10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-K

x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Fee Required)

For the Fiscal Year Ended December 31, 2012

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(No Fee Required)

For the Transition Period from _____________to ______________

Commission File Number 000-12436

COLONY BANKCORP, INC.

(Exact Name of Registrant Specified in its Charter)

Georgia	58-1492391
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
115 South Grant Street
Fitzgerald, Georgia	31750
(Address of Principal Executive Offices)	(Zip Code)

(229) 426-6000

Issuer’s Telephone Number, Including Area Code

Securities Registered Pursuant to Section 12(b) of the Act:  None.

Securities Registered Pursuant to Section 12(g) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, Par Value $1.00	The NASDAQ Stock Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  o  No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x   No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer   o	Accelerated Filer    o
Nonaccelerated Filer    o  (Do not check if a smaller reporting company)	Smaller Reporting Company    x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act):   Yes o   No  x

State the aggregate market value of the voting and non-voting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of June 30, 2012:  $28,778,233 based on stock price of $4.73.

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date:  8,439,258 shares of $1.00 par value common stock as of March 12, 2013.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the information required by Part III of this Annual Report are incorporated by reference from the Registrant’s definitive Proxy Statement for the 2012 annual meeting of shareholders to be filed with Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report.

TABLE OF CONTENTS

			Page
PART I
	Forward Looking Statement Disclosure		3
	Item 1.	Business	5
	Item 1A.	Not Applicable	24
	Item 1B.	Not Applicable	24
	Item 2.	Properties	24
	Item 3.	Legal Proceedings	24
	Item 4.	Not Applicable	24
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
	Item 6.	Selected Financial Data	26
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	59
	Item 8.	Financial Statements and Supplementary Data	59
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	60
	Item 9A.	Controls and Procedures	61
	Item 9B.	Other Information	62
PART III
	Item 10.	Directors and Executive Officers and Corporate Governance	62
	Item 11.	Executive Compensation	62
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	63
	Item 13.	Certain Relationships and Related Transactions and Director Independence	63
	Item 14.	Principal Accounting Fees and Services	63
PART IV
	Item 15.	Exhibits, Financial Statement Schedules	64
	Signatures		67

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Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this Annual Report that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the Act), notwithstanding that such statements are not specifically identified. In addition, certain statements may be contained in the Company’s future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

● Local and regional economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact.

● Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.

● The effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board.

● Inflation, interest rate, market and monetary fluctuations.

● Political instability.

● Acts of war or terrorism.

● The timely development and acceptance of new products and services and perceived overall value of these products and services by users.

● Changes in consumer spending, borrowings and savings habits.

● Technological changes.

● Acquisitions and integration of acquired businesses.

● The ability to increase market share and control expenses.

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Forward-Looking Statements and Factors that Could Affect Future Results (Continued)

● The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiary must comply.

● The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters.

● Changes in the Company’s organization, compensation and benefit plans.

· The costs and effects of litigation and of unexpected or adverse outcomes in such litigation.

● Greater than expected costs or difficulties related to the integration of new lines of business.

● The Company’s success at managing the risks involved in the foregoing items.

● Restrictions or conditions imposed by our regulators on our operations, including the terms of our memorandum of understanding.

Forward-looking statements speak only as of the date on which such statements are made.  The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

Readers should carefully review all disclosures we file from time to time with the Securities and Exchange Commission (SEC).

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Part I

Item 1

Business

COLONY BANKCORP, INC.

General

Colony Bankcorp, Inc. (the “Company” or “Colony”) is a Georgia business corporation which was incorporated on November 8, 1982. The Company was organized for the purpose of operating as a bank holding company under the Federal Bank Holding Company Act of 1956, as amended, and the bank holding company laws of Georgia (Georgia Laws 1976, p. 168, et. seq.). On July 22, 1983, the Company, after obtaining the requisite regulatory approvals, acquired 100 percent of the issued and outstanding common stock of Colony Bank (formerly Colony Bank of Fitzgerald and The Bank of Fitzgerald), Fitzgerald, Georgia, through the merger of the Bank with a subsidiary of the Company which was created for the purpose of organizing the Bank into a one-bank holding company.  Since that time, Colony Bank has operated as a wholly-owned subsidiary of the Company.  Our business is conducted primarily through our wholly-owned subsidiary, which provides a broad range of banking services to its retail and commercial customers.  The company headquarters are located at 115 South Grant Street, Fitzgerald, Georgia 31750, its telephone number is 229-426-6000 and its Internet address is http://www.colonybank.com.  We operate twenty-eight domestic banking offices and one corporate operations office and, at December 31, 2012, we had approximately $1.14 billion in total assets, $734.08 million in total loans, $979.68 million in total deposits and $95.76 million in stockholder’s equity.  Deposits are insured, up to applicable limits, by the Federal Deposit Insurance Corporation.

The Parent Company

Because Colony Bankcorp, Inc. is a bank holding company, its principal operations are conducted through its subsidiary bank, Colony Bank (the “Bank”).  It has 100 percent ownership of its subsidiary and maintains systems of financial, operational and administrative controls that permit centralized evaluation of the operations of the subsidiary bank in selected functional areas including operations, accounting, marketing, investment management, purchasing, human resources, computer services, auditing, compliance and credit review.  As a bank holding company, we perform certain stockholder and investor relations functions.

Colony Bank - Banking Services

Our principal subsidiary is the Bank.  The Bank, headquartered in Fitzgerald, Georgia, offers traditional banking products and services to commercial and consumer customers in our markets.  Our product line includes, among other things, loans to small and medium-sized businesses, residential and commercial construction and land development loans, commercial real estate loans, commercial loans, agri-business and production loans, residential mortgage loans, home equity loans, consumer loans and a variety of demand, savings and time deposit products.  We also offer internet banking services, electronic bill payment services, safe deposit box rentals, telephone banking, credit and debit card services, remote depository products and access to a network of ATMs to our customers.  Colony Bank conducts a general full service commercial, consumer and mortgage banking business through twenty-nine offices located in central, south and coastal Georgia cities of Fitzgerald, Warner Robins, Centerville, Ashburn, Leesburg, Cordele, Albany, Thomaston, Columbus, Sylvester, Tifton, Moultrie, Douglas, Broxton, Savannah, Eastman, Chester, Soperton, Rochelle, Pitts, Quitman and Valdosta, Georgia.

For additional discussion of our loan portfolio and deposit accounts, see “Management’s Discussion of Financial Condition and Results of Operations - Loans and Deposits.”

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Part I (Continued)

Item 1 (Continued)

Subordinated Debentures (Trust Preferred Securities)

During the second quarter of 2004, the Company formed Colony Bankcorp Statutory Trust III for the sole purpose of issuing $4,500,000 in Trust Preferred Securities through a pool sponsored by FTN Financial Capital Market.  The securities have a maturity of thirty years and are redeemable after five years with certain exceptions.

During the second quarter of 2006, the Company formed Colony Bankcorp Capital Trust I for the sole purpose of issuing $5,000,000 in Trust Preferred Securities through a pool sponsored by SunTrust Bank Capital Markets.  The securities have a maturity of thirty years and are redeemable after five years with certain exceptions.

During the first quarter of 2007, the Company formed Colony Bankcorp Capital Trust II for the sole purpose of issuing $9,000,000 in Trust Preferred Securities through a pool sponsored by Trapeza Capital Management, LLC.  The securities have a maturity of thirty years and are redeemable after five years with certain exceptions.  Proceeds from this issuance were used to pay off trust preferred securities issued on March 26, 2002 through Colony Bankcorp Statutory Trust I.

During the third quarter of 2007, the Company formed Colony Bankcorp Capital Trust III for the sole purpose of issuing $5,000,000 in Trust Preferred Securities through a pool sponsored by Trapeza Capital Management, LLC.  The securities have a maturity of thirty years and are redeemable after five years with certain exceptions.  Proceeds from this issuance were used to pay off trust preferred securities issued on December 19, 2002 through Colony Bankcorp Statutory Trust II.

Corporate Restructuring and Business Combinations

On April 30, 1984, after acquiring the requisite regulatory approvals, the Company acquired 100 percent of the issued and outstanding stock of Colony Bank Wilcox (formerly Community Bank of Wilcox and Pitts Banking Company), Pitts, Wilcox County, Georgia.  As part of the transaction, Colony issued an additional 17,872 shares of its $10.00 par value common stock, all of which was exchanged with the holders of shares of common stock of Pitts Banking Company for 100 percent of the 250 issued and outstanding shares of common stock of Pitts Banking Company.  Since the date of acquisition, Colony Bank Wilcox operated as a wholly-owned subsidiary of the Company until it was merged into Colony Bank effective August 1, 2008.

On November 1, 1984, after obtaining the requisite regulatory approvals, the Company acquired 100 percent of the issued and outstanding common stock of Colony Bank Ashburn (formerly Ashburn Bank), Ashburn, Turner County, Georgia, for a combination of cash and interest-bearing promissory notes.  Since the date of acquisition, Colony Bank Ashburn operated as a wholly-owned subsidiary of the Company until it was merged into Colony Bank effective August 1, 2008.

On September 30, 1985, after obtaining the requisite regulatory approvals, the Company acquired 100 percent of the issued and outstanding common stock of Colony Bank of Dodge County, (formerly The Bank of Dodge County), Chester, Dodge County, Georgia.  The stock was acquired in exchange for the issuance of 3,500 shares of common stock of Colony.  Since the date of acquisition, Colony Bank of Dodge County operated as a wholly-owned subsidiary of the Company until it was merged into Colony Bank effective August 1, 2008.

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Part I (Continued)

Item 1 (Continued)

On July 31, 1991, after obtaining the requisite regulatory approvals, the Company acquired 100 percent of the issued and outstanding common stock of Colony Bank Worth, (formerly Worth Federal Savings and Loan Association and Bank of Worth), Sylvester, Worth County, Georgia.  The stock was acquired in exchange for cash and the issuance of 7,661 shares of common stock of Colony for an aggregate purchase price of approximately $718,000.  Since the date of acquisition, Colony Bank Worth operated as a wholly-owned subsidiary of the Company until it was merged into Colony Bank effective August 1, 2008.

On November 8, 1996, Colony organized Colony Management Services, Inc. to provide support services to each subsidiary.  Services provided include loan and compliance review, internal audit and data processing. Colony Management Services, Inc. operated as a wholly-owned subsidiary of the Company until it was merged into Colony Bank effective August 1, 2008.

On November 30, 1996, after obtaining the requisite regulatory approvals, the Company acquired 100 percent of the issued and outstanding common stock of Colony Bank Southeast (formerly Broxton State Bank), Broxton, Coffee County, Georgia in a business combination accounted for as a pooling of interests.  Broxton State Bank became a wholly-owned subsidiary of the Company through the exchange of 157,735 shares of the Company’s common stock for all of the outstanding stock of Broxton State Bank.  Since the date of acquisition, Colony Bank Southeast operated as a wholly-owned subsidiary of the Company until it was merged into Colony Bank effective August 1, 2008.

On March 2, 2000, Colony Bank Ashburn purchased the capital stock of Colony Mortgage Corp (formerly Georgia First Mortgage Company) in a business combination accounted for as a purchase.  The purchase price of $346,725 was the fair value of the net assets of Georgia First Mortgage Company at the date of purchase.  Colony Mortgage Corp is primarily engaged in residential real estate mortgage lending in the state of Georgia. Colony Mortgage Corp operated as a subsidiary of Colony Bank effective with the August 1, 2008 merger until October 1, 2012 when the corporation was dissolved.

On March 29, 2002, after obtaining the requisite regulatory approvals, the Company acquired 100 percent of the issued and outstanding stock of Colony Bank Quitman, FSB, (formerly Quitman Federal Saving Bank), Quitman, Brooks County, Georgia.  Quitman Federal Savings Bank became a wholly-owned subsidiary of the Company through the exchange of 367,093 shares of the Company’s common stock and cash for an aggregate acquisition price of $7,446,163.  Since the date of acquisition, Colony Bank Quitman, FSB operated as a wholly-owned subsidiary of the Company until it was merged into Colony Bank effective August 1, 2008.

On March 19, 2004, Colony Bank Ashburn purchased Flag Bank - Thomaston office in a business combination accounted for as a purchase.  Since the date of acquisition, the Thomaston office operated as an office of Colony Bank Ashburn until August 1, 2008 when it became an office of Colony Bank.

On August 1, 2008, the Company effected a merger of its seven banking subsidiaries and its one nonbank subsidiary into one surviving bank subsidiary, Colony Bank (formerly Colony Bank of Fitzgerald).

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Part I (Continued)

Item 1 (Continued)

Markets and Competition

The banking industry in general is highly competitive.  Our market areas of central, south and coastal Georgia have experienced good economic and population growth the past several years, however the current downturn in the housing and real estate market that began in late 2007 along with recessionary fears has proven to be quite challenging - not only for Colony but the entire banking industry.  In our markets, we face competitive pressures in attracting deposits and making loans from larger regional banks and smaller community banks, thrift institutions, credit unions, consumer finance companies, mortgage bankers, brokerage firms and insurance companies.  The principal factors in competing for deposits and loans include interest rates, fee structures, range of products and services offered and convenience of office and ATM locations.  The banking industry is also experiencing increased competition for deposits from less traditional sources such as money market and mutual funds.  In addition, intense market demands, economic concerns, volatile interest rates and customer awareness of product and services have forced banks to be more competitive - often resulting in margin compression and a decrease in operating efficiency.

In response to competitive issues, the Company merged all of its operations into one operating subsidiary, Colony Bank, effective August 1, 2008.  This consolidation effort enabled the Company to align products, pricing and marketing efforts while re-allocating resources to support management’s future growth strategies.

Correspondents

Colony Bank has correspondent relationships with the following banks: Federal Reserve Bank in Atlanta, Georgia; SunTrust Bank in Atlanta, Georgia; FTN Financial in Memphis, Tennessee, CenterState Bank in Lake Wales, Florida and Federal Home Loan Bank in Atlanta, Georgia.  The correspondent relationships facilitate the transactions of business by means of loans, collections, investment services, lines of credit and exchange services.  As compensation for these services, the Bank maintains balances with its correspondents in noninterest-bearing accounts and pays some service charges.

Employees

On December 31, 2012, the Company had a total of 308 full-time and 19 part-time employees.  We consider our relationship with our employees to be satisfactory.

The Company has a noncontributory profit-sharing plan covering all employees subject to certain minimum age and service requirements.  No Company contributions were made in 2012 due to performance.  In addition, the Company maintains a comprehensive employee benefit program providing, among other benefits, hospitalization, major medical, life insurance and disability insurance.  Management considers these benefits to be competitive with those offered by other financial institutions in our market area.  Colony’s employees are not represented by any collective bargaining group.

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Part I (Continued)

Item 1 (Continued)

SUPERVISION AND REGULATION

BANK HOLDING COMPANY REGULATION

General

Colony is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended (BHCA).  We are extensively regulated under federal and state law.  Generally, these laws and regulations are intended to protect our depositors, not necessarily our shareholders or our creditors.  As a bank holding company registered with the Federal Reserve under the BHCA and the Georgia Department of Banking and Finance (“the Georgia Department”) under the Financial Institutions Code of Georgia, we are subject to supervision, examination and reporting by the Federal Reserve and the Georgia Department.  Our activities are limited to banking, managing or controlling banks, furnishing services to or performing services for its subsidiaries, or engaging in any other activity that the Federal Reserve determines to be so closely related to banking, or managing or controlling banks, as to be a proper incident to these activities.

Colony is required to file with the Federal Reserve and the Georgia Department periodic reports and any additional information as they may require.  The Federal Reserve and Georgia Department will also regularly examine the Company.  The Federal Deposit Insurance Corporation (“FDIC”) and Georgia Department also examine the Bank.

The following is a summary of certain provisions of certain laws that affect the regulation of bank holding companies and banks.  The discussion is qualified in its entirety by reference to applicable laws and regulations.  Changes in such laws and regulations may have a material effect on our business and prospects.

Activity Limitations

The BHCA requires prior Federal Reserve approval for, among other things:

● the acquisition by a bank holding company of direct or indirect ownership or control of more than 5 percent of the voting shares or substantially all of the assets of any bank, or

● a merger or consolidation of a bank holding company with another bank holding company.

Similar requirements are imposed by the Georgia Department.

A bank holding company may acquire direct or indirect ownership or control of voting shares of any company that is engaged directly or indirectly in banking, or managing or controlling banks, or performing services for its authorized subsidiaries.  A bank holding company may also engage in or acquire an interest in a company that engages in activities that the Federal Reserve has determined by regulation or order to be so closely related to banking as to be a proper incident to these activities.  The Federal Reserve normally requires some form of notice or application to engage in or acquire companies engaged in such activities.  Under the BHCA, Colony will generally be prohibited from engaging in or acquiring direct or indirect control of more than 5 percent of the voting shares of any company engaged in activities other than those referred to above.

The BHCA permits a bank holding company located in one state to lawfully acquire a bank located in any other state, subject to deposit percentage, aging requirements and other restrictions.  The Riegle-Neal Interstate Banking and Branching Efficiency Act also generally provides that national and state chartered banks may, subject to applicable state law, branch interstate through acquisitions of banks in other states.

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Part I (Continued)

Item 1 (Continued)

In November 1999, Congress enacted the Gramm-Leach-Bliley Act, which made substantial revisions to the statutory restrictions separating banking activities from other financial activities.  Under the Gramm-Leach-Bliley Act, bank holding companies that are well capitalized, well managed and meet other conditions can elect to become “financial holding companies.”  As financial holding companies, they and their subsidiaries are permitted to acquire or engage in activities that were not previously allowed bank holding companies, such as insurance underwriting, securities underwriting and distribution, travel agency activities, broad insurance agency activities, merchant banking and other activities that the Federal Reserve determines to be financial in nature or complementary to these activities.  Financial holding companies continue to be subject to the overall oversight and supervision of the Federal Reserve, but the Gramm-Leach-Bliley Act applies the concept of functional regulation to the activities conducted by subsidiaries.  For example, insurance activities would be subject to supervision and regulation by state insurance authorities.  While Colony has not elected to become a financial holding company in order to exercise the broader activity powers provided by the Gramm-Leach-Bliley Act, it may elect to do so in the future.

Limitations on Acquisitions of Bank Holding Companies

As a general proposition, other companies seeking to acquire control of a bank holding company would require the approval of the Federal Reserve under the BHCA.  In addition, individuals or groups of individuals seeking to acquire control of a bank holding company would need to file a prior notice with the Federal Reserve (which the Federal Reserve may disapprove under certain circumstances) under the Change in Bank Control Act.  Control is conclusively presumed to exist if an individual or company acquires 25 percent or more of any class of voting securities of the bank holding company.  Control may exist under the Change in Bank Control Act if the individual or company acquires 10 percent or more of any class of voting securities of the bank holding company.

Source of Strength Doctrine

In accordance with Federal Reserve Board policy, the holding company is expected to act as a source of financial and managerial strength to the Bank. Under this policy, the holding company is expected to commit resources to support its bank subsidiary, including at times when the holding company may not be in a financial position to provide it. As discussed below, the holding company could be required to guarantee the capital plan of the Bank if it becomes undercapitalized for purposes of banking regulations. Any capital loans by a bank holding company to its subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. The BHC Act provides that, in the event of a bank holding company’s bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a bank subsidiary will be assumed by the bankruptcy trustee and entitled to priority of payment.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) has added additional guidance regarding the source of strength doctrine and has directed the regulatory agencies to promulgate new regulations to increase the capital requirements for bank holding companies to a level that matches those of banking institutions.

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Part I (Continued)

Item 1 (Continued)

Sale of TARP Securities

On January 9, 2009, the Company, pursuant to the TARP CPP, issued and sold to the Treasury, for an aggregate cash purchase price of $28 million, (i) 28,000 shares (the “Preferred Shares”) of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, having a liquidation preference of $1,000 per share, and (ii) a ten-year warrant (the “Warrant”) to purchase up to 500,000 shares of our common stock, par value $1.00 per share, at an exercise price of $8.40 per share.  On January 29, 2013, the Company’s 28,000 shares of Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) was sold by the Treasury to the public through a modified dutch auction. This auction is part of the Treasury’s ongoing efforts to wind down its remaining TARP bank investments. The sale of the Preferred Stock to new investors did not result in any accounting entries and does not change the Company’s capital position. The Treasury continues to hold the Warrant for 500,000 shares of common stock; however, the Company has notified the Treasury of its intentions to repurchase the warrant, although no price for the repurchase has been set.

Cumulative dividends on the Preferred Shares will continue to accrue at a rate of 5 percent per annum for the first five years from initial issuance and at a rate of 9 percent per annum thereafter. The Preferred Stock continues to have no maturity date and ranks senior to the Company’s Common Stock. The Preferred Stock continues to be redeemable at the option of the Company at 100 percent of their liquidation preference, plus any accrued and unpaid dividends.

The Dodd-Frank Act

The Dodd-Frank Act, which was enacted on July 21, 2010, significantly changed the current bank regulatory structure and affected the lending, investment, trading and operating activities of financial institutions and their holding companies. The Dodd-Frank Act requires the Federal Reserve Board to set minimum capital levels for bank holding companies that are as stringent as those required for insured depository institutions, and the components of Tier 1 capital would be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. In addition, the proceeds of trust preferred securities are excluded from Tier 1 capital unless such securities were issued before May 19, 2010 by bank or savings and loan holding companies with less than $15 billion of assets. The legislation also establishes a floor for capital of insured depository institutions that cannot be lower than the standards in effect today, and directs the federal banking regulators to implement new leverage and capital requirements within 18 months. These new leverage and capital requirements must take into account off-balance sheet activities and other risks, including risks relating to securitized products and derivatives.

The Dodd-Frank Act also created a new Consumer Financial Protection Bureau, which has been delegated broad powers to supervise and enforce consumer protection laws. The Consumer Financial Protection Bureau has broad rulemaking authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings institutions with more than $10.0 billion in assets. Banks and savings institutions with $10.0 billion or less in assets will be examined by their applicable bank regulators. The new legislation also weakens the federal preemption available for national banks and federal savings associations, and gives the state attorneys general the ability to enforce applicable federal consumer protection laws.

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Part I (Continued)

Item 1 (Continued)

The Dodd-Frank Act (Continued)

The Dodd-Frank Act increased stockholder influence over boards of directors by requiring companies to give stockholders a nonbinding vote on executive compensation and so-called “golden parachute” payments, and by authorizing the Securities and Exchange Commission to promulgate rules that would allow stockholders to nominate and solicit votes for their own candidates using a company’s proxy materials. The legislation also directed the Federal Reserve Board to promulgate rules prohibiting excessive incentive compensation paid to bank holding company executives, regardless of whether the company is publicly traded.

The Dodd-Frank Act contains a wide variety of provisions (many of which are not yet effective) affecting the regulation of depository institutions in addition to those stated above. Those include restrictions related to mortgage originations, risk retention requirements as to securitized loans and the Consumer Financial Protection Bureau. The full effect of the Dodd-Frank Act on our business and operations will not be known for years until regulations implementing the statute are written and adopted. The Dodd-Frank Act may have a material effect on the Company’s and the Bank’s operations, particularly through increased compliance costs resulting from possible future consumer and fair lending regulations.

Limitations on Senior Executive Compensation

In June of 2010, federal banking regulators issued guidance designed to help ensure that incentive compensation policies at banking organizations do not encourage excessive risk-taking or undermined the safety and soundness of the organization. In connection with this guidance, the regulatory agencies announced that they will review incentive compensation arrangements as part of the regular, risk-focused supervisory process. Regulatory authorities may also take enforcement action against a banking organization if its incentive compensation arrangement or related risk management, control, or governance processes pose a risk to the safety and soundness of the organization and the organization is not taking prompt and effective measures to correct the deficiencies. To ensure that incentive compensation arrangements do not undermine safety and soundness at insured depository institutions, the incentive compensation guidance sets forth the following key principles:

● Incentive compensation arrangements should provide employees incentives that appropriately balance risk and financial results in a manner that does not encourage employees to expose the organization to imprudent risk;

● Incentive compensation arrangements should be compatible with effective controls and risk management; and

● Incentive compensation arrangements should be supported by strong corporate governance, including active and effective oversight by the board of directors.

Tying

Bank holding companies and their affiliates are prohibited from tying the provision of certain services, such as extending credit, to other services or products offered by the holding company or its affiliates, such as deposit products.

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Part I (Continued)

Item 1 (Continued)

Capital; Dividends; Source of Strength

The Federal Reserve imposes certain capital requirements on bank holding companies under the Bank Holding Company Act, including a minimum leverage ratio and a minimum ratio of “qualifying” capital to risk-weighted assets. These requirements are described below under “Capital Regulations.” Subject to its capital requirements and certain other restrictions, we are able to borrow money to make a capital contribution to Colony Bank, and such loans may be repaid from dividends paid from Colony Bank to us.

The ability of Colony Bank to pay dividends, however, will be subject to regulatory restrictions that are described below under “Dividends.” We are also able to raise capital for contributions to Colony Bank by issuing securities without having to receive regulatory approval, subject to compliance with federal and state securities laws.

In accordance with Federal Reserve policy, which has been codified by the Dodd-Frank Act, we are expected to act as a source of financial strength to Colony Bank and to commit resources to support Colony Bank in circumstances in which we might not otherwise do so. In furtherance of this policy, the Federal Reserve may require a financial holding company to terminate any activity or relinquish control of a nonbank subsidiary (other than a nonbank subsidiary of a bank) upon the Federal Reserve's determination that such activity or control constitutes a serious risk to the financial soundness or stability of any subsidiary depository institution of the bank holding company. Further, federal bank regulatory authorities have additional discretion to require a financial holding company to divest itself of any bank or nonbank subsidiary if the agency determines that divestiture may aid the depository institution's financial condition.

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Part I (Continued)

Item 1 (Continued)

BANK REGULATION

General

The Bank is a commercial bank chartered under the laws of the State of Georgia, and as such is subject to supervision, regulation and examination by the Georgia Department.  The Bank is a member of the FDIC, and their deposits are insured by the FDIC’s Deposit Insurance Fund up to the amount permitted by law.  The FDIC and the Georgia Department routinely examine the Bank and monitor and regulate all of the Bank’s operations, including such things as adequacy of reserves, quality and documentation of loans, payments of dividends, capital adequacy, adequacy of systems and controls, credit underwriting and asset liability management, compliance with laws and establishment of branches.  Interest and other charges collected or contracted for by the Bank is subject to state usury laws and certain federal laws concerning interest rates.  The Bank files periodic reports with the FDIC and the Georgia Department.

BUSINESS

Recent Developments

On October 21, 2010, the Board of Directors of the Company’s subsidiary bank, Colony Bank (the “Bank”), received notification from its primary regulators, the Georgia Department of Banking and Finance (“the Georgia Department”) and the FDIC that the Bank’s latest examination results require a program of corrective action as outlined in a proposed Memorandum of Understanding (“MOU”).  An MOU is characterized by the supervising authorities as an informal action that is neither published nor made publically available by the supervising authorities and is used when circumstances do not warrant formal supervisory action.  An MOU is not a “written agreement” for purposes of Section 8 of the Federal Deposit Insurance Act.  The Board of Directors entered into the MOU at its regularly scheduled monthly meeting on November 16, 2010 with the effective date of the MOU being November 23, 2010.  At December 31, 2012, the Bank is in compliance with terms of the MOU.

The MOU requires the Bank to develop, implement and maintain various processes to improve the Bank’s risk management of its loan portfolio, reduce adversely classified loans subject to certain exceptions, adopt a written plan to properly monitor and reduce the Bank’s commercial real estate concentration, continue to maintain the Bank’s loan loss provision and review its adequacy at least quarterly, and formulate and implement a written plan to improve and maintain earnings to be forwarded for review by the Georgia Department and FDIC.  The Bank is also required to obtain approval before any cash dividends can be paid.

The Bank has also agreed to have and maintain minimum capital ratios at specified levels higher than those otherwise required by applicable regulations as follows:  Tier 1 capital to total average assets of 8 percent and total risk-based capital to total risk-weighted assets of 10 percent.  At December 31, 2012, the Bank’s capital ratios were 10.31 percent and 16.61 percent, respectively.

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Part I (Continued)

Item 1 (Continued)

Transactions with Affiliates and Insiders

The Company is a legal entity separate and distinct from the Bank.  Various legal limitations restrict the Bank from lending or otherwise supplying funds to the Company and other nonbank subsidiaries of the Company, all of which are deemed to be “affiliates” of the Bank for the purposes of these restrictions.  The Company and the Bank are subject to Section 23A of the Federal Reserve Act.  Section 23A defines “covered transactions,” which include extensions of credit, and limits a bank’s covered transactions with any affiliate to 10 percent of such bank’s capital and surplus and with all affiliates to 20 percent of such bank’s capital and surplus.  All covered and exempt transactions between a bank and its affiliates must be on terms and conditions consistent with safe and sound banking practices, and banks and their subsidiaries are prohibited from purchasing low-quality assets from the bank’s affiliates.  Finally,   Section 23 A requires that all of a bank’s extensions of credit to an affiliate be appropriately secured by acceptable collateral, generally United States government or agency securities.  The Company and the Bank are also subject to Section 23B of the Federal Reserve Act, which generally limits covered and other transactions between a bank and its affiliates to terms and under circumstances, including credit standards, that are substantially the same or at least as favorable to the bank as prevailing at the time for transactions with unaffiliated companies.  The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) enhances the requirements for certain transactions with affiliates under Section 23A and 23B, including an expansion of the definition of “covered transactions” and increasing the amount of time for which collateral requirements regarding covered transactions must be maintained.  The Bank is also subject to restrictions on extensions of credit to its executive officers, directors, principal shareholders and their related interests. These extensions of credit (1) must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties, and (2) must not involve more than the normal risk of repayment or present other unfavorable features. Effective July 21, 2011, an insured depository institution is prohibited from engaging in asset purchases or sales transactions with its officers, directors or principal shareholders unless on market terms and, if the transaction represents greater than 10 percent of the capital and surplus of the bank, it has been approved by a majority of the disinterested directors.

Dividends

The Company is a legal entity separate and distinct from the Bank.  The principal source of the Company’s cash flow, including cash flow to pay dividends to its stockholders, is dividends that the Bank pays to it.  Statutory and regulatory limitations apply to the Bank’s payment of dividends to the Company as well as to the Company’s payment of dividends to its stockholders.  Pursuant to MOU entered into with the Georgia Department and the FDIC, the Bank is required to obtain approval from these regulators before any cash dividends can be paid.  Currently, the Company is likewise unable to declare or pay any cash dividend to its shareholders or to pay interest on its junior subordinated debentures without first obtaining prior written consent from the applicable regulators.

As of December 31, 2012, the Company has obtained approval from its regulators to declare and pay scheduled dividend payments on its equity securities and interest on its junior subordinated debentures in each instance where it has sought such approval, except for the requests to pay (i) the dividend payment on the TARP preferred stock due on February 15, 2012 and (ii) the interest payments on its four series of junior subordinated debentures due on March 19, 2012, March 30, 2012, April 2, 2012 and April 30, 2012, respectively, all of which were denied by the regulators because of a lack of funds at the Company to make such payments. Since such time, the Company has not sought, and for the foreseeable future does not expect to seek, regulatory approval to pay a dividend on the Securities or interest on its junior subordinated debentures because it does not reasonably believe that such approval would be granted by the regulators.

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Part I (Continued)

Item 1 (Continued)

As of December 31, 2012, the Bank has twice sought regulatory approval to declare and pay a cash dividend to the Company. On one occasion, in the first quarter of 2012, the Bank’s request was denied. On the second occasion, in the fourth quarter of 2012, the Bank’s request was approved. The Bank will therefore declare and pay a cash dividend to the Company in the first quarter of 2013. Such regulatory approval provided that the Company may not use the dividend proceeds to pay dividends on its equity securities or to make interest payments on its junior subordinated debentures.

The Company expects that it will use the dividend proceeds for general corporate purposes. The Bank expects to request regulatory approval to pay dividends to the Company in the future, but cannot give any assurances that such future requests will receive approval or whether such approvals will contain similar restrictions that the proceeds therefrom may not be used to pay dividends on the Company’s equity securities or interest on its junior subordinated debentures.

Furthermore, while the Company is deferring interest payments on its junior subordinated debentures, the Company may not declare or pay any dividends on any of its capital stock. For the foreseeable future after December 31, 2012, the Company expects to be unable to declare and pay any scheduled interest payments on its junior subordinated debentures.

The Company has not paid scheduled dividend payments on the TARP preferred stock since the payment due on November 15, 2011, and for the foreseeable future reasonably expects to be unable to declare and pay any scheduled dividend payments on the TARP preferred stock.

A variety of federal and state laws and regulations affect the ability of the Bank and the Company to pay dividends.  A depository institution may not pay any dividend if payment would cause it to become undercapitalized or if it already is undercapitalized.  The federal banking agencies may prevent the payment of a dividend if they determine that the payment would be an unsafe and unsound banking practice.  Moreover, the federal agencies have issued policy statements that provide that bank holding companies and insured banks should generally only pay dividends out of current operating earnings.  In addition, regulations promulgated by the Georgia Department limit the Bank’s payment of dividends.

Enforcement Policies and Actions

Federal law gives the Federal Reserve and FDIC substantial powers to enforce compliance with laws, rules and regulations.  Bank or individuals may be ordered to cease and desist from violations of law or other unsafe or unsound practices.  The agencies have the power to impose civil money penalties against individuals or institutions of up to $1,000,000 per day for certain egregious violations.  Persons who are affiliated with depository institutions can be removed from any office held in that institution and banned from participating in the affairs of any financial institution.  The banking regulators have not hesitated to use the enforcement authorities provided in federal law.

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Part I (Continued)

Item 1 (Continued)

Capital Regulations

The federal bank regulatory authorities have adopted capital guidelines for banks and bank holding companies.  In general, the authorities measure the amount of capital an institution holds against its assets.  There are three major capital tests: (i) the Total Capital ratio (the total of Tier 1 Capital and Tier 2 Capital measured against risk-adjusted assets), (ii) the Tier 1 Capital ratio (Tier 1 Capital measured against risk-adjusted assets) and (iii) the leverage ratio (Tier 1 Capital measured against average (i.e., nonrisk-weighted) assets).

Tier 1 Capital consists of common equity, retained earnings and a limited amount of qualifying preferred stock, less disallowed deferred tax assets, goodwill and core deposit intangibles.  Tier 2 Capital consists of nonqualifying preferred stock, qualifying subordinated, perpetual and/or mandatory convertible debt, term subordinated debt and intermediate term preferred stock and up to 45 percent of the pretax unrealized holding gains on available-for-sale equity securities with readily determinable market values that are prudently valued, and a limited amount of any loan loss allowance.

In measuring the adequacy of capital, assets are generally weighted for risk.  Certain assets, such as cash and U.S. government securities, have a zero risk weighting.  Others, such as commercial and consumer loans, have a 100 percent risk weighting.  Risk weightings are also assigned for off-balance sheet items such as loan commitments.  The various assets are multiplied by the appropriate risk-weighting to determine risk-adjusted assets for the capital calculations.  For the leverage ratio mentioned above, average assets are not risk-weighted.

The federal banking agencies must take “prompt corrective action” in respect of depository institutions that do not meet minimum capital requirements.  There are five tiers for financial institutions: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.”  Under these regulations, a bank will be:

● “well capitalized” if it has a Total Capital ratio of 10 percent or greater, a Tier 1 Capital ratio of 6 percent or greater, a leverage ratio of 5 percent or better - or 4 percent in certain circumstances - and is not subject to any written agreement, order, capital directive, or prompt corrective action directive by a federal bank regulatory agency to meet and maintain a specific capital level for any capital measure;

● “adequately capitalized” if it has a Total Capital ratio of 8 percent or greater, a Tier 1 Capital ratio of 4 percent or greater, and a leverage ratio of 4 percent or greater - or 3 percent in certain circumstances - and is not well capitalized;

● “undercapitalized” if it has a Total Capital ratio of less that 8 percent, a Tier 1 Capital ratio of less that 4 percent - or 3 percent in certain circumstances;

● “significantly undercapitalized” if it has a Total Capital ratio of less than 6 percent or a Tier 1 Capital ratio of less than 3 percent, or a leverage ratio of less than 3 percent; or

● “critically undercapitalized” if its tangible equity is equal to or less than 2 percent of average quarterly assets.

