized cost and fair value of investment securities as of June 30, 2000 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.
Securities Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value Due in One Year or Less $3,660 $3,645 $400 $400 Due After One Year Through Five Years 50,479 48,584 100 99 Due After Five Years Through Ten Years 2,380 2,277 0 0 Due After Ten Years 360 341 210 198 ------- ------- ---- ---- 56,879 54,847 710 697 Federal Home Loan Bank Stock 1,610 1,610 0 0 The Banker's Bank Stock 50 50 0 0 Marketable Equity Securities 1,130 890 0 0 Mortgage-Backed Securities 4,128 3,986 0 0 ------- ------- ---- ---- $63,797 $61,383 $710 $697 ======= ======= ==== ====
9 (3) Investment Securities (continued) Investment securities as of December 31, 1999 are summarized as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Securities Available for Sale: U.S. Government Agencies: Mortgage-Backed Securities $ 4,629 $0 $ (139) $ 4,490 Other 48,291 0 (1,955) 46,336 State, County & Municipal 8,826 3 (165) 8,664 The Banker's Bank Stock 50 0 0 50 Federal Home Loan Bank Stock 1,426 0 0 1,426 Marketable Equity Securities 1,130 0 (240) 890 ------- -- ------- ------- $64,352 $3 $(2,499) $61,856 ======= == ======= ======= Securities Held to Maturity: State, County and Municipal $ 963 $0 $ (26) $ 937 ======= == ======= ======= Investment securities having a carry value approximating $38,054 and $28,318 as of June 30, 2000 and December 31, 1999, respectively, were pledged to secure public deposits and for other purposes. (4) Loans The composition of loans as of June 30, 2000 and December 31, 1999 was as follows: June 30, 2000 December 31, 1999 ------------- ----------------- Commercial, Financial and Agricultural $ 52,801 $ 42,595 Real Estate - Construction 5,045 4,003 Real Estate - Farmland 18,040 24,179 Real Estate - Other 214,730 185,663 Installment Loans to Individuals 59,649 48,226 All Other Loans 12,444 10,775 -------- -------- $362,709 $315,441 -------- -------- 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 $4,931 and $5,334 as of June 30, 2000 and December 31, 1999, respectively. On June 30, 2000, the Company had 90 day past due loans with principal balances of $383 and restructured loans with principal balances of $229. Colony Bankcorp, Inc. recognizes impaired loans as nonaccrual loans delinquent in excess of 120 days for which collateral values are insufficient to recover outstanding principal and interest under original loan terms. Impaired loan data as of December 31, 1999 was as follows: December 31, 1999 ----------------- Total Investment in Impaired Loans $ 885 Less Allowance for Impaired Loan Losses (106) ------- Net Investment, December 31, 1999 $ 779 ======= 10 (5) Allowance for Loan Losses Transactions in the allowance for loan losses are summarized below for six months ended June 30, 2000 and June 30, 1999 as follows: June 30, 2000 June 30, 1999 ------------- ------------- Balance, Beginning $4,682 $ 4,726 Provision Charged to Operating Expenses 1,082 443 Loans Charged Off (793) (1,002) Loan Recoveries 116 216 ------ ------- Balance, Ending $5,087 $(4,383) ====== ======= (6) Premises and Equipment Premises and equipment are comprised of the following as of June 30, 2000 and December 31, 1999: June 30, 2000 December 31, 1999 ------------- ----------------- Land $ 1,572 $ 1,572 Building 10,685 9,841 Furniture, Fixtures and Equipment 7,900 7,775 Leasehold Improvements 327 327 Construction in Progress 0 96 ------- ------- 20,484 19,611 ------- ------- Accumulated Depreciation (7,338) (6,764) ------- ------- $13,146 $12,847 ======= ======= Depreciation charged to operations totaled $308 and $276 for June 30, 2000 and June 30, 1999 respectively. Certain Company facilities and equipment are leased under various operating leases. Future minimum rental payments to be paid are as follows: Year Ending December 31 Amount ----------- ------ 2000 $122 2001 106 2002 70 2003 49 2004 0 ---- $347 ==== (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. 