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Part I (Continued)

Item 1 (Continued)

Capital Regulations (Continued)

Federal law generally prohibits a depository institution from making any capital distribution, including the payment of a dividend or paying any management fee to its holding company if the depository institution would be undercapitalized as a result.  Undercapitalized depository institutions may not accept brokered deposits absent a waiver from the FDIC, are subject to growth limitations and are required to submit a capital restoration plan for approval.  For a capital restoration plan to be acceptable, the depository institution’s parent holding company must guarantee that the institution will comply with such capital restoration plan.  The aggregate liability of the parent holding company is limited to the lesser of 5 percent of the depository institution’s total assets at the time it became undercapitalized, and the amount necessary to bring the institution into compliance with applicable capital standards.  If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized.  If the controlling holding company fails to fulfill its obligations under this law and files, or has filed against it, a petition under the federal Bankruptcy Code, the FDIC claim related to the holding company’s obligations would be entitled to a priority in such bankruptcy proceeding over third party creditors of the bank holding company.

Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets and cessation of receipt of deposits from correspondent banks.  Critically undercapitalized institutions are subject to the appointment of a receiver or conservator.

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Part I (Continued)

Item 1 (Continued)

At December 31, 2012, the Company exceeded the minimum Tier 1, risk-based and leverage ratios and qualified as “well capitalized” under current Federal Reserve Board criteria.  The following table sets forth certain capital information for the Company as of December 31, 2012.  As of December 31, 2012, Colony had Tier 1 Capital and Total Capital of approximately 15.22 percent and 16.47 percent, respectively, of risk-weighted assets.  As of December 31, 2012, Colony had a leverage ratio of Tier 1 Capital to total average assets of approximately 10.22 percent.

	December 31, 2012
	Amount		Percent
Leverage Ratio
Actual	$	113,283		10.22	%
Well-Capitalized Requirement		55,428		5.00
Minimum Required (1)(2)		44,343		4.00
Risk Based Capital:
Tier 1 Capital
Actual		113,283		15.22
Well-Capitalized Requirement		44,661		6.00
Minimum Required (1)		29,774		4.00
Total Capital
Actual		122,630		16.47
Well-Capitalized Requirement		74,436		10.00
Minimum Required (1)(2)		59,548		8.00

(1) Represents the minimum requirement.  Institutions that are contemplating acquisitions or anticipating or experiencing significant growth may be required to maintain a substantially higher leverage ratio.

(2) As discussed in Note 21 of the consolidated financial statements as of December 31, 2012, the Bank has agreed to have and maintain a minimum Tier 1 Capital to average assets ratio of 8 percent and a minimum Total Capital to risk-weighted assets ratio of 10 percent as a result of the Bank’s Memorandum of Understanding (MOU).  Refer to Note 21.

The guidelines also provide that institutions experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets.  Higher capital may be required in individual cases, depending upon a bank or bank holding company’s risk profile.  All bank holding companies and banks are expected to hold capital commensurate with the level and nature of their risks, including the volume and severity of their problem loans.  Lastly, the Federal Reserve’s guidelines indicate that the Federal Reserve will continue to consider a “Tangible Tier 1 Leverage Ratio,” calculated by deducting all intangibles, in evaluating proposals for expansion or new activity.

On August 30, 2012, the federal banking agencies issued proposed rules that would implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. “Basel III” refers to two consultative documents released by the Basel Committee on Banking Supervision in December 2009, the rules-text released in December 2010, and loss-absorbency rules issued in January 2011, which include significant changes to bank capital, leverage, and liquidity requirements. The proposed rules are subject to a comment period which ended on October 22, 2012.

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Part I (Continued)

Item 1 (Continued)

The proposed rules include new risk-based capital and leverage ratios, which would be phased in from 2013 to 2019, and would revise the definition of what constitutes “capital” for purposes of calculating those ratios. The proposed new minimum capital level requirements applicable to the Company and the Bank under the proposals would be: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The proposed rules would also establish a “capital conservation buffer” of 2.5% above the new regulatory minimum capital requirements, which must consist entirely of common equity Tier 1 capital and would result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement would be phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase by that amount each year until fully implemented in January 2019. An institution would be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations would establish a maximum percentage of eligible retained income that could be utilized for such actions.

FDIC Insurance Assessments

The Bank’s deposits are insured by the Deposit Insurance Fund (the “DIF”) of the FDIC up to the maximum amount permitted by law, which was permanently increased to $250,000 by the Dodd-Frank Act. The FDIC uses the DIF to protect against the loss of insured deposits if an FDIC-insured bank or savings association fails. Pursuant to the Dodd-Frank Act, the FDIC must take steps, as necessary, for the DIF reserve ratio to reach 1.35 percent of estimated insured deposits by September 30, 2020.  The Bank is thus subject to FDIC deposit premium assessments.

Recent depository institutional failures have resulted in a decline in the targeted amount of funds in the DIF mandated by law. In 2009, the FDIC undertook several measures in an effort to replenish the DIF. It imposed a 5 basis point emergency assessment on insured depository institutions that was paid on September 30, 2009.  In the fourth quarter of 2009, the FDIC adopted a rule that, in lieu of any further special assessment in 2009, required all insured depository institutions, with limited exceptions, to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012.  The prepaid assessments were to be applied against future quarterly assessments until the prepaid assessment is exhausted or the balance is returned, whichever occurs first.  This assessment totaled $6.3 million for the Bank.  At December 31, 2012, the remainder of the prepaid assessment available to be applied toward future assessments totaled $1.36 million and is included in Other Assets on the Company’s consolidated balance sheet.

On April 1, 2011, new regulations became effective which redefined the assessment base used for calculating deposit insurance assessments.  Rather than the previous system, whereby the deposit insurance assessment was calculated using an institution’s total domestic deposits, less a few allowable exclusions, the new assessment base is calculated using average total assets of the institution minus average tangible equity (Tier 1 Capital).  The FDIC continues to utilize a risk-based assessment system in which institutions will be subject to assessment rates ranging from 2.5 to 45 basis points, subject to adjustments for unsecured debt and, in certain cases, brokered deposits.

In October 2010, the FDIC adopted a new DIF restoration plan to ensure that the fund reserve ratio reaches 1.35 percent by September 30, 2020, as required by the Dodd-Frank Act. At least semi-annually, the FDIC will update its loss and income projections for the fund and, if needed, will increase or decrease assessment rates, following notice-and-comment rulemaking if required.

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Part I (Continued)

Item 1 (Continued)

FDIC Insurance Assessments (Continued)

The FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

Community Reinvestment Act

The Bank is subject to the provisions of the Community Reinvestment Act of 1977, as amended (the CRA), and the federal banking agencies’ related regulations.  Under the CRA, all banks and thrifts have a continuing and affirmative obligation, consistent with safe and sound operation, to help meet the credit needs for their entire communities, including low- and moderate-income neighborhoods.  The CRA requires a depository institution’s primary federal regulator, in connection with its examination of the institution or its evaluation of certain regulatory applications, to assess the institution’s record in assessing and meeting the credit needs of the community served by that institution, including low- and moderate-income neighborhoods.  The regulatory agency’s assessment of the institution’s record is made available to the public.

Current CRA regulations rate institutions based on their actual performance in meeting community credit needs. The Bank received a “satisfactory” rating on its most recent examination in 2012.

Consumer Regulations

Interest and other charges collected or contracted for by the Bank is subject to state usury laws and certain federal laws concerning interest rates.  The Bank’s loan operations are also subject to federal laws and regulations applicable to credit transactions, such as those:

● Governing disclosures of credit terms to consumer borrowers;

● Requiring financial institutions provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;

● Prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;

● Governing the use and provision of information to credit reporting agencies; and

● Governing the manner in which consumer debts may be collected by collection agencies.

The deposit operations of the Bank is also subject to laws and regulations that:

● Impose a duty to maintain the confidentiality of consumer financial records and prescribe procedures for complying with administrative subpoenas of financial records; and

● Govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.

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Part I (Continued)

Item 1 (Continued)

Fiscal and Monetary Policy

Banking is a business that depends on interest rate differentials.  In general, the difference between the interest paid by a bank on its deposits and its other borrowings, and the interest received by a bank on its loans and securities holdings, constitutes the major portion of a bank’s earnings.  Thus, Colony’s earnings and growth and that of the Bank will be subject to the influence of economic conditions, generally both domestic and foreign, and also to the monetary and fiscal policies of the United States and its agencies, particularly the Federal Reserve.  The Federal Reserve regulates the supply of money through various means, including open market dealings in United States government securities, the discount rate at which banks may borrow from the Federal Reserve and the reserve requirements on deposits.

The monetary policies of the Federal Reserve historically have had a significant effect on the operating results of commercial banks and mortgage banking operations and will continue to do so in the future.  The Company cannot predict the conditions in the national and international economies and money markets, the actions and changes in policy by monetary and fiscal authorities or their effect on the Bank.

Financial Privacy

The federal banking regulators adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party. These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.

Anti-Money Laundering and the USA Patriot Act

A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The USA PATRIOT Act of 2001 (the “USA Patriot Act”) substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States. The United States Treasury Department has issued and, in some cases, proposed a number of regulations that apply various requirements of the USA Patriot Act to financial institutions such as the Bank. These regulations impose obligations on financial institutions to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing and to verify the identity of their customers. Certain of those regulations impose specific due diligence requirements on financial institutions that maintain correspondent or private banking relationships with non-U.S. financial institutions or persons. Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the Company.

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Part I (Continued)

Item 1 (Continued)

Office of Foreign Assets Control Regulation

The United States has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others. These are typically known as the “OFAC” rules based on their administration by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”). The OFAC-administered sanctions targeting countries take many different forms. Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on “U.S. persons” engaging in financial transactions relating to making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons). Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences.

Legislative and Regulatory Initiatives

From time to time, various legislative and regulatory initiatives are introduced in Congress and state legislatures, as well as by regulatory agencies. Such initiatives may include proposals to expand or contract the powers of bank holding companies and depository institutions or proposals to substantially change the financial institution regulatory system. Such legislation could change banking statutes and the operating environment of the Company in substantial and unpredictable ways. If enacted, such legislation could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. The Company cannot predict whether any such legislation will be enacted, and, if enacted, the effect that it, or any implementing regulations, would have on the financial condition or results of operations of the Company. A change in statutes, regulations or regulatory policies applicable to the Company or any of its subsidiaries could have a material effect on the business of the Company.

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Part I (Continued)

Item 1A

Risk Factors

Not Applicable.

Item 1B

Unresolved Staff Comments

Not Applicable.

Item 2

Properties

The principal properties of the Registrant consist of the properties of the Bank.  The Bank owns all of the banking offices occupied except two offices in Tifton, one office in Valdosta, and one office in Douglas which are leased.  In addition, the Company owns the corporate offices located in Fitzgerald, Georgia.

Item 3

Legal Proceedings

The Company and its subsidiary may become parties to various legal proceedings arising from the normal course of business.  As of December 31, 2012, there are no material pending legal proceedings to which Colony or its subsidiary are a party or of which any of its property is the subject.

Item 4

Mine Safety Disclosures

Not Applicable.

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Part II

Item 5

Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

Effective April 2, 1998, Colony Bankcorp, Inc. common stock is quoted on the NASDAQ Global Market under the symbol “CBAN.”  Prior to this date, there was no public market for the common stock of the registrant.

The following table sets forth the high, low and close sale prices per share of the common stock as reported on the NASDAQ Global Market, and the dividends declared per share for the periods indicated.

Year Ended December 31, 2012	High		Low		Close
Fourth Quarter	$	4.50	$	3.42	$	3.60
Third Quarter		5.48		3.22		3.68
Second Quarter		8.06		3.70		4.73
First Quarter		5.83		1.90		3.75
Year Ended December 31, 2011
Fourth Quarter		2.79		1.99		2.24
Third Quarter		3.48		2.40		2.63
Second Quarter		4.24		2.72		2.87
First Quarter		4.50		4.01		4.15

No cash dividends were paid on its common stock in 2011 or 2012.  The Company’s board of directors suspended the payment of dividends in the third quarter of 2009.  For a description of the restrictions and limitations on the Company’s ability to pay dividends, please see “Dividends” on Page 18.

As of December 31, 2012, the Company had approximately 1,960 common stockholders of record.  At December 31, 2012, the U.S. Treasury held all 28,000 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A.

On March 30, 2010, Colony Bankcorp, Inc. accepted the subscriptions of several investors in a private placement offering to accredited investors under an exemption from registration contained in Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D under the Securities Act.  The Company offered a maximum of 1,216,545 shares of its common stock at a price of $4.11-$4.50 per share.  The price for non-affiliates was determined using a twenty day average trading price as quoted on NASDAQ Stock Market immediately prior to the beginning of the offering.  All of the shares were purchased for a total of $5.08 million, less offering expenses of approximately $20,000.  The offering was closed      March 30, 2010.

Issuer Purchase of Equity Securities

The Company purchased no shares of the Company’s common stock during the quarter ended December 31, 2012.

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Part II (Continued)

Item 6

Selected Financial Data

	Year Ended December 31,
	2012		2011		2010			2009			2008
	(Dollars in Thousands, except per share data)
Selected Balance Sheet Data
Total Assets	$	1,139,397	$	1,195,376	$	1,275,658		$	1,307,089		$	1,252,782
Total Loans, Net of Unearned Interest and Fees		746,816		716,264		813,189			931,252			960,857
Total Deposits		979,685		999,985		1,059,124			1,057,586			1,006,991
Investment Securities		268,342		303,937		303,886			267,300			207,704
Federal Home Loan Bank Stock		3,364		5,398		6,064			6,345			6,272
Stockholders’ Equity		95,759		96,613		92,959			89,275			83,215
Selected Income Statement Data
Interest Income		47,289		51,793		58,738			65,847			75,297
Interest Expense		11,016		16,806		21,523			26,281			37,922
Net Interest Income		36,273		34,987		37,215			39,566			37,375
Provision for Loan Losses		6,785		8,250		13,350			43,445			12,938
Other Income		9,733		9,951		10,006			9,544			9,005
Other Expense		35,379		33,051		33,856			34,844			30,856
Income (Loss) Before Tax		3,842		3,637		15			(29,179	)		2,586
Income Tax Expense (Benefit)		1,201		1,104		(459	)		(9,995	)		557
Net Income (Loss)		2,641		2,533		474			(19,184	)		2,029
Preferred Stock Dividends		1,435		1,400		1,400			1,365			-
Net Income (Loss) Available to Common Stockholders	$	1,206	$	1,133	$	(926	)	$	(20,549	)	$	2,029
Weighted Average Common Shares Outstanding		8,439		8,439		8,149			7,213			7,199
Shares Outstanding		8,439		8,439		8,443			7,229			7,212
Intangible Assets	$	224	$	259	$	295		$	331		$	2,779
Dividends Declared		-		-		-			1,057			2,814
Average Assets		1,139,814		1,205,891		1,269,607			1,286,418			1,204,846
Average Stockholders’ Equity		96,541		94,737		94,452			105,655			84,372
Net Charge-Offs		9,698		20,880		16,471			29,060			11,435
Reserve for Loan Losses		12,737		15,650		28,280			31,401			17,016
OREO		15,941		20,445		20,208			19,705			12,812
Nonperforming Loans		29,855		38,837		28,921			33,566			35,374
Nonperforming Assets		46,162		59,708		49,262			53,403			48,186
Average Interest-Earning Assets		1,066,333		1,132,523		1,199,216			1,218,153			1,144,927
Noninterest-Bearing Deposits		123,967		94,269		102,959			84,239			77,497

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Part II (Continued)

Item 6 (Continued)

	Year Ended December 31,
	2012			2011			2010			2009			2008
	(Dollars in Thousands, except per share data)
Per Share Data:
Net Income (Loss) Per Common Share (Diluted)	$	0.14		$	0.13		$	(0.11	)	$	(2.85	)	$	0.28
Common Book Value Per Share		8.05			8.17			7.75			8.57			11.54
Tangible Common Book Value Per Share		8.02			8.14			7.72			8.52			11.15
Dividends Per Common Share		0.00			0.00			0.00			0.15			0.39
Profitability Ratios:
Net Income (Loss) to Average Assets		0.11	%		0.09	%		(0.07	)%		(1.60	)%		0.17	%
Net Income (Loss) to Average Stockholders’ Equity		1.25			1.20			(0.98	)		(19.45	)		2.40
Net Interest Margin		3.41			3.11			3.12			3.27			3.30
Loan Quality Ratios:
Net Charge-Offs to Total Loans		1.30			2.92			2.03			3.12			1.19
Reserve for Loan Losses to Total Loans and OREO		1.67			2.12			3.39			3.30			1.75
Nonperforming Assets to Total Loans and OREO		6.05			8.10			5.91			5.62			4.95
Reserve for Loan Losses to Nonperforming Loans		42.66			40.30			97.78			93.55			48.10
Reserve for Loan Losses to Total Nonperforming Assets		27.59			26.21			57.41			58.80			35.31
Liquidity Ratios:
Loans to Total Deposits (2)		76.23			71.63			76.78			88.06			95.42
Loans to Average Earning Assets (2)		70.04			63.24			67.81			76.45			83.92
Noninterest-Bearing Deposits to Total Deposits		12.65			9.43			9.72			7.97			7.70
Capital Adequacy Ratios:
Common Stockholders’ Equity to Total Assets		5.96			5.77			5.13			4.74			6.64
Total Stockholders’ Equity to Total Assets		8.40			8.08			7.29			6.83			6.64
Dividend Payout Ratio		0.00			0.00		NM(1)			NM(1)				139.29

(1)  Not meaningful due to net loss recorded.

(2)  Total loans, net of unearned interest and fees.

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Part II (Continued)

Item 7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements and Factors that Could Affect Future Results

Certain statements contained in this Annual Report that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the Act), notwithstanding that such statements are not specifically identified.  In addition, certain statements may be contained in the Company’s future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act.  Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

● Local and regional economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact.

● Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements.

● The effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board.

● Inflation, interest rate, market and monetary fluctuations.

● Political instability.

● Acts of war or terrorism.

● The timely development and acceptance of new products and services and perceived overall value of these products and services by users.

● Changes in consumer spending, borrowings and savings habits.

● Technological changes.

● Acquisitions and integration of acquired businesses.

● The ability to increase market share and control expenses.

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Part II (Continued)

Item 7 (Continued)

● The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply.

· The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters.

● Changes in the Company’s organization, compensation and benefit plans.

● The costs and effects of litigation and of unexpected or adverse outcomes in such litigation.

● Greater than expected costs or difficulties related to the integration of new lines of business.

● The Company’s success at managing the risks involved in the foregoing items.

· Restrictions or conditions imposed by our regulators on our operations, including the terms of our Memorandum of Understanding.

Forward-looking statements speak only as of the date on which such statements are made.  The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

The Company

Colony Bankcorp, Inc. (Colony) is a bank holding company headquartered in Fitzgerald, Georgia that provides, through its wholly-owned subsidiary (collectively referred to as the Company), a broad array of products and services throughout central, south and coastal Georgia markets. The Company offers commercial, consumer and mortgage banking services.

Application of Critical Accounting Policies and Accounting Estimates

The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America and conform to general practices within the banking industry.  The Company’s financial position and results of operations are affected by management’s application of accounting policies, including judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues, expenses and related disclosures.  Different assumptions in the application of these policies could result in material changes in the Company’s financial position and/or results of operations.  Critical accounting policies are those policies that management believes are the most important to the portrayal of the Company’s financial condition and results of operations, and they require management to make estimates that are difficult and subjective or complete.

Allowance for Loan Losses - The allowance for loan losses provides coverage for probable losses inherent in the Company’s loan portfolio.  Management evaluates the adequacy of the allowance for loan losses quarterly based on changes, if any, in underwriting activities, the loan portfolio composition (including product mix and geographic, industry or customer-specific concentrations), trends in loan performance, regulatory guidance and economic factors.  This evaluation is inherently subjective, as it requires the use of significant management estimates.  Many factors can affect management’s estimates of specific and expected losses, including volatility of default probabilities, collateral values, rating migrations, loss severity and economic and political conditions.  The allowance is increased through provisions charged to operating earnings and reduced by net charge-offs.

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Part II (Continued)

Item 7 (Continued)

The Company determines the amount of the allowance based on relative risk characteristics of the loan portfolio.  The allowance recorded for loans is based on reviews of individual credit relationships and historical loss experience.  The allowance for losses relating to impaired loans is based on the loan’s observable market price, the discounted cash flows using the loan’s effective interest rate, or the value of collateral for collateral dependent loans.

Regardless of the extent of the Company’s analysis of customer performance, portfolio trends or risk management processes, certain inherent but undetected losses are probable within the loan portfolio.  This is due to several factors, including inherent delays in obtaining information regarding a customer’s financial condition or changes in their unique business conditions, the judgmental nature of individual loan evaluations, collateral assessments and the interpretation of economic trends.  Volatility of economic or customer-specific conditions affecting the identification and estimation of losses for larger nonhomogeneous credits and the sensitivity of assumptions utilized to establish allowances for homogeneous groups of loans are among other factors.  The Company estimates a range of inherent losses related to the existence of these exposures.  The estimates are based upon the Company’s evaluation of risk associated with the commercial and consumer levels and the estimated impact of the current economic environment.

Other Real Estate Owned and Foreclosed Assets

Other real estate owned or other foreclosed assets acquired through loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.  The adjustment at the time of foreclosure is recorded through the allowance for loan losses.  Due to the subjective nature of establishing the fair value when the asset is acquired, the actual fair value of the other real estate owned or foreclosed asset could differ from the original estimate.  If it is determined that fair value declines subsequent to foreclosure, the valuation allowance is adjusted through a charge to noninterest expense.  Operating costs associated with the assets after acquisition are also recorded as noninterest expense. Gains and losses on the disposition of other real estate owned and foreclosed assets are netted and recognized in noninterest expense.  Management obtains appraisals performed by certified, third-parties within one year of placing a property into OREO.  The fair value of the property is then evaluated by management annually going forward, or more often if necessary.  Annual evaluations may be performed by certified third parties, or internally by management comparing recent sales of similar properties within the Company’s OREO portfolio.

Overview

The following discussion and analysis presents the more significant factors affecting the Company’s financial condition as of December 31, 2012 and 2011, and results of operations for each of the years in the three-year period ended December 31, 2012. This discussion and analysis should be read in conjunction with the Company’s consolidated financial statements, notes thereto and other financial information appearing elsewhere in this report.

Taxable-equivalent adjustments are the result of increasing income from tax-free loans and investments by an amount equal to the taxes that would be paid if the income were fully taxable based on a 34 percent  federal tax rate, thus making tax-exempt yields comparable to taxable asset yields.

Dollar amounts in tables are stated in thousands, except for per share amounts.

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Part II (Continued)

Item 7 (Continued)

Results of Operations

The Company’s results of operations are determined by its ability to effectively manage interest income and expense, to minimize loan and investment losses, to generate noninterest income and to control noninterest expense.  Since market forces and economic conditions beyond the control of the Company determine interest rates, the ability to generate net interest income is dependent upon the Company’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 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 (loss) available to common shareholders totaled $1.21 million, or $0.14 per diluted common share in 2012 compared to $1.13 million, or $0.13 per diluted common share in 2011 compared to $(0.93) million, or $(0.11) diluted per common share in 2010.

Selected income statement data, returns on average assets and average equity and dividends per share for the comparable periods were as follows:

	2012			2011			2010
Taxable-Equivalent Net Interest Income	$	36,417		$	35,178		$	37,393
Taxable-Equivalent Adjustment		144			191			178
Net Interest Income		36,273			34,987			37,215
Provision for Loan Losses		6,785			8,250			13,350
Noninterest Income		9,733			9,951			10,007
Noninterest Expense		35,379			33,051			33,857
Income Before Income Taxes		3,842			3,637			15
Income Taxes (Benefits)		1,201			1,104			(459	)
Net Income	$	2,641		$	2,533		$	474
Preferred Stock Dividends		1,435			1,400			1,400
Net Income (Loss) Available to
Common Stockholders	$	1,206		$	1,133		$	(926	)
Basic per Common Share:
Net Income (Loss)	$	0.14		$	0.13		$	(0.11	)
Diluted per Common Share:
Net Income (Loss)	$	0.14		$	0.13		$	(0.11	)
Return on Average Assets:
Net Income (Loss)		0.11	%		0.09	%		(0.07	)%
Return on Average Equity:
Net Income (Loss)		1.25	%		1.20	%		(0.98	)%

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Part II (Continued)

Item 7 (Continued)

Net income available to common shareholders for 2012 increased $73 thousand, or 6.44 percent, compared to 2011.  The increase was primarily the result of a $1.47 million decrease in provision for loan losses and an increase of $1.29 million in net interest income.  The impact of these items was partly offset by a $218 thousand decrease in noninterest income, an increase of $2.33 million in noninterest expense and an increase of $97 thousand in income tax expense.

Net income available to common shareholders for 2011 increased $2.06 million, or 222.35 percent, compared to 2010.  The increase was primarily the result of a $5.1 million decrease in provision for loan losses and a decrease of $805 thousand in noninterest expense.  The impact of these items was partly offset by a $2.23 million decrease in net interest income, a decrease of $55 thousand in noninterest income and an increase of $1.56 million in income tax expense.

Details of the changes in the various components of net income are further discussed below.

Net Interest Income

Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is the Company’s largest source of revenue, representing 78.84 percent of total revenue during 2012 and 77.86 percent during 2011.

Net interest margin is the taxable-equivalent net interest income as a percentage of average earning assets for the period.  The level of interest rates and the volume and mix of earning assets and interest-bearing liabilities impact net interest income and net interest margin.

The Federal Reserve Board influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. The Company’s loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate, which is the rate offered on loans to borrowers with strong credit is currently 3.25 percent and has been for the past four years.  The federal funds rate moved similar to prime rate with interest rates currently at 0.25 percent and has been for the past four years.  We anticipate the Federal Reserve maintaining its current interest rate policy in 2013, which should benefit Colony’s net interest margin.

The following table presents the changes in taxable-equivalent net interest income and identifies the changes due to differences in the average volume of earning assets and interest-bearing liabilities and the changes due to changes in the average interest rate on those assets and liabilities. The changes in net interest income due to changes in both average volume and average interest rate have been allocated to the average volume change or the average interest rate change in proportion to the absolute amounts of the change in each. The Company’s consolidated average balance sheets along with an analysis of taxable-equivalent net interest earnings are presented in the Quantitative and Qualitative Disclosures About Market Risk included elsewhere in this report.

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Part II (Continued)

Item 7 (Continued)

Rate/Volume Analysis

The rate/volume analysis presented hereafter illustrates the change from year to year for each component of the taxable equivalent net interest income separated into the amount generated through volume changes and the amount generated by changes in the yields/rates.

	Changes From									Changes From
	2011 to 2012 (a)									2010 to 2011 (a)
	Volume			Rate			Total			Volume			Rate			Total
Interest Income
Loans, Net-Taxable	$	(2,406	)	$	(133	)	$	(2,539	)	$	(6,117	)	$	(1,149	)	$	(7,266	)
Investment Securities
Taxable		(377	)		(1,630	)		(2,007	)		831			(581	)		250
Tax-Exempt		(2	)		(14	)		(16	)		46			(15	)		31
Total Investment Securities		(379	)		(1,644	)		(2,023	)		877			(596	)		281
Interest-Bearing Deposits in Other Banks		(4	)		34			30			(3	)		28			25
Federal Funds Sold		(15	)		(1	)		(16	)		15			5			20
Other Interest - Earning Assets		(12	)		9			(3	)		(3	)		11			8
Total Interest Income		(2,816	)		(1,735	)		(4,551	)		(5,231	)		(1,701	)		(6,932	)
Interest Expense
Interest-Bearing Demand and Savings Deposits		253			(227	)		26			145			(549	)		(404	)
Time Deposits		(1,762	)		(2,477	)		(4,239	)		(1,499	)		(2,359	)		(3,858	)
Total Interest Expense On Deposits		(1,509	)		(2,704	)		(4,213	)		(1,354	)		(2,908	)		(4,262	)
Other Interest-Bearing Liabilities
Federal Funds Purchased and Repurchase Agreements		(338	)		-			(338	)		(449	)		385			(64	)
Subordinated Debentures		-			46			46			-			(8	)		(8	)
Other Debt		(1,175	)		(110	)		(1,285	)		(508	)		125			(383	)
Total Interest Expense		(3,022	)		(2,768	)		(5,790	)		(2,311	)		(2,406	)		(4,717	)
Net Interest Income (Loss)	$	206		$	1,033		$	1,239		$	(2,920	)	$	705		$	(2,215	)

(a) Changes in net interest income for the periods, based on either changes in average balances or changes in average rates for interest-earning assets and interest-bearing liabilities, are shown on this table. During each year there are numerous and simultaneous balance and rate changes; therefore, it is not possible to precisely allocate the changes between balances and rates. For the purpose of this table, changes that are not exclusively due to balance changes or rate changes have been attributed to rates.

Our financial performance is impacted by, among other factors, interest rate risk and credit risk.  We do not utilize derivatives to mitigate our credit risk, relying instead on an extensive loan review process and our allowance for loan losses.

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Part II (Continued)

Item 7 (Continued)

Interest rate risk is the change in value due to changes in interest rates.  The Company is exposed only to U.S. dollar interest rate changes and, accordingly, the Company manages exposure by considering the possible changes in the net interest margin. The Company does not have any trading instruments nor does it classify any portion of its investment portfolio as held for trading. The Company does not engage in any hedging activity or utilize any derivatives. The Company has no exposure to foreign currency exchange rate risk, commodity price risk and other market risks. Interest rate risk is addressed by our Asset & Liability Management Committee (ALCO) which includes senior management representatives. The ALCO monitors interest rate risk by analyzing the potential impact to the net portfolio of equity value and net interest income from potential changes to interest rates and considers the impact of alternative strategies or changes in balance sheet structure.

Interest rates play a major part in the net interest income of financial institutions.  The repricing of interest earnings assets and interest-bearing liabilities can influence the changes in net interest income.  The timing of repriced assets and liabilities is Gap management and our Company has established its policy to maintain a Gap ratio in the one-year time horizon of .80 to 1.20.

Our exposure to interest rate risk is reviewed at least quarterly by our Board of Directors and the ALCO.  Interest rate risk exposure is measured using interest rate sensitivity analysis to determine our change in net portfolio value in the event of assumed changes in interest rates.  In order to reduce the exposure to interest rate fluctuations, we have implemented strategies to more closely match our balance sheet composition. The Company has engaged FTN Financial to run a quarterly asset/liability model for interest rate risk analysis.  We are generally focusing our investment activities on securities with terms or average lives in the 2-5 year range.

The Company maintains about 16.8 percent of its loan portfolio in adjustable rate loans that reprice with prime rate changes, while the bulk of its other loans mature within 3 years.  The liabilities to fund assets are primarily in short term certificates of deposit that mature within one year.  This balance sheet composition allowed the Company to be relatively constant with its net interest margin until 2008.  During 2007, interest rates decreased 100 basis points and this decrease by the Federal Reserve in 2007 followed by 400 basis point decrease in 2008 resulted in significant pressure in net interest margins.  While the Federal Reserve rates have remained unchanged since 2008, we have seen the net interest margin increase to 3.41 percent for 2012 compared to 3.11 percent for 2011 and to 3.12 percent for 2010.  Given the Federal Reserve’s aggressive posture during 2008 that ended the year with a range of 0 - 0.25 percent federal funds target rate and remained the same for all of 2012, we have seen our net interest margin reach a low of 3.23 percent for first quarter 2012 to a high of 3.56 percent for third quarter 2012.

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Part II (Continued)

Item 7 (Continued)

Taxable-equivalent net interest income for 2012 increased by $1.24 million, or 3.52 percent, compared to 2011 while taxable-equivalent net interest income for 2011 decreased by $2.21 million, or 5.92 percent, compared to 2010.  The average volume of earning assets during 2012 decreased $66.19 million compared to 2011 while over the same period the net interest margin increased to 3.41 from 3.11 percent.  Improvement in the net interest margin in 2012 was primarily driven by reduction in the cost of funds and maintaining longer term investments.  Similarly, the average volume of earning assets during 2011 decreased $66.69 million compared to 2010 while over the same period the net interest margin decreased to 3.11 from 3.12 percent.  The decline in average earning assets in 2012 affected each category of assets, while the significant decrease was primarily in average loans and investment securities.  Growth in average earning assets during 2011 and 2010 was primarily in fed funds sold and investment securities, while average loans outstanding decreased significantly.  The slight reduction in the net interest margin in 2011 was primarily the result of the decrease in average earning assets and maintenance of a higher liquidity level.

The average volume of loans decreased $41.20 million in 2012 compared to 2011 and decreased $102.12 million in 2011 compared to 2010.  The average yield on loans decreased 1 basis point in 2012 compared to 2011 and decreased 15 basis points in 2011 compared to 2010. The average volume of deposits decreased $31.03 million while other borrowings decreased $37.83 million in 2012 compared to 2011.  The average volume of other borrowings decreased $30.42 million in 2011 compared to 2010 while average deposits decreased $33.54 million in 2011 compared to 2010.  Interest-bearing deposits made up 125.76 percent of the decrease in average deposits in 2012 and 135.02 percent of the decrease in average deposits in 2011. Accordingly, the ratio of average interest-bearing deposits to total average deposits was 89.5 percent in 2012, 90.6 percent in 2011 and 92.1 percent in 2010. This deposit mix, combined with a general decrease in interest rates, had the effect of (i) decreasing the average cost of total deposits by 39 basis points in 2012 compared to 2011 and decreasing the average cost of total deposits by 37 basis points in 2011 compared to 2010, and (ii) mitigating a portion of the impact of decreasing yields on earning assets on the Company’s net interest income.

The Company’s net interest spread, which represents the difference between the average rate earned on earning assets and the average rate paid on interest-bearing liabilities, was 3.27 percent in 2012 compared to 2.93 percent in 2011 and 2.94 percent in 2010. The net interest spread, as well as the net interest margin, will be impacted by future changes in short-term and long-term interest rate levels, as well as the impact from the competitive environment. A discussion of the effects of changing interest rates on net interest income is set forth in Quantitative and Qualitative Disclosures About Interest Rate Sensitivity included elsewhere in this report.

Provision for Loan Losses

The provision for loan losses is determined by management as the amount to be added to the allowance for loan losses after net charge-offs have been deducted to bring the allowance to a level which, in management’s best estimate, is necessary to absorb probable losses within the existing loan portfolio. The provision for loan losses totaled $6.79 million in 2012 compared to $8.25 million in 2011 and $13.35 million in 2010.  See the section captioned “Allowance for Loan Losses” elsewhere in this discussion for further analysis of the provision for loan losses.

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Part II (Continued)

Item 7 (Continued)

Noninterest Income

The components of noninterest income were as follows:

	2012		2011		2010
Service Charges on Deposit Accounts	$	3,573	$	3,244	$	3,597
Other Charges, Commissions and Fees		1,515		1,312		1,140
Other		1,102		1,259		1,335
Mortgage Fee Income		400		265		313
Securities Gains		2,837		2,924		2,617
SBA Premiums		306		947		1,005
	$	9,733	$	9,951	$	10,007

Total noninterest income for 2012 decreased $218 thousand, or 2.19 percent, compared to 2011 while total noninterest income for 2011 decreased $56 thousand, or 0.56 percent, compared to 2010.  The decrease in 2012 noninterest income compared to 2011 was primarily in SBA premiums while the decrease in 2011 noninterest income compared to 2010 was primarily in mortgage fee income, SBA premiums, and service charges on deposit accounts.  Changes in these items and the other components of noninterest income are discussed in more detail below.

Service Charges on Deposit Accounts.  Service charges on deposit accounts for 2012 increased $329 thousand, or 10.14 percent, compared to 2011.  Service charges on deposit accounts for 2011 decreased $353 thousand, or 9.81 percent, compared to 2010.  The increase in 2012 was primarily due to an increase in volume of consumer and business account overdraft fees.

Mortgage Fee Income.  Mortgage fee income for 2012 increased $135 thousand, or 50.94 percent, compared to 2011 while mortgage fee income for 2011 decreased $48 thousand, or 15.34 percent, compared to 2010.  The increase in 2012 was due to increased mortgage loan activity due to an initiative to increase mortgage lending opportunities given the low interest rate environment.  The decrease in 2011 was primarily due to decreased mortgage loan activity with the housing and real estate downturn.