11 (8) Deposits Components of interest-bearing deposits as of June 30, 2000 and December 31, 1999 are as follows: June 30, 2000 December 31, 1999 ------------- ----------------- Interest-Bearing Demand $ 67,130 $ 66,418 Savings 13,761 13,541 Time, $100,000 and Over 100,722 90,460 Other Time 187,504 170,311 -------- -------- $369,117 $340,730 ======== ======== The aggregate amount of short-term jumbo certificates of deposit, each with a minimum denomination of $100,000, was approximately $89,332 and $81,129 as of June 30, 2000 and December 31, 1999, respectively. As of June 30, 2000 and December 31, 1999, the scheduled maturities of certificates of deposits are as follows: Maturity June 30, 2000 December 31, 1999 -------- ------------- ----------------- One Year and Under $238,104 $210,238 One to Three Years 42,062 38,676 Three Years and Over 8,060 11,857 -------- -------- $288,226 $260,771 ======== ======== (9) Borrowed Money Borrowed money at June 30, 2000 and December 31, 1999 is summarized as follows: June 30, 2000 December 31, 1999 ------------- ----------------- Federal Home Loan Bank Advances $31,100 $20,700 First Port City Note Payable 674 674 The Banker's Bank Note Payable 495 593 ------- ------- $32,269 $21,967 ======= ======= Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2000 to 2008 and interest rates ranging from 5.40 percent to 6.98 percent. Of the balances outstanding at June 30, 2000, $2,000,000 is callable by the FHLB during 2000. Under the Blanket Agreement for Advances and Security Agreement with the FHLB, residential first mortgage loans are pledged as collateral for the FHLB advances outstanding. First Port City note payable originated on January 30, 1997 with additional funds added for an amount totaling $963. Annual principal payments of $96 are due with interest paid quarterly at The Wall Street Prime Rate Indicator. The debt is secured by commercial real estate in downtown Fitzgerald, which includes the parent company's facilities. The note was renewed on January 20, 2000 for $674. Any unpaid balance is due January 29, 2003. The Bankers Bank note payable originated on September 5, 1997 for $1,000 at a rate of The Wall Street Prime minus one half percent. Payments are due monthly with the entire unpaid balance due September 5, 2002. The debt is secured by all furniture, fixtures, machinery, equipment and software of Colony Management Services, Inc. Colony Bankcorp, Inc. guarantees the debt. The aggregate stated maturities of other borrowed money at June 30, 2000 are as follows: Year Amount ---- ------- 2000 $ 211 2001 15,220 2002 4,856 2003 3,482 2004 and Thereafter 8,500 ------- $32,269 ======= 12 (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 $328 for 1999 and $264 for 1998. (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. Commitments under standby letters of credit to U.S. addresses approximate $1,626 as of June 30, 2000 and $1,705 as of December 31, 1999. Unfulfilled loan commitments as of June 30, 2000 and December 31, 1999 approximated $42,900 and $43,197 respectively. No losses are anticipated as a result of commitments and contingencies. (12) 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 2000 without prior approval from the banking regulatory agencies approximates $2,090. 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 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 consolidated 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, 2000, 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.