Security Gains.  The Company realized gains from the sale of securities of $2.83 million for 2012 compared to $2.92 million for 2011 and $2.62 million in 2010.

All Other Noninterest Income.  Other charges, commissions and fees, other income and SBA premiums for 2012 decreased $595 thousand, or 16.91 percent, compared to 2011.  The decrease was primarily attributable to the decline in SBA premiums.  In 2011 other charges, commissions and fees, other income and SBA premiums for 2011 increased $38 thousand, or 1.09 percent, compared to 2010. The increase was primarily attributable to increased ATM and bank debit card interchange fees for 2011 compared to 2010.

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Part II (Continued)

Item 7 (Continued)

Noninterest Expense

The components of noninterest expense were as follows:

	2012		2011		2010
Salaries and Employee Benefits	$	15,565	$	14,633	$	14,098
Occupancy and Equipment		3,878		3,998		4,422
Other		15,936		14,420		15,337
	$	35,379	$	33,051	$	33,857

Total noninterest expense for 2012 increased $2.33 million, or 7.04 percent compared to 2011 while total noninterest expense decreased $806 thousand, or 2.38 percent compared to 2010.  Growth in noninterest expense in 2012 was primarily in salaries and employee benefits and noninterest expense while the Company had a slight decrease in occupancy and equipment.  Reduction in noninterest expense in 2011 was primarily in occupancy and equipment and other noninterest expense while the Company had a slight increase in salaries and employee benefits.

Salaries and Employee Benefits.  Salaries and employee benefits expense for 2012 increased $932 thousand, or 6.37 percent, compared to 2011.  This increase is primarily attributable to an increase in headcount related to increased regulatory compliance demands.  Salaries and employee benefits expense for 2011 increased $535 thousand, or 3.80 percent, compared to 2010.

Occupancy and Equipment.  Net occupancy expense for 2012 decreased $120 thousand compared to 2011, or a decrease of 3.00 percent.  Net occupancy expense for 2011 decreased $424 thousand compared to 2010, or a decrease of 9.59 percent.  The decrease in occupancy expense in 2011 is primarily due to a reduction in depreciation expense of $351 thousand from 2010.

All Other Noninterest Expense.  All other noninterest expense for 2012 increased $1.52 million, or 10.51 percent.  Significant changes in noninterest expense were:  FDIC insurance assessment fees decreased to $1.50 million for 2012 compared to $1.83 million for 2011, or a decrease of $331 thousand, legal and professional fees decreased to $1.1 million for 2012 in comparison to $1.2 million for 2011, or a decrease of $101 thousand, foreclosed property and repossession expense increased to $5.6 million in 2012 compared to $4.0 million in 2011, or an increase of $1.57 million, and advertising decreased to $423 thousand in 2012 compared to $508 thousand in 2011, or a decrease of $86 thousand.  All other noninterest expense for 2011 decreased $917 thousand, or 5.98 percent.  Significant changes in noninterest expense were:  FDIC insurance assessment fees decreased to $1.83 million for 2011 compared to $1.87 million for 2010, or a decrease of $38 thousand; foreclosed property and repossession expense decreased to $4.0 million for 2011 compared to $4.9 million for 2010, or a decrease of $898 thousand, legal and professional fees decreased to $1.2 million for 2011 in comparison to $1.4 million for 2010, or a decrease of $183 thousand, and advertising decreased to $568 thousand in 2011 compared to $743 thousand, or 4.59 percent.

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Part II (Continued)

Item 7 (Continued)

Sources and Uses of Funds

The following table illustrates, during the years presented, the mix of the Company’s funding sources and the assets in which those funds are invested as a percentage of the Company’s average total assets for the period indicated. Average assets totaled $1.14 billion in 2012 compared to 1.21 billion in 2011 and $1.27 billion in 2010.

	2012				2011				2010
Sources of Funds:
Deposits:
Noninterest-Bearing	$	101,896	8.9	%	$	93,903	7.8	%	$	82,160	6.5	%
Interest-Bearing		867,794	76.1			906,816	75.2			952,095	75.0
Federal Funds Purchased and Repurchase Agreements		-	-			9,851	0.8			26,070	2.0
Subordinated Debentures and Other Borrowed Money		67,974	6.0			95,949	8.0			110,149	8.7
Other Noninterest-Bearing Liabilities		5,609	0.5			4,635	0.4			4,681	0.4
Equity Capital		96,541	8.5			94,737	7.8			94,452	7.4
Total	$	1,139,814	100.0	%	$	1,205,891	100.0	%	$	1,269,607	100.0	%
Uses of Funds:
Loans	$	706,091	62.0	%	$	742,482	61.6	%	$	834,739	65.8	%
Investment Securities		284,261	24.9			300,293	24.9			267,015	21.0
Federal Funds Sold		38,877	3.4			44,667	3.7			38,809	3.1
Interest-Bearing Deposits		17,046	1.5			18,715	1.5			21,911	1.7
Other Interest-Earning Assets		4,277	0.4			5,781	0.5			6,297	0.5
Other Noninterest-Earning Assets		89,262	7.8			93,953	7.8			100,836	7.9
Total	$	1,139,814	100.0	%	$	1,205,891	100.0	%	$	1,269,607	100.0	%

Deposits continue to be the Company’s primary source of funding.  Over the comparable periods, the relative mix of deposits continues to be high in interest-bearing deposits.  Interest-bearing deposits totaled 89.5 percent of total average deposits in 2012 compared to 90.62 percent in 2011 and 92.06 percent in 2010.

The Company primarily invests funds in loans and securities.  Loans continue to be the largest component of the Company’s mix of invested assets.  Loan demand increased in 2012 as total loans were $747.1 million at December 31, 2012, up 4.3 percent, compared to loans of $716.3 million at December 31, 2011, while total loans at December 31, 2011 were down 11.9 percent, compared to loans of $813.3 million at December 31, 2010.  See additional discussion regarding the Company’s loan portfolio in the section captioned “Loans” included below.  The majority of funds provided by deposits have been invested in loans.

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Part II (Continued)

Item 7 (Continued)

Loans

The following table presents the composition of the Company’s loan portfolio as of December 31 for the past five years.

	2012			2011			2010			2009			2008
Commercial, Financial and Agricultural	$	61,895		$	57,408		$	63,772		$	80,984		$	86,379
Real Estate
Construction		59,660			62,076			76,682			113,117			160,374
Mortgage, Farmland		49,057			48,225			52,778			54,965			54,159
Mortgage, Other		538,231			508,919			570,350			626,993			600,653
Consumer		29,778			30,449			33,564			38,383			44,163
Other		8,429			9,244			16,104			16,950			15,308
		747,050			716,321			813,250			931,392			961,036
Unearned Interest and Fees		(234	)		(57	)		(61	)		(140	)		(179	)
Allowance for Loan Losses		(12,737	)		(15,650	)		(28,280	)		(31,401	)		(17,016	)
Loans	$	734,079		$	700,614		$	784,909		$	899,851		$	943,841

The following table presents total loans as of December 31, 2012 according to maturity distribution and/or repricing opportunity on adjustable rate loans.

Maturity and Repricing Opportunity

One Year or Less	$	362,748
After One Year through Three Years		297,333
After Three Years through Five Years		44,758
Over Five Years		42,211
	$	747,050

Overview. Loans totaled $747.1 million at December 31, 2012, up 4.3 percent from December 31, 2011 loans of $716.3 million.  The majority of the Company’s loan portfolio is comprised of the real estate loans-mortgage other, real estate construction and commercial financial and agricultural loans.  Real estate-other, which is primarily 1-4 family residential properties and nonfarm nonresidential properties, made up 72.05 percent and 71.04 percent of total loans, real estate construction made up 7.99 percent and 8.67 percent while commercial financial and agricultural loans made up 8.29 percent and 8.01 percent of total loans at December 31, 2012 and December 31, 2011, respectively.  Real estate loans-mortgage other include both commercial and consumer balances.

Loan Origination/Risk Management.  In accordance with the Company’s decentralized banking model, loan decisions are made at the local bank level.  The Company utilizes an Executive Loan Committee to assist lenders with the decision making and underwriting process of larger loan requests.  Due to the diverse economic markets served by the Company, evaluation and underwriting criterion may vary slightly by market.  Overall, loans are extended after a review of the borrower’s repayment ability, collateral adequacy, and overall credit worthiness.

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Part II (Continued)

Item 7 (Continued)

Commercial purpose, commercial real estate, and industrial loans are underwritten similar to other loans throughout the company.  The properties securing the Company’s commercial real estate portfolio are diverse in terms of type and geographic location.  This diversity helps reduce the company’s exposure to adverse economic events that affect any single market or industry.  Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria.  The Company also utilizes information provided by third-party agencies to provide additional insight and guidance about economic conditions and trends affecting the markets it serves.

The Company extends loans to builders and developers that are secured by non-owner occupied properties.  In such cases, the Company reviews the overall economic conditions and trends for each market to determine the desirability of loans to be extended for residential construction and development.  Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim mini-perm loan commitment from the Company until permanent financing is obtained.  In some cases, loans are extended for residential loan construction for speculative purposes and are based on the perceived present and future demand for housing in a particular market served by the Company.  These loans are monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions and trends, the demand for the properties, and the availability of long-term financing.

The Company originates consumer loans at the bank level.  Due to the diverse economic markets served by the Company, underwriting criterion may vary slightly by market.  The Company is committed to serving the borrowing needs of all markets served and, in some cases, adjusts certain evaluation methods to meet the overall credit demographics of each market.  Consumer loans represent relatively small loan amounts that are spread across many individual borrowers to help minimize risk.  Additionally, consumer trends and outlook reports are reviewed by management on a regular basis.

The Company utilizes an independent third party company for loan review and validation of the credit risk program on an ongoing quarterly basis.  Results of these reviews are presented to management and the audit committee.  The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.

Commercial, Financial and Agricultural.  Commercial, financial and agricultural loans at December 31, 2012 increased 7.82 percent from December 31, 2011 to $61.90 million. The Company’s commercial and industrial loans are a diverse group of loans to small, medium and large businesses. The purpose of these loans varies from supporting seasonal working capital needs to term financing of equipment. While some short-term loans may be made on an unsecured basis, most are secured by the assets being financed with collateral margins that are consistent with the Company’s loan policy guidelines.

Industry Concentrations. As of December 31, 2012 and December 31, 2011, there were no concentrations of loans within any single industry in excess of 10 percent of total loans, as segregated by Standard Industrial Classification code (“SIC code”). The SIC code is a federally designed standard industrial numbering system used by the Company to categorize loans by the borrower’s type of business.

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Part II (Continued)

Item 7 (Continued)

Collateral Concentrations.  Concentrations of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries, or certain geographic regions.  The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market.  At December 31, 2012, approximately 86.60 percent of the Company’s loan portfolio was concentrated in loans secured by real estate.  A substantial portion of borrowers’ ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector.  The downturn of the housing and real estate market that began in 2007 resulted in an increase of problem loans secured by real estate.  These loans are centered primarily in the Company’s larger MSA markets.  Declining collateral real estate values that secure land development, construction and speculative real estate loans in the Company’s larger MSA markets have resulted in high loan loss provisions in the last several years.  In addition, a large portion of the Company’s foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions.  Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis.

Large Credit Relationships.   The Company is currently in eighteen counties in central, south and coastal Georgia and includes metropolitan markets in Dougherty, Lowndes, Houston, Chatham and Muscogee counties.  As a result, the Company originates and maintains large credit relationships with several commercial customers in the ordinary course of business.  The Company considers large credit relationships to be those with commitments equal to or in excess of $5.0 million prior to any portion being sold.  Large relationships also include loan participations purchased if the credit relationship with the agent is equal to or in excess of $5.0 million.  In addition to the Company’s normal policies and procedures related to the origination of large credits, the Company’s Executive Loan Committee and Director Loan Committee must approve all new and renewed credit facilities which are part of large credit relationships.  The following table provides additional information on the Company’s large credit relationships outstanding at December 31, 2012 and December 31, 2011.

	December 31, 2012						December 31, 2011
	Number of		Period End Balances				Number of		Period End Balances
	Relationships		Committed		Outstanding		Relationships		Committed		Outstanding
Large Credit Relationships:
$10 million and greater		1	$	10,276	$	10,276		1	$	11,811	$	11,811
$5 million to $9.9 million		13		88,248		72,179		5		31,363		31,363

Maturities and Sensitivities of Loans to Changes in Interest Rates.  The following table presents the maturity distribution of the Company’s loans at December 31, 2012. The table also presents the portion of loans that have fixed interest rates or variable interest rates that fluctuate over the life of the loans in accordance with changes in an interest rate index such as the prime rate.

	Due in One Year or Less		After One, but Within Three Years		After Three, but Within Five Years		After Five Years		Total
Loans with fixed interest rates	$	244,450	$	295,346	$	42,668	$	39,413	$	621,877
Loans with floating interest rates		118,298		1,987		2,090		2,798		125,173
Total	$	362,748	$	297,333	$	44,758	$	42,211	$	747,050

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Part II (Continued)

Item 7 (Continued)

The Company may renew loans at maturity when requested by a customer whose financial strength appears to support such renewal or when such renewal appears to be in the Company’s best interest. In such instances, the Company generally requires payment of accrued interest and may adjust the rate of interest, require a principal reduction or modify other terms of the loan at the time of renewal.

Nonperforming Assets and Potential Problem Loans

Year-end nonperforming assets and accruing past due loans were as follows:

	2012			2011			2010			2009			2008
Loans Accounted for on Nonaccrual	$	29,851		$	38,822		$	28,902		$	33,535		$	35,124
Loans Past Due 90 Days or More		4			15			19			31			250
Other Real Estate Foreclosed		15,941			20,445			20,208			19,705			12,812
Securities Accounted for on Nonaccrual		366			426			132			132			---
Total Nonperforming Assets	$	46,162		$	59,708		$	49,261		$	53,403		$	48,186
Nonperforming Assets as a Percentage of:
Total Loans and Foreclosed Assets		6.05	%		8.10	%		5.91	%		5.62	%		4.95	%
Total Assets		4.05	%		4.99	%		3.86	%		4.09	%		3.85	%
Supplemental Data:
Trouble Debt Restructured Loans In Compliance with Modified Terms	$	24,870		$	29,839		$	26,556		$	9,269		$	---
Trouble Debt Restructured Loans Past Due 30-89 Days		1,377			611			1,048			459			---
Accruing Past Due Loans:
30-89 Days Past Due		14,911			7,161			19,740			25,547			18,675
90 or More Days Past Due		4			15			19			31			250
Total Accruing Past Due Loans	$	14,915		$	7,176		$	19,759		$	25,578		$	18,925

Nonperforming assets include nonaccrual loans, loans past due 90 days or more, foreclosed real estate and nonaccrual securities.  Nonperforming assets at December 31, 2012 decreased 22.69 percent from December 31, 2011.

Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due and/or management deems the collectibility of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to a customer whose financial condition has deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. For consumer loans, collectibility and loss are generally determined before the loan reaches 90 days past due. Accordingly, losses on consumer loans are recorded at the time they are determined. Consumer loans that are 90 days or more past due are generally either in liquidation/payment status or bankruptcy awaiting confirmation of a plan. Once interest accruals are discontinued, accrued but uncollected interest is charged to current year operations. Subsequent receipts on nonaccrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Classification of a loan as nonaccrual does not preclude the ultimate collection of loan principal or interest.

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Part II (Continued)

Item 7 (Continued)

Troubled debt restructured loans are loans on which, due to deterioration in the borrower’s financial condition, the original terms have been modified in favor of the borrower or either principal or interest has been forgiven.

Foreclosed assets represent property acquired as the result of borrower defaults on loans. Foreclosed assets are recorded at estimated fair value, less estimated selling costs, at the time of foreclosure. Write-downs occurring at foreclosure are charged against the allowance for possible loan losses. On an ongoing basis, properties are appraised as required by market indications and applicable regulations. Write-downs are provided for subsequent declines in value and are included in other non-interest expense along with other expenses related to maintaining the properties.

Allowance for Loan Losses

The allowance for loan losses is a reserve established through a provision for loan losses charged to expense, which represents management’s best estimate of probable losses that have been incurred within the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio. The allowance for loan losses includes allowance allocations calculated in accordance with current U.S. accounting standards.  The level of the allowance reflects management’s continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions and unidentified losses inherent in the current loan portfolio. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management’s judgment, should be charged off. While management utilizes its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Company’s control, including the performance of the Company’s loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.

The Company’s allowance for loan losses consists of specific valuation allowances established for probable losses on specific loans and historical valuation allowances, adjusted for qualitative factors, for other loans with similar risk characteristics.

The allowances established for probable losses on specific loans are based on a regular analysis and evaluation of classified loans.  Loans are classified based on an internal credit risk grading process that evaluates, among other things: (i) the obligor’s ability to repay; (ii) the underlying collateral, if any; and (iii) the economic environment and industry in which the borrower operates.  This analysis is performed at the subsidiary bank level and is reviewed at the parent Company level.  Once a loan is classified, it is reviewed to determine whether the loan is impaired and, if impaired, a portion of the allowance for possible loan losses is specifically allocated to the loan.  Specific valuation allowances are determined after considering the borrower’s financial condition, collateral deficiencies, and economic conditions affecting the borrower’s industry, among other things.

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Part II (Continued)

Item 7 (Continued)

Historical valuation allowances are calculated from loss factors applied to loans with similar risk characteristics.  The loss factors are based on loss ratios for groups of loans with similar risk characteristics.  The loss ratios are derived from the proportional relationship between actual loan losses and the total population of loans in the risk category.  The historical loss ratios are periodically updated based on actual charge-off experience.  The Company’s groups of similar loans include similarly risk-graded groups of loans not reviewed for individual impairment.  In addition, the Company has also segmented its’ real estate portfolio into thirteen separate categories and captured loan loss experience for each category.  Most of the Company’s charge-offs the past two years have been real estate dependent loans and we believe this segmentation provides more accuracy in determining allowance for loan loss adequacy.  During first quarter 2012, management refined the Company’s methodology used in estimating the amount of the Allowance for Loan and Lease Losses (ALLL) which is defined in the notes to the financial statements.  The effect of these changes on the ALLL resulted in a reduction in the ALLL estimate of $2,154,639.  Management believes the adjustments made will result in a better estimation of losses incurred in the portfolio.

Management evaluates the adequacy of the allowance for each of these components on a quarterly basis.  Peer comparisons, industry comparisons, and regulatory guidelines are also used in the determination of the general valuation allowance.

Loans identified as losses by management, internal loan review, and/or bank examiners are charged-off.

An allocation for loan losses has been made according to the respective amounts deemed necessary to provide for the possibility of incurred losses within the various loan categories.  The allocation is based primarily on previous charge-off experience adjusted for changes in experience among each category.  Additional amounts are allocated by evaluating the loss potential of individual loans that management has considered impaired.  The reserve for loan loss allocation is subjective since it is based on judgment and estimates, and therefore is not necessarily indicative of the specific amounts or loan categories in which the charge-offs may ultimately occur.  The following table shows a comparison of the allocation of the reserve for loan losses for the periods indicated.

	2012				2011				2010				2009				2008
	Reserve		%	*	Reserve		%	*	Reserve		%	*	Reserve		%	*	Reserve		%	*
Commercial, Financial and Agricultural	$	1,277	8	%	$	1,368	8	%	$	5,113	8	%	$	4,710	9	%	$	4,254	9	%
Real Estate - Construction		2,028	8			3,261	9			4,646	9			7,850	12			2,808	17
Real Estate - Farmland		291	7			365	7			944	7			942	6			681	6
Real Estate - Other		8,569	72			10,143	71			13,972	70			13,816	67			5,955	62
Loans to Individuals		228	4			205	4			3,074	4			2,826	4			2,467	4
All other loans		344	1			308	1			531	2			1,257	2			851	2
Total	$	12,737	100	%	$	15,650	100	%	$	28,280	100	%	$	31,401	100	%	$	17,016	100	%

* Loan balance in each category expressed as a percentage of total end of period loans.

Activity in the allowance for loan losses is presented in the following table. There were no charge-offs or recoveries related to foreign loans during any of the periods presented.

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Part II (Continued)

Item 7 (Continued)

The following table presents an analysis of the Company’s loan loss experience for the periods indicated.

	2012			2011			2010			2009			2008
Allowance for Loan Losses at Beginning of Year	$	15,650		$	28,280		$	31,401		$	17,016		$	15,513
Charge-Offs
Commercial, Financial and Agricultural		656			1,297			725			768			1,680
Real Estate		9,618			21,215			15,309			27,545			9,190
Consumer		169			223			549			908			994
All Other		11			115			1,040			272			103
		10,454			22,850			17,623			29,493			11,967
Recoveries
Commercial, Financial and Agricultural		140			582			82			73			73
Real Estate		494			1,235			774			156			285
Consumer		82			145			246			191			155
All Other		40			8			50			13			19
		756			1,970			1,152			433			532
Net Charge-Offs		9,698			20,880			16,471			29,060			11,435
Provision for Loans Losses		6,785			8,250			13,350			43,445			12,938
Allowance for Loan Losses at End of Year	$	12,737		$	15,650		$	28,280		$	31,401		$	17,016
Ratio of Net Charge-Offs to Average Loans		1.34	%		2.74	%		1.90	%		3.02	%		1.19	%

The allowance for loan losses is maintained at a level considered appropriate by management, based on estimated probable losses within the existing loan portfolio.  The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio.  The provision for loan losses reflects loan quality trends, including the level of net charge-offs or recoveries, among other factors.  The provision for loan losses decreased $1.47 million from $8.25 million in 2011 to $6.79 million in 2012.  The provision for loan losses charged to earnings was based upon management’s judgment of the amount necessary to maintain the allowance at an adequate level to absorb losses inherent in the loan portfolio at year end.  The amount each period is dependent upon many factors, including changes in the risk ratings of the loan portfolio, net charge-offs, past due ratios, the value of collateral, and other environmental factors that include portfolio loan quality indicators; portfolio growth and composition of commercial real estate and concentrations; portfolio policies, procedures, underwriting standards, loss recognition, collection and recovery practices; local economic business conditions; and the experience, ability, and depth of lending management and staff.  Of significance to changes in the allowance during 2012 was the reduction in the net charge-offs in 2012 to $9.70 million from $20.88 million in 2011.  The Company believes that collection efforts have reduced impaired loans and the reduction in net charge-offs runs parallel with the improvement in the substandard assets.  As we begin to see stabilization in the economy and the housing and real estate market, we expect continued improvement in our substandard assets, including net charge-offs.

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Part II (Continued)

Item 7 (Continued)

Provisions continue to be higher than normal primarily due to the elevated risk of residential real estate and land development loans that began during 2007 with the housing and real estate downturn.  Nonperforming assets as a percentage of total loans and foreclosed assets decreased to 6.05 percent at December 31, 2012 compared to 8.10 percent at December 31, 2011.  Total nonperforming assets at December 31, 2012 were $46.2 million, of which $23.9 million were construction, land development and other land loans; $2.4 million were farmland properties; $7.2 million were 1-4 family residential properties; $0.6 million were multifamily properties; $10.4 million were nonfarm nonresidential properties; and the remainder of nonperforming assets totaling $1.7 million were commercial and consumer loans.  Total nonperforming assets at December 31, 2011 were $59.7 million, of which $35.5 million were construction, land development and other land loans; $4.6 million were 1-4 family residential properties; $0.7 million were multifamily properties; $15.3 million were nonfarm nonresidential properties; $0.7 million were farmland properties; and the remainder of nonperforming assets totaling $2.9 million were commercial and consumer loans.  All of the classified loans greater than $50 thousand, including the nonperforming loans, are reviewed each quarter for impairment.  The allowance for loan losses of $12.7 million at December 31, 2012 was 1.70 percent of total loans which compares to $15.6 million at December 31, 2011, or 2.18 percent of total loans and to $28.3 million at December 31, 2010, or 3.48 percent.  Unusually high levels of loan loss provision have been required over the past few years as Company management addresses asset quality deterioration.  While the nonperforming loans as a percentage of total loans was 4.00 percent, 5.42 percent, and 3.56 percent, respectively as of December 31, 2012, December 31, 2011 and December 31, 2010, the Company’s allowance for loan losses as a percentage of nonperforming loans was 42.66 percent, 40.29 percent, and 97.78 percent, respectively as of December 31, 2012, December 31, 2011 and December 31, 2010.  We continue to identify new problem loans, though at a slower pace than the previous year.

While the allowance for loan losses decreased from $15.65 million, or 2.18 percent of total loans at December 31, 2011 to $12.74 million, or 1.71 percent of total loans at December 31, 2012, the Company also reflected a decrease in nonperforming loans from $38.84 million at December 31, 2011 to $29.86 million at December 31, 2012.  When a loan is performing, it is accounted for under the Company’s general loan loss reserve methodology.  Once the loan becomes impaired, it is removed from the pool of loans covered by the general reserve and reviewed individually for exposure.  In cases where the individual review reveals no exposure, no reserve is recorded for that loan.  If, however, the individual review of the loan does indicate some exposure, management often charges off this exposure, rather than recording a specific reserve.  In these instances, a loan which becomes nonperforming could actually reduce the allowance for loan losses.  The allowance for loan losses is inherently judgmental, nevertheless the Company’s methodology is consistently applied based on standards for current accounting by creditors for impairment of a loan and allowance allocations determined in accordance with accounting for contingencies.  Loans individually selected for impairment review consist of all loans classified substandard that are $50 thousand and over.  The remaining portfolio is analyzed based on historical loss data.  Loans selected for individual review where no individual impairment amount is identified do not receive a contribution to the allowance for loan losses based on historical data.  Historical loss rates are updated annually to provide the annual loss rate which is applied to the appropriate portfolio grades.  In addition, the Company has also segmented its real estate portfolio into thirteen separate categories and captured loan loss experience for each category.  Most of the Company’s charge-offs during the past four years have been real estate dependent loans and we believe this segmentation provides more accuracy in determining allowance for loan loss adequacy.

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Part II (Continued)

Item 7 (Continued)

In addition, environmental factors as discussed earlier are evaluated for any adjustments needed to the allowance for loan losses determination produced by individual loan impairment analysis and remaining portfolio segmentation analysis.  The allowance for loan losses determination is based on individual loan reviews throughout the year and an environmental analysis at quarter end.

As part of our monitoring and evaluation of collateral values for nonperforming and problem loans in determining adequate allowance for loan losses, regional credit officers along with lending officers submit monthly problem loan reports for loans greater than $50 thousand in which impairment is identified.  This process typically determines collateral shortfall based upon local market real estate value estimates should the collateral be liquidated.  Once the loan is deemed uncollectible, it is transferred to our problem loan department for workout, foreclosure and/or liquidation.  The problem loan department gets a current appraisal on the property in order to record a fair market value (less selling expenses) when the property is foreclosed on and moved into other real estate.  Trends the past several quarters reflect a decrease in collateral values from two to three years ago on improved properties of fifteen to twenty five percent and on land development and land loans of thirty to fifty percent.  The significant reduction in collateral values on nonperforming assets has resulted in charge-offs particularly during 2012.

The allowance for loan losses is $2.91 million less than the prior year end, after factoring in net-charge offs, additional provisions, and the normal determination for an adequate funding level.  Restructuring of some substandard and non-performing loans during 2012 has resulted in significant charge-offs, but a strategy deemed prudent in bringing resolution with these credits and a return to performing status in the future.  Management believes the level of the allowance for loan losses was adequate as of December 31, 2012.  Should any of the factors considered by management in evaluating the adequacy of the allowance for loan losses change, the Company’s estimate of probable loan losses could also change, which could affect the level of future provisions for loan losses.

Investment Portfolio

The following table presents carrying values of investment securities held by the Company as of December 31, 2012, 2011 and 2010.

	2012		2011		2010
Obligations of States and Political Subdivisions	$	4,046	$	7,630	$	3,305
Corporate Obligations		1,105		2,114		1,986
Asset-Backed Securities		132		132		132
Investment Securities		5,283		9,876		5,423
Mortgage-Backed Securities		263,059		294,061		298,463
Total Investment Securities and Mortgage-Backed Securities	$	268,342	$	303,937	$	303,886

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Part II (Continued)

Item 7 (Continued)

The following table represents expected maturities and weighted-average yields of investment securities held by the Company as of December 31, 2012.  (Mortgage-backed securities are based on the average life at the projected speed, while State and Political Subdivisions and Corporate Obligations reflect anticipated calls being exercised.)

						After 1 Year But					After 5 Years But
	Within 1 Year					Within 5 Years					Within 10 Years					After 10 Years
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Mortgage-Backed Securities	$	35,639		(0.97	)%	$	112,374		1.39	%	$	73,161		1.64	%	$	41,885		1.89	%
Obligations of State and Political Subdivisions		827		3.69			1,788		2.71			1,431		3.71			-		-
Corporate Obligations		-		-			1,105		4.48			-		-			-		-
Asset-Backed Securities		-		-			-		-			-		-			132		-
Total Investment Portfolio	$	36,466		(0.87	)%	$	115,267		1.44	%	$	74,592		1.68	%	$	42,017		1.87	%

Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income. The Company has 99.9 percent of its portfolio classified as available for sale.

At December 31, 2012, there were no holdings of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10 percent of the Company’s shareholders’ equity.

The average yield of the securities portfolio was 1.82 percent in 2012 compared to 2.39 percent in 2011 and 2.59 percent in 2010. The decrease in the average yield from 2011 to 2012 and from 2010 to 2011 primarily resulted from the turnover of the securities portfolio resulting in the investment of new funds at lower rates.

Deposits

The following table presents the average amount outstanding and the average rate paid on deposits by the Company for the years 2012, 2011 and 2010.

	2012					2011					2010
	Average		Average			Average		Average			Average		Average
	Amount		Rate			Amount		Rate			Amount		Rate
Noninterest-Bearing Demand Deposits	$	101,896				$	93,903				$	82,160
Interest-Bearing Demand and Savings		329,984		0.38	%		273,783		0.45	%		251,537		0.65	%
Time Deposits		537,810		1.39	%		633,033		1.85	%		700,558		2.22	%
Total Deposits	$	969,690		0.90	%	$	1,000,719		1.29	%	$	1,034,255		1.66	%

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Part II (Continued)

Item 7 (Continued)

The following table presents the maturities of the Company’s other time deposits as of December 31, 2012.

	Other Time		Other Time
	Deposits		Deposits
	$100,000		Less Than
	or Greater		$100,000		Total
Months to Maturity
3 or Less	$	50,559	$	80,838	$	131,397
Over 3 through 12		110,971		146,116		257,087
Over 12 Months		49,715		54,711		104,426
	$	211,245	$	281,665	$	492,910

Average deposits decreased $31.03 million in 2012 compared to 2011 and decreased $33.54 million in 2011 compared to 2010.  The decrease in 2012 included $95.22 million, or 15.04 percent in time deposits while, at the same time, noninterest bearing deposits increased $7.99 million, or 8.51 percent and interest-bearing demand and savings deposits increased $56.20 million, or 20.53 percent.  The decrease in 2011 included $67.53 million, or 9.6 percent in time deposits while, at the same time, noninterest bearing deposits increased $11.74 million, or 14.29 percent and interest-bearing demand and savings deposits increased $22.25 million, or 8.84 percent.  Accordingly, the ratio of average noninterest-bearing deposits to total average deposits was 10.51 in 2012, 9.4 percent in 2011 and 7.9 percent in 2010.  The general decrease in market rates in 2012 had the effect of (i) decreasing the average cost of interest-bearing deposits by 42 basis points in 2012 compared to 2011 and (ii) mitigating a portion of the impact of decreasing yields on earning assets in the Company’s net interest income in 2012.  The general decrease in market rates in 2011 had the effect of (i) decreasing the average cost of interest-bearing deposits by 38 basis points in 2011 compared to 2010 and (ii) mitigating a portion of the impact of decreasing yields on earning assets in the Company’s net interest income in 2011.

Total average interest-bearing deposits decreased $39.0 million, or 4.3 percent in 2012 compared to 2011 and decreased $45.3 million, or 4.8 percent in 2011 compared to 2010.  The decrease in average deposits in 2012 compared to 2011 was time deposit accounts.

The Company supplements deposit sources with brokered deposits.  As of December 31, 2012, the Company had $28.2 million, or 2.88 percent of total deposits, in brokered certificates of deposit attracted by external third parties.  Additional information is provided in the Footnote for Deposits.

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Part II (Continued)

Item 7 (Continued)

Off-Balance-Sheet Arrangements, Commitments, Guarantees, and Contractual Obligations

The following table summarizes the Company’s contractual obligations and other commitments to make future payments as of December 31, 2012. Payments for borrowings do not include interest. Payments related to leases are based on actual payments specified in the underlying contracts. Loan commitments and standby letters of credit are presented at contractual amounts; however, since many of these commitments are expected to expire unused or only partially used, the total amounts of these commitments do not necessarily reflect future cash requirements.

	Payments Due by Period
	1 Year or Less		More than 1 Year but Less Than  3 Years		3 Years or More but Less Than 5 Years		5 Years or More		Total
Contractual Obligations:
Subordinated Debentures	$	-	$	-	$	-	$	24,229	$	24,229
Federal Home Loan Bank Advances		-		-		9,000		26,000		35,000
Operating Leases		132		94		84		-		310
Deposits with Stated Maturity Dates		388,484		87,464		16,931		31		492,910
		388,616		87,558		26,015		50,260		552,449
Other Commitments:
Loan Commitments		64,147		-		-		-		64,147
Standby Letters of Credit		1,141		-		-		-		1,141
		65,288		-		-		-		65,288
Total Contractual Obligations and Other Commitments	$	453,904	$	87,558	$	26,015	$	50,260	$	617,737

In the ordinary course of business, the Company has entered into off-balance sheet financial instruments which are not reflected in the consolidated financial statements.  These instruments include commitments to extend credit, standby letters of credit, performance letters of credit, guarantees and liability for assets held in trust.

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Part II (Continued)

Item 7 (Continued)

Such financial instruments are recorded in the financial statements when funds are disbursed or the instruments become payable.  The Company uses the same credit policies for these off-balance sheet financial instruments as they do for instruments that are recorded in the consolidated financial statements.

Loan Commitments. The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. The Company minimizes its exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for possible loan losses.

Loan commitments outstanding at December 31, 2012 are included in the preceding table.

Standby Letters of Credit.  Letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third party. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment is funded, the Company would be entitled to seek recovery from the customer. The Company’s policies generally require that standby letters of credit arrangements contain security and debt covenants similar to those contained in loan agreements. Standby letters of credit outstanding at December 31, 2012 are included in the preceding table.

Capital and Liquidity

At December 31, 2012, shareholders’ equity totaled $95.8 million compared to $96.6 million at    December 31, 2011. In addition to net income of $2.6 million, other significant changes in shareholders’ equity during 2012 included $1.4 million of dividends declared on preferred stock. The accumulated other comprehensive income component of shareholders’ equity totaled $(150) thousand at December 31, 2012 compared to $1.9 million at December 31, 2011. This fluctuation was mostly related to the after-tax effect of changes in the fair value of securities available for sale. Under regulatory requirements, the unrealized gain or loss on securities available for sale does not increase or reduce regulatory capital and is not included in the calculation of risk-based capital and leverage ratios. Regulatory agencies for banks and bank holding companies utilize capital guidelines designed to measure Tier 1 and total capital and take into consideration the risk inherent in both on-balance sheet and off-balance sheet items. Tier 1 capital consists of common stock and qualifying preferred stockholders’ equity less goodwill and disallowed deferred tax assets.  Tier 2 capital consists of certain convertible, subordinated and other qualifying 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 as of December 31, 2012 was 15.22 percent and total Tier 1 and 2 risk-based capital was 16.47 percent.  Both of these measures compare favorably with the regulatory minimum of 4 percent for Tier 1 and 8 percent for total risk-based capital.  The Company’s Tier 1 leverage ratio as of December 31, 2012 was 10.22 percent, which exceeds the required ratio standard of 4 percent.

For 2012, average capital was $96.5 million, representing 8.47 percent of average assets for the year.  This compares to 7.86 percent for 2011.

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Part II (Continued)

Item 7 (Continued)

The Company did not pay any common stock dividends in 2012 or 2011.  The Company suspended dividend payments beginning in the third quarter of 2009.

The Company declared dividends of $1,435 and $1,400 on preferred stock during 2012 and 2011, respectively.  The Company deferred all dividend payments declared in 2012 on its preferred stock, as well as all interest payments on its TRUPS in order to preserve cash at the holding company level.  The Company had no preferred stock until January 2009 when shares were issued to U.S. Treasury.