To Be Well Capitalized For Capital Under Prompt Corrective Actual Adequacy Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio As of June 30, 2000 Total Capital to Risk-Weighted Assets $42,742 11.36% $30,095 8.00% $37,619 10.00% Tier 1 Capital to Risk-Weighted Assets 38,035 10.11% 15,048 4.00% 22,572 6.00% Tier 1 Capital to Average Assets 38,035 8.23% 18,495 4.00% 23,118 5.00% As of December 31, 1999 Total Capital to Risk-Weighted Assets $40,267 11.88% $27,108 8.00% $33,885 10.00% Tier 1 Capital to Risk-Weighted Assets 36,026 10.63% 13,554 4.00% 20,331 6.00% Tier 1 Capital to Average Assets 36,026 8.39% 17,176 4.00% 21,469 5.00%
13 (13) Financial Information of Colony Bankcorp, Inc. (Parent Only) The parent company's balance sheets as of June 30, 2000 and December 31, 1999 and the related statements of income and comprehensive income and cash flows are as follows: COLONY BANKCORP, INC. (PARENT ONLY) BALANCE SHEETS FOR PERIOD ENDED JUNE 30, 2000 AND DECEMBER 31, 1999
ASSETS June 30, 2000 December 31, 1999 ------------- ----------------- Cash $ 169 $ 247 Investments in Subsidiaries at Equity 36,398 34,266 Other 1,403 1,448 ------- ------- Total Assets $37,970 $35,961 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Dividends Payable $200 $177 Notes and Debentures Payable 674 674 Other 40 99 ---- ---- 914 950 Stockholders' Equity Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 4,440,276 and 4,435,026 Shares as of June 30, 2000 and December 31, 1999 Respectively $ 4,440 $ 4,435 Paid-In Capital 21,603 21,537 Retained Earnings 12,688 10,767 Accumulated Other Comprehensive Income, Net of Tax (1,675) (1,728) ------- ------- Total Stockholders' Equity 37,056 35,011 ------- ------ Total Liabilities and Stockholders' Equity $37,970 $35,961 ======= =======
14 (13) Financial Information of Colony Bankcorp, Inc. (Parent Only) (continued) COLONY BANKCORP, INC. (PARENT ONLY) STATEMENT OF INCOME AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
June 30, 2000 June 30, 1999 ------------- ------------- Income $1,038 $ 925 Dividends from Subsidiaries 1 0 Management Fees from Subsidiaries 35 45 ------ ------ Other $1,074 $970 Expenses 29 38 Interest 9 9 Amortization 379 367 ------ ------ Other $ 417 $ 414 ------ ------ Income Before Taxes and Equity in Undistributed Earnings of Subsidiaries 657 556 Income Tax (Benefits) (123) (127) ----- ----- Income Before Equity in Undistributed Earnings of Subsidiaries 780 683 Equity in Undistributed Earnings of Subsidiaries 1,578 1,426 ------ ------ Net Income 2,358 2,109 Other Comprehensive Income, Net of Tax Gains (losses) on Securities Arising During Year 53 (879) Reclassification Adjustment 0 1 ------ ------ Unrealized Gains (Losses) in Securities 53 (878) ------ ------ Comprehensive Income $2,411 $1,231 ====== ======
15 (13) Financial Information of Colony Bankcorp, Inc. (Parent Only) (continued) COLONY BANKCORP, INC. (PARENT ONLY) STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
June 30, 2000 June 30, 1999 ------------- ------------- Cash Flows from Operating Activities Net Income $ 2,358 $ 2,109 Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities Depreciation and Amortization 45 44 Equity in Undistributed Earnings of Subsidiary (1,578) (1,426) Other (49) (48) ------- ------- 776 679 Cash Flows from Investing Activities Capital Infusion in Subsidiary (500) 0 Purchase of Premises and Equipment 0 (22) ------- ------- (500) (22) Cash Flows from Financing Activities Dividends Paid (354) (266) Proceeds from Issuance of Common Stock 0 0 Principal Payments on Notes and Debentures 0 0 Proceeds from Notes and Debentures 0 0 ------- ------- (354) (266) Increase (Decrease) in Cash and Cash Equivalents (78) 391 Cash and Cash Equivalents, Beginning 247 111 ------- ------- Cash and Cash Equivalents, Ending $ 169 $ 502 ======= =======
(14) Common Stock Split On February 16, 1999, a 100 percent stock split to be effected on June 30, 1999 in the form of a dividend was approved by the board.. Weighted average shares 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. (15) Legal Contingencies In the ordinary course of business, there are various legal proceedings pending against Colony and its subsidiaries. The aggregate liabilities, if any, arising from such proceedings would not, in the opinion of management, have a material adverse effect on Colony's consolidated financial position. (16) Stock Grant Plan On February 16, 1999, a restricted stock grant plan was approved by the Board. The plan was adopted for the purpose of establishing incentives designed to recognize, reward and retain executive employees whose performance, contribution and skills are critical to the Company. The plan period commences February 16, 1999 and ends February 15, 2009 with the maximum number of shares subject to restricted stock awards being 22,175 shares (44,350 shares after the two-for-one stock split effective June 30, 1999). On January 3, 2000, the Company issued 5,250 shares under the stock grant plan to increase the total outstanding shares from 4,435,026 at December 31, 1999 to 4,440,276 at June 30, 2000. 