The Company, primarily through the actions of its subsidiary bank, engages in liquidity management to ensure adequate cash flow for deposit withdrawals, credit commitments and repayments of borrowed funds.  Needs are met through loan repayments, net interest and fee income and the sale or maturity of existing assets.  In addition, liquidity is continuously provided through the acquisition of new deposits, the renewal of maturing deposits and external borrowings.

Management monitors deposit flow and evaluates alternate pricing structures to retain and grow deposits.   To the extent needed to fund loan demand, traditional local deposit funding sources are supplemented by the use of FHLB borrowings, brokered deposits and other wholesale deposit sources outside the immediate market area.  Internal policies have been updated to monitor the use of various core and non-core funding sources, and to balance ready access with risk and cost.  Through various asset/liability management strategies, a balance is maintained among goals of liquidity, safety and earnings potential.  Internal policies that are consistent with regulatory liquidity guidelines are monitored and enforced by the Bank.

The investment portfolio provides a ready means to raise cash if liquidity needs arise.  As of December 31, 2012, the available for sale bond portfolio totaled $268.3 million.  At December 31, 2011, the Company held $303.9 million in bonds (excluding FHLB stock), at current market value in the available for sale portfolio.  Only marketable investment grade bonds are purchased.  Although most of the Banks’ bond portfolios are encumbered as pledges to secure various public funds deposits, repurchase agreements, and for other purposes, management can restructure and free up investment securities for a sale if required to meet liquidity needs.

Management continually monitors the relationship of loans to deposits as it primarily determines the Company’s liquidity posture.  Colony had ratios of loans to deposits of 76.3 percent as of December 31, 2012 and 71.6 percent at December 31, 2011.  Management employs alternative funding sources when deposit balances will not meet loan demands.  The ratios of loans to all funding sources (excluding Subordinated Debentures) at December 31, 2012 and December 31, 2011 were 73.6 percent and 66.9 percent, respectively.  Management continues to emphasize programs to generate local core deposits as our Company’s primary funding sources.  The stability of the Banks’ core deposit base is an important factor in Colony’s liquidity position.  A heavy percentage of the deposit base is comprised of accounts of individuals and small businesses with comprehensive banking relationships and limited volatility.  At December 31, 2012 and December 31, 2011, the Bank had $211 million and $248 million, respectively, in certificates of deposit of $100,000 or more.  These larger deposits represented 21.6 percent and 24.8 percent of respective total deposits.  Management seeks to monitor and control the use of these larger certificates, which tend to be more volatile in nature, to ensure an adequate supply of funds as needed.  Relative interest costs to attract local core relationships are compared to market rates of interest on various external deposit sources to help minimize the Company’s overall cost of funds.

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Part II (Continued)

Item 7 (Continued)

The Company supplemented deposit sources with brokered deposits.  As of December 31, 2012, the Company had $28.2 million, or 2.88 percent of total deposits, in brokered certificates of deposit attracted by external third parties.  Additionally, the bank uses external wholesale or Internet services to obtain out-of-market certificates of deposit at competitive interest rates when funding is needed.  As of December 31, 2012, the Company had $33.6 million, or 3.43 percent of total deposits, in external wholesale or internet network deposits.

To plan for contingent sources of funding not satisfied by both local and out-of-market deposit balances, Colony and its subsidiary have established multiple borrowing sources to augment their funds management.  The Company has borrowing capacity through membership of the Federal Home Loan Bank program.  The bank has also established overnight borrowing for Federal Funds Purchased through various correspondent banks.  Management believes the various funding sources discussed above are adequate to meet the Company’s liquidity needs in the future without any material adverse impact on operating results.

Liquidity measures the ability to meet current and future cash flow needs as they become due. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest rate market opportunities. The ability of a financial institution to meet its current financial obligations is a function of balance sheet structure, the ability to liquidate assets, and the availability of alternative sources of funds. The Company seeks to ensure its funding needs are met by maintaining a level of liquid funds through asset/liability management.

Asset liquidity is provided by liquid assets which are readily marketable or pledgeable or which will mature in the near future. Liquid assets include cash, interest-bearing deposits in banks, securities available for sale, maturities and cash flow from securities held to maturity, and federal funds sold and securities purchased under resale agreements.

Liability liquidity is provided by access to funding sources which include core deposits.  Should the need arise, the Company also maintains relationships with the Federal Home Loan Bank, Federal Reserve Bank,   two correspondent banks and repurchase agreement lines that can provide funds on short notice.

Since Colony is a bank holding Company and does not conduct operations, its primary sources of liquidity are dividends up streamed from the subsidiary bank and borrowings from outside sources.

The liquidity position of the Company is continuously monitored and adjustments are made to the balance between sources and uses of funds as deemed appropriate. Management is not aware of any events that are reasonably likely to have a material adverse effect on the Company’s liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity, which if implemented, would have a material adverse effect on the Company.

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Part II (Continued)

Item 7 (Continued)

Impact of Inflation and Changing Prices

The Company’s financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). GAAP presently requires the Company to measure financial position and operating results primarily in terms of historic dollars. Changes in the relative value of money due to inflation or recession are generally not considered. The primary effect of inflation on the operations of the Company is reflected in increased operating costs. In management’s opinion, changes in interest rates affect the financial condition of a financial institution to a far greater degree than changes in the inflation rate. While interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. Interest rates are highly sensitive to many factors that are beyond the control of the Company, including changes in the expected rate of inflation, the influence of general and local economic conditions and the monetary and fiscal policies of the United States government, its agencies and various other governmental regulatory authorities, among other things, as further discussed in the next section.

Regulatory and Economic Policies

The Company’s business and earnings are affected by general and local economic conditions and by the monetary and fiscal policies of the United States government, its agencies and various other governmental regulatory authorities, among other things. The Federal Reserve Board regulates the supply of money in order to influence general economic conditions. Among the instruments of monetary policy available to the Federal Reserve Board are (i) conducting open market operations in United States government obligations, (ii) changing the discount rate on financial institution borrowings, (iii) imposing or changing reserve requirements against financial institution deposits, and (iv) restricting certain borrowings and imposing or changing reserve requirements against certain borrowing by financial institutions and their affiliates. These methods are used in varying degrees and combinations to affect directly the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits. For that reason alone, the policies of the Federal Reserve Board have a material effect on the earnings of the Company.

Governmental policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future; however, the Company cannot accurately predict the nature, timing or extent of any effect such policies may have on its future business and earnings.

Recently Issued Accounting Pronouncements

See Note 1 - Summary of Significant Accounting Policies under the section headed Changes in Accounting Principles and Effects of New Accounting Pronouncements included in the Notes to Consolidated Financial Statements.

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Part II (Continued)

Item 7 (Continued)

Quantitative and Qualitative Disclosures About Market Risk

AVERAGE BALANCE SHEETS

				2012								2011								2010
	Average			Income/		Yields/			Average			Income/		Yields/			Average			Income/		Yields/
	Balances			Expense		Rates			Balances			Expense		Rates			Balances			Expense		Rates
Assets
Interest-Earning Assets
Loans, Net of Unearned Income (1)	$	721,872		$	42,054		5.83	%	$	763,067		$	44,593		5.84	%	$	865,184		$	51,859		5.99	%
Investment Securities
Taxable		280,959			5,005		1.78			296,948			7,012		2.36			264,494			6,762		2.56
Tax-Exempt (2)		3,302			155		4.69			3,345			171		5.11			2,521			140		5.55
Total Investment Securities		284,261			5,160		1.82			300,293			7,183		2.39			267,015			6,902		2.59
Interest-Bearing Deposits		17,046			77		0.45			18,715			47		0.25			21,911			22		0.10
Federal Funds Sold		38,877			99		0.25			44,667			115		0.26			38,809			95		0.25
Other Interest-Earning Assets		4,277			43		1.01			5,781			46		0.80			6,297			38		0.60
Total Interest-Earning Assets		1,066,333			47,433		4.45			1,132,523			51,984		4.59			1,199,216			58,916		4.92
Noninterest-Earning Assets
Cash		18,474								19,057								19,347
Allowance for Loan Losses		(15,781	)							(20,585	)							(30,445	)
Other Assets		70,788								74,896								81,489
Total Noninterest-Earning Assets		73,481								73,368								70,391
Total Assets	$	1,139,814							$	1,205,891							$	1,269,607
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities
Interest-Bearing Demand and Savings	$	329,984		$	1,258		0.38	%	$	273,783		$	1,232		0.45	%	$	251,537		$	1,636		0.65	%
Other Time		537,810			7,479		1.39			633,033			11,718		1.85			700,558			15,576		2.22
Total Interest-Bearing Deposits		867,794			8,737		1.01			906,816			12,950		1.43			952,095			17,212		1.81
Other Interest-Bearing Liabilities
Other Borrowed Money		43,745			1,725		3.94			71,720			3,010		4.20			85,920			3,074		3.58
Subordinated Debentures		24,229			554		2.29			24,229			508		2.10			24,229			516		2.13
Federal Funds Purchased and Repurchase Agreements		-			-		-			9,851			338		3.43			26,070			721		2.77
Total Other Interest-Bearing Liabilities		67,974			2,279		3.35			105,800			3,856		3.64			136,219			4,311		3.17
Total Interest-Bearing Liabilities		935,768			11,016		1.18			1,012,616			16,806		1.66			1,088,314			21,523		1.98
Noninterest-Bearing Liabilities and Stockholders' Equity
Demand Deposits		101,896								93,903								82,160
Other Liabilities		5,609								4,635								4,681
Stockholders' Equity		96,541								94,737								94,452
Total Noninterest-Bearing
Liabilities and Stockholders' Equity		204,046								193,275								181,293
Total Liabilities and Stockholders' Equity	$	1,139,814							$	1,205,891							$	1,269,607
Interest Rate Spread							3.27	%							2.93	%							2.94	%
Net Interest Income				$	36,417							$	35,178							$	37,393
Net Interest Margin							3.41	%							3.11	%							3.12	%

(1) The average balance of loans includes the average balance of nonaccrual loans.  Income on such loans is recognized and recorded on the cash basis.  Taxable equivalent adjustments totaling $91, $133 and $130 for 2012, 2011 and 2010 respectively, are included in interest on loans.  The adjustments are based on a federal tax rate of 34 percent.

(2) Taxable-equivalent adjustments totaling $53, $58 and $48 for 2012, 2011 and 2010 respectively, are included in tax-exempt interest on investment securities. The adjustments are based on a federal tax rate of 34 percent with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.

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Part II (Continued)

Item 7 (Continued)

Colony Bankcorp, Inc. and Subsidiaries

Interest Rate Sensitivity

The following table is an analysis of the Company’s interest rate-sensitivity position at December 31, 2012.  The interest-bearing rate-sensitivity gap, which is the difference between interest-earning assets and interest-bearing liabilities by repricing period, is based upon maturity or first repricing opportunity, along with a cumulative interest rate-sensitivity gap.  It is important to note that the table indicates a position at a specific point in time and may not be reflective of positions at other times during the year or in subsequent periods.  Major changes in the gap position can be, and are, made promptly as market outlooks change.

	Assets and Liabilities Repricing Within
	3 Months			4 to 12						1 to 5			Over 5
	or Less			Months			1 Year			Years			Years			Total
EARNING ASSETS:
Interest-Bearing Deposits	$	21,795		$	-		$	21,795		$	-		$	-		$	21,795
Federal Funds Sold		20,002			-			20,002			-			-			20,002
Investment Securities		126			-			126			132,553			135,663			268,342
Loans, Net of Unearned Income		219,181			143,450			362,631			341,974			42,211			746,816
Other Interest- Earning Assets		3,364			-			3,364			-			-			3,364
Total Interest-Earning Assets		264,468			143,450			407,918			474,527			177,874			1,060,319
INTEREST-BEARING LIABILITIES:
Interest-Bearing Demand Deposits (1)		314,031			-			314,031			-			-			314,031
Savings (1)		48,778			-			48,778			-			-			48,778
Time Deposits		131,397			257,087			388,484			104,395			31			492,910
Other Borrowings (2)		-			-			-			9,000			26,000			35,000
Subordinated Debentures		24,229			-			24,229			-			-			24,229
Total Interest-Bearing Liabilities		518,435			257,087			775,522			113,395			26,031			914,948
Interest Rate-Sensitivity Gap		(253,967	)		(113,637	)		(367,604	)		361,132			151,843		$	145,371
Cumulative Interest-Sensitivity Gap	$	(253,967	)	$	(367,604	)	$	(367,604	)	$	(6,472	)	$	145,371
Interest Rate-Sensitivity Gap as a Percentage of Interest-Earning Assets		(23.95	)%		(10.72	)%		(34.67	)%		34.06	%		14.32	%
Cumulative Interest Rate-Sensitivity as a Percentage of Interest-Earning Assets		(23.95	)%		(34.67	)%		(34.67	)%		(0.61	)%		13.71	%

(1)  Interest-bearing Demand and Savings Accounts for repricing purposes are considered to reprice within 3 months or less.

(2)  Short-term borrowings for repricing purposes are considered to reprice within 3 months or less.

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Part II (Continued)

Item 7 (Continued)

The foregoing table indicates that we had a one year negative gap of $368 million, or 34.67 percent of total interest-earning assets at December 31, 2012.  In theory, this would indicate that at December 31, 2012, $368 million more in liabilities than assets would reprice if there were a change in interest rates over the next 365 days.  Thus, if interest rates were to decline, the gap would indicate a resulting increase in net interest margin.  However, changes in the mix of earning assets or supporting liabilities can either increase or decrease the net interest margin without affecting interest rate sensitivity.  In addition, the interest rate spread between an asset and our supporting liability can vary significantly while the timing of repricing of both the assets and our supporting liability can remain the same, thus impacting net interest income.  This characteristic is referred to as a basis risk and, generally, relates to the repricing characteristics of short-term funding sources such as certificates of deposits.

Gap analysis has certain limitations.  Measuring the volume of repricing or maturing assets and liabilities does not always measure the full impact on the portfolio value of equity or net interest income.  Gap analysis does not account for rate caps on products; dynamic changes such as increasing prepay speeds as interest rates decrease, basis risk, or the benefit of non-rate funding sources.  The majority of our loan portfolio reprices quickly and completely following changes in market rates, while non-term deposit rates in general move slowly and usually incorporate only a fraction of the change in rates.  Products categorized as nonrate sensitive, such as our noninterest-bearing demand deposits, in the gap analysis behave like long term fixed rate funding sources.  Both of these factors tend to make our actual behavior more asset sensitive than is indicated in the gap analysis.  In fact, we experience higher net interest income when rates rise, opposite what is indicated by the gap analysis.  Therefore, management uses gap analysis, net interest margin analysis and market value of portfolio equity as our primary interest rate risk management tools.

The Company utilizes FTN Financial Asset/Liability Management Analysis for a more dynamic analysis of balance sheet structure.  The Company has established earnings at risk for net interest income in a +/- 200 basis point rate shock to be no more than a fifteen percent percentage change.  The most recent analysis as of December 31, 2012 indicates that net interest income would deteriorate 21 percent with a 200 basis point decrease and would improve 3.6 percent with a 200 basis point increase.  Though slightly outside policy, the increased exposure to declining rates is mitigated by the low likelihood of a further decline of 200 basis points from the current rate levels.  The Company has established equity at risk in a +/- 200 basis point rate shock to be no more than a twenty percent percentage change.  The most recent analysis as of December 31, 2012 indicates that net economic value of equity percentage change would decrease 9 percent with a 200 basis point increase and would decrease 6 percent with a 200 basis point decrease.  The Company has established its one year gap to be 80 percent to 120 percent.  The most recent analysis as of December 31, 2012 indicates a one year gap of 71 percent.  The analysis reflects net interest margin compression in a declining interest rate environment.  Given that interest rates have basically “bottomed-out” with the recent Federal Reserve action, the Company is anticipating interest rates to increase in the future though we believe that interest rates will remain flat most of 2013.  The Company is focusing on areas to minimize margin compression in the future by minimizing longer term fixed rate loans, shortening on the yield curve with investments, securing longer term FHLB advances, securing certificates of deposit for longer terms and focusing on reduction of nonperforming assets.

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Part II (Continued)

Item 7 (Continued)

Return on Assets and Stockholder’s Equity

The following table presents selected financial ratios for each of the periods indicated.

	Years Ended December 31
	2012			2011			2010
Return on Average Assets(1)		0.11	%		0.09	%		(0.07	)%
Return on Average Equity(1)		1.25	%		1.20	%		(0.98	)%
Equity to Assets		8.40	%		8.08	%		7.29	%
Dividends Declared	$	0.00		$	0.00		$	0.00

(1) Computed using net income available to common shareholders.

Future Outlook

During the past four years, the financial services industry experienced tremendous adversities as a result of the collapse of the real estate markets across the country.  Colony, like most banking companies, has been affected by these economic challenges that started with a rapid stall of real estate sales and development throughout the country.  Focus during 2012 and again in 2013 will be directed toward addressing and bringing resolution to problem assets.

In response to the elevated risk of residential real estate and land development loans, management has extensively reviewed our loan portfolio with a particular emphasis on our residential and land development real estate exposure.  Senior management with experience in problem loan workouts have been identified and assigned responsibility to oversee the workout and resolution of problem loans.  The Company will continue to closely monitor our real estate dependent loans throughout the Company and focus on asset quality during this economic downturn.

Revenue enhancement initiatives to improve core non-interest income should be realized during 2013.  These initiatives include formalized overdraft privilege program and new product lines and services.

Business

Regulatory Action

On October 21, 2010, the Board of Directors of the Company’s subsidiary bank, Colony Bank (the “Bank”), received notification from its primary regulators, the Georgia Department of Banking and Finance (“the Georgia Department”) and the FDIC that the Bank’s latest examination results require a program of corrective action as outlined in a proposed Memorandum of Understanding (“MOU”).  An MOU is characterized by the supervising authorities as an informal action that is neither published nor made publically available by the supervising authorities and is used when circumstances do not warrant formal supervisory action.  An MOU is not a “written agreement” for purposes of Section 8 of the Federal Deposit Insurance Act.  The Board of Directors entered into the MOU at its regularly scheduled monthly meeting on November 16, 2010 with the effective date of the MOU being November 23, 2010.

- 58 -

Part II (Continued)

Item 7 (Continued)

The MOU requires the Bank to develop, implement, and maintain various processes to improve the Bank’s risk management of its loan portfolio, reduce adversely classified assets in accordance with certain timeframes, limit the extension of additional credit to borrowers with adversely classified loans subject to certain exceptions, adopt a written plan to properly monitor and reduce the Bank’s commercial real estate concentration, continue to maintain the Bank’s loan loss provision and review its adequacy at least quarterly, and formulate and implement a written plan to improve and maintain earnings to be forwarded for review by the Georgia Department and FDIC.  The Bank is also required to obtain approval before any cash dividends can be paid.

The Bank has also agreed to have and maintain minimum capital ratios at specified levels higher than those otherwise required by applicable regulations as follows:  Tier 1 leverage capital to total assets of 8% and total risk-based capital to total risk-weighted assets of 10%.  At December 31, 2012, the Bank’s capital ratios were 10.31% and 16.61%, respectively.

Item 7A

Quantitative and Qualitative Disclosures about Market Risk

The information required by this item is located in Item 7 under the heading Interest Rate Sensitivity.

Item 8

Financial Statements and Supplemental Data

The following consolidated financial statements of the Registrant and its subsidiaries are included on Exhibit 13 of this Annual Report on Form 10-K:

Consolidated Balance Sheets - December 31, 2012 and 2011

Consolidated Statements of Income - Years Ended December 31, 2012, 2011 and 2010

Consolidated Statements of Comprehensive Income - Years Ended December 31, 2012, 2011 and 2010

Consolidated Statements of Stockholders’ Equity - Years Ended December 31, 2012, 2011 and 2010

Consolidated Statements of Cash Flows - Years Ended December 31, 2012, 2011 and 2010

Notes to Consolidated Financial Statements

- 59 -

Part II (Continued)

Item 8 (Continued)

Quarterly Results of Operations (Unaudited)

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2012 and 2011:

	Three Months Ended
	December 31		September 30		June 30		March 31
2012	($ in Thousands, Except Per Share Data)
Interest Income	$	11,378	$	11,748	$	11,973	$	12,191
Interest Expense		2,302		2,526		2,882		3,307
Net Interest Income		9,076		9,222		9,091		8,884
Provision for Loan Losses		1,158		1,742		1,943		1,942
Securities Gains		770		1,187		743		137
Noninterest Income		1,872		1,716		1,631		1,677
Noninterest Expense		9,744		9,247		8,405		7,983
Income Before Income Taxes		816		1,136		1,117		773
Provision for Income Taxes		248		364		357		232
Net Income		568		772		760		541
Preferred Stock Dividends		365		361		357		352
Net Income Available to Common Stockholders	$	203	$	411	$	403	$	189
Net Income Per Common Share
Basic	$	0.02	$	0.05	$	0.05	$	0.02
Diluted	$	0.02	$	0.05	$	0.05	$	0.02
2011
Interest Income	$	12,439	$	12,732	$	13,095	$	13,527
Interest Expense		3,594		3,989		4,514		4,709
Net Interest Income		8,845		8,743		8,581		8,818
Provision for Loan Losses		2,250		2,250		2,250		1,500
Securities Gains		979		813		736		396
Noninterest Income		1,774		1,610		1,935		1,708
Noninterest Expense		8,804		8,090		8,218		7,939
Income Before Income Taxes		544		826		784		1,483
Provision for Income Taxes		164		268		245		427
Net Income		380		558		539		1,056
Preferred Stock Dividends		350		350		350		350
Net Income Available to Common Stockholders	$	30	$	208	$	189	$	706
Net Income Per Common Share
Basic	$	0.00	$	0.02	$	0.02	$	0.08
Diluted	$	0.00	$	0.02	$	0.02	$	0.08

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There was no accounting or disclosure disagreement or reportable event with the current auditors that would have required the filing of a report on Form 8-K.

- 60 -

Part II (Continued)

Item 9A

Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report, as required by paragraph (b) of Rules 13a-15 or 15d-15 of the Exchange Act.  Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective.

During the year ended December 31, 2012, there was not any change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Colony’s management is responsible for establishing and maintaining adequate internal control over financial reporting.  Colony’s internal control over financial reporting is a process designed under the supervision of the Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Colony’s financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Colony’s management assessed the effectiveness of Colony’s internal control over financial reporting as of December 31, 2012 based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on the assessment, management determined that Colony maintained effective internal control over financial reporting as of December 31, 2012.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.  The Company’s registered public accounting firm was not required to issue an attestation on its internal controls over financial reporting pursuant to the rules of the SEC that permit the Company to provide only management’s report in this Annual Report on Form 10-K.

Colony Bankcorp, Inc.

March 12, 2013

Changes in Internal Controls

There were no changes made in our internal controls during the period covered by this report or, to our knowledge, in other factors that have materially affected, or are reasonably likely to materially affect these controls.

See the Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

- 61 -

Part II (Continued)

Item 9B

Other Information

None.

Part III

Item 10

Directors and Executive Officers and Corporate Governance

Code of Ethics

Colony Bankcorp, Inc. has adopted a Code of Ethics that applies to the Company’s principal executive officer and principal accounting and financial officer.  A copy of the Code of Ethics will be provided to any person without charge, upon written request mailed to Terry Hester, Colony Bankcorp, Inc., 115 S. Grant Street, Fitzgerald, Georgia 31750.

The remaining information required by this item is incorporated by reference to the Company’s definitive Proxy Statements to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report.

Item 11

Executive Compensation

The information required by this item is incorporated by reference to the Company’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report.

- 62 -

Part III (Continued)

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

EQUITY COMPENSATION PLAN INFORMATION

Plan Category	Number of Securities to be Issued Upon Stock Grant, Exercise of Outstanding Options, Warrants and Rights (a)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity Compensation Plans Approved By Security Holders
2004 Restricted Stock Grant Plan				108,042
				108,042

The remaining information required by this item is incorporated by reference to the Company’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report.

Item 13

Certain Relationships and Related Transactions and Director Independence

The information required by this item is incorporated by reference to the Company’s definitive Proxy Statements to be filed with Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the fiscal year covered by this Annual Report.

Item 14

Principal Accounting Fees and Services

The information required by this item is incorporated by reference to the Company’s definitive Proxy Statements to be filed with Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the fiscal year covered by this Annual Report.

- 63 -

Part IV

Item 15

Exhibits, Financial Statement Schedules

(a)	The following documents are filed as part of this report:
	(1)	Financial Statements
	(2)	Financial Statements Schedules:
		All schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or the related notes.
	(3)	A list of the exhibits required by Item 601 of Regulation S-K to be filed as a part of this report is shown on the “Exhibit Index” filed herewith.
Exhibit Index
3.1	Articles of Incorporation
		-filed as Exhibit 3(a) to the Registrant’s Registration Statement on Form 10 (File No. 0-18486), filed with the Commission on April 25, 1990 and incorporated herein by reference.
3.2	Bylaws, as Amended
		-filed as Exhibit 3(b) to the Registrant’s Registration Statement on Form 10 (File No. 0-18486), filed with the Commission on April 25, 1990 and incorporated herein by reference.
3.3	Articles of Amendment to the Company’s Articles of Incorporation Authorizing Additional Capital Stock in the Form of Ten Million Shares of Preferred Stock
		-filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436) filed with the Commission on January 13, 2009 and incorporated herein by reference.
3.4	Articles of Amendment to the Company’s Articles of Incorporation Establishing the Terms of the Series A Preferred Stock
		-filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 000-12436) filed with the Commission on January 13, 2009 and incorporated herein by reference.
4.1	Instruments Defining the Rights of Security Holders
		-incorporated herein by reference to page 1 of the Company’s Definitive Proxy Statement for Annual Meeting of Stockholders to be held on April 26, 2005, filed with the Securities and Exchange Commission on March 2, 2005 (File No. 000-12436).
4.2	Warrant to Purchase up to 500,000 shares of Common Stock
		-filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.

- 64 -

Part IV (Continued)

Item 15 (Continued)

4.3	Form of Series A Preferred Stock Certificate
		-filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.
10.1	Deferred Compensation Plan and Sample Director Agreement
		-filed as Exhibit 10(a) to the Registrant’s Registration Statement on Form 10 (File No. 0-18486), filed with the Commission on April 25, 1990 and incorporated herein by reference.
10.2	Profit-Sharing Plan Dated January 1, 1979
		-filed as Exhibit 10(b) to the Registrant’s Registration Statement on Form 10 (File No. 0-18486), filed with the Commission on April 25, 1990 and incorporated herein by reference.
10.3	1999 Restricted Stock Grant Plan and Restricted Stock Grant Agreement
		-filed as Exhibit 10© the Registrant’s Annual Report on Form 10-K (File 000-12436), filed with the Commission on March 30, 2001 and incorporated herein by reference.
10.4	2004 Restricted Stock Grant Plan and Restricted Stock Grant Agreement
		-filed as Exhibit C to the Registrant’s Definitive Proxy Statement for Annual Meeting of Stockholders held on April 27, 2004, filed with the Securities and Exchange Commission on March 3, 2004 (File No. 000-12436) and incorporated herein by reference.
10.5	Lease Agreement - Mobile Home Tracks, LLC c/o Stafford Properties, Inc. and Colony Bank Worth
		-filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10Q (File No. 000-12436), filed with Securities and Exchange Commission on November 5, 2004 and incorporated herein by reference.
10.6	Letter Agreement, Dated January 9, 2009, Including Securities Purchase Agreement – Standard Terms Incorporated by Reference Therein, Between the Company and the United States Department of the Treasury
		-filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.
10.7	Form of Waiver, Executed by Each of Messrs Al D. Ross, Terry L. Hester, Henry F. Brown, Jr., Walter P. Patten and Larry E. Stevenson
		-filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.
10.8	Employment Agreement, Dated April 27, 2012 Between Edward P. Loomis, Jr. and Colony Bankcorp, Inc.
		-filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on May 2, 2012 and incorporated herein by reference.

- 65 -

Part IV (Continued)

Item 15 (Continued)

13	Consolidated Financial Statements of Colony Bankcorp, Inc. as of December 31, 2012 and 2011
21	Subsidiaries of the Company
31.1	Certificate of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certificate of Chief Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certificate of the Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Certificate of the Chief Executive Officer and Chief Financial Officer Pursuant to Section 30.15 of 31 CFR Part 30
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

- 66 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Colony Bankcorp, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized:

COLONY BANKCORP, INC.

/s/ Edward P. Loomis, Jr.

Edward P. Loomis, Jr.

President/Director/Chief Executive Officer

March 12, 2013

Date

/s/ Terry L. Hester

Terry L. Hester

Executive Vice-President/Chief Financial Officer/Director

March 12, 2013

Date

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

/s/ B. Gene Waldron	March 12, 2013
B. Gene Waldron, Director	Date
/s/ Edward J. Harrell	March 12, 2013
Edward J. Harrell, Director	Date
/s/ Mark H. Massee	March 12, 2013
Mark H. Massee, Director	Date

- 67 -

/s/ Jonathan W. R. Ross	March 12, 2013
Jonathan W. R. Ross, Director	Date
/s/ M. Frederick Dwozan	March 12, 2013
M. Frederick Dwozan, Director	Date
/s/ Davis W. King, Sr.	March 12, 2013
Davis W. King, Sr., Director	Date
/s/ Scott Lowell Downing	March 12, 2013
Scott Lowell Downing, Director	Date

- 68 -

EX-13

EXHIBIT NO. 13

McNair, McLemore, Middlebrooks & Co., LLC

CERTIFIED PUBLIC ACCOUNTANTS

389 Mulberry Street • Post Office Box One • Macon, GA 31202

Telephone (478) 746-6277 • Facsimile (478) 743-6858

www.mmmcpa.com

March 12, 2013

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Colony Bankcorp, Inc.

We have audited the accompanying consolidated balance sheets of Colony Bankcorp, Inc. and Subsidiary as of December 31, 2012 and 2011 and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2012.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Colony Bankcorp, Inc. and Subsidiary as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to examine management’s assessment of the effectiveness of Colony Bankcorp, Inc.’s internal control over financial reporting as of December 31, 2012 included under Item 9A, Controls and Procedures, in Colony Bankcorp, Inc.’s Annual Report on Form 10-K and, accordingly, we do not express an opinion thereon.

McNAIR, McLEMORE, MIDDLEBROOKS & CO., LLC

- 1 -

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31

ASSETS
	2012			2011
Cash and Cash Equivalents
Cash and Due from Banks	$	29,243,927		$	28,380,368
Federal Funds Sold		20,001,906			54,991,474
		49,245,833			83,371,842
Interest-Bearing Deposits		21,795,341			28,957,310
Investment Securities
Available for Sale, at Fair Value		268,300,411			303,890,847
Held to Maturity, at Cost (Fair Value of $41,909 and $45,635 as of December 31, 2012 and 2011, Respectively)		41,467			46,111
		268,341,878			303,936,958
Federal Home Loan Bank Stock, at Cost		3,364,300			5,398,200
Loans		747,050,011			716,321,321
Allowance for Loan Losses		(12,736,921	)		(15,649,594	)
Unearned Interest and Fees		(233,927	)		(57,646	)
		734,079,163			700,614,081
Premises and Equipment		24,916,106			25,750,235
Other Real Estate (Net of Allowance of $4,561,099 and $2,373,511 in 2012 and 2011, Respectively)		15,940,693			20,445,085
Other Intangible Assets		223,510			259,258
Other Assets		21,489,957			26,643,467
Total Assets	$	1,139,396,781		$	1,195,376,436

See accompanying notes which are an integral part of these financial statements.

- 2 -

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31

LIABILITIES AND STOCKHOLDERS’ EQUITY
	2012			2011
Deposits
Noninterest-Bearing	$	123,966,542		$	94,268,911
Interest-Bearing		855,718,349			905,716,361
		979,684,891			999,985,272
Borrowed Money
Subordinated Debentures		24,229,000			24,229,000
Other Borrowed Money		35,000,000			71,000,000
		59,229,000			95,229,000
Other Liabilities		4,723,723			3,549,354
Commitments and Contingencies
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares		27,827,053			27,662,476
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 and 8,439,258 Shares as of December 31, 2012 and 2011, Respectively		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		30,497,576			29,456,240
Accumulated Other Comprehensive Income (Loss), Net of Tax		(149,814	)		1,909,742
		95,759,167			96,612,810
Total Liabilities and Stockholders’ Equity	$	1,139,396,781		$	1,195,376,436

See accompanying notes which are an integral part of these financial statements.

- 3 -

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2012		2011		2010
Interest Income
Loans, Including Fees	$	41,963,113	$	44,460,149	$	51,728,665
Federal Funds Sold and Securities Purchased Under Agreements to Resell		99,273		114,794		95,428
Deposits with Other Banks		42,903		45,646		38,085
Investment Securities
U. S. Government Agencies		4,824,423		6,873,296		6,613,030
State, County and Municipal		206,483		160,892		103,133
Corporate Obligations		76,029		91,034		137,831
Dividends on Other Investments		77,203		47,001		21,547
		47,289,427		51,792,812		58,737,719
Interest Expense
Deposits		8,737,281		12,950,229		17,212,312
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase		-		337,711		721,044
Borrowed Money		2,279,469		3,517,633		3,589,847
		11,016,750		16,805,573		21,523,203
Net Interest Income		36,272,677		34,987,239		37,214,516
Provision for Loan Losses		6,784,767		8,250,000		13,350,000
Net Interest Income After Provision for Loan Losses		29,487,910		26,737,239		23,864,516
Noninterest Income
Service Charges on Deposits		3,572,897		3,244,536		3,597,416
Other Service Charges, Commissions and Fees		1,514,898		1,311,758		1,139,935
Mortgage Fee Income		400,009		265,636		313,005
Securities Gains		2,837,464		2,923,601		2,617,062
Gain on Sale of SBA Loans		305,924		946,732		1,004,585
Other		1,102,077		1,258,813		1,334,846
		9,733,269		9,951,076		10,006,849
Noninterest Expenses
Salaries and Employee Benefits		15,564,893		14,632,693		14,096,698
Occupancy and Equipment		3,878,268		3,997,667		4,422,152
Directors’ Fees		465,220		466,075		495,950
Legal and Professional Fees		1,085,881		1,186,884		1,369,864
Foreclosed Property		5,613,316		4,045,245		4,943,530
FDIC Assessment		1,497,974		1,828,799		1,866,956
Advertising		422,718		508,329		743,278
Software		789,226		660,120		630,543
Telephone		744,930		735,758		703,786
Other		5,316,604		4,989,267		4,583,606
		35,379,030		33,050,837		33,856,363
Income Before Income Taxes (Benefits)		3,842,149		3,637,478		15,002
Income Taxes (Benefits)		1,200,851		1,103,883		(459,214	)
Net Income		2,641,298		2,533,595		474,216
Preferred Stock Dividends		1,435,385		1,400,000		1,400,000
Net Income (Loss) Available to Common Stockholders	$	1,205,913	$	1,133,595	$	(925,784	)
Net Income (Loss) Per Share of Common Stock
Basic	$	0.14	$	0.13	$	(0.11	)
Diluted	$	0.14	$	0.13	$	(0.11	)
Cash Dividends Declared Per Share of Common Stock	$	0.00	$	0.00	$	0.00
Weighted Average Shares Outstanding		8,439,258		8,439,258		8,149,217

See accompanying notes which are an integral part of these financial statements.

- 4 -

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Net Income	$	2,641,298		$	2,533,595		$	474,216
Other Comprehensive Income, Net of Tax
Gains (Losses) on Securities Arising During the Year		(186,830	)		4,439,108			1,227,281
Reclassification Adjustment		(1,872,726	)		(1,929,577	)		(1,727,261	)
Change in Net Unrealized Gains (Losses) on    Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		(2,059,556	)		2,509,531			(499,980	)
Comprehensive Income (Loss)	$	581,742		$	5,043,126		$	(25,764	)

See accompanying notes which are an integral part of these financial statements.