16 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 new deposits. For the six months ended June 30, 2000, the Company was successful in meeting its liquidity needs by increasing deposits 8.67% to $406,929,000 from deposits of $374,450,000 on December 31, 1999. Should the need arise, the Company also maintains relationships with several correspondent banks and the Federal Home Loan Bank that can provide funds on short notice. The Company's liquidity position remained acceptable for the six months ended June 30, 2000. Average liquid assets (cash and amounts due from banks, interest- bearing deposits in other banks, funds sold and investment securities) represented 25.22% of average deposits for six months ended June 30, 2000 as compared to 31.30% of average deposits for six months ended June 30, 1999 and 28.80% of average deposits for calendar year 1999. Average loans represented 87.31% of average deposits for six months ended June 30, 2000 as compared to 78.91% for six months ended June 30, 1999 and 82.35% for calendar year 1999, Average interest-bearing deposits were 82.39% of average earning assets for six months ended June 30, 2000 as compared to 84.96% for six months ended June 30, 1999 and 84.58% for calendar year 1999. The Company satisfies most of its capital requirements through retained earnings. During the first three months of 2000, retained earnings provided $1,042,000 of increase in equity and the change in unrealized losses on securities available-for-sale net of taxes resulted in equity capital increasing $42,000. Thus, total equity increased by a net amount of $1,084,000 for the three month period ended March 31, 2000. During the second quarter of 2000, retained earnings provided $950,000 of increase in equity and the change in unrealized losses on securities available-for-sale, net of taxes resulted in equity capital increasing $11,000. Thus, total equity increased by a net amount of $961,000 for the second quarter of 2000 and by a net amount of $2,045,000 for six months ended June 30, 2000. This compares to growth in equity through retained earnings of $903,000 and $918,000, respectively, for the first two quarters of 1999. Additionally, equity capital decreased by $246,000 and $632,000 for the first two quarters of 1999 as a result of changes in unrealized losses on securities available-for-sale, net of taxes. Thus, total equity increased by a net amount of $657,000 for first quarter 1999 and $286,000 for second quarter 1999 for a net change of $943,000 for the six month period ended June 30, 1999. Total equity increased by a net amount of $1,914,000 for calendar year 1999. At June 30, 2000, total capital of Colony amounted to approximately $37,056,000. At June 30, 2000 there were two new outstanding commitments for capital expenditures of approximately $1,350,000 for construction and furnishings for branch offices to be located in Moultrie and Soperton, Georgia. Approximately 75% of the $1,350,000 total capital expenditure had been remitted to contractors/venders as of June 30, 2000. 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 I capital consists of common stock and qualifying preferred stockholders' equity less goodwill. Tier 2 capital consists of 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 I capital to risk- weighted assets at June 30, 2000 was 10.11% and total Tier 1 and 2 capital to risk-weighted assets was 11.36%. 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 as of June 30, 2000 was 8.23% which exceeds the required leverage ratio standard of 4%. For the first quarter of 2000, the Company paid quarterly dividends of $0.04 per share and for the second quarter of 2000 the Company paid quarterly dividends of $0.045 per share, or $0.085 for the first two quarters of 2000. The dividend payout ratio, defined as dividends per share divided by net income per share, was 16.04% for six months ended June 30, 2000. This compares to $0.065 for the first two quarters of 1999 or a dividend payout ratio of 13.54% for the six months ended June 30, 1999. At June 30, 2000, 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 examination by regulatory authorities in the future could precipitate additional loan charge-offs which could materially impact the Company's liquidity, capital resources and operations. 