- 5 -

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010

	Preferred Stock		Shares Issued			Common Stock			Paid-In Capital			Retained Earnings			Restricted Stock - Unearned Compensation			Accumulated Other Comprehensive Income (Loss)			Total
Balance, December 31, 2009	$	27,356,964		7,229,163		$	7,229,163		$	25,392,913		$	29,553,941		$	(158,548	)	$	(99,809	)	$	89,274,624
Issuance of Common Stock				1,216,545			1,216,545			3,861,710												5,078,255
Forfeiture of Restricted Stock				(2,750	)		(2,750	)		(27,570	)					30,320						-
Tax Loss on Restricted Stock										(55,966	)											(55,966	)
Amortization of Unearned Compensation																87,434						87,434
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects																			(499,980	)		(499,980	)
Accretion of Fair Value of Warrant		148,946											(148,946	)								-
Dividends on Preferred Shares													(1,400,000	)								(1,400,000	)
Net Income													474,216									474,216
Balance, December 31, 2010		27,505,910		8,442,958			8,442,958			29,171,087			28,479,211			(40,794	)		(599,789	)		92,958,583
Forfeiture of Restricted Stock				(3,700	)		(3,700	)		(25,993	)					29,693						-
Amortization of Unearned Compensation																11,101						11,101
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects																			2,509,531			2,509,531
Accretion of Fair Value of Warrant		156,566											(156,566	)								-
Dividends on Preferred Shares													(1,400,000	)								(1,400,000	)
Net Income													2,533,595									2,533,595
Balance, December 31, 2011		27,662,476		8,439,258			8,439,258			29,145,094			29,456,240			-			1,909,742			96,612,810
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects																			(2,059,556	)		(2,059,556	)
Accretion of Fair Value of Warrant		164,577											(164,577	)								-
Dividends on Preferred Shares													(1,435,385	)								(1,435,385	)
Net Income													2,641,298									2,641,298
Balance, December 31, 2012	$	27,827,053		8,439,258		$	8,439,258		$	29,145,094		$	30,497,576		$	-		$	(149,814	)	$	95,759,167

See accompanying notes which are an integral part of these financial statements.

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COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Cash Flows from Operating Activities
Net Income	$	2,641,298		$	2,533,595		$	474,216
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Depreciation		1,676,820			1,790,041			2,140,735
Amortization and Accretion		4,180,158			3,487,124			4,043,795
Provision for Loan Losses		6,784,767			8,250,000			13,350,000
Deferred Income Taxes		1,204,439			867,006			639,607
Securities Gains		(2,837,464	)		(2,923,601	)		(2,617,062	)
Loss on Sale of Premises and Equipment		1,148			3,668			28,146
Loss on Sale of Other Real Estate and Repossessions		1,839,196			1,106,479			1,827,704
Provision for Losses on Other Real Estate		2,702,709			1,411,061			1,293,174
Increase in Cash Surrender Value of Life Insurance		(185,341	)		(174,289	)		(56,024	)
Change In
Interest Receivable		250,755			739,423			1,325,068
Prepaid Expenses		1,741,834			1,861,810			2,006,032
Interest Payable		74,637			(398,903	)		(452,764	)
Accrued Expenses and Accounts Payable		(95,972	)		(405,612	)		(148,591	)
Other		2,827,648			(2,987,906	)		3,500,575
		22,806,632			15,159,896			27,354,611
Cash Flows from Investing Activities
Interest-Bearing Deposits in Other Banks		7,161,969			21,769,424			(44,247,933	)
Purchase of Investment Securities Available for Sale		(250,445,594	)		(381,284,748	)		(380,490,982	)
Proceeds from Sale of Investment Securities Available for Sale		227,690,806			342,672,937			286,387,727
Proceeds from Maturities, Calls and Paydowns of Investment Securities Available for Sale		54,006,594			41,978,769			55,648,274
Held to Maturity		14,019			12,565			14,001
Proceeds from Sale of Premises and Equipment		1,500			1,605			-
Net Loans to Customers		(50,126,252	)		63,267,200			88,105,734
Purchase of Premises and Equipment		(845,338	)		(397,825	)		(490,256	)
Proceeds from Sale of Other Real Estate and Repossessions		9,876,136			9,991,792			9,866,063
Proceeds from Sale of Federal Home Loan Bank Stock		2,033,900			665,300			281,900
		(632,260	)		98,677,019			15,074,528
Cash Flows from Financing Activities
Interest-Bearing Customer Deposits		(49,998,012	)		(50,448,220	)		(17,183,061	)
Noninterest-Bearing Customer Deposits		29,697,631			(8,690,512	)		18,720,584
Proceeds from Other Borrowed Money		5,000,000			-			23,076,010
Principal Payments on Other Borrowed Money		(41,000,000	)		(4,076,010	)		(39,000,000	)
Dividends Paid on Preferred Stock		-			(1,400,000	)		(1,400,000	)
Issuance of Common Stock		-			-			5,078,255
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase		-			(20,000,000	)		(20,000,000	)
		(56,300,381	)		(84,614,742	)		(30,708,212	)
Net Increase (Decrease) in Cash and Cash Equivalents		(34,126,009	)		29,222,173			11,720,927
Cash and Cash Equivalents, Beginning		83,371,842			54,149,669			42,428,742
Cash and Cash Equivalents, Ending	$	49,245,833		$	83,371,842		$	54,149,669

See accompanying notes which are an integral part of these financial statements.

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COLONY BANKCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  Summary of Significant Accounting Policies

Principles of Consolidation

Colony Bankcorp, Inc. (the Company) is a bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of Colony Bankcorp, Inc. and its wholly-owned subsidiary, Colony Bank, 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.

Nature of Operations

The Company provides a full range of retail and commercial banking services for consumers and small- to medium-size businesses located primarily in central, south and coastal Georgia. Colony Bank is headquartered in Fitzgerald, Georgia with banking offices in Albany, Ashburn, Broxton, Centerville, Chester, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, Pitts, Quitman, Rochelle, Savannah, Soperton, Sylvester, Thomaston, Tifton, Valdosta and Warner Robins.  Lending and investing activities are funded primarily by deposits gathered through its retail banking office network.

Use of Estimates

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.

Reclassifications

In certain instances, amounts reported in prior years’ consolidated financial statements and note disclosures have been reclassified to conform to statement presentations selected for 2012.  Such reclassifications had no effect on previously reported stockholders’ equity or net income.

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(1)  Summary of Significant Accounting Policies (Continued)

Concentrations of Credit Risk

Concentrations of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions.  The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market.  At December 31, 2012, approximately 87 percent of the Company’s loan portfolio was concentrated in loans secured by real estate.  A substantial portion of borrowers’ ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector.  The downturn of the housing and real estate market that began in 2007 resulted in an increase of problem loans secured by real estate, of which most are centered in the Company’s larger MSA markets.  Declining collateral real estate values that secure land development, construction and speculative real estate loans in the Company’s larger MSA markets have resulted in high loan loss provisions in recent years.  In addition, a large portion of the Company’s foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions.  Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis.

The success of the Company is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves.  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 the Company 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.

At times, the Company may have cash and cash equivalents at financial institutions in excess of federal deposit insurance limits.  The Company places its cash and cash equivalents with high credit quality financial institutions whose credit rating is monitored by management to minimize credit risk.

Investment Securities

The Company classifies its investment securities as trading, available for sale or held to maturity.  Securities that are held principally for resale in the near term are classified as trading.  Trading securities are carried at fair value, with realized and unrealized gains and losses included in noninterest income.  Currently, no securities are classified as trading.  Securities acquired with both the intent and ability to be held to maturity are classified as held to maturity and reported at amortized cost.  All securities not classified as trading or held to maturity are considered available for sale.  Securities available for sale are reported at estimated fair value.  Unrealized gains and losses on securities available for sale are excluded from earnings and are reported, net of deferred taxes, in accumulated other comprehensive income (loss), a component of stockholders’ equity.  Gains and losses from sales of securities available for sale are computed using the specific identification method.  Securities available for sale includes securities, which may be sold to meet liquidity needs arising from unanticipated deposit and loan fluctuations, changes in regulatory capital requirements, or unforeseen changes in market conditions.

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(1)  Summary of Significant Accounting Policies (Continued)

Investment Securities (Continued)

The Company evaluates each held to maturity and available for sale security in a loss position for other-than-temporary impairment (OTTI).  In estimating other-than-temporary impairment losses, management considers such factors as the length of time and the extent to which the market value has been below cost, the financial condition of the issuer and the Company’s intent to sell and whether it is more likely than not that the Company will be required to sell the security before anticipated recovery of the amortized cost basis.  If the Company intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery, the OTTI write-down is recognized in earnings.  If the Company does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in other comprehensive income (loss).

Federal Home Loan Bank Stock

Investment in stock of a Federal Home Loan Bank (FHLB) is required for every federally insured institution that utilizes its services.  FHLB stock is considered restricted, as defined in the accounting standards.  The FHLB stock is reported in the consolidated financial statements at cost.  Dividend income is recognized when earned.

Loans

Loans that the Company has the ability and intent to hold for the foreseeable future or until maturity are recorded at their principal amount outstanding, net of unearned interest and fees.  Loan origination fees, net of certain direct origination costs, are deferred and amortized over the estimated terms of the loans using the straight-line method.  Interest income on loans is recognized using the effective interest method.

A loan is considered to be delinquent when payments have not been made according to contractual terms, typically evidenced by nonpayment of a monthly installment by the due date.

When management believes there is sufficient doubt as to the collectibility of principal or interest on any loan or generally when loans are 90 days or more past due, the accrual of applicable interest is discontinued and the loan is designated as nonaccrual, unless the loan is well secured and in the process of collection.  Interest payments received on nonaccrual loans are either applied against principal or reported as income, according to management’s judgment as to the collectibility of principal.  Loans are returned to an accrual status when factors indicating doubtful collectibility on a timely basis no longer exist.

Loans Modified in a Troubled Debt Restructuring (TDR)

Loans are considered to have been modified in a TDR when, due to a borrower’s financial difficulty, the Company makes certain concessions to the borrower that it would not otherwise consider for new debt with similar risk characteristics.  Modifications may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of the collateral.  Generally, a nonaccrual loan that has been modified in a TDR remains on nonaccrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan.  However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period.  If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status. Once a loan is modified in a troubled debt restructuring, it is accounted for as an impaired loan, regardless of its accrual status, until the loan is paid in full, sold or charged off.

- 10 -

(1)  Summary of Significant Accounting Policies (Continued)

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions.  This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revisions as more information becomes available.

The allowance consists of specific, historical and general components.  The specific component relates to loans that are classified as either doubtful, substandard or special mention.  For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.  The historical component covers nonclassified loans and is based on historical loss experience adjusted for qualitative factors.  A general component is maintained to cover uncertainties that could affect management’s estimate of probable losses.  The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio.  General valuation allowances are based on internal and external qualitative risk factors such as (1) changes in the composition of the loan portfolio, (2) the extent of loan concentrations within the portfolio, (3) the effectiveness of the Company’s lending policies, procedures and internal controls, (4) the experience, ability and effectiveness of the Company’s lending management and staff, and (5) national and local economics and business conditions.

Loans identified as losses by management, internal loan review and/or Bank examiners are charged off.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.  Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

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(1)  Summary of Significant Accounting Policies (Continued)

Allowance for Loan Losses (Continued)

A significant portion of the Company’s impaired loans are deemed to be collateral dependent.  Management therefore measures impairment on these loans based on the fair value of the collateral.  Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company or by senior members of the Company’s credit administration staff.  The decision whether or not to obtain an external third-party appraisal usually depends on the type of property being evaluated.  External appraisals are usually obtained on more complex, income producing properties such as hotels, shopping centers and businesses.  Less complex properties such as residential lots, farm land and single family houses may be evaluated internally by senior credit administration staff.  When the Company does obtain appraisals from external third-parties, the values utilized in the impairment calculation are “as is” or current market values.  The appraisals, whether prepared internally or externally, may utilize a single valuation approach or a combination of approaches including the comparable sales, income and cost approach.  Appraised amounts used in the impairment calculation are typically discounted 10 percent to account for selling and marketing costs, if the repayment of the loan is to come from the sale of the collateral.  Although appraisals are not obtained each year on all impaired loans, the collateral values used in the impairment calculations are evaluated quarterly by management.  Based on management’s knowledge of the collateral and the current real estate market conditions, appraised values may be further discounted to reflect facts and circumstances known to management since the initial appraisal was performed.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are typically significant and result in a level 3 classification of the inputs for determining fair value.  Because of the high degree of judgment required in estimating the fair value of collateral underlying impaired loans and because of the relationship between fair value and general economic conditions, we consider the fair value of impaired loans to be highly sensitive to changes in market conditions.

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:

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.

Intangible Assets

Intangible assets consist of core deposit intangibles acquired in connection with a business combination.  The core deposit intangible is initially recognized based on an independent valuation performed as of the consummation date.  The core deposit intangible is amortized by the straight-line method over the average remaining life of the acquired customer deposits.

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(1)  Summary of Significant Accounting Policies (Continued)

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered.  Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Statement of Cash Flows

For reporting cash flows, cash and cash equivalents include cash on hand, noninterest-bearing amounts due from banks, federal funds sold and securities purchased under agreement to resell.  Cash flows from demand deposits, NOW accounts, savings accounts, loans and certificates of deposit are reported net.

Securities Purchased Under Agreement to Resell and Securities Sold Under Agreements to Repurchase

The Company purchases certain securities under agreements to resell.  The amounts advanced under these agreements represent short-term loans and are reflected as assets in the consolidated balance sheets.

The Company sells securities under agreements to repurchase.  These repurchase agreements are treated as borrowings.  The obligations to repurchase securities sold are reflected as a liability and the securities underlying the agreements are reflected as assets in the consolidated balance sheets.

Advertising Costs

The Company expenses the cost of advertising in the periods in which those costs are incurred.

Income Taxes

The provision for income taxes is based upon income for financial statement purposes, adjusted for nontaxable income and nondeductible expenses.  Deferred income taxes have been provided when different accounting methods have been used in determining income for income tax purposes and for financial reporting purposes.

Deferred tax assets and liabilities are recognized based on future tax consequences attributable to differences arising from the financial statement carrying values of assets and liabilities and their tax bases.  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 direct write-off method for tax purposes).  In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with effects included in the income tax provision.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The Company and its subsidiary file a consolidated federal income tax return.  The subsidiary pays its proportional share of federal income taxes to the Company based on its taxable income.

The Company’s federal and state income tax returns for tax years 2012, 2011, 2010 and 2009 are subject to examination by the Internal Revenue Service (IRS) and the Georgia Department of Revenue, generally for three years after filing.

- 13 -

(1)  Summary of Significant Accounting Policies (Continued)

Income Taxes (Continued)

Positions taken in the Company’s tax returns may be subject to challenge by the taxing authorities upon examination.  Uncertain tax positions are initially recognized in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.  Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts.  The Company provides for interest and, in some cases, penalties on tax positions that may be challenged by the taxing authorities. Interest expense is recognized beginning in the first period that such interest would begin accruing.  Penalties are recognized in the period that the Company claims the position in the tax return.  Interest and penalties on income tax uncertainties are classified within income tax expense in the consolidated statements of operations.

Other Real Estate

Other real estate generally represents real estate acquired through foreclosure and is initially recorded at estimated fair value at the date of acquisition less the cost of disposal.  Losses from the acquisition of property in full or partial satisfaction of debt are recorded as loan losses.  Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and valuation allowances are recorded as necessary to reduce the carrying amount to fair value less estimated cost of disposal.  Routine holding costs and gains or losses upon disposition are included in foreclosed property expense.

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.  Such items are considered components of other comprehensive income (loss).  Accounting standards codification requires the presentation in the consolidated financial statements of net income and all items of other comprehensive income (loss) as total comprehensive income (loss).

Off-Balance Sheet Credit Related Financial Instruments

In the ordinary course of business, the Company has entered into commitments to extend credit, commercial letters of credit and standby letters of credit.  Such financial instruments are recorded on the balance sheet when they are funded.

Changes in Accounting Principles and Effects of New Accounting Pronouncements

Adoption of New Accounting Standards

ASU No. 2011-03, “Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements.” ASU 2011-03 is intended to improve financial reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.  ASU 2011-03 removes from the assessment of effective control (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance guidance related to that criterion. ASU 2011-03 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company’s consolidated financial statements.

- 14 -

(1)  Summary of Significant Accounting Policies (Continued)

Changes in Accounting Principles and Effects of New Accounting Pronouncements (Continued)

Adoption of New Accounting Standards (Continued)

ASU 2011-04, “Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU 2011-04 amends Topic 820, “Fair Value Measurements and Disclosures,” to converge the fair value measurement guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards.  ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures.  ASU 2011-04 became effective for the Company on January 1, 2012 and, aside from new disclosures included in Note 20 - Fair Value of Financial Instruments and Fair Value Measurements, did not have a significant impact on the Company’s consolidated financial statements.

ASU 2011-05, “Comprehensive Income (Topic 220) - Presentation of Comprehensive Income.”  ASU 2011-05 amends Topic 220, “Comprehensive Income,” to require that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements.  Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented.  The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. ASU 2011-05 became effective for the Company on January 1, 2012; however, certain provisions related to the presentation of reclassification adjustments have been deferred by ASU 2011-12 “Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05,” as further discussed below.

ASU 2011-12, “Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.”  ASU 2011-12 defers changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to redeliberate whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income.  ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05.  All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12. ASU 2011-12 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company’s consolidated financial statements.

Recently Issued But Not Yet Effective Accounting Standards

ASU 2011-11, “Balance Sheet (Topic 210) - “Disclosures about Offsetting Assets and Liabilities.”  ASU 2011-11 amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the consolidated balance sheet and/or subject to a master netting arrangement or similar agreement.  ASU No. 2013-01, “Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities,” clarifies that ordinary trade receivables are not within the scope of ASU 2011-11.  ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013, and is not expected to have a significant impact on the Company’s consolidated financial statements.

- 15 -

(2)  Cash and Balances Due from Banks

Components of cash and balances due from banks are as follows as of December 31:

	2012		2011
Cash on Hand and Cash Items	$	9,063,437	$	9,271,705
Noninterest-Bearing Deposits with Other Banks		20,180,490		19,108,663
	$	29,243,927	$	28,380,368

The Company is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank based on a percentage of deposits.  Reserve balances totaled approximately $6,065,000 and $4,183,000 at December 31, 2012 and 2011, respectively.

(3)  Investment Securities

Investment securities as of December 31, 2012 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	263,186,852	$	833,920	$	(961,698	)	$	263,059,074
State, County and Municipal		3,973,926		34,670		(4,586	)		4,004,010
Corporate Obligations		1,000,000		104,900		-			1,104,900
Asset-Backed Securities		366,623		-		(234,196	)		132,427
	$	268,527,401	$	973,490	$	(1,200,480	)	$	268,300,411
Securities Held to Maturity
State, County and Municipal	$	41,467	$	442	$	-		$	41,909

The amortized cost and fair value of investment securities as of December 31, 2012, by contractual maturity, are shown hereafter.  Expected maturities may differ from contractual maturities for certain investments because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.  This is often the case with mortgage-backed securities, which are disclosed separately in the table below.

	Securities
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in One Year or Less	$	125,000	$	125,665	$	-	$	-
Due After One Year Through Five Years		2,758,034		2,892,955		41,467		41,909
Due After Five Years Through Ten Years		1,882,647		1,882,228		-		-
Due After Ten Years		574,868		340,489		-		-
		5,340,549		5,241,337		41,467		41,909
Mortgage-Backed Securities		263,186,852		263,059,074		-		-
	$	268,527,401	$	268,300,411	$	41,467	$	41,909

- 16 -

(3)  Investment Securities (Continued)

Investment securities as of December 31, 2011 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	291,096,606	$	3,152,095	$	(187,902	)	$	294,060,799
State, County and Municipal		7,474,500		132,226		(23,035	)		7,583,691
Corporate Obligations		2,000,000		123,930		(10,000	)		2,113,930
Asset-Backed Securities		426,191		-		(293,764	)		132,427
	$	300,997,297	$	3,408,251	$	(514,701	)	$	303,890,847
Securities Held to Maturity
State, County and Municipal	$	46,111	$	-	$	(476	)	$	45,635

Proceeds from sales of investments available for sale were $227,690,806 in 2012, $342,672,937 in 2011 and $286,387,727 in 2010.  Gross realized gains totaled $3,084,666 in 2012, $2,978,193 in 2011 and $2,617,062 in 2010.  Gross realized losses totaled $247,202 in 2012, $54,592 in 2011 and $0 in 2010.

Nonaccrual securities are securities for which principal and interest are doubtful of collection in accordance with original terms and for which accruals of interest have been discontinued due to payment delinquency.  Fair value of securities on nonaccrual status totaled $132,427 as of December 31, 2012 and 2011.

Investment securities having a carrying value totaling $117,450,817 and $136,838,456 as of December 31, 2012 and 2011, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at December 31, 2012 and 2011 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2012
U.S. Government Agencies
Mortgage-Backed	$	142,103,991	$	(961,698	)	$	-	$	-		$	142,103,991	$	(961,698	)
State, County and Municipal		1,430,512		(4,586	)		-		-			1,430,512		(4,586	)
Asset-Backed Securities		-		-			132,427		(234,196	)		132,427		(234,196	)
	$	143,534,503	$	(966,284	)	$	132,427	$	(234,196	)	$	143,666,930	$	(1,200,480	)
December 31, 2011
U.S. Government Agencies Mortgage-Backed	$	26,439,317	$	(187,902	)	$	-	$	-		$	26,439,317	$	(187,902	)
State, County and Municipal		1,224,119		(21,704	)		73,193		(1,807	)		1,297,312		(23,511	)
Corporate Obligations		-		-			990,000		(10,000	)		990,000		(10,000	)
Asset-Backed Securities		-		-			132,427		(293,764	)		132,427		(293,764	)
	$	27,663,436	$	(209,606	)	$	1,195,620	$	(305,571	)	$	28,859,056	$	(515,177	)

- 17 -

(3)  Investment Securities (Continued)

Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At December 31, 2012, the debt securities with unrealized losses have depreciated 0.84 percent from the Company’s amortized cost basis. These securities are guaranteed by either the U.S. Government, other governments or U.S. corporations, except for asset-backed securities.  In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition.  The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.  As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other than temporary.  However, the Company did own one asset-backed security at December 31, 2012 which has been in a continuous unrealized loss position for more than 12 months.  This investment is comprised of one issuance of a trust preferred security, has a book value of $366,623 and an unrealized loss of $234,196.  Management evaluates this investment on a quarterly basis utilizing a third-party valuation model.  The results of this model revealed other-than-temporary impairment and as a result, $59,568, $53,058 and $520,751 were written off during the years ended December 31, 2012, 2011 and 2009, respectively.  The Company does not intend to sell this investment, nor does the Company consider it likely that it will be required to sell the investment prior to recovery of the remaining fair value.

(4)  Loans

The following table presents the composition of loans, segregated by class of loans, as of December 31:

	2012		2011
Commercial and Agricultural
Commercial	$	55,684,492	$	48,986,102
Agricultural		6,210,953		8,421,884
Real Estate
Commercial Construction		53,808,056		58,545,820
Residential Construction		5,852,238		3,530,502
Commercial		334,386,177		315,280,748
Residential		203,844,522		193,637,817
Farmland		49,056,861		48,225,406
Consumer and Other
Consumer		29,777,776		30,449,303
Other		8,428,936		9,243,739
Total Loans	$	747,050,011	$	716,321,321

- 18 -

(4)  Loans (Continued)

Commercial and agricultural loans are extended to a diverse group of businesses within the Company’s market area.  These loans are often underwritten based on the borrower’s ability to service the debt from income from the business.  Real estate construction loans often require loan funds to be advanced prior to completion of the project.  Due to uncertainties inherent in estimating construction costs, changes in interest rates and other economic conditions, these loans often pose a higher risk than other types of loans.  Consumer loans are originated at the bank level.  These loans are generally smaller loan amounts spread across many individual borrowers to help minimize risk.

Credit Quality Indicators.  As part of the ongoing monitoring of the credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (1) the risk grade assigned to commercial and consumer loans, (2) the level of classified commercial loans, (3) net charge-offs, (4) nonperforming loans, and (5) the general economic conditions in the Company’s geographic markets.

The Company uses a risk grading matrix to assign a risk grade to each of its loans.  Loans are graded on a scale of 1 to 8.  A description of the general characteristics of the grades is as follows:

● Grades 1 and 2 - Borrowers with these assigned grades range in risk from virtual absence of risk to minimal risk.  Such loans may be secured by Company-issued and controlled certificates of deposit or properly margined equity securities or bonds.  Other loans comprising these grades are made to companies that have been in existence for a long period of time with many years of consecutive profits and strong equity, good liquidity, excellent debt service ability and unblemished past performance, or to exceptionally strong individuals with collateral of unquestioned value that fully secures the loans.  Loans in this category fall into the “pass” classification.

● Grades 3 and 4 - Loans assigned these “pass” risk grades are made to borrowers with acceptable credit quality and risk.  The risk ranges from loans with no significant weaknesses in repayment capacity and collateral protection to acceptable loans with one or more risk factors considered to be more than average.

● Grade 5 - This grade includes “special mention” loans on management’s watch list and is intended to be used on a temporary basis for pass grade loans where risk-modifying action is intended in the short-term.

● Grade 6 - This grade includes “substandard” loans in accordance with regulatory guidelines.  This category includes borrowers with well-defined weaknesses that jeopardize the payment of the debt in accordance with the agreed terms.  Loans considered to be impaired are assigned this grade, and these loans often have assigned loss allocations as part of the allowance for loan and lease losses.  Generally, loans on which interest accrual has been stopped would be included in this grade.

● Grades 7 and 8 - These grades correspond to regulatory classification definitions of “doubtful” and “loss,” respectively.  In practice, any loan with these grades would be for a very short period of time, and generally the Company has no loans with these assigned grades.  Management manages the Company’s problem loans in such a way that uncollectible loans or uncollectible portions of loans are charged off immediately with any residual, collectible amounts assigned a risk grade of 6.

- 19 -

(4)  Loans (Continued)

The following tables present the loan portfolio by credit quality indicator (risk grade) as of December 31. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes.

2012	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	49,947,552	$	1,417,735	$	4,319,205	$	55,684,492
Agricultural		6,155,864		-		55,089		6,210,953
Real Estate
Commercial Construction		37,256,301		1,663,588		14,888,167		53,808,056
Residential Construction		5,748,829		103,409		-		5,852,238
Commercial		298,222,139		9,759,473		26,404,565		334,386,177
Residential		183,222,020		11,412,973		9,209,529		203,844,522
Farmland		45,495,038		913,487		2,648,336		49,056,861
Consumer and Other
Consumer		28,839,058		293,467		645,251		29,777,776
Other		8,350,772		8,907		69,257		8,428,936
Total Loans	$	663,237,573	$	25,573,039	$	58,239,399	$	747,050,011
2011
Commercial and Agricultural
Commercial	$	42,586,230	$	1,480,726	$	4,919,146	$	48,986,102
Agricultural		8,153,224		-		268,660		8,421,884
Real Estate
Commercial Construction		28,745,596		2,814,113		26,986,111		58,545,820
Residential Construction		3,227,392		303,110		-		3,530,502
Commercial		272,062,206		14,789,290		28,429,252		315,280,748
Residential		175,099,480		8,343,336		10,195,001		193,637,817
Farmland		43,664,126		1,413,476		3,147,804		48,225,406
Consumer and Other
Consumer		29,372,493		361,714		715,096		30,449,303
Other		9,028,428		99,418		115,893		9,243,739
Total Loans	$	611,939,175	$	29,605,183	$	74,776,963	$	716,321,321

A loan’s risk grade is assigned at the inception of the loan and is based on the financial strength of the borrower and the type of collateral.  Loan risk grades are subject to reassessment at various times throughout the year as part of the Company’s ongoing loan review process.  Loans with an assigned risk grade of 6 or below and an outstanding balance of $50,000 or more are reassessed on a quarterly basis.  During this reassessment process individual reserves may be identified and placed against certain loans which are not considered impaired.

In assessing the overall economic condition of the markets in which it operates, the Company monitors the unemployment rates for its major service areas.  The unemployment rates are reviewed on a quarterly basis as part of the allowance for loan loss determination.

- 20 -

(4)  Loans (Continued)

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.  Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provision.  Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due.  Nonaccrual loans totaled $29,850,735 and $38,821,632 as of December 31, 2012 and 2011, respectively, and total recorded investment in loans past due 90 days or more and still accruing interest totaled $4,355 and $15,160, respectively.  During its review of impaired loans, the Company determined the majority of its exposures on these loans were known losses.  As a result, the exposures were charged off, reducing the specific allowances on impaired loans.

The following table represents an age analysis of past due loans and nonaccrual loans, segregated by class of loans, as of December 31:

	Accruing Loans
2012	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	797,612	$	-	$	797,612	$	1,033,371	$	53,853,509	$	55,684,492
Agricultural		28,228		-		28,228		39,213		6,143,512		6,210,953
Real Estate
Commercial Construction		1,309,618		-		1,309,618		14,032,580		38,465,858		53,808,056
Residential Construction		-		-		-		-		5,852,238		5,852,238
Commercial		3,771,106		-		3,771,106		6,629,789		323,985,282		334,386,177
Residential		8,223,174		-		8,223,174		5,429,971		190,191,377		203,844,522
Farmland		140,095		-		140,095		2,413,104		46,503,662		49,056,861
Consumer and Other
Consumer		636,888		4,355		641,243		255,216		28,881,317		29,777,776
Other		4,557		-		4,557		17,491		8,406,888		8,428,936
Total Loans	$	14,911,278	$	4,355	$	14,915,633	$	29,850,735	$	702,283,643	$	747,050,011
2011
Commercial and Agricultural
Commercial	$	644,899	$	-	$	644,899	$	2,102,522	$	46,238,681	$	48,986,102
Agricultural		-		-		-		85,670		8,336,214		8,421,884
Real Estate
Commercial Construction		513,905		-		513,905		23,578,263		34,453,652		58,545,820
Residential Construction		33,541		-		33,541		-		3,496,961		3,530,502
Commercial		2,930,743		-		2,930,743		9,193,650		303,156,355		315,280,748
Residential		2,251,009		15,160		2,266,169		3,110,032		188,261,616		193,637,817
Farmland		376,426		-		376,426		486,683		47,362,297		48,225,406
Consumer and Other
Consumer		410,041		-		410,041		221,360		29,817,902		30,449,303
Other		-		-		-		43,452		9,200,287		9,243,739
Total Loans	$	7,160,564	$	15,160	$	7,175,724	$	38,821,632	$	670,323,965	$	716,321,321

- 21 -

(4)  Loans (Continued)

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $1,634,600, $1,639,800 and $1,621,700 for the years ended December 31, 2012, 2011 and 2010, respectively.

The following table details impaired loan data as of December 31, 2012:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	1,508,236	$	1,041,938	$	-	$	1,052,916	$	27,407	$	28,410
Agricultural		39,213		39,213		-		58,056		-		-
Commercial Construction		10,624,917		6,414,986		-		9,194,360		27,377		51,820
Commercial Real Estate		16,565,971		15,505,907		-		26,482,274		430,339		420,549
Residential Real Estate		4,450,128		4,131,707		-		3,096,151		89,139		123,101
Farmland		2,828,539		2,413,103		-		2,326,180		42,588		55,258
Consumer		297,356		255,216		-		228,181		10,441		12,920
Other		17,491		17,491		-		24,414		1,191		1,291
		36,331,851		29,819,561		-		42,462,532		628,482		693,349
With An Allowance Recorded
Commercial		1,493,432		1,493,432		462,555		942,673		91,888		87,611
Agricultural		-		-		-		-		-		-
Commercial Construction		8,266,649		7,617,594		1,732,534		10,533,468		-		-
Commercial Real Estate		12,758,884		12,745,422		1,236,526		6,398,364		383,356		366,423
Residential Real Estate		5,514,994		4,421,809		840,492		4,288,062		144,661		117,266
Farmland		-		-		-		64,862		-		-
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
		28,033,959		26,278,257		4,272,107		22,227,429		619,905		571,300
Total
Commercial		3,001,668		2,535,370		462,555		1,995,589		119,295		116,021
Agricultural		39,213		39,213		-		58,056		-		-
Commercial Construction		18,891,566		14,032,580		1,732,534		19,727,828		27,377		51,820
Commercial Real Estate		29,324,855		28,251,329		1,236,526		32,880,638		813,695		786,972
Residential Real Estate		9,965,122		8,553,516		840,492		7,384,213		233,800		240,367
Farmland		2,828,539		2,413,103		-		2,391,042		42,588		55,258
Consumer		297,356		255,216		-		228,181		10,441		12,920
Other		17,491		17,491		-		24,414		1,191		1,291
	$	64,365,810	$	56,097,818	$	4,272,107	$	64,689,961	$	1,248,387	$	1,264,649

- 22 -

(4)  Loans (Continued)

The following table details impaired loan data as of December 31, 2011:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	1,742,961	$	1,580,140	$	-	$	946,466	$	60,078		$	65,346
Agricultural		85,670		85,670		-		208,162		(4,024	)		-
Commercial Construction		17,699,542		12,799,454		-		13,309,517		116,077			143,443
Commercial Real Estate		34,686,574		29,384,623		-		27,027,403		832,590			834,161
Residential Real Estate		2,600,919		1,933,669		-		3,176,244		88,419			80,334
Farmland		277,656		227,233		-		342,280		66,273			66,273
Consumer		228,688		215,956		-		184,372		10,732			12,203
Other		51,666		43,452		-		39,621		1,107			1,606
		57,373,676		46,270,197		-		45,234,065		1,171,252			1,203,366
With An Allowance Recorded
Commercial		775,506		775,506		308,211		213,898		15,086			19,171
Agricultural		-		-		-		-		-			-
Commercial Construction		14,035,742		11,489,233		2,693,571		10,470,491		13,759			61,012
Commercial Real Estate		6,429,874		6,429,874		2,060,815		6,556,769		181,799			197,132
Residential Real Estate		4,771,867		4,041,950		674,998		3,858,609		97,383			96,534
Farmland		298,893		259,450		11,878		64,862		(17,958	)		-
Consumer		5,404		5,404		1,632		3,987		607			724
Other		-		-		-		19,566		-			-
		26,317,286		23,001,417		5,751,105		21,188,182		290,676			374,573
Total
Commercial		2,518,467		2,355,646		308,211		1,160,364		75,164			84,517
Agricultural		85,670		85,670		-		208,162		(4,024	)		-
Commercial Construction		31,735,284		24,288,687		2,693,571		23,780,008		129,836			204,455
Commercial Real Estate		41,116,448		35,814,497		2,060,815		33,584,172		1,014,389			1,031,293
Residential Real Estate		7,372,786		5,975,619		674,998		7,034,853		185,802			176,868
Farmland		576,549		486,683		11,878		407,142		48,315			66,273
Consumer		234,092		221,360		1,632		188,359		11,339			12,927
Other		51,666		43,452		-		59,187		1,107			1,606
	$	83,690,962	$	69,271,614	$	5,751,105	$	66,422,247	$	1,461,928		$	1,577,939

At December 31, 2010, the average recorded investment in impaired loans was $28,700,626 and the interest income recognized and collected on impaired loans was $484,984 and $694,764, respectively.

- 23 -

(4)  Loans (Continued)

Troubled Debt Restructurings (TDRs) are troubled loans on which the original terms of the loan have been modified in favor of the borrower due to deterioration in the borrower’s financial condition.  Each potential loan modification is reviewed individually and the terms of the loan are modified to meet the borrower’s specific circumstances at a point in time.  Not all loan modifications are TDRs.  Loan modifications are reviewed and approved by the Company’s senior lending staff, who then determine whether the loan meets the criteria for a TDR.  Generally, the types of concessions granted to borrowers that are evaluated in determining whether a loan is classified as a TDR include:

● Interest rate reductions - Occur when the stated interest rate is reduced to a nonmarket rate or a rate the borrower would not be able to obtain elsewhere under similar circumstances.

● Amortization or maturity date changes - Result when the amortization period of the loan is extended beyond what is considered a normal amortization period for loans of similar type with similar collateral.

● Principal reductions - These are often the result of commercial real estate loan workouts where two new notes are created.  The primary note is underwritten based upon our normal underwriting standards and is structured so that the projected cash flows are sufficient to repay the contractual principal and interest of the newly restructured note.  The terms of the secondary note vary by situation and often involve that note being charged off, or the principal and interest payments being deferred until after the primary note has been repaid.  In situations where a portion of the note is charged off during modification, there is often no specific reserve allocated to those loans.  This is due to the fact that the amount of the charge-off usually represents the excess of the original loan balance over the collateral value and the Company has determined there is no additional exposure on those loans.

As discussed in Note 1, Summary of Significant Accounting Policies, once a loan is identified as a TDR, it is accounted for as an impaired loan.  The Company had no unfunded commitments to lend to a customer that has a troubled debt restructured loan as of December 31, 2012.  The following tables present the number of loan contracts restructured during the 12 months ended December 31, 2012 and the pre- and post-modification recorded investment as well as the number of contracts and the recorded investment for those TDRs modified during the previous 12 months which subsequently defaulted during the period.  Loans modified in a troubled debt restructuring are considered to be in default once the loan becomes 90 days past due.

Troubled Debt Restructurings
2012	# of Contracts		Pre-Modification		Post-Modification
Commercial		1	$	107,749	$	107,749
Commercial Real Estate		1		56,835		56,835
Residential Real Estate		5		1,082,585		1,079,614
Total Loans		7	$	1,247,169	$	1,244,198

- 24 -

(4)  Loans (Continued)

Troubled Debt Restructurings
2011	# of Contracts		Pre-Modification		Post-Modification
Commercial		3	$	3,240,469	$	1,541,882
Commercial Construction		3		1,430,147		1,430,101
Commercial Real Estate		9		20,827,349		15,906,547
Residential Real Estate		8		1,505,356		1,456,878
Total Loans		23	$	27,003,321	$	20,335,408

Troubled debt restructurings that subsequently defaulted as of December 31 are as follows:

2012	# of Contracts		Recorded Investment
Residential Real Estate		1	$	10,000
Commercial Real Estate		1		203,291
Total Loans		2	$	213,291
2011
Commercial		1	$	1,175,922
Commercial Construction		3		4,475,473
Commercial Real Estate		3		2,322,361
Total Loans		7	$	7,973,756

At December 31, 2012 and 2011, all restructured loans were performing as agreed.  However, three restructured loans totaling $999,133, $51,998 and $10,000 at December 31, 2011 failed to continue to perform as agreed and, as a result, the loans were charged off in March 2011, December 2011 and January 2012, respectively.

(5)  Allowance for Loan Losses

Changes in the allowance for loan losses for the years ended December 31 are as follows:

	December 31
	2012			2011			2010
Balance, Beginning of Year	$	15,649,594		$	28,280,077		$	31,400,641
Provision for Loan Losses		6,784,767			8,250,000			13,350,000
Loans Charged Off		(10,454,175	)		(22,850,673	)		(17,622,454	)
Recoveries of Loans Previously Charged Off		756,735			1,970,190			1,151,890
Balance, End of Year	$	12,736,921		$	15,649,594		$	28,280,077

- 25 -

(5)  Allowance for Loan Losses (Continued)

The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the years ended December 31.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other loan categories and periodically may result in reallocation within the provision categories.

2012	Beginning Balance		Charge-Offs			Recoveries		Provision			Ending Balance
Commercial and Agricultural
Commercial	$	1,070,560	$	(653,389	)	$	139,802	$	424,048		$	981,021
Agricultural		297,168		(3,028	)		-		2,035			296,175
Real Estate
Commercial Construction		3,122,594		(4,106,124	)		209,352		2,664,378			1,890,200
Residential Construction		138,092		-			-		-			138,092
Commercial		6,448,064		(4,325,642	)		232,880		2,807,537			5,162,839
Residential		3,695,357		(960,620	)		47,690		623,520			3,405,947
Farmland		364,663		(224,725	)		4,716		145,872			290,526
Consumer and Other
Consumer		205,154		(169,249	)		81,956		109,913			227,774
Other		307,942		(11,398	)		40,339		7,464			344,347
	$	15,649,594	$	(10,454,175	)	$	756,735	$	6,784,767		$	12,736,921
2011
Commercial and Agricultural
Commercial	$	4,414,817	$	(841,887	)	$	127,490	$	(2,629,860	)	$	1,070,560
Agricultural		698,637		(455,165	)		454,453		(400,757	)		297,168
Real Estate
Commercial Construction		4,126,043		(6,957,181	)		557,168		5,396,564			3,122,594
Residential Construction		519,766		(481	)		-		(381,193	)		138,092
Commercial		8,029,525		(12,492,097	)		527,996		10,382,640			6,448,064
Residential		5,941,696		(1,704,887	)		149,173		(690,625	)		3,695,357
Farmland		944,323		(60,447	)		411		(519,624	)		364,663
Consumer and Other
Consumer		3,074,220		(222,878	)		145,279		(2,791,467	)		205,154
Other		531,050		(115,650	)		8,220		(115,678	)		307,942
	$	28,280,077	$	(22,850,673	)	$	1,970,190	$	8,250,000		$	15,649,594

- 26 -

(5)  Allowance for Loan Losses (Continued)

2010	Beginning Balance		Charge-Offs			Recoveries		Provision		Ending Balance
Commercial and Agricultural
Commercial	$	3,930,760	$	(469,214	)	$	80,181	$	873,090	$	4,414,817
Agricultural		779,337		(255,627	)		1,377		173,550		698,637
Real Estate
Commercial Construction		7,402,484		(4,648,124	)		184,868		1,186,815		4,126,043
Residential Construction		447,676		-			-		72,090		519,766
Commercial		8,790,443		(7,459,619	)		141,931		6,556,770		8,029,525
Residential		5,025,839		(2,929,668	)		439,940		3,405,585		5,941,696
Farmland		942,019		(271,750	)		7,639		266,415		944,323
Consumer and Other
Consumer		2,826,058		(548,834	)		245,641		551,355		3,074,220
Other		1,256,025		(1,039,618	)		50,313		264,330		531,050
	$	31,400,641	$	(17,622,454	)	$	1,151,890	$	13,350,000	$	28,280,077

In 2012, the Company refined its methodology used in estimating the amount of the Allowance for Loan and Lease Losses (ALLL).  Management has been proactive in identifying problem loans, assessing exposure and providing sufficient reserves to cover the exposures.  The ALLL was increased in anticipation of identified exposures resulting in confirmed losses.  When losses were confirmed, they were promptly charged off.  As a result, losses for the years 2009, 2010 and 2011 were very high.  During this period and in 2012, newer loans granted were made subject to higher underwriting standards and more conservative appraisals.  Because of the prompt recognition of losses that drove the excessive charge-off history, management now believes the remaining losses incurred in the current portfolio, including newer loans made, will be less than unadjusted loss history factors will suggest.  Considering the major losses taken, along with organizational and staffing changes, the validity of qualitative factors in determining adjustments of loss history needed to be reviewed.  Recognizing the importance of credit administration and the role of personnel involved in granting, approving, administering, monitoring and collecting loans, management concluded that greater weight should be placed on factors associated with those activities.  Additionally, during the year ended December 31, 2012, management reviewed the appropriateness of continuing to use a one-year annual loss rate to determine losses incurred in the loan portfolio segments of loans collectively reviewed for impairment.  Consideration was given to the trends in losses incurred over prior quarters and economic indicators impacting the Company.  Management concluded that the one-year charge-off history should be expanded to include quarters from the current year.  Thus, the annualized loss rates used for the December 31, 2012 allowance for loan loss calculation were based on an expanded period that includes all four quarters of 2011 and the first three quarters of 2012. The effect of these changes on the ALLL resulted in a reduction in the ALLL estimate of $2,154,639.  Management believes the adjustments made will result in a better estimation of losses incurred in the portfolio.

- 27 -

(5)  Allowance for Loan Losses (Continued)

The Company determines its individual loan reserves during its quarterly review of substandard loans.  This process involves reviewing all loans with a risk grade of 6 or greater and an outstanding relationship balance of $50,000 or more, regardless of the loan’s impairment classification.  Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on nonimpaired loans.  Management considers those loans graded substandard, but not classified as impaired, to be higher risk loans and will make specific allocations of the allowance to those loans if warranted.  Since these loans are not considered impaired, they are included in the “Collectively Evaluated for Impairment” column of the following tables.  At December 31, 2012 and 2011, substandard loans, not classified as impaired, for which a specific allocation was made totaled $10,795,911 and $16,746,384, respectively.  The specific allocation associated with these loans for December 31, 2012 and 2011 was $898,773 and $1,926,438.  At December 31, 2012, 2011 and 2010, impaired loans totaling $1,026,624, $995,168 and $976,971, respectively, were below the $50,000 review threshold and were not individually reviewed for impairment.  Those loans were subject to the bank’s general loan loss reserve methodology and are included in the “Collectively Evaluated for Impairment” column of the following tables.  The following tables present breakdowns of the allowance for loan losses, segregated by impairment methodology for December 31, 2012 and 2011:

	Ending Allowance Balance						Ending Loan Balance
2012	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	462,555	$	518,466	$	981,021	$	2,512,133	$	53,172,359	$	55,684,492
Agricultural		-		296,175		296,175		-		6,210,953		6,210,953
Real Estate
Commercial Construction		1,732,534		157,666		1,890,200		13,892,135		39,915,921		53,808,056
Residential Construction		-		138,092		138,092		-		5,852,238		5,852,238
Commercial		1,236,526		3,926,313		5,162,839		28,205,405		306,180,772		334,386,177
Residential		840,492		2,565,455		3,405,947		8,022,249		195,822,273		203,844,522
Farmland		-		290,526		290,526		2,393,775		46,663,086		49,056,861
Consumer and Other
Consumer		-		227,774		227,774		28,007		29,749,769		29,777,776
Other		-		344,347		344,347		17,491		8,411,445		8,428,936
Total End of Year Balance	$	4,272,107	$	8,464,814	$	12,736,921	$	55,071,195	$	691,978,816	$	747,050,011

- 28 -

(5)  Allowance for Loan Losses (Continued)

	Ending Allowance Balance						Ending Loan Balance
2011	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	308,211	$	762,349	$	1,070,560	$	2,237,878	$	46,748,224	$	48,986,102
Agricultural		-		297,168		297,168		-		8,421,884		8,421,884
Real Estate
Commercial Construction		2,693,571		429,023		3,122,594		24,212,519		34,333,301		58,545,820
Residential Construction		-		138,092		138,092		-		3,530,502		3,530,502
Commercial		2,060,815		4,387,249		6,448,064		35,715,026		279,565,722		315,280,748
Residential		674,998		3,020,359		3,695,357		5,614,744		188,023,073		193,637,817
Farmland		11,878		352,785		364,663		486,683		47,738,723		48,225,406
Consumer and Other
Consumer		1,632		203,522		205,154		9,596		30,439,707		30,449,303
Other		-		307,942		307,942		-		9,243,739		9,243,739
Total End of Year Balance	$	5,751,105	$	9,898,489	$	15,649,594	$	68,276,446	$	648,044,875	$	716,321,321

	Ending Allowance Balance						Ending Loan Balance
2010	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	336,011	$	4,078,806	$	4,414,817	$	2,131,375	$	51,088,966	$	53,220,341
Agricultural		-		698,637		698,637		274,679		10,277,112		10,551,791
Real Estate
Commercial Construction		3,501,117		624,926		4,126,043		28,392,107		43,917,124		72,309,231
Residential Construction		-		519,766		519,766		194,881		4,178,130		4,373,011
Commercial		7,539,533		489,992		8,029,525		58,562,946		304,315,619		362,878,565
Residential		1,561,952		4,379,744		5,941,696		13,645,907		193,825,906		207,471,813
Farmland		-		944,323		944,323		1,416,538		51,361,851		52,778,389
Consumer and Other
Consumer		3,033		3,071,187		3,074,220		76,420		33,487,443		33,563,863
Other		-		531,050		531,050		113,002		15,990,667		16,103,669
Total End of Year Balance	$	12,941,646	$	15,338,431	$	28,280,077	$	104,807,855	$	708,442,818	$	813,250,673

- 29 -

(6)  Premises and Equipment

Premises and equipment are comprised of the following as of December 31:

	2012			2011
Land	$	7,780,167		$	7,780,167
Building		23,758,761			23,662,849
Furniture, Fixtures and Equipment		12,923,699			12,982,160
Leasehold Improvements		948,260			994,637
Construction in Progress		-			77,366
		45,410,887			45,497,179
Accumulated Depreciation		(20,494,781	)		(19,746,944	)
	$	24,916,106		$	25,750,235

Depreciation charged to operations totaled $1,676,820 in 2012, $1,790,041 in 2011 and $2,140,735 in 2010.

Certain Company facilities and equipment are leased under various operating leases.  Rental expense approximated $447,000 for 2012, $376,000 for 2011 and $377,000 for 2010.

Future minimum rental payments as of December 31, 2012 are as follows:

Year Ending December 31	Amount
2013	$	131,978
2014		52,138
2015		42,000
2016 and After		84,000
	$	310,116

(7)  Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at December 31, 2012, 2011 and 2010 was $15,940,693, $20,445,805 and $20,207,806, respectively.  All of the Company’s other real estate owned represents properties acquired through foreclosure or deed in lieu of foreclosure.  The following table details the change in OREO during 2012, 2011 and 2010.

	December 31
	2012			2011			2010
Balance, Beginning of Year	$	20,445,085		$	20,207,806		$	19,705,044
Additions		9,729,174			12,555,622			13,159,402
Sales of OREO		(9,711,890	)		(9,804,669	)		(9,531,210	)
Loss on Sale		(1,818,967	)		(1,102,613	)		(1,832,256	)
Provision for Losses		(2,702,709	)		(1,411,061	)		(1,293,174	)
Balance, End of Year	$	15,940,693		$	20,445,085		$	20,207,806

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(8)  Intangible Assets

The following is an analysis of the core deposit intangible activity for the years ended December 31:

	Core Deposit Intangible		Accumulated Amortization			Net Core Deposit Intangible
Core Deposit Intangible
Balance, December 31, 2010	$	1,056,693	$	(761,686	)	$	295,007
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2011		1,056,693		(797,435	)		259,258
Amortization Expense		-		(35,748	)		(35,748	)
Balance, December 31, 2012	$	1,056,693	$	(833,183	)	$	223,510

Amortization expense related to the core deposit intangible was $35,748, $35,749 and $35,749 for the years ended December 31, 2012, 2011 and 2010.  Amortizations expense will continue at an annual rate of approximately $35,749 through the first quarter of 2019, at which point the core deposit will be fully amortized.

(9)  Income Taxes

The components of income tax (benefit) expense for the years ended December 31 are as follows:

	2012			2011			2010
Current Federal (Benefit) Expense	$	(3,588	)	$	311,174		$	(1,037,717	)
Deferred Federal (Benefit) Expense		1,204,439			867,006			639,607
Federal Income Tax (Benefit) Expense		1,198,325			1,178,180			(398,110	)
Current State Income Tax (Benefit) Expense		2,526			(74,297	)		(61,104	)
	$	1,200,851		$	1,103,883		$	(459,214	)

The federal income tax (benefit) expense of $1,200,851 in 2012, $1,178,180 in 2011 and $(398,110) in 2010 is different than the income taxes computed by applying the federal statutory rates to income before income taxes.  The reasons for the differences are as follows:

	2012			2011			2010
Statutory Federal Income Taxes	$	1,306,331		$	1,228,538		$	5,101
Tax-Exempt Interest		(94,891	)		(126,468	)		(117,586	)
Interest Expense Disallowance		4,908			8,751			8,400
Premiums on Officers’ Life Insurance		(59,603	)		(52,431	)		(134,106	)
Meal and Entertainment Disallowance		25,567			20,693			24,972
Other		16,013			99,097			(184,891	)
Actual Federal Income Taxes	$	1,198,325		$	1,178,180		$	(398,110	)

- 31 -

(9)  Income Taxes (Continued)

Deferred taxes in the accompanying consolidated balance sheets as of December 31 include the following:

	2012			2011
Deferred Tax Assets
Allowance for Loan Losses	$	4,330,553		$	5,320,862
Other Real Estate		1,668,653			1,012,326
Deferred Compensation		342,547			386,225
Restricted Stock		-			508,547
Goodwill		345,762			392,124
Net Operating Loss Carryforward		2,310,708			2,992,777
Other		529,706			559,836
		9,527,929			11,172,697
Deferred Tax Liabilities
Premises and Equipment		(1,232,905	)		(1,195,334	)
Vested Restricted Stock		-			(476,540	)
Other		(4,185	)		(4,185	)
		(1,237,090	)		(1,676,059	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		77,177			(983,807	)
Net Deferred Tax Assets	$	8,368,016		$	8,512,831

As discussed in Note 1, certain positions taken in the Company’s tax returns may be subject to challenge by the taxing authorities.  An analysis of activity related to unrecognized taxes follows as of December 31, 2012 and 2011.

	2012			2011
Balance, Beginning	$	33,368		$	78,121
Positions Taken During the Current Year		11,794			14,275
Reductions Resulting from Lapse of Statutes of Limitation		(6,486	)		(59,028	)
Balance, Ending	$	38,676		$	33,368

The net increase (decrease) of $5,308 and $(44,753) is included in income tax expense for the years ended December 31, 2012 and 2011, respectively.

The Company has cumulative federal net operation loss carryforwards of $4,299,505 at December 31, 2012 that expire beginning in 2021.

The Company considers the determination of the deferred tax asset amount and the need for any valuation reserve to be a critical accounting policy that requires significant judgment.  The Company has, in its judgment, made reasonable assumptions and considered both positive and negative evidence relating to the ultimate realization of deferred tax assets.  Based upon this evaluation, the Company determined that a valuation allowance on its deferred tax asset was not required as of December 31, 2012.

- 32 -

(10) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $389,331 and $147,398 as of December 31, 2012 and 2011, respectively.

Components of interest-bearing deposits as of December 31 are as follows:

	2012		2011
Interest-Bearing Demand	$	314,030,843	$	284,870,972
Savings		48,777,743		41,230,662
Time, $100,000 and Over		211,244,750		247,589,188
Other Time		281,665,013		332,025,539
	$	855,718,349	$	905,716,361

At December 31, 2012 and 2011, the Company had brokered deposits of $28,229,608 and $28,157,961, respectively.  Of the brokered deposits at December 31, 2012 and 2011, $28,229,608 and $28,157,961 represented Certificate of Deposits Account Registry Service (CDARS) reciprocal deposits in which customers placed core deposits into the CDARS program for FDIC insurance coverage and the Company received reciprocal brokered deposits in a like amount.  Thus, brokered deposits less the reciprocal deposits totaled $0 at December 31, 2012 and 2011.  The aggregate amount of short-term jumbo certificates of deposit, each with a minimum denomination of $100,000, was approximately $161,530,500 and $190,876,500 as of December 31, 2012 and 2011, respectively.

As of December 31, 2012, the scheduled maturities of certificates of deposit are as follows:

Year	Amount
2013	$	388,484,260
2014		59,082,678
2015		28,380,949
2016		8,169,838
2017 and Thereafter		8,792,038
	$	492,909,763

(11) Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:

	2012		2011
Federal Home Loan Bank Advances	$	35,000,000	$	71,000,000

Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2017 to 2019 and interest rates ranging from 0.56 percent to 4.75 percent.  As collateral on the outstanding FHLB advances, the Company has provided a blanket lien on its portfolio of qualifying residential first mortgage loans and commercial loans.  At December 31, 2012, the book value of those loans pledged approximated $76,000,000.  At December 31, 2012, the Company had remaining credit availability from the FHLB of approximately $129,190,000.  The Company may be required to pledge additional qualifying collateral in order to utilize the full amount of the remaining credit line.

- 33 -

(11) Other Borrowed Money (Continued)

Other borrowed money of $9,000,000 matures in 2017, with the remainder of $26,000,000 maturing in 2018 and thereafter.

The Company also has available federal funds lines of credit with various financial institutions totaling $43,000,000, of which there were none outstanding at December 31, 2012.

The Company has the ability to borrow funds from the Federal Reserve Bank (FRB) of Atlanta utilizing the discount window.  The discount window is an instrument of monetary policy that allows eligible institutions to borrow money from the FRB on a short-term basis to meet temporary liquidity shortages caused by internal or external disruptions.  At December 31, 2012, the Company had borrowing capacity available under this arrangement, with no outstanding balances.  The Company would be required to pledge certain available-for-sale investment securities as collateral under this agreement.

In addition, at December 31, 2012, the Company had an available repurchase agreement line of credit with a third party totaling $50,000,000.  Use of this credit facility is subject to the underwriting and risk management policies of the third party in effect at the time of the request.  Such policies may take into consideration current market conditions, the current financial condition of the Company and the ability of the Company to provide adequate securities as collateral for the transaction, among other factors.

(12) Subordinated Debentures (Trust Preferred Securities)

								Total
				3-Month		Added		Interest			5-Year
Description	Date	Amount		Libor Rate		Points		Rate		Maturity	Call Option
	(In Thousands)
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,500		0.30800		2.68		2.98800	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,000		0.31100		1.50		1.81100	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,000		0.31100		1.65		1.96100	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,000		0.31325		1.40		1.71325	9/14/2037	9/14/2012

The Trust Preferred Securities are recorded as subordinated debentures on the consolidated balance sheets, but subject to certain limitations, qualify as Tier 1 Capital for regulatory capital purposes.  The proceeds from the offering were used to fund the cash portion of the Quitman acquisition, pay off holding Company debt, and inject capital into bank subsidiaries.

On February 13, 2012, the Company announced the suspension of the quarterly interest payments on the Trust Preferred Securities.  Under the terms of the trust documents, the Company may defer payments of interest for up to 20 consecutive quarterly periods without default or penalty.  The regularly scheduled interest payments will continue to be accrued for payment in the future and reported as an expense in the current period.  At December 31, 2012, accrued but unpaid interest expense totaled $553,127.

- 34 -

(13) Preferred Stock

On January 9, 2009, the Company issued to the United States Department of the Treasury (Treasury), in exchange for aggregate consideration of $28.0 million, (i) 28,000 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, (the Preferred Stock), and (ii) a warrant (the Warrant) to purchase up to 500,000 shares (the Warrant Common Stock) of the Company’s common stock.

The Preferred Stock qualifies as Tier 1 capital and pays cumulative cash dividends quarterly at a rate of 5 percent per annum for the first five years, and 9 percent per annum thereafter.  The Preferred Stock is nonvoting, other than class voting rights on certain matters that could adversely affect the Preferred Stock.  The Preferred Stock may be redeemed by the Company at the liquidation preference of $1,000 per share plus any accrued and unpaid dividends.  Accrued and unpaid dividends on the Preferred Stock must be declared and set aside for the benefit of the holders of the Preferred Stock before any dividend may be declared on common stock.

On February 13, 2012, the Company announced the suspension of dividends on the Preferred Stock.  At December 31, 2012, there were accumulated dividends in arrears of $1.61 million, approximately $57 per share, including related accrued interest.  The Company may defer dividend payments for up to an aggregate of six dividend periods, whether consecutive or not, without default or penalty under the terms of the agreement.  Failure to pay dividends for six periods would trigger board appointment rights for the holder of the Preferred Stock.

Upon receipt of the aggregate consideration from the Treasury on January 9, 2009, the Company allocated the $28,000,000 proceeds on a pro rata basis to the Preferred Stock and the Warrant based on relative fair values.  As a result, the Company allocated $27,220,000 of the aggregate proceeds to the Preferred Stock, and $780,000 was allocated to the Warrant.  The discount recorded on the Preferred Stock that resulted from allocating a portion of the proceeds to the Warrant is being accreted directly to retained earnings over a 5-year period applying a level yield.

The Warrant may be exercised on or before January 9, 2019 at an exercise price of $8.40 per share.  The Treasury may not exercise voting power with respect to any shares of Warrant Common Stock until the Warrant has been exercised.

As discussed in Note 24, Subsequent Event, the Preferred Stock was sold by the Treasury at public auction on January 29, 2013.

(14) Restricted Stock - Unearned Compensation

In April 2004, the stockholders of Colony Bankcorp, Inc. adopted a restricted stock grant plan which awards certain executive officers common shares of the Company.  The maximum number of shares which may be subject to restricted stock awards (split-adjusted) is 143,500.  To date, 53,256 shares have been issued under this plan and 17,798 shares have been forfeited; thus, remaining shares which may be issued are 108,042 at December 31, 2012.  During 2012, there were no shares of restricted stock issued or forfeited. The shares are recorded at fair market value (on the date granted) as a separate component of stockholders’ equity.  The cost of these shares is being amortized against earnings using the straight-line method over three years (the restriction period).

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(15) 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 Company has not made any provisions for contributions to the plan for 2012, 2011 and 2010.

(16) Commitments and Contingencies

Credit-Related Financial Instruments.  The Company is a party to credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments include commitments to extend credit, standby letters of credit and commercial letters of credit.  Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss is represented by the contractual amount of these commitments.  The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments.

At December 31, 2012 and 2011, the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	2012		2011
Commitments to Extend Credit	$	64,147,000	$	39,966,000
Standby Letters of Credit		1,141,000		1,327,000

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  The commitments for equity lines of credit may expire without being drawn upon.  Therefore, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.

Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers.  These lines of credit are uncollateralized and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed.

Standby and performance letters of credit are conditional lending commitments issued by the Company to guarantee the performance of a customer to a third party.  Those letters of credit are primarily issued to support public and private borrowing arrangements.  Essentially all letters of credit issued have expiration dates within one year.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

Legal Contingencies.  In the ordinary course of business, there are various legal proceedings pending against Colony and its subsidiary.  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.

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(17) Deferred Compensation Plan

Colony Bank, the wholly-owned subsidiary, has deferred compensation plans covering certain former directors and certain officers choosing to participate through individual deferred compensation contracts.  In accordance with terms of the contracts, the Bank is committed to pay the participant’s deferred compensation over a specified number of years, beginning at age 65.  In the event of a participant’s death before age 65, payments are made to the participant’s named beneficiary over a specified number of years, beginning on the first day of the month following the death of the participant.

Liabilities accrued under the plans totaled $1,007,490 and $1,135,956 as of December 31, 2012 and 2011, respectively.  Benefit payments under the contracts were $203,904 in 2012 and $196,501 in 2011.  Provisions charged to operations totaled $82,250 in 2012, $98,901 in 2011 and $154,553 in 2010.

Fee income recognized with deferred compensation plans totaled $175,302 in 2012, $154,210 in 2011 and $182,685 in 2010.

(18) Supplemental Cash Flow Information

Cash payments for the following were made during the years ended December 31:

	2012		2011		2010
Interest Expense	$	10,942,113	$	17,204,476	$	21,975,968
Income Taxes	$	-	$	390,152	$	275,000

Noncash financing and investing activities for the years ended December 31 are as follows:

	2012		2011			2010
Acquisitions of Real Estate Through Loan Foreclosures	$	9,729,174	$	12,555,622		$	13,159,402
Unrealized (Gain) Loss on Investment Securities	$	3,120,540	$	(3,802,320	)	$	757,545

(19) Related Party Transactions

The aggregate balance of direct and indirect loans to directors, executive officers or principal holders of equity securities of the Company was $4,776,492 as of December 31, 2012 and $5,504,230 as of December 31, 2011. All such loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and do not involve more than a normal risk of collectibility.  A summary of activity of related party loans is shown below:

	2012			2011
Balance, Beginning	$	5,504,230		$	9,797,492
New Loans		8,075,835			15,455,299
Repayments		(10,510,517	)		(17,871,362	)
Transactions Due to Changes in Directors		1,706,944			(1,877,199	)
Balance, Ending	$	4,776,492		$	5,504,230

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(20) Fair Value of Financial Instruments and Fair Value Measurements

Generally accepted accounting standards in the U.S. require disclosure of fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value.  The assumptions used in the estimation of the fair value of Colony Bankcorp, Inc. and Subsidiary’s financial instruments are detailed hereafter.  Where quoted prices are not available, fair values are based on estimates using discounted cash flows and other valuation techniques.  The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.  The following disclosures should not be considered a surrogate of the liquidation value of the Company, but rather a good-faith estimate of the increase or decrease in value of financial instruments held by the Company since purchase, origination or issuance.

Cash and Short-Term Investments - For cash, due from banks, bank-owned deposits and federal funds sold, the carrying amount is a reasonable estimate of fair value and is classified level 1.

Investment Securities - Fair values for investment securities are based on quoted market prices where available.  If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable instruments.  If a comparable is not available, the investment securities are classified as level 3.

Federal Home Loan Bank Stock - The fair value of Federal Home Loan Bank stock approximates carrying value.

Loans - The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings.  For variable rate loans, the carrying amount is a reasonable estimate of fair value.

Deposit Liabilities - The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date and is classified as level 1.  The fair value of fixed maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities and is classified as level 2.

Subordinated Debentures - Fair value approximates carrying value due to the variable interest rates of the subordinated debentures.

Other Borrowed Money - The fair value of other borrowed money is calculated by discounting contractual cash flows using an estimated interest rate based on current rates available to the Company for debt of similar remaining maturities and collateral terms. Other borrowed money is classified as level 2 due to their expected maturities.

Disclosures of the fair value of financial assets and financial liabilities, including those of financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis, are required in the financial statements.

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(20) Fair Value of Financial Instruments and Fair Value Measurements (Continued)

The carrying amount and estimated fair values of the Company’s financial instruments as of December 31 are as follows:

	2012										2011
	Carrying		Estimated		Level						Carrying		Estimated
	Amount		Fair Value		1		2		3		Amount		Fair Value
	(in Thousands)
Assets
Cash and Short-Term Investments	$	71,041	$	71,041	$	71,041	$	-	$	-	$	112,329	$	112,329
Investment Securities Available for Sale		268,300		268,300		-		267,162		1,138		303,891		303,891
Investment Securities Held to Maturity		41		42		-		42		-		46		46
Federal Home Loan Bank Stock		3,364		3,364		3,364		-		-		5,398		5,398
Loans, Net		734,079		735,115		-		713,109		22,006		700,614		702,438
Liabilities
Deposits		979,685		982,215		486,775		495,440		-		999,985		1,003,648
Subordinated Debentures		24,229		24,229		24,229		-		-		24,229		24,229
Other Borrowed Money		35,000		38,424		-		38,424		-		71,000		74,720

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument.  Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on many judgments.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.  Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment.  In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Fair Value Measurements

Generally accepted accounting principles related to Fair Value Measurements define fair value, establish a framework for measuring fair value, establish a three-level valuation hierarchy for disclosure of fair value measurement and enhance disclosure requirements for fair value measurements.  The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.  The three levels are defined as follows:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

● Level 3 inputs to the valuation methodology are unobservable and represent the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

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(20) Fair Value of Financial Instruments and Fair Value Measurements (Continued)

Fair Value Measurements (Continued)

Following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:

Assets

Securities -Where quoted prices are available in an active market, securities are classified within level 1 of the valuation hierarchy.  Level 1 inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow.  Examples of such instruments, which would generally be classified within level 2 of the valuation hierarchy, include certain collateralized mortgage and debt obligations and certain high-yield debt securities.  In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within level 3 of the valuation hierarchy.  When measuring fair value, the valuation techniques available under the market approach, income approach and/or cost approach are used.  The Company’s evaluations are based on market data and the Company employs combinations of these approaches for its valuation methods depending on the asset class.

Impaired loans -Impaired loans are those that are not accounted for under ASC Subtopic 310-40, Troubled Debt Restructurings by Creditors, in which the Company has measured impairment generally based on the fair value of the loan’s collateral.  Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds.  These assets are included as level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

Other Real Estate - Other real estate owned assets are adjusted to fair value less estimated selling costs upon transfer of the loans to other real estate owned.  Typically, an external, third-party appraisal is performed on the collateral upon transfer into the other real estate owned account to determine the asset’s fair value.  Subsequent adjustments to the collateral’s value may be based upon either updated third-party appraisals or management’s knowledge of the collateral and the current real estate market conditions.   Appraised amounts used in determining the asset’s fair value, whether internally or externally prepared, are discounted 10 percent to account for selling and marketing costs.  Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are typically significant and result in a level 3 classification of the inputs for determining fair value.  Because of the high degree of judgment required in estimating the fair value of other real estate owned assets and because of the relationship between fair value and general economic conditions, we consider the fair value of other real estate owned assets to be highly sensitive to changes in market conditions.

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(20) Fair Value of Financial Instruments and Fair Value Measurements (Continued)

Fair Value Measurements (Continued)

Assets (Continued)

Assets and Liabilities Measured at Fair Value on a Recurring Basis -The following table presents the recorded amount of the Company’s assets measured at fair value on a recurring and nonrecurring basis as of December 31, 2012 and 2011, aggregated by the level in the fair value hierarchy within which those measurements fall.  The table below includes only impaired loans with a specific reserve and only other real estate properties with a valuation allowance at December 31, 2012.  Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
2012	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	263,059,074	$	-	$	263,059,074	$	-
State, County and Municipal		4,004,010		-		2,998,199		1,005,811
Corporate Obligations		1,104,900		-		1,104,900		-
Asset-Backed Securities		132,427		-		-		132,427
	$	268,300,411	$	-	$	267,162,173	$	1,138,238
Nonrecurring
Impaired Loans	$	22,006,150	$	-	$	-	$	22,006,150
Other Real Estate	$	8,817,204	$	-	$	-	$	8,817,204
2011
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	294,060,799	$	-	$	294,060,799	$	-
State, County and Municipal		7,583,691		-		7,583,691		-
Corporate Obligations		2,113,930		-		1,123,930		990,000
Asset-Backed Securities		132,427		-		-		132,427
	$	303,890,847	$	-	$	302,768,420	$	1,122,427
Nonrecurring
Impaired Loans	$	17,250,312	$	-	$	-	$	17,250,312
Other Real Estate	$	5,094,081	$	-	$	-	$	5,094,081

Liabilities

The Company did not identify any liabilities that are required to be presented at fair value.

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(20) Fair Value of Financial Instruments and Fair Value Measurements (Continued)

Fair Value Measurements (Continued)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at December 31, 2012.  This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2012		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired Loans
Commercial	$	1,030,877	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(45.00%)-80.00% (17.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00%-80.00% (40.00%)
			Income Approach	Capitalization Rate		8.50%
Real Estate
Commercial Construction		5,885,060	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00%-45.00% (22.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00%-40.00% (20.00%)
			Income Approach	Discount Rate		7.94%
Residential Real Estate		3,581,317	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00%-24.00% (12.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00%-40.00% (20.00%)
			Income Approach	Capitalization Rate		8.90%
Commercial Real Estate		11,508,896	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(7.40%)-73.70% (32.95%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00%-40.00% (20.00%)
			Income Approach	Capitalization Rate		9.50%
				Discount Rate		5.13%
Other Real Estate Owned		8,817,204	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(35.00%)-129.50% (47.25%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		3.10%-61.32% (32.33%)
			Income Approach	Discount Rate		3.00%

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(20) Fair Value of Financial Instruments and Fair Value Measurements (Continued)

Fair Value Measurements (Continued)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Continued)

The following table presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the years ended December 31, 2012, 2011 and 2010.

	Available for Sale Securities
	2012			2011			2010
Balance, Beginning	$	1,122,427		$	1,016,997		$	982,427
Total Realized/Unrealized Gains (Losses) Included In Purchases, Sales, Issuances       and Settlements
Transfers into Level 3		788,933			-			-
Securities Purchased During the Year		208,245			-			-
Securities Called During the Year		(1,000,000	)		-			-
Unrealized Gains Included in Other Comprehensive Income		78,201			158,488			34,570
Loss on OTTI Impairment Included in Noninterest Income		(59,568	)		(53,058	)		-
Balance, Ending	$	1,138,238		$	1,122,427		$	1,016,997

The Company’s policy is to recognize transfers in and transfers out of levels 1, 2 and 3 as of the end of a reporting period.  During the year ended December 31, 2012, the Company transferred certain state, county and municipal securities out of level 2 and into level 3.  The transfers into level 3 were the result of decreased market activity for these types of securities, as well as a lack of current credit ratings on these securities.  There were no gains or losses recognized as a result of the transfers.  There were no transfers of securities between level 1 and level 2 for the years ended December 31, 2012, 2011 or 2010.

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2012.

	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Asset-Back Securities	$	132,427	Discounted Cash Flow	Discount Rate		2.95%-3.42%(3.19%)
State, County and Municipal		1,005,811	Discounted Cash Flow	Discount Rate or Yield		N/A*

*  The Company relies on a third-party pricing service to value its municipal securities.  The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.