17 RESULTS OF OPERATION The Company's results of operations are determined by its ability to effectively manage interest income and expenses, 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 Net income for the three months ended June 30, 2000 was $1,145,000 as compared to $1,073,000 for the three months ended June 30, 1999, or an increase of 6.71% while net income for the six months ended June 30, 2000 was $2,358,000 as compared to $2,109,000 for the six months ended June 30, 1999, or an increase of 11.81%. This earnings increase was achieved while the company experienced additional overhead associated with its denovo branch expansions; however, the new offices are largely responsible for the $79 million asset growth from a year ago. Additionally, net income was positively impacted by an increase of 14 basis points with the net interest margin for the first half of 2000 as compared to the same period in 1999. Net Interest Margin The net interest margin increased by 10 basis points to 4.50% in second quarter 2000 as compared to 4.40% in second quarter 1999 and increased by 14 basis points to 4.44% for six months ended June 30, 2000 as compared to 4.30% for the same period in 1999. Net interest income increased 21.95% as second quarter 2000 net interest income was $4,845,000 compared to $3,973,000 for the same period in 1999 on an increase in average earning assets to $436,957,000 in second quarter 2000 from $368,130,000 in second quarter 1999. Net interest income increased by 21.75% to $9,945,000 for six months ended June 30, 2000 from $7,668,000 for the same period in 1999 on an increase in average earning assets to $426,823,000 for the six months ended June 30, 2000 from $363,746,000 for the same period in 1999. For the six months ended June 30, 2000 compared to the same period in 1999, average loans increased by $70,359,000 or 26.28%, average funds sold decreased by $241,000 or 1.77%, average investment securities decreased by $8,450,000 or 11.55%, and average interest-bearing deposits in other banks increased by $1,409,000 or 15.23%, resulting in a net increase in average earning assets of $63,077,000 or 17.34%. The net increase in average earning assets was funded by a net increase in average deposits of 14.13% to $387,184,000 for six months ended June 30, 2000 from $339,237,000 for the same period in 1999. Average interest-bearing deposits increased by 13.78% to $351,641,000 for six months ended June 30, 2000 compared to $309,055,000 for six months ended June 30, 1999, while average noninterest- bearing deposits represented 9.18% of average total deposits for six months ended June 30, 2000, compared to 8.90% for the same period in 1999 and 8.79% for calendar year 1999. Interest expense increased for the three months ended June 30, 2000 by $1,090,000 compared to the same period in 1999 and increased by $1,798,000 for the six months ended June 30, 2000 compared to the same period in 1999. The increase in interest expense is primarily attributable to the Federal Reserve raising interest rates the first half of the year and to the increase in average interest-bearing deposits to $351,641,000 for the six months ended June 30, 2000 compared to $309,055,000 for the six months ended June 30, 1999 and an increase in average borrowings to $27,193,000 for six months ended June 30, 2000 compared to $14,052,000 for the six months ended June 30, 1999. The combination of higher interest rates increasing the net interest margin and an increase in average earning assets resulted in an increase in net interest income of $872,000 for second quarter 2000 compared to second quarter 1999 and an increase in net interest income of $1,668,000 for six months ended June 30, 2000 compared to the same period in 1999. Provision for Loan Losses 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. 