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(21) Regulatory Capital Matters

The amount of dividends payable to the parent company from the subsidiary bank is limited by various banking regulatory agencies.  Upon approval by regulatory authorities, the Bank may pay cash dividends to the parent company in excess of regulatory limitations.  Additionally, the Company suspended the payment of dividends to its stockholders in the third quarter of 2009.  At December 31, 2012, the Company is subject to certain regulatory restrictions that preclude the declaration of or payment of any dividends to its common stockholders, without prior approval from the Federal Reserve Bank.

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 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 classification 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 I capital to risk-weighted assets, and of Tier I capital to average assets.  The amounts and ratios as defined in regulations are presented hereafter.  Management believes, as of December 31, 2012, the Company meets all capital adequacy requirements to which it is subject 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.

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(21) Regulatory Capital Matters (Continued)

The following table summarizes regulatory capital information as of December 31, 2012 and 2011 on a consolidated basis and for its wholly-owned subsidiary, as defined.

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2012	(In Thousands)
Total Capital to Risk-Weighted Assets
Consolidated	$	122,630		16.47	%	$	59,548		8.00	%		N/A		N/A
Colony Bank		123,463		16.61			59,474		8.00		$	74,342		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		113,283		15.22			29,774		4.00			N/A		N/A
Colony Bank		114,128		15.35			29,737		4.00			44,605		6.00
Tier I Capital to Average Assets
Consolidated		113,283		10.22			44,343		4.00			N/A		N/A
Colony Bank		114,128		10.31			44,282		4.00			55,352		5.00
As of December 31, 2011
Total Capital to Risk-Weighted Assets
Consolidated	$	118,913		16.50	%	$	57,658		8.00	%		N/A		N/A
Colony Bank		117,243		16.29			57,584		8.00		$	71,980		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		109,822		15.24			28,829		4.00			N/A		N/A
Colony Bank		108,163		15.03			28,792		4.00			43,188		6.00
Tier I Capital to Average Assets
Consolidated		109,822		9.51			46,185		4.00			N/A		N/A
Colony Bank		108,163		9.38			46,117		4.00			57,646		5.00

The Bank is currently subject to a memorandum of understanding (MOU) which requires, among other things, that the Bank maintain minimum capital ratios at specified levels higher than those otherwise required by applicable regulations as follows: Tier 1 capital to total average assets of 8 percent and total risk-based capital to total risk-weighted assets of 10 percent during the life of the MOU.  The MOU also requires that, prior to declaring or paying any cash dividend to the Company, the Bank must obtain written consent of its regulators.  Additional requirements of the MOU are discussed in Part 1, Item 1 of the Company’s December 31, 2012 Form 10-K filed with the Securities Exchange Commission on March 12, 2013.  Failure to comply with the terms of the MOU could have an adverse impact on the Company’s consolidated financial condition.

- 45 -

(22) Financial Information of Colony Bankcorp, Inc. (Parent Only)

The parent company’s balance sheets as of December 31, 2012 and 2011 and the related statements of operations and comprehensive income (loss) and cash flows for each of the years in the three-year period then ended are as follows:

COLONY BANKCORP, INC. (PARENT ONLY)

BALANCE SHEETS

DECEMBER 31

ASSETS
	2012			2011
Cash	$	494,432		$	1,051,904
Premises and Equipment, Net		1,284,968			1,378,395
Investment in Subsidiary, at Equity		119,646,209			118,289,024
Other		821,145			437,414
Total Assets	$	122,246,754		$	121,156,737
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Dividends Payable	$	1,610,385		$	175,000
Other		648,202			139,927
		2,258,587			314,927
Subordinated Debt		24,229,000			24,229,000
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares		27,827,053			27,662,476
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258Shares as of December 31, 2012 and 2011		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		30,497,576			29,456,240
Accumulated Other Comprehensive Income, Net of Tax		(149,814	)		1,909,742
		95,759,167			96,612,810
Total Liabilities and Stockholders’ Equity	$	122,246,754		$	121,156,737

- 46 -

(22) Financial Information of Colony Bankcorp, Inc. (Parent Only) (Continued)

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Income
Dividends from Subsidiary	$	17,372		$	15,265		$	15,536
Management Fees		590,422			505,414			455,241
Other		101,397			98,180			119,776
		709,191			618,859			590,553
Expenses
Interest		554,004			508,081			516,170
Amortization		2,250			2,250			2,250
Salaries and Employee Benefits		735,919			734,104			761,873
Other		558,151			656,914			807,209
		1,850,324			1,901,349			2,087,502
Loss Before Taxes and Equity in Undistributed Earnings of Subsidiary		(1,141,133	)		(1,282,490	)		(1,496,949	)
Income Tax Benefits		365,691			425,605			532,823
Loss Before Equity in Undistributed Earnings of Subsidiary		(775,442	)		(856,885	)		(964,126	)
Equity in Undistributed Earnings of Subsidiary		3,416,740			3,390,480			1,438,342
Net Income		2,641,298			2,533,595			474,216
Preferred Stock Dividends		1,435,385			1,400,000			1,400,000
Net Income (Loss) Available to Common Stockholders	$	1,205,913		$	1,133,595		$	(925,784	)

- 47 -

(22) Financial Information of Colony Bankcorp, Inc. (Parent Only) (Continued)

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Net Income	$	2,641,298		$	2,533,595		$	474,216
Other Comprehensive Income, Net of Tax
Gains (Losses) on Securities Arising During the Year		(186,830	)		4,439,108			1,227,281
Reclassification Adjustment		(1,872,726	)		(1,929,577	)		(1,727,261	)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		(2,059,556	)		2,509,531			(499,980	)
Comprehensive Income (Loss)	$	581,742		$	5,043,126		$	(25,764	)

- 48 -

(22) Financial Information of Colony Bankcorp, Inc. (Parent Only) (Continued)

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Cash Flows from Operating Activities
Net Income	$	2,641,298		$	2,533,595		$	474,216
Adjustments to Reconcile Net Income to Net Cash Used by Operating Activities
Depreciation and Amortization		93,427			112,651			194,918
Equity in Undistributed Earnings of Subsidiary		(3,416,740	)		(3,390,480	)		(1,438,342	)
Other		124,543			24,977			(260,318	)
		(557,472	)		(719,257	)		(1,029,526	)
Cash Flows from Investing Activities
Purchases of Premises and Equipment		-			(1,900	)		(31,877	)
Cash Flows from Financing Activities
Dividends Paid on Preferred Stock		-			(1,400,000	)		(1,400,000	)
Proceeds from Issuance of Common Stock		-			-			5,078,255
		-			(1,400,000	)		3,678,255
Increase (Decrease) in Cash		(557,472	)		(2,121,157	)		2,616,852
Cash, Beginning		1,051,904			3,173,061			556,209
Cash, Ending	$	494,432		$	1,051,904		$	3,173,061

- 49 -

(23) Earnings Per Share

Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during each period.  Diluted earnings per share reflects the potential dilution of restricted stock and common stock warrants.  Net income available to common stockholders represents net income (loss) after preferred stock dividends.  The following table presents earnings per share for the years ended December 31, 2012, 2011 and 2010:

	2012		2011		2010
Numerator
Net Income (Loss) Available to Common Stockholders	$	1,205,913	$	1,133,595	$	(925,784	)
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,149,217
Dilutive Effect of Potential Common Stock
Restricted Stock		-		-		-
Stock Warrants		-		-		-
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,439,258		8,439,258		8,149,217
Earnings (Loss) Per Share - Basic	$	0.14	$	0.13	$	(0.11	)
Earnings (Loss) Per Share - Diluted	$	0.14	$	0.13	$	(0.11	)

For the years ended December 31, 2012 and 2011, respectively, the Company has excluded 500,000 and 501,855 common stock equivalents with strike prices that would cause them to be antidilutive.  Additionally, due to the net loss reported for the year ended December 31, 2010, the Company has excluded 505,283 shares of common stock equivalents because these would also have been antidilutive.

(24) Subsequent Event

On January 29, 2013, the Company’s 28,000 shares of Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) was sold by the Treasury to the public through a modified dutch auction.  This auction is part of the Treasury’s ongoing efforts to wind down its remaining TARP bank investments.  The sale of the Preferred Stock to new investors did not result in any accounting entries and does not change the Company’s capital position.  The Treasury continues to hold the Warrant for 500,000 shares of common stock; however, the Company has notified the Treasury of its intentions to repurchase the warrant, although no price for the repurchase has been set.

Cumulative dividends on the Preferred Shares will continue to accrue at a rate of 5 percent per annum for the first five years from initial issuance and at a rate of 9 percent per annum thereafter.  The Preferred Stock continues to have no maturity date and ranks senior to the Company’s Common Stock.  The Preferred Stock continues to be redeemable at the option of the Company at 100 percent of their liquidation preference, plus any accrued and unpaid dividends.

- 50 -

EX-21

 EXHIBIT NO. 21

SUBSIDIARIES OF THE COMPANY

Name of Subsidiary	State of Incorporation
Colony Bank	Georgia
Colony Bankcorp Statutory Trust III	Delaware
Colony Bankcorp Capital Trust I	Delaware
Colony Bankcorp Capital Trust II	Delaware
Colony Bankcorp Capital Trust III	Delaware

EX-31.1

EXHIBIT NO. 31.1

CERTIFICATIONS PURSUANT TO RULE 13a-14(a)/15d-14(a) UNDER THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Edward P. Loomis, Jr., certify that:

1.  I have reviewed this Form 10-K of Colony Bankcorp, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report.

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

March 12, 2013	/s/ Edward P. Loomis, Jr.
	EDWARD P. LOOMIS, JR.
	President and Chief Executive Officer

EX-31.2

EXHIBIT NO. 31.2

CERTIFICATIONS PURSUANT TO RULE 13a-14(a)/15d-14(a) UNDER THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Terry L. Hester, certify that:

1.  I have reviewed this Form 10-K of Colony Bankcorp, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report.

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

March 12, 2013	/s/ Terry L. Hester
	TERRY L. HESTER
	Executive Vice President and Chief Financial Officer

EX-32

EXHIBIT NO. 32

CERTIFICATION OF CEO AND CFO PURSUANT TO

18 U.S.C. §1350

AS ADOPTED PURSUANT TO

§906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-K of Colony Bankcorp, Inc. (the Company) for the year ended    December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Edward P. Loomis, Jr., President and Chief Executive Officer of the Company, and Terry L. Hester, Chief Financial and Accounting Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of our knowledge and belief that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Edward P. Loomis, Jr.

Edward P. Loomis, Jr.

President and Chief Executive Officer

March 12, 2013

/s/ Terry L. Hester

Terry L. Hester

Chief Financial and Accounting Officer

March 12, 2013

This certification accompanies this Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

EX-99.1

EXHIBIT NO. 99.1

COLONY BANKCORP, INC.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 30.15 OF 31 CFR PART 30

The undersigned, Edward P. Loomis, Jr. and Terry L. Hester, Chief Executive Officer and Chief Financial Officer of Colony Bankcorp, Inc. (the “Company”) respectively, do hereby certify, based on our knowledge, that:

i. The Compensation Committee of the Company has discussed, reviewed, and evaluated with senior risk officers at least every six months during any part of the most recently completed fiscal year that was a TARP period, senior executive officer (“SEO”) compensation plans and employee compensation plans and the risks these plans pose to the Company;

ii. The Compensation Committee of the Company has identified and limited during any part of the most recently completed fiscal year that was a TARP period any features of the SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of the Company and has identified any features of the employee compensation plans that pose risks to the Company and has limited those features to ensure that the Company is not unnecessarily exposed to risks;

iii. The Compensation Committee has reviewed, at least every six months during any part of the most recently completed fiscal year that was a TARP period, the terms of each employee compensation plan and identified any features of the plan that could encourage the manipulation of reported earnings of the Company to enhance the compensation of an employee, and has limited any such features;

iv. The Compensation Committee of the Company will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii) above;

v. The Compensation Committee of the Company will provide a narrative description of how it limited during any part of the most recently completed fiscal year that was a TARP period the features in:

a. SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of the Company;

b. Employee compensation plans that unnecessarily expose the Company to risks; and

c. Employee compensation plans that could encourage the manipulation of reported earnings of the Company to enhance the compensation of an employee;

vi. The Company has required that bonus payments to SEOs or any of the next twenty most highly compensated employees, as defined in the regulations and guidance established under Section 111 of EESA (bonus payments), be subject to a recovery or “clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;

vii. The Company has prohibited any golden parachute payment, as defined in the regulations and guidance established under Section 111 of EESA, to a SEO or any of the next five most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

viii. The Company has limited bonus payments to its applicable employees in accordance with Section 111 of EESA and the regulations and guidance established thereunder during any part of the most recently completed fiscal year that was a TARP period;

ix. The Company and its employees have complied with the excessive or luxury expenditures policy, as defined in the regulations and guidance established under Section 111 of EESA, during any part of the most recently completed fiscal year that was a TARP period; and any expenses that, pursuant to the policy, required approval of the board of directors, a committee of the board of directors, an SEO, or an executive officer with a similar level of responsibility were properly approved;

x. The Company will permit a non-binding shareholder resolution in compliance with any applicable federal securities rules and regulations on the disclosures provided under the federal securities laws related to SEO compensation paid or accrued during any part of the most recently completed fiscal year that was a TARP period;

xi. The Company will disclose the amount, nature, and justification for the offering, during any part of the most recently completed fiscal year that was a TARP period, of any perquisites, as defined in the regulations and guidance established under Section 111 of EESA, whose total value exceeds $25,000 for any employee who is subject to the bonus payment limitations identified in paragraph (viii);

xii. The Company will disclose whether the Company, the board of directors of the Company, or the Compensation Committee of the Company has engaged during any part of the most recently completed fiscal year that was a TARP period a compensation consultant; and the services the compensation consultant or any affiliate of the compensation consultant provided during this period;

xiii. The Company has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under Section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during any part of the most recently completed fiscal year that was a TARP period;

xiv. The Company has substantially complied with all other requirements related to employee compensation that are provided in the agreement between the Company and Treasury, including any amendments;

xv. The Company has submitted to Treasury a complete and accurate list of the SEOs and the twenty next most highly compensated employees for the current fiscal year, with the non-SEOs ranked in descending order of level of annual compensation, and with the name, title, and employer of each SEO and most highly compensated employee identified; and

xvi. I understand that a knowing and willful false or fraudulent statement made in connection with this certification may be punished by fine, imprisonment, or both. (See, for example, 18 USC 1001).

	COLONY BANKCORP, INC.
March 12, 2013	/s/ Edward P. Loomis, Jr.
	EDWARD P. LOOMIS, JR.
	President and Chief Executive Officer

March 12, 2013	/s/ Terry L. Hester
	TERRY L. HESTER
	Chief Financial Officer

XML

Other Real Estate Owned (Tables)

12 Months Ended

Dec. 31, 2012

Other Real Estate Owned [Abstract]

Change in Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at December 31, 2012, 2011 and 2010 was $15,940,693, $20,445,805 and $20,207,806, respectively.  All of the Company's other real estate owned represents properties acquired through foreclosure or deed in lieu of foreclosure.  The following table details the change in OREO during 2012, 2011 and 2010.

	December 31
	2012			2011			2010
Balance, Beginning of Year	$	20,445,085		$	20,207,806		$	19,705,044
Additions		9,729,174			12,555,622			13,159,402
Sales of OREO		(9,711,890	)		(9,804,669	)		(9,531,210	)
Loss on Sale		(1,818,967	)		(1,102,613	)		(1,832,256	)
Provision for Losses		(2,702,709	)		(1,411,061	)		(1,293,174	)
Balance, End of Year	$	15,940,693		$	20,445,085		$	20,207,806

XML

Investment Securities (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Securities Available for Sale
Amortized Cost	$ 268,527,401	$ 300,997,297
Gross Unrealized Gains	973,490	3,408,251
Gross Unrealized Losses	(1,200,480)	(514,701)
Fair Value	268,300,411	303,890,847
Securities Held to Maturity
Fair Value	41,909	45,635
Available-for-sale Amortized Cost [Abstract]
Due in One Year or Less	125,000
Due After One Year Through Five Years	2,758,034
Due After Five Years Through Ten Years	1,882,647
Due After Ten Years	574,868
Total	5,340,549
Mortgage-Backed Securities	263,186,852
Amortized Cost	268,527,401
Available-for-sale Fair Value [Abstract]
Due in One Year or Less	125,665
Due After One Year Through Five Years	2,892,955
Due After Five Years Through Ten Years	1,882,228
Due After Ten Years	340,489
Total	5,241,337
Mortgage-Backed Securities	263,059,074
Fair Value	268,300,411
Held-to-maturity Amortized Cost [Abstract]
Due in One Year or Less	0
Due After One Year Through Five Years	41,467
Due After Five Years Through Ten Years	0
Due After Ten Years	0
Total	41,467
Mortgage-Backed Securities	0
Amortized Cost	41,467
Held-to-maturity Fair Value [Abstract]
Due in One Year or Less	0
Due After One Year Through Five Years	41,909
Due After Five Years Through Ten Years	0
Due After Ten Years	0
Total	41,909
Mortgage-Backed Securities	0
Fair Value	41,909
Proceeds from sale of investment securities available for sale	227,690,806	342,672,937	286,387,727
Available-for-sale securities, gross realized gains	3,084,666	2,978,193	2,617,062
Available-for-sale securities, gross realized losses	247,202	54,592	0
Fair value of securities on nonaccrual status	132,427	132,427
Investment securities pledged	117,450,817	136,838,456
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value	143,534,503	27,663,436
12 Months or Greater, Fair value	132,427	1,195,620
Total, Fair Value	143,666,930	28,859,056
Less Than 12 Months, Gross Unrealized Losses	(966,284)	(209,606)
12 Months or Greater, Gross Unrealized Losses	(234,196)	(305,571)
Total, Unrealized Losses	(1,200,480)	(515,177)
Debt securities with unrealized losses, depreciated (in hundredths)	0.84%
Number of asset-backed security owned	1
Periods for asset-backed security in continuous unrealized loss position, minimum	12 months
Number of issuance of trust preferred security	1
Book value of trust preferred security	366,623
Unrealized loss on trust preferred security	234,196
Other than temporary impairment written off	59,568	53,058		520,751
US Government Agencies Mortgage-Backed [Member]
Securities Available for Sale
Amortized Cost	263,186,852	291,096,606
Gross Unrealized Gains	833,920	3,152,095
Gross Unrealized Losses	(961,698)	(187,902)
Fair Value	263,059,074	294,060,799
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value	142,103,991	26,439,317
12 Months or Greater, Fair value	0	0
Total, Fair Value	142,103,991	26,439,317
Less Than 12 Months, Gross Unrealized Losses	(961,698)	(187,902)
12 Months or Greater, Gross Unrealized Losses	0	0
Total, Unrealized Losses	(961,698)	(187,902)
State, County & Municipal [Member]
Securities Available for Sale
Amortized Cost	3,973,926	7,474,500
Gross Unrealized Gains	34,670	132,226
Gross Unrealized Losses	(4,586)	(23,035)
Fair Value	4,004,010	7,583,691
Securities Held to Maturity
Amortized Cost	41,467	46,111
Gross Unrealized Gains	442	0
Gross Unrealized Losses	0	(476)
Fair Value	41,909	45,635
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value	1,430,512	1,224,119
12 Months or Greater, Fair value	0	73,193
Total, Fair Value	1,430,512	1,297,312
Less Than 12 Months, Gross Unrealized Losses	(4,586)	(21,704)
12 Months or Greater, Gross Unrealized Losses	0	(1,807)
Total, Unrealized Losses	(4,586)	(23,511)
Corporate Obligations [Member]
Securities Available for Sale
Amortized Cost	1,000,000	2,000,000
Gross Unrealized Gains	104,900	123,930
Gross Unrealized Losses	0	(10,000)
Fair Value	1,104,900	2,113,930
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value		0
12 Months or Greater, Fair value		990,000
Total, Fair Value		990,000
Less Than 12 Months, Gross Unrealized Losses		0
12 Months or Greater, Gross Unrealized Losses		(10,000)
Total, Unrealized Losses		(10,000)
Asset-Backed Securities [Member]
Securities Available for Sale
Amortized Cost	366,623	426,191
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(234,196)	(293,764)
Fair Value	132,427	132,427
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value	0	0
12 Months or Greater, Fair value	132,427	132,427
Total, Fair Value	132,427	132,427
Less Than 12 Months, Gross Unrealized Losses	0	0
12 Months or Greater, Gross Unrealized Losses	(234,196)	(293,764)
Total, Unrealized Losses	$ (234,196)	$ (293,764)

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Fair Value of Financial Instruments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

Carrying amount and estimated fair values of financial instruments

The carrying amount and estimated fair values of the Company's financial instruments as of December 31 are as follows:

	2012										2011
	Carrying		Estimated		Level						Carrying		Estimated
	Amount		Fair Value			1		2		3	Amount		Fair Value
	(in Thousands)
Assets
Cash and Short-Term Investments	$	71,041	$	71,041	$	71,041	$	-	$	-	$	112,329	$	112,329
Investment Securities Available for Sale		268,300		268,300		-		267,162		1,138		303,891		303,891
Investment Securities Held to Maturity		41		42		-		42		-		46		46
Federal Home Loan Bank Stock		3,364		3,364		3,364		-		-		5,398		5,398
Loans, Net		734,079		735,115		-		713,109		22,006		700,614		702,438
Liabilities
Deposits		979,685		982,215		486,775		495,440		-		999,985		1,003,648
Subordinated Debentures		24,229		24,229		24,229		-		-		24,229		24,229
Other Borrowed Money		35,000		38,424		-		38,424		-		71,000		74,720

Assets and liabilities measured at fair value on a recurring basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis -The following table presents the recorded amount of the Company's assets measured at fair value on a recurring and nonrecurring basis as of December 31, 2012 and 2011, aggregated by the level in the fair value hierarchy within which those measurements fall.  The table below includes only impaired loans with a specific reserve and only other real estate properties with a valuation allowance at December 31, 2012.  Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
2012	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	263,059,074	$	-	$	263,059,074	$	-
State, County and Municipal		4,004,010		-		2,998,199		1,005,811
Corporate Obligations		1,104,900		-		1,104,900		-
Asset-Backed Securities		132,427		-		-		132,427
	$	268,300,411	$	-	$	267,162,173	$	1,138,238
Nonrecurring
Impaired Loans	$	22,006,150	$	-	$	-	$	22,006,150
Other Real Estate	$	8,817,204	$	-	$	-	$	8,817,204
2011
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	294,060,799	$	-	$	294,060,799	$	-
State, County and Municipal		7,583,691		-		7,583,691		-
Corporate Obligations		2,113,930		-		1,123,930		990,000
Asset-Backed Securities		132,427		-		-		132,427
	$	303,890,847	$	-	$	302,768,420	$	1,122,427
Nonrecurring
Impaired Loans	$	17,250,312	$	-	$	-	$	17,250,312
Other Real Estate	$	5,094,081	$	-	$	-	$	5,094,081

Quantitative information for financial instruments measured at fair value

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at December 31, 2012.  This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2012	Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired Loans
Commercial	$  1,030,877	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(45.00%)-80.00% (17.50%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-80.00% (40.00%)
		Income Approach	Capitalization Rate	8.50%
Real Estate
Commercial Construction	5,885,060	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-45.00% (22.50%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)
		Income Approach	Discount Rate	7.94%
Residential Real Estate	3,581,317	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-24.00% (12.00%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)
		Income Approach	Capitalization Rate	8.90%
Commercial Real Estate	11,508,896	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(7.40%)-73.70% (32.95%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)
		Income Approach	Capitalization Rate	9.50%
			Discount Rate	5.13%
Other Real Estate Owned	8,817,204	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(35.00%)-129.50% (47.25%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	3.10%-61.32% (32.33%)
		Income Approach	Discount Rate	3.00%

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2012.

	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Asset-Back Securities	$	132,427	Discounted Cash Flow	Discount Rate	2.95%-3.42% (3.19%)
State, County and Municipal		1,005,811	Discounted Cash Flow	Discount Rate or Yield	N/A*

*  The Company relies on a third-party pricing service to value its municipal securities.  The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.

Fair value measurement using significant unobservable inputs (Level 3)

The following table presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the years ended December 31, 2012, 2011 and 2010.

	Available for Sale Securities
	2012			2011			2010
Balance, Beginning	$	1,122,427		$	1,016,997		$	982,427
Total Realized/Unrealized Gains (Losses) Included In Purchases, Sales, Issuances and Settlements
Transfers into Level 3		788,933			-			-
Securities Purchased During the Year		208,245			-			-
Securities Called During the Year		(1,000,000	)		-			-
Unrealized Gains Included in Other Comprehensive Income		78,201			158,488			34,570
Loss on OTTI Impairment Included in Noninterest Income		(59,568	)		(53,058	)		-
Balance, Ending	$	1,138,238		$	1,122,427		$	1,016,997

XML

Preferred Stock (Details) (USD $)	12 Months Ended
	Dec. 31, 2012
Class of Stock [Line Items]
Aggregate consideration	$ 28,000,000
Warrants to purchase shares (in shares)	500,000
Preferred stock dividend rate for first five years (in hundredths)	5.00%
Preferred stock dividend rate thereafter five years (in hundredths)	9.00%
Liquidation preference (in dollars per share)	$ 1,000
Accumulated dividends in arrears	1,610,000
Accumulated dividends in arrears, redemption price (in dollars per share)	$ 57
Maximum number of preferred dividend deferment periods	6
Period for warrant proceeds accretion to retained earnings	5 years
Exercise price (in dollars per share)	$ 8.4
Cumulative Perpetual Preferred Stock, Series A [Member]
Class of Stock [Line Items]
Aggregate consideration	27,220,000
Shares issued for cash during period (in shares)	28,000
Warrant [Member]
Class of Stock [Line Items]
Aggregate consideration	$ 780,000

XML

Loans (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 747,050,011	$ 716,321,321	$ 813,250,673
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	55,684,492	48,986,102
Agricultural [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	6,210,953	8,421,884	10,551,791
Commercial Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	53,808,056	58,545,820	72,309,231
Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	5,852,238	3,530,502	4,373,011
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	334,386,177	315,280,748	362,878,565
Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	203,844,522	193,637,817
Farmland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	49,056,861	48,225,406	52,778,389
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	29,777,776	30,449,303
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 8,428,936	$ 9,243,739

XML

Fair Value of Financial Instruments and Fair Value Measurements, Recurring and Nonrecurring Basis (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Available-for-Sale Securities [Member]
Fair Value Measured Using Significant Unobservable Inputs (Level 3) [Roll Forward]
Balance, Beginning	$ 1,122,427	$ 1,016,997	$ 982,427
Purchases, Sales, Issuances and Settlements
Transfers into Level 3	788,933	0	0
Securities Purchased During the Year	208,245	0	0
Securities Called During the Year	(1,000,000)	0	0
Unrealized Gains Included in Other Comprehensive Income	78,201	158,488	34,570
Loss on OTTI Impairment Included in Noninterest Income	(59,568)	(53,058)	0
Balance, Ending	1,138,238	1,122,427	1,016,997
Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government Agencies Mortgage-Backed	263,059,074	294,060,799
State, County & Municipal	4,004,010	7,583,691
Corporate Obligations	1,104,900	2,113,930
Asset-Backed Securities	132,427	132,427
Securities Available for Sale	268,300,411	303,890,847
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government Agencies Mortgage-Backed	0	0
State, County & Municipal	0	0
Corporate Obligations	0	0
Asset-Backed Securities	0	0
Securities Available for Sale	0	0
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government Agencies Mortgage-Backed	263,059,074	294,060,799
State, County & Municipal	2,998,199	7,583,691
Corporate Obligations	1,104,900	1,123,930
Asset-Backed Securities	0	0
Securities Available for Sale	267,162,173	302,768,420
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government Agencies Mortgage-Backed	0	0
State, County & Municipal	1,005,811	0
Corporate Obligations	0	990,000
Asset-Backed Securities	132,427	132,427
Securities Available for Sale	1,138,238	1,122,427
Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	22,006,150	17,250,312
Other Real Estate	8,817,204	5,094,081
Nonrecurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	0	0
Other Real Estate	0	0
Nonrecurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	0	0
Other Real Estate	0	0
Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	22,006,150	17,250,312
Other Real Estate	$ 8,817,204	$ 5,094,081

XML

Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2012

Supplemental Cash Flow Information [Abstract ]

Cash payments

Cash payments for the following were made during the years ended December 31:

	2012		2011		2010
Interest Expense	$	10,942,113	$	17,204,476	$	21,975,968
Income Taxes	$	-	$	390,152	$	275,000

Noncash financing and investing activities

Noncash financing and investing activities for the years ended December 31 are as follows:

	2012		2011			2010
Acquisitions of Real Estate   Through Loan Foreclosures	$	9,729,174	$	12,555,622		$	13,159,402
Unrealized (Gain) Loss on Investment Securities	$	3,120,540	$	(3,802,320	)	$	757,545

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Estimated useful lives and methods of 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

XML

Fair Value of Financial Instruments and Fair Value Measurements, Quantitative Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2012
Impaired Loans [Member] | Commercial [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	1,030,877
Impaired Loans [Member] | Sales Comparison [Member] | Commercial [Member] | Nonrecurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	45.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.00%
Impaired Loans [Member] | Sales Comparison [Member] | Commercial [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	80.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	80.00%
Impaired Loans [Member] | Sales Comparison [Member] | Commercial [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	17.50%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	40.00%
Impaired Loans [Member] | Income Approach [Member] | Commercial [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Capitalization Rate (in hundredths)	8.50%
Real Estate [Member] | Commercial Construction [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	5,885,060
Real Estate [Member] | Residential Real Estate [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	3,581,317
Real Estate [Member] | Commercial Real Estate [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	11,508,896
Real Estate [Member] | Sales Comparison [Member] | Commercial Construction [Member] | Nonrecurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	0.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.00%
Real Estate [Member] | Sales Comparison [Member] | Commercial Construction [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	45.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	40.00%
Real Estate [Member] | Sales Comparison [Member] | Commercial Construction [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	22.50%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	20.00%
Real Estate [Member] | Sales Comparison [Member] | Residential Real Estate [Member] | Nonrecurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	0.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.00%
Real Estate [Member] | Sales Comparison [Member] | Residential Real Estate [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	24.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	40.00%
Real Estate [Member] | Sales Comparison [Member] | Residential Real Estate [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	12.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	20.00%
Real Estate [Member] | Sales Comparison [Member] | Commercial Real Estate [Member] | Nonrecurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	(7.40%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.00%
Real Estate [Member] | Sales Comparison [Member] | Commercial Real Estate [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	73.70%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	40.00%
Real Estate [Member] | Sales Comparison [Member] | Commercial Real Estate [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	32.95%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	20.00%
Real Estate [Member] | Income Approach [Member] | Commercial Construction [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)	7.94%
Real Estate [Member] | Income Approach [Member] | Residential Real Estate [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Capitalization Rate (in hundredths)	8.90%
Real Estate [Member] | Income Approach [Member] | Commercial Real Estate [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Capitalization Rate (in hundredths)	9.50%
Discount Rate (in hundredths)	5.13%
Other Real Estate Owned [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	8,817,204
Other Real Estate Owned [Member] | Sales Comparison [Member] | Nonrecurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	(35.00%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	3.10%
Other Real Estate Owned [Member] | Sales Comparison [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	129.50%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	61.32%
Other Real Estate Owned [Member] | Sales Comparison [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	47.25%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	32.33%
Other Real Estate Owned [Member] | Income Approach [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)	3.00%
Asset-Backed Securities [Member] | Recurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	132,427
Asset-Backed Securities [Member] | Discounted Cash Flow Member] | Recurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)	2.95%
Asset-Backed Securities [Member] | Discounted Cash Flow Member] | Recurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)	(3.42%)
Asset-Backed Securities [Member] | Discounted Cash Flow Member] | Recurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)	(3.19%)
State, County and Municipal [Member] | Recurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	1,005,811
State, County and Municipal [Member] | Discounted Cash Flow Member] | Recurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)		[1]

[1] The Company relies on a third-party pricing service to value its municipal securities. The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.