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 that management has determined to be adequate. The provision for loan losses was $605,000 for second quarter 2000 compared to $194,000 for second quarter 1999 and $1,082,000 for six months ended June 30, 2000 compared to $443,000 for the same period in 1999. The increase in the provision for loan losses in both periods is attributable to maintaining adequate reserve levels given the significant increase in outstanding loans for the past twelve months. Net loan charge-offs represented 40.50% of the provision for loan losses in second quarter 2000 compared to 372.16% in second quarter 1999. The second quarter 1999 ratio was skewed due to one commercial loan totaling $637,000 being charged-off. This loan had been fully reserved for the past several years and management deemed the loan uncollectable during the second quarter of 1999. Net loan charge-offs represented 62.57% of the provision for loan losses in the six month period ended June 30, 2000 compared to 177.43% of the provision for loan losses in the six 18 month period ended June 30, 1999. During the first six months of 2000 and 1999, a net of $677,000 and $786,000, respectively, was charged-off. Net loan charge- offs for the six months ended June 30, 2000 represented 0.20% of average loans outstanding compared to 0.29% for the six months ended June 30, 1999. At June 30, 2000 the allowance for loan losses was 1.40% of total loans outstanding as compared to an allowance for loan losses of 1.52% at June 30, 1999 and 1.48% at December 31, 1999. The allowance for loan losses of 1.40% at June 30, 2000 provided coverage of 95.73% of nonperforming loans and 89.76% of nonperforming assets, compared to 68.12% and 57.12%, respectively, at June 30, 1999. 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, 2000 allowance for loan losses adequate to cover potential losses in the loan portfolio. Noninterest Income Noninterest income consists primarily of service charges on deposit accounts. Service charges on deposit accounts amounted to $620,000 in second quarter 2000 compared to $544,000 in second quarter 1999, or an increase of 13.97% and amounted to $1,182,000 for six months ended June 30, 2000 compared to $1,025,000 for six months ended June 30, 1999, or an increase of 15.32%. All other non- interest income decreased by $65,000 to $215,000 for second quarter 2000 from $280,000 for second quarter 1999 and all other noninterest income decreased by $36,000 to $500,000 for six months ended June 30, 2000 from $536,000 for the same period in 1999. The primary decrease of other noninterest income results from the recovery of $94,000 in 1999 on a previously written down investment security at one of the subsidiary banks. There were no other significant variances in other noninterest income accounts during these time periods. Noninterest Expense Noninterest expense increased by 9.86% to $3,353,000 in second quarter 2000 from $3,052,000 for the same period a year ago and increased by 11.89% to $6,435,000 for six months ended June 30, 2000 from $5,751,000 for the same period in 1999. Salaries and benefits along with occupancy expense had significant increases due to the new offices opened in 1998 and 1999. Salaries and employee benefits increased 11.04% to $1,841,000 in second quarter 2000 compared to $1,658,000 for the same period in 1999 and increased 15.99% to $3,576,000 for six months ended June 30, 2000 compared to $3,083,000 for the same period a year ago. Occupancy expense increased 20.87% to $585,000 for second quarter 2000 from $484,000 for the same period in 1999 and increased 14.08% to $1,086,000 for six months ended June 30, 2000 from $952,000 for the same period a year ago. All other noninterest expense remained relatively flat with an increase of 3.32% to $1,773,000 for six months ended June 30, 2000 compared to $1,716,000 for the same period a year ago. Income Tax Expense Income before taxes increased by 11.03% to $1,722,000 in second quarter 2000 from $1,551,000 in second quarter 1999 and increased by 15.35% to $3,501,000 for six months ended June 30, 2000 compared to $3,035,000 for the same period in 1999. Income tax as a percentage of income before taxes increased by 8.73% to 33.51% in second quarter 2000 compared to 30.82% in second quarter 1999 and increased by 7.01% to 32.65% for six months ended June 30, 2000 compared to 30.51% for six months ended June 30, 1999. Income tax expense increased 20.71% to $577,000 for second quarter 2000 compared to $478,000 for second quarter 1999 and increased 23.43% to $1,143,000 for six months ended June 30, 2000 compared to $926,000 for the same period a year ago. Future Outlook Colony is an emerging company operating in an industry filled with non-regulated competitors and a rapid pace of consolidation. 2000 brings with it new opportunities for growth in our existing markets, as well as opportunities to expand into new markets through acquisitions and branching. Colony completed the acquisition of Georgia First Mortgage Company during first quarter 2000 to expand its mortgage opportunities. Colony has targeted two new branches in 2000 to be located in Moultrie and Soperton, Georgia and has targeted a new branch to be located in Southwest Georgia for 2001. Colony Management Services, Inc. continues to stay abreast of technology changes and its back-office consolidation effort will allow for continued reduction in overhead, while allowing the Company to better serve our customers through improved customer data resources and state-of-the-art technological services. Year 2000 Compliance Issue Colony initiated a company-wide program to identify and address issues associated with the ability of its in-house systems and outside service providers to properly recognize date-sensitive information as a result of the century change on January 1, 2000 (Year 2000). We are pleased that Colony experienced no Y2K related problems. All of our branches, ATM's and processing systems are working normally in the new millennium. Though the company realized minimal cost in addressing Y2K, we devoted a significant amount of resources over the last two years to remediation efforts for Year 2000 which can now be redirected into more productive projects. 19 Liquidity The Company's goals with respect to liquidity are to ensure that sufficient funds are available to meet current operating requirements and 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, 2000 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. Forward-Looking Statements This document contains statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe", "estimate", "expect", "intend", "anticipate" and similar expressions and variations thereof identify certain of such forward-looking statements, which speaks only as of the dates which they were made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Users are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Users are therefore cautioned not to place undue reliance on these forward-looking statements. 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 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 Colony Bank Southeast and in November, 1996 formed a non-bank subsidiary Colony Management Services, Inc. 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. On April 2, 1998, the Company was listed on Nasdaq National Market. The Company's common stock trades on the Nasdaq Stock Market under the symbol "CBAN". The Company presently has 920 shareholders of record as of June 30, 2000. "The Nasdaq Stock Market" or "Nasdaq" is a highly-regulated electronic securities market comprised of competing Market Makers whose trading is supported by a communications network linking them to quotation dissemination, trade reporting and order execution systems. This market also provides specialized automation services for screen-based negotiations of transactions, on-line comparison of transactions, and a range of informational services tailored to the needs of the securities industry, investors and issuers. The Nasdaq Stock Market is operated by The Nasdaq Stock Market, Inc., a wholly-owned subsidiary of the National Association of Securities Dealers, Inc. 20 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 25, 2000. At the Annual Meeting of the Shareholders, proxies were solicited under Regulation 14 of the Securities and Exchange Act of 1934. Total shares amount to 4,440,276. A total of 3,160,808.019 shares (71%) were represented by shareholders in attendance or by proxy. The following directors were elected by yes votes totaling 3,159,601.544 and no votes totaling 1,206.4756 to serve one year until the next annual meeting: Marion H. Massee, III Milton N. Hopkins, Jr. W. B. Roberts, Jr. Terry L. Coleman Harold E. Kimball R. Sidney Ross L. Morris Downing, Jr. Ben B. Mills, Jr. Joe Shiver Terry L. Hester James D. Minix Curtis Summerlin Ralph D. Roberts No other matters were voted upon by 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, 2000. 21 SIGNATURE Pursuant to the requirements of the Securities and 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. August 9, 2000 /s/ James D. Minix - ----------------------------- ----------------------------------- Date James D. Minix, President and Chief Executive Officer /s/ Terry L. Hester ----------------------------------- Terry L. Hester, Executive Vice President and Chief Financial Officer 22 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
9 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 13,049 7,096 17,490 0 61,383 710 697 362,704 5,087 480,364 406,929 17,400 3,410 15,569 0 0 4,440 32,616 480,364 16,729 1,829 723 19,281 9,068 9,945 9,336 1,082 0 6,435 3,501 3,501 0 0 2,358 0.53 0.53 4.44 4,931 383 229 0 4,682 793 116 5,087 5,087 0 0
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