XML

Commitments and Contingencies (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Contract Amount [Abstract]
Commitments to Extend Credit	$ 64,147,000	$ 39,966,000
Standby Letters of Credit	$ 1,141,000	$ 1,327,000
Expiration period of letter of credit issued	1 year

XML

Loans, Past Due (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	$ 14,911,278	$ 7,160,564
Accruing Loans 90 Days or More Past Due	4,355	15,160
Total Accruing Loans Past Due	14,915,633	7,175,724
Nonaccrual Loans	29,850,735	38,821,632
Current Loans	702,283,643	670,323,965
Total Loans	747,050,011	716,321,321	813,250,673
Interest income	1,634,600	1,639,800	1,621,700
Commercial [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	797,612	644,899
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	797,612	644,899
Nonaccrual Loans	1,033,371	2,102,522
Current Loans	53,853,509	46,238,681
Total Loans	55,684,492	48,986,102
Agricultural [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	28,228	0
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	28,228	0
Nonaccrual Loans	39,213	85,670
Current Loans	6,143,512	8,336,214
Total Loans	6,210,953	8,421,884	10,551,791
Commercial Construction [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	1,309,618	513,905
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	1,309,618	513,905
Nonaccrual Loans	14,032,580	23,578,263
Current Loans	38,465,858	34,453,652
Total Loans	53,808,056	58,545,820	72,309,231
Residential Construction [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	0	33,541
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	0	33,541
Nonaccrual Loans	0	0
Current Loans	5,852,238	3,496,961
Total Loans	5,852,238	3,530,502	4,373,011
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	3,771,106	2,930,743
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	3,771,106	2,930,743
Nonaccrual Loans	6,629,789	9,193,650
Current Loans	323,985,282	303,156,355
Total Loans	334,386,177	315,280,748	362,878,565
Residential [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	8,223,174	2,251,009
Accruing Loans 90 Days or More Past Due	0	15,160
Total Accruing Loans Past Due	8,223,174	2,266,169
Nonaccrual Loans	5,429,971	3,110,032
Current Loans	190,191,377	188,261,616
Total Loans	203,844,522	193,637,817
Farmland [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	140,095	376,426
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	140,095	376,426
Nonaccrual Loans	2,413,104	486,683
Current Loans	46,503,662	47,362,297
Total Loans	49,056,861	48,225,406	52,778,389
Consumer [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	636,888	410,041
Accruing Loans 90 Days or More Past Due	4,355	0
Total Accruing Loans Past Due	641,243	410,041
Nonaccrual Loans	255,216	221,360
Current Loans	28,881,317	29,817,902
Total Loans	29,777,776	30,449,303
Other [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Dues	4,557	0
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	4,557	0
Nonaccrual Loans	17,491	43,452
Current Loans	8,406,888	9,200,287
Total Loans	$ 8,428,936	$ 9,243,739

XML

Related Party Transactions (Details) (Loans to directors, executive officers or principal holders [Member], USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Loans to directors, executive officers or principal holders [Member]
Loans to directors, executive officers or principal holders [Roll Forward]
Balance, Beginning	$ 5,504,230	$ 9,797,492
New Loans	8,075,835	15,455,299
Repayments	(10,510,517)	(17,871,362)
Transactions Due to Changes in Directors	1,706,944	(1,877,199)
Balance, Ending	$ 4,776,492	$ 5,504,230

XML

Financial Information of Colony Bankcorp, Inc (Parent Only) (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
ASSETS [Abstract]
Cash	$ 9,063,437	$ 9,271,705
Premises and Equipment, Net	24,916,106	25,750,235
Other	21,489,957	26,643,467
Total Assets	1,139,396,781	1,195,376,436
Liabilities [Abstract]
Other	4,723,723	3,549,354
Subordinated Debt	24,229,000	24,229,000
Stockholders' Equity [Abstract]
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares	27,827,053	27,662,476
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2012 and 2011, Respectively	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	30,497,576	29,456,240
Accumulated Other Comprehensive Income, Net of Tax	(149,814)	1,909,742
Stockholders' Equity	95,759,167	96,612,810
Total Liabilities and Stockholders' Equity	1,139,396,781	1,195,376,436
Preferred Stock, Par Value (in dollars per share)	$ 1,000	$ 1,000
Preferred Stock, Authorized (in shares)	10,000,000	10,000,000
Preferred Stock, Issued (in shares)	28,000	28,000
Common Stock, Par Value (in dollars per share)	$ 1	$ 1
Common Stock, Authorized (in shares)	20,000,000	20,000,000
Common Stock, Issued (in shares)	8,439,258	8,439,258
Expenses [Abstract]
Salaries and Employee Benefits	15,564,893	14,632,693	14,096,698
Income Before Income Taxes (Benefits)	3,842,149	3,637,478	15,002
Income Tax Benefits	(1,200,851)	(1,103,883)	459,214
Net Income	2,641,298	2,533,595	474,216
Preferred Stock Dividends	1,435,385	1,400,000	1,400,000
Net Income (Loss) Available to Common Stockholders	1,205,913	1,133,595	(925,784)
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net Income	2,641,298	2,533,595	474,216
Other Comprehensive Income, Net of Tax [Abstract]
Gains (Losses) on Securities Arising During the Year	(186,830)	4,439,108	1,227,281
Reclassification Adjustment	(1,872,726)	(1,929,577)	(1,727,261)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	(2,059,556)	2,509,531	(499,980)
Comprehensive Income (Loss)	581,742	5,043,126	(25,764)
Cash Flows from Operating Activities [Abstract]
Net Income	2,641,298	2,533,595	474,216
Adjustments to Reconcile Net Income to Net Cash Used by Operating Activities [Abstract]
Cash Flow from Operating Activities	22,806,632	15,159,896	27,354,611
Cash Flows from Investing Activities [Abstract]
Purchases of Premises and Equipment	(845,338)	(397,825)	(490,256)
Cash Flows from Financing Activities [Abstract]
Proceeds from Issuance of Common Stock	0	0	5,078,255
Net Cash Flows from Financing Activities	(56,300,381)	(84,614,742)	(30,708,212)
Net Increase (Decrease) in Cash and Cash Equivalents	(34,126,009)	29,222,173	11,720,927
Cash and Cash Equivalents, Beginning	83,371,842	54,149,669	42,428,742
Cash and Cash Equivalents, Ending	49,245,833	83,371,842	54,149,669
Colony Bankcorp, Inc. [Member]
ASSETS [Abstract]
Cash	494,432	1,051,904
Premises and Equipment, Net	1,284,968	1,378,395
Investment in Subsidiary, at Equity	119,646,209	118,289,024
Other	821,145	437,414
Total Assets	122,246,754	121,156,737
Liabilities [Abstract]
Dividends Payable	1,610,385	175,000
Other	648,202	139,927
Liabilities Total	2,258,587	314,927
Subordinated Debt	24,229,000	24,229,000
Stockholders' Equity [Abstract]
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares	27,827,053	27,662,476
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2012 and 2011, Respectively	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	30,497,576	29,456,240
Accumulated Other Comprehensive Income, Net of Tax	(149,814)	1,909,742
Stockholders' Equity	95,759,167	96,612,810
Total Liabilities and Stockholders' Equity	122,246,754	121,156,737
Preferred Stock, Par Value (in dollars per share)	$ 1,000	$ 1,000
Preferred Stock, Authorized (in shares)	10,000,000	10,000,000
Preferred Stock, Issued (in shares)	28,000	28,000
Common Stock, Par Value (in dollars per share)	$ 1	$ 1
Common Stock, Authorized (in shares)	20,000,000	20,000,000
Common Stock, Issued (in shares)	8,439,258	8,439,258
Income [Abstract]
Dividends from Subsidiary	17,372	15,265	15,536
Management Fees	590,422	505,414	455,241
Other	101,397	98,180	119,776
Income total	709,191	618,859	590,553
Expenses [Abstract]
Interest	554,004	508,081	516,170
Amortization	2,250	2,250	2,250
Salaries and Employee Benefits	735,919	734,104	761,873
Other	558,151	656,914	807,209
Expenses total	1,850,324	1,901,349	2,087,502
Income Before Income Taxes (Benefits)	(1,141,133)	(1,282,490)	(1,496,949)
Income Tax Benefits	365,691	425,605	532,823
Loss Before Equity in Undistributed Earnings of Subsidiary	(775,442)	(856,885)	(964,126)
Equity in Undistributed Earnings of Subsidiary	3,416,740	3,390,480	1,438,342
Net Income	2,641,298	2,533,595	474,216
Preferred Stock Dividends	1,435,385	1,400,000	1,400,000
Net Income (Loss) Available to Common Stockholders	1,205,913	1,133,595	(925,784)
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net Income	2,641,298	2,533,595	474,216
Other Comprehensive Income, Net of Tax [Abstract]
Gains (Losses) on Securities Arising During the Year	(186,830)	4,439,108	1,227,281
Reclassification Adjustment	(1,872,726)	(1,929,577)	(1,727,261)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	(2,059,556)	2,509,531	(499,980)
Comprehensive Income (Loss)	581,742	5,043,126	(25,764)
Cash Flows from Operating Activities [Abstract]
Net Income	2,641,298	2,533,595	474,216
Adjustments to Reconcile Net Income to Net Cash Used by Operating Activities [Abstract]
Depreciation and Amortization	93,427	112,651	194,918
Equity in Undistributed Earnings of Subsidiary	(3,416,740)	(3,390,480)	(1,438,342)
Other	124,543	24,977	(260,318)
Cash Flow from Operating Activities	(557,472)	(719,257)	(1,029,526)
Cash Flows from Investing Activities [Abstract]
Purchases of Premises and Equipment	0	(1,900)	(31,877)
Cash Flows from Financing Activities [Abstract]
Dividends Paid on Preferred Stock	0	(1,400,000)	(1,400,000)
Proceeds from Issuance of Common Stock	0	0	5,078,255
Net Cash Flows from Financing Activities	0	(1,400,000)	3,678,255
Net Increase (Decrease) in Cash and Cash Equivalents	(557,472)	(2,121,157)	2,616,852
Cash and Cash Equivalents, Beginning	1,051,904	3,173,061	556,209
Cash and Cash Equivalents, Ending	$ 494,432	$ 1,051,904	$ 3,173,061

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Fair Value of Financial Instruments and Fair Value Measurements (Details) (Recurring [Member], USD $)	Dec. 31, 2012	Dec. 31, 2011
Assets [Abstract]
Investment Securities Available for Sale	$ 268,300,411	$ 303,890,847
Carrying Amount [Member]
Assets [Abstract]
Cash and Short-Term Investments	71,041,000	112,329,000
Investment Securities Available for Sale	268,300,000	303,891,000
Investment Securities Held to Maturity	41,000	46,000
Federal Home Loan Bank Stock	3,364,000	5,398,000
Loans, Net	734,079,000	700,614,000
Liabilities [Abstract]
Deposits	979,685,000	999,985,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	35,000,000	71,000,000
Estimated Fair Value [Member]
Assets [Abstract]
Cash and Short-Term Investments	71,041,000	112,329,000
Investment Securities Available for Sale	268,300,000	303,891,000
Investment Securities Held to Maturity	42,000	46,000
Federal Home Loan Bank Stock	3,364,000	5,398,000
Loans, Net	735,115,000	702,438,000
Liabilities [Abstract]
Deposits	982,215,000	1,003,648,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	38,424,000	74,720,000
Level 1 [Member]
Assets [Abstract]
Cash and Short-Term Investments	71,041,000
Investment Securities Available for Sale	0	0
Investment Securities Held to Maturity	0
Federal Home Loan Bank Stock	3,364,000
Loans, Net	0
Liabilities [Abstract]
Deposits	486,775,000
Subordinated Debentures	24,229,000
Other Borrowed Money	0
Level 2 [Member]
Assets [Abstract]
Cash and Short-Term Investments	0
Investment Securities Available for Sale	267,162,173	302,768,420
Investment Securities Held to Maturity	42,000
Federal Home Loan Bank Stock	0
Loans, Net	713,109,000
Liabilities [Abstract]
Deposits	495,440,000
Subordinated Debentures	0
Other Borrowed Money	38,424,000
Level 3 [Member]
Assets [Abstract]
Cash and Short-Term Investments	0
Investment Securities Available for Sale	1,138,238	1,122,427
Investment Securities Held to Maturity	0
Federal Home Loan Bank Stock	0
Loans, Net	22,006,000
Liabilities [Abstract]
Deposits	0
Subordinated Debentures	0
Other Borrowed Money	$ 0

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Restricted Stock - Unearned Compensation (Details) (Restricted Stock [Member])	12 Months Ended
	Dec. 31, 2012
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awards, maximum (in shares)	143,500
Issued shares (in shares)	53,256
Forfeited shares (in shares)	17,798
Remaining shares (in shares)	108,042
Cost recognition period	3 years

XML

Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2012

Supplemental Cash Flow Information [Abstract ]

Supplemental Cash Flow Information

(18) Supplemental Cash Flow Information

Cash payments for the following were made during the years ended December 31:

	2012		2011		2010
Interest Expense	$	10,942,113	$	17,204,476	$	21,975,968
Income Taxes	$	-	$	390,152	$	275,000

Noncash financing and investing activities for the years ended December 31 are as follows:

	2012		2011			2010
Acquisitions of Real Estate   Through Loan Foreclosures	$	9,729,174	$	12,555,622		$	13,159,402
Unrealized (Gain) Loss on Investment Securities	$	3,120,540	$	(3,802,320	)	$	757,545

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Financial Information of Colony Bankcorp, Inc (Parent Only) (Tables)

12 Months Ended

Dec. 31, 2012

Financial Information of Colony Bankcorp, Inc. (Parent Only) [Abstract]

Balance Sheets

COLONY BANKCORP, INC. (PARENT ONLY)

BALANCE SHEETS

DECEMBER 31

ASSETS
	2012			2011
Cash	$	494,432		$	1,051,904
Premises and Equipment, Net		1,284,968			1,378,395
Investment in Subsidiary, at Equity		119,646,209			118,289,024
Other		821,145			437,414
Total Assets	$	122,246,754		$	121,156,737
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Dividends Payable	$	1,610,385		$	175,000
Other		648,202			139,927
		2,258,587			314,927
Subordinated Debt		24,229,000			24,229,000
Stockholders' Equity
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares		27,827,053			27,662,476
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2012 and 2011		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		30,497,576			29,456,240
Accumulated Other Comprehensive Income, Net of Tax		(149,814	)		1,909,742
		95,759,167			96,612,810
Total Liabilities and Stockholders' Equity	$	122,246,754		$	121,156,737

Statements of Operations

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Income
Dividends from Subsidiary	$	17,372		$	15,265		$	15,536
Management Fees		590,422			505,414			455,241
Other		101,397			98,180			119,776
		709,191			618,859			590,553
Expenses
Interest		554,004			508,081			516,170
Amortization		2,250			2,250			2,250
Salaries and Employee Benefits		735,919			734,104			761,873
Other		558,151			656,914			807,209
		1,850,324			1,901,349			2,087,502
Loss Before Taxes and Equity in Undistributed Earnings of Subsidiary		(1,141,133	)		(1,282,490	)		(1,496,949	)
Income Tax Benefits		365,691			425,605			532,823
Loss Before Equity in Undistributed Earnings of Subsidiary		(775,442	)		(856,885	)		(964,126	)
Equity in Undistributed Earnings of Subsidiary		3,416,740			3,390,480			1,438,342
Net Income		2,641,298			2,533,595			474,216
Preferred Stock Dividends		1,435,385			1,400,000			1,400,000
Net Income (Loss) Available to Common Stockholders	$	1,205,913		$	1,133,595		$	(925,784	)

Statements of Comprehensive Income (Loss)

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Net Income	$	2,641,298		$	2,533,595		$	474,216
Other Comprehensive Income, Net of Tax
Gains (Losses) on Securities Arising During the Year		(186,830	)		4,439,108			1,227,281
Reclassification Adjustment		(1,872,726	)		(1,929,577	)		(1,727,261	)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		(2,059,556	)		2,509,531			(499,980	)
Comprehensive Income (Loss)	$	581,742		$	5,043,126		$	(25,764	)

Statements of Cash Flows

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Cash Flows from Operating Activities
Net Income	$	2,641,298		$	2,533,595		$	474,216
Adjustments to Reconcile Net Income to Net Cash Used by Operating Activities
Depreciation and Amortization		93,427			112,651			194,918
Equity in Undistributed Earnings of Subsidiary		(3,416,740	)		(3,390,480	)		(1,438,342	)
Other		124,543			24,977			(260,318	)
		(557,472	)		(719,257	)		(1,029,526	)
Cash Flows from Investing Activities
Purchases of Premises and Equipment		-			(1,900	)		(31,877	)
Cash Flows from Financing Activities
Dividends Paid on Preferred Stock		-			(1,400,000	)		(1,400,000	)
Proceeds from Issuance of Common Stock		-			-			5,078,255
		-			(1,400,000	)		3,678,255
Increase (Decrease) in Cash		(557,472	)		(2,121,157	)		2,616,852
Cash, Beginning		1,051,904			3,173,061			556,209
Cash, Ending	$	494,432		$	1,051,904		$	3,173,061

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Deposits (Tables)

12 Months Ended

Dec. 31, 2012

Deposits [Abstract]

Components of interest-bearing deposits

Components of interest-bearing deposits as of December 31 are as follows:

	2012		2011
Interest-Bearing Demand	$	314,030,843	$	284,870,972
Savings		48,777,743		41,230,662
Time, $100,000 and Over		211,244,750		247,589,188
Other Time		281,665,013		332,025,539
	$	855,718,349	$	905,716,361

Scheduled maturities of certificates of deposits

As of December 31, 2012, the scheduled maturities of certificates of deposit are as follows:

Year	Amount
2013	$	388,484,260
2014		59,082,678
2015		28,380,949
2016		8,169,838
2017 and Thereafter		8,792,038
	$	492,909,763

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Supplemental Cash Flow Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash payments [Abstract]
Interest Expense	$ 10,942,113	$ 17,204,476	$ 21,975,968
Income Taxes	0	390,152	275,000
Noncash financing and investing activities [Abstract]
Acquisitions of Real Estate Through Loan Foreclosures	9,729,174	12,555,622	13,159,402
Unrealized (Gain) Loss on Investment Securities	$ 3,120,540	$ (3,802,320)	$ 757,545

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Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2012

Allowance for Loan Losses [Abstract]

Allowance for loan losses

Changes in the allowance for loan losses for the years ended December 31 are as follows:

	December 31
	2012			2011			2010
Balance, Beginning of Year	$	15,649,594		$	28,280,077		$	31,400,641
Provision for Loan Losses		6,784,767			8,250,000			13,350,000
Loans Charged Off		(10,454,175	)		(22,850,673	)		(17,622,454	)
Recoveries of Loans Previously Charged Off		756,735			1,970,190			1,151,890
Balance, End of Year	$	12,736,921		$	15,649,594		$	28,280,077

The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the years ended December 31.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other loan categories and periodically may result in reallocation within the provision categories.

2012	Beginning Balance		Charge-Offs			Recoveries		Provision			Ending Balance
Commercial and Agricultural
Commercial	$	1,070,560	$	(653,389	)	$	139,802	$	424,048		$	981,021
Agricultural		297,168		(3,028	)		-		2,035			296,175
Real Estate
Commercial Construction		3,122,594		(4,106,124	)		209,352		2,664,378			1,890,200
Residential Construction		138,092		-			-		-			138,092
Commercial		6,448,064		(4,325,642	)		232,880		2,807,537			5,162,839
Residential		3,695,357		(960,620	)		47,690		623,520			3,405,947
Farmland		364,663		(224,725	)		4,716		145,872			290,526
Consumer and Other
Consumer		205,154		(169,249	)		81,956		109,913			227,774
Other		307,942		(11,398	)		40,339		7,464			344,347
	$	15,649,594	$	(10,454,175	)	$	756,735	$	6,784,767		$	12,736,921
2011
Commercial and Agricultural
Commercial	$	4,414,817	$	(841,887	)	$	127,490	$	(2,629,860	)	$	1,070,560
Agricultural		698,637		(455,165	)		454,453		(400,757	)		297,168
Real Estate
Commercial Construction		4,126,043		(6,957,181	)		557,168		5,396,564			3,122,594
Residential Construction		519,766		(481	)		-		(381,193	)		138,092
Commercial		8,029,525		(12,492,097	)		527,996		10,382,640			6,448,064
Residential		5,941,696		(1,704,887	)		149,173		(690,625	)		3,695,357
Farmland		944,323		(60,447	)		411		(519,624	)		364,663
Consumer and Other
Consumer		3,074,220		(222,878	)		145,279		(2,791,467	)		205,154
Other		531,050		(115,650	)		8,220		(115,678	)		307,942
	$	28,280,077	$	(22,850,673	)	$	1,970,190	$	8,250,000		$	15,649,594

2010	Beginning Balance		Charge-Offs			Recoveries		Provision		Ending Balance
Commercial and Agricultural
Commercial	$	3,930,760	$	(469,214	)	$	80,181	$	873,090	$	4,414,817
Agricultural		779,337		(255,627	)		1,377		173,550		698,637
Real Estate
Commercial Construction		7,402,484		(4,648,124	)		184,868		1,186,815		4,126,043
Residential Construction		447,676		-			-		72,090		519,766
Commercial		8,790,443		(7,459,619	)		141,931		6,556,770		8,029,525
Residential		5,025,839		(2,929,668	)		439,940		3,405,585		5,941,696
Farmland		942,019		(271,750	)		7,639		266,415		944,323
Consumer and Other
Consumer		2,826,058		(548,834	)		245,641		551,355		3,074,220
Other		1,256,025		(1,039,618	)		50,313		264,330		531,050
	$	31,400,641	$	(17,622,454	)	$	1,151,890	$	13,350,000	$	28,280,077

Allowance for loan losses, segregated by impairment methodology

The Company determines its individual loan reserves during its quarterly review of substandard loans.  This process involves reviewing all loans with a risk grade of 6 or greater and an outstanding relationship balance of $50,000 or more, regardless of the loan's impairment classification.  Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on nonimpaired loans.  Management considers those loans graded substandard, but not classified as impaired, to be higher risk loans and will make specific allocations of the allowance to those loans if warranted.  Since these loans are not considered impaired, they are included in the "Collectively Evaluated for Impairment" column of the following tables.  At December 31, 2012 and 2011, substandard loans, not classified as impaired, for which a specific allocation was made totaled $10,795,911 and $16,746,384, respectively.  The specific allocation associated with these loans for December 31, 2012 and 2011 was $898,773 and $1,926,438.  At December 31, 2012, 2011 and 2010, impaired loans totaling $1,026,624, $995,168 and $976,971, respectively, were below the $50,000 review threshold and were not individually reviewed for impairment.  Those loans were subject to the bank's general loan loss reserve methodology and are included in the "Collectively Evaluated for Impairment" column of the following tables.  The following tables present breakdowns of the allowance for loan losses, segregated by impairment methodology for December 31, 2012 and 2011:

	Ending Allowance Balance						Ending Loan Balance
2012	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	462,555	$	518,466	$	981,021	$	2,512,133	$	53,172,359	$	55,684,492
Agricultural		-		296,175		296,175		-		6,210,953		6,210,953
Real Estate
Commercial Construction		1,732,534		157,666		1,890,200		13,892,135		39,915,921		53,808,056
Residential Construction		-		138,092		138,092		-		5,852,238		5,852,238
Commercial		1,236,526		3,926,313		5,162,839		28,205,405		306,180,772		334,386,177
Residential		840,492		2,565,455		3,405,947		8,022,249		195,822,273		203,844,522
Farmland		-		290,526		290,526		2,393,775		46,663,086		49,056,861
Consumer and Other
Consumer		-		227,774		227,774		28,007		29,749,769		29,777,776
Other		-		344,347		344,347		17,491		8,411,445		8,428,936
Total End of Year Balance	$	4,272,107	$	8,464,814	$	12,736,921	$	55,071,195	$	691,978,816	$	747,050,011

	Ending Allowance Balance						Ending Loan Balance
2011	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	308,211	$	762,349	$	1,070,560	$	2,237,878	$	46,748,224	$	48,986,102
Agricultural		-		297,168		297,168		-		8,421,884		8,421,884
Real Estate
Commercial Construction		2,693,571		429,023		3,122,594		24,212,519		34,333,301		58,545,820
Residential Construction		-		138,092		138,092		-		3,530,502		3,530,502
Commercial		2,060,815		4,387,249		6,448,064		35,715,026		279,565,722		315,280,748
Residential		674,998		3,020,359		3,695,357		5,614,744		188,023,073		193,637,817
Farmland		11,878		352,785		364,663		486,683		47,738,723		48,225,406
Consumer and Other
Consumer		1,632		203,522		205,154		9,596		30,439,707		30,449,303
Other		-		307,942		307,942		-		9,243,739		9,243,739
Total End of Year Balance	$	5,751,105	$	9,898,489	$	15,649,594	$	68,276,446	$	648,044,875	$	716,321,321

	Ending Allowance Balance						Ending Loan Balance
2010	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	336,011	$	4,078,806	$	4,414,817	$	2,131,375	$	51,088,966	$	53,220,341
Agricultural		-		698,637		698,637		274,679		10,277,112		10,551,791
Real Estate
Commercial Construction		3,501,117		624,926		4,126,043		28,392,107		43,917,124		72,309,231
Residential Construction		-		519,766		519,766		194,881		4,178,130		4,373,011
Commercial		7,539,533		489,992		8,029,525		58,562,946		304,315,619		362,878,565
Residential		1,561,952		4,379,744		5,941,696		13,645,907		193,825,906		207,471,813
Farmland		-		944,323		944,323		1,416,538		51,361,851		52,778,389
Consumer and Other
Consumer		3,033		3,071,187		3,074,220		76,420		33,487,443		33,563,863
Other		-		531,050		531,050		113,002		15,990,667		16,103,669
Total End of Year Balance	$	12,941,646	$	15,338,431	$	28,280,077	$	104,807,855	$	708,442,818	$	813,250,673

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Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2012
Summary of Significant Accounting Policies [Abstract]
Percentage of loan portfolio concentrated in loans secured by real estate (in hundredths)	87.00%
Discounted percentage for selling and marketing cost	10.00%
Income Taxes [Abstract]
Probability of uncertain tax positions of being realized upon settlement, minimum (in hundredths)	50.00%
Banking Premises [Member]
Premises and equipment [Line Items]
Methods	Straight-Line and Accelerated
Banking Premises [Member] | Minimum [Member]
Premises and equipment [Line Items]
Useful lives of the assets	15 years
Banking Premises [Member] | Maximum [Member]
Premises and equipment [Line Items]
Useful lives of the assets	40 years
Furniture and Equipment [Member]
Premises and equipment [Line Items]
Methods	Straight-Line and Accelerated
Furniture and Equipment [Member] | Minimum [Member]
Premises and equipment [Line Items]
Useful lives of the assets	5 years
Furniture and Equipment [Member] | Maximum [Member]
Premises and equipment [Line Items]
Useful lives of the assets	10 years

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Deposits (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Deposits [Abstract]
Aggregate amount of overdrawn deposit accounts reclassified as loan balances	$ 389,331	$ 147,398
Components of interest-bearing deposits [Abstract]
Interest-Bearing Demand	314,030,843	284,870,972
Savings	48,777,743	41,230,662
Time, $100,000 and Over	211,244,750	247,589,188
Other Time	281,665,013	332,025,539
Total Interest bearing Deposits	855,718,349	905,716,361
Brokered deposits balances	28,229,608	28,157,961
CDARS balances	28,229,608	28,157,961
Brokered deposits less the reciprocal deposits	0	0
Certificates of deposits, $100,000 or more	161,530,500	190,876,500
Scheduled maturities of certificates of deposits [Abstract]
2013	388,484,260
2014	59,082,678
2015	28,380,949
2016	8,169,838
2017 and Thereafter	8,792,038
Total	$ 492,909,763

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Allowance for Loan Losses, by class of loan (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	$ 15,649,594	$ 28,280,077	$ 31,400,641
Charge-Offs	(10,454,175)	(22,850,673)	(17,622,454)
Recoveries	756,735	1,970,190	1,151,890
Provision	6,784,767	8,250,000	13,350,000
Ending Balance	12,736,921	15,649,594	28,280,077
Reduction in Allowance for Loans and Lease Losses estimate	2,154,639
Loan balance for reviewing, minimum	50,000
Impaired loans below the $50,000 review threshold	1,026,624	995,168	976,971
Substandard [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Specific allocation associated with Substandard loans	898,773	1,926,438
Substandard loans, not classified as impaired	10,795,911	16,746,384
Commercial [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	1,070,560	4,414,817	3,930,760
Charge-Offs	(653,389)	(841,887)	(469,214)
Recoveries	139,802	127,490	80,181
Provision	424,048	(2,629,860)	873,090
Ending Balance	981,021	1,070,560	4,414,817
Agricultural [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	297,168	698,637	779,337
Charge-Offs	(3,028)	(455,165)	(255,627)
Recoveries	0	454,453	1,377
Provision	2,035	(400,757)	173,550
Ending Balance	296,175	297,168	698,637
Commercial Construction [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	3,122,594	4,126,043	7,402,484
Charge-Offs	(4,106,124)	(6,957,181)	(4,648,124)
Recoveries	209,352	557,168	184,868
Provision	2,664,378	5,396,564	1,186,815
Ending Balance	1,890,200	3,122,594	4,126,043
Residential Construction [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	138,092	519,766	447,676
Charge-Offs	0	(481)	0
Recoveries	0	0	0
Provision	0	(381,193)	72,090
Ending Balance	138,092	138,092	519,766
Commercial Real Estate [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	6,448,064	8,029,525	8,790,443
Charge-Offs	(4,325,642)	(12,492,097)	(7,459,619)
Recoveries	232,880	527,996	141,931
Provision	2,807,537	10,382,640	6,556,770
Ending Balance	5,162,839	6,448,064	8,029,525
Residential [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	3,695,357	5,941,696	5,025,839
Charge-Offs	(960,620)	(1,704,887)	(2,929,668)
Recoveries	47,690	149,173	439,940
Provision	623,520	(690,625)	3,405,585
Ending Balance	3,405,947	3,695,357	5,941,696
Farmland [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	364,663	944,323	942,019
Charge-Offs	(224,725)	(60,447)	(271,750)
Recoveries	4,716	411	7,639
Provision	145,872	(519,624)	266,415
Ending Balance	290,526	364,663	944,323
Consumer [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	205,154	3,074,220	2,826,058
Charge-Offs	(169,249)	(222,878)	(548,834)
Recoveries	81,956	145,279	245,641
Provision	109,913	(2,791,467)	551,355
Ending Balance	227,774	205,154	3,074,220
Other [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	307,942	531,050	1,256,025
Charge-Offs	(11,398)	(115,650)	(1,039,618)
Recoveries	40,339	8,220	50,313
Provision	7,464	(115,678)	264,330
Ending Balance	$ 344,347	$ 307,942	$ 531,050

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related party loans

The aggregate balance of direct and indirect loans to directors, executive officers or principal holders of equity securities of the Company was $4,776,492 as of December 31, 2012 and $5,504,230 as of December 31, 2011. All such loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and do not involve more than a normal risk of collectibility.  A summary of activity of related party loans is shown below:

	2012			2011
Balance, Beginning	$	5,504,230		$	9,797,492
New Loans		8,075,835			15,455,299
Repayments		(10,510,517	)		(17,871,362	)
Transactions Due to Changes in Directors		1,706,944			(1,877,199	)
Balance, Ending	$	4,776,492		$	5,504,230

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Cash and Balances Due from Banks

12 Months Ended

Dec. 31, 2012

Cash and Balances Due from Banks [Abstract]

Cash and Balances Due from Banks

(2)  Cash and Balances Due from Banks

Components of cash and balances due from banks are as follows as of December 31:

	2012		2011
Cash on Hand and Cash Items	$	9,063,437	$	9,271,705
Noninterest-Bearing Deposits with Other Banks		20,180,490		19,108,663
	$	29,243,927	$	28,380,368

The Company is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank based on a percentage of deposits.  Reserve balances totaled approximately $6,065,000 and $4,183,000 at December 31, 2012 and 2011, respectively.

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Allowance for Loan Losses, evaluated for impairment (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Ending allowance balance [Abstract]
Individually evaluated for impairment	$ 4,272,107	$ 5,751,105	$ 12,941,646
Collectively evaluated for impairment	8,464,814	9,898,489	15,338,431
Total ending allowance balance	12,736,921	15,649,594	28,280,077	31,400,641
Ending loan balance [Abstract]
Individually evaluated for impairment	55,071,195	68,276,446	104,807,855
Collectively evaluated for impairment	691,978,816	648,044,875	708,442,818
Total Loans	747,050,011	716,321,321	813,250,673
Commercial [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	462,555	308,211	336,011
Collectively evaluated for impairment	518,466	762,349	4,078,806
Total ending allowance balance	981,021	1,070,560	4,414,817	3,930,760
Ending loan balance [Abstract]
Individually evaluated for impairment	2,512,133	2,237,878	2,131,375
Collectively evaluated for impairment	53,172,359	46,748,224	51,088,966
Total Loans	55,684,492	48,986,102	53,220,341
Agricultural [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	296,175	297,168	698,637
Total ending allowance balance	296,175	297,168	698,637	779,337
Ending loan balance [Abstract]
Individually evaluated for impairment	0	0	274,679
Collectively evaluated for impairment	6,210,953	8,421,884	10,277,112
Total Loans	6,210,953	8,421,884	10,551,791
Commercial Construction [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	1,732,534	2,693,571	3,501,117
Collectively evaluated for impairment	157,666	429,023	624,926
Total ending allowance balance	1,890,200	3,122,594	4,126,043	7,402,484
Ending loan balance [Abstract]
Individually evaluated for impairment	13,892,135	24,212,519	28,392,107
Collectively evaluated for impairment	39,915,921	34,333,301	43,917,124
Total Loans	53,808,056	58,545,820	72,309,231
Residential Construction [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	138,092	138,092	519,766
Total ending allowance balance	138,092	138,092	519,766	447,676
Ending loan balance [Abstract]
Individually evaluated for impairment	0	0	194,881
Collectively evaluated for impairment	5,852,238	3,530,502	4,178,130
Total Loans	5,852,238	3,530,502	4,373,011
Commercial Real Estate [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	1,236,526	2,060,815	7,539,533
Collectively evaluated for impairment	3,926,313	4,387,249	489,992
Total ending allowance balance	5,162,839	6,448,064	8,029,525	8,790,443
Ending loan balance [Abstract]
Individually evaluated for impairment	28,205,405	35,715,026	58,562,946
Collectively evaluated for impairment	306,180,772	279,565,722	304,315,619
Total Loans	334,386,177	315,280,748	362,878,565
Residential [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	840,492	674,998	1,561,952
Collectively evaluated for impairment	2,565,455	3,020,359	4,379,744
Total ending allowance balance	3,405,947	3,695,357	5,941,696	5,025,839
Ending loan balance [Abstract]
Individually evaluated for impairment	8,022,249	5,614,744	13,645,907
Collectively evaluated for impairment	195,822,273	188,023,073	193,825,906
Total Loans	203,844,522	193,637,817	207,471,813
Farmland [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	11,878	0
Collectively evaluated for impairment	290,526	352,785	944,323
Total ending allowance balance	290,526	364,663	944,323	942,019
Ending loan balance [Abstract]
Individually evaluated for impairment	2,393,775	486,683	1,416,538
Collectively evaluated for impairment	46,663,086	47,738,723	51,361,851
Total Loans	49,056,861	48,225,406	52,778,389
Consumer [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	1,632	3,033
Collectively evaluated for impairment	227,774	203,522	3,071,187
Total ending allowance balance	227,774	205,154	3,074,220	2,826,058
Ending loan balance [Abstract]
Individually evaluated for impairment	28,007	9,596	76,420
Collectively evaluated for impairment	29,749,769	30,439,707	33,487,443
Total Loans	29,777,776	30,449,303	33,563,863
Other [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	344,347	307,942	531,050
Total ending allowance balance	344,347	307,942	531,050	1,256,025
Ending loan balance [Abstract]
Individually evaluated for impairment	17,491	0	113,002
Collectively evaluated for impairment	8,411,445	9,243,739	15,990,667
Total Loans	$ 8,428,936	$ 9,243,739	$ 16,103,669

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Other Borrowed Money (Tables)

12 Months Ended

Dec. 31, 2012

Other Borrowed Money [Abstract]

Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:

	2012		2011
Federal Home Loan Bank Advances	$	35,000,000	$	71,000,000

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Financial Information of Colony Bankcorp, Inc (Parent Only)

12 Months Ended

Dec. 31, 2012

Financial Information of Colony Bankcorp, Inc. (Parent Only) [Abstract]

Financial Information of Colony Bankcorp, Inc. (Parent Only)

(22) Financial Information of Colony Bankcorp, Inc. (Parent Only)

The parent company's balance sheets as of December 31, 2012 and 2011 and the related statements of operations and comprehensive income (loss) and cash flows for each of the years in the three-year period then ended are as follows:

COLONY BANKCORP, INC. (PARENT ONLY)

BALANCE SHEETS

DECEMBER 31

ASSETS
	2012			2011
Cash	$	494,432		$	1,051,904
Premises and Equipment, Net		1,284,968			1,378,395
Investment in Subsidiary, at Equity		119,646,209			118,289,024
Other		821,145			437,414
Total Assets	$	122,246,754		$	121,156,737
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Dividends Payable	$	1,610,385		$	175,000
Other		648,202			139,927
		2,258,587			314,927
Subordinated Debt		24,229,000			24,229,000
Stockholders' Equity
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares		27,827,053			27,662,476
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2012 and 2011		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		30,497,576			29,456,240
Accumulated Other Comprehensive Income, Net of Tax		(149,814	)		1,909,742
		95,759,167			96,612,810
Total Liabilities and Stockholders' Equity	$	122,246,754		$	121,156,737

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Income
Dividends from Subsidiary	$	17,372		$	15,265		$	15,536
Management Fees		590,422			505,414			455,241
Other		101,397			98,180			119,776
		709,191			618,859			590,553
Expenses
Interest		554,004			508,081			516,170
Amortization		2,250			2,250			2,250
Salaries and Employee Benefits		735,919			734,104			761,873
Other		558,151			656,914			807,209
		1,850,324			1,901,349			2,087,502
Loss Before Taxes and Equity in Undistributed Earnings of Subsidiary		(1,141,133	)		(1,282,490	)		(1,496,949	)
Income Tax Benefits		365,691			425,605			532,823
Loss Before Equity in Undistributed Earnings of Subsidiary		(775,442	)		(856,885	)		(964,126	)
Equity in Undistributed Earnings of Subsidiary		3,416,740			3,390,480			1,438,342
Net Income		2,641,298			2,533,595			474,216
Preferred Stock Dividends		1,435,385			1,400,000			1,400,000
Net Income (Loss) Available to Common Stockholders	$	1,205,913		$	1,133,595		$	(925,784	)

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Net Income	$	2,641,298		$	2,533,595		$	474,216
Other Comprehensive Income, Net of Tax
Gains (Losses) on Securities Arising During the Year		(186,830	)		4,439,108			1,227,281
Reclassification Adjustment		(1,872,726	)		(1,929,577	)		(1,727,261	)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		(2,059,556	)		2,509,531			(499,980	)
Comprehensive Income (Loss)	$	581,742		$	5,043,126		$	(25,764	)

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2012			2011			2010
Cash Flows from Operating Activities
Net Income	$	2,641,298		$	2,533,595		$	474,216
Adjustments to Reconcile Net Income to Net Cash Used by Operating Activities
Depreciation and Amortization		93,427			112,651			194,918
Equity in Undistributed Earnings of Subsidiary		(3,416,740	)		(3,390,480	)		(1,438,342	)
Other		124,543			24,977			(260,318	)
		(557,472	)		(719,257	)		(1,029,526	)
Cash Flows from Investing Activities
Purchases of Premises and Equipment		-			(1,900	)		(31,877	)
Cash Flows from Financing Activities
Dividends Paid on Preferred Stock		-			(1,400,000	)		(1,400,000	)
Proceeds from Issuance of Common Stock		-			-			5,078,255
		-			(1,400,000	)		3,678,255
Increase (Decrease) in Cash		(557,472	)		(2,121,157	)		2,616,852
Cash, Beginning		1,051,904			3,173,061			556,209
Cash, Ending	$	494,432		$	1,051,904		$	3,173,061

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Regulatory Capital Matters

12 Months Ended

Dec. 31, 2012

Regulatory Capital Matters [Abstract]

Regulatory Capital Matters

(21) Regulatory Capital Matters

The amount of dividends payable to the parent company from the subsidiary bank is limited by various banking regulatory agencies.  Upon approval by regulatory authorities, the Bank may pay cash dividends to the parent company in excess of regulatory limitations.  Additionally, the Company suspended the payment of dividends to its stockholders in the third quarter of 2009.  At December 31, 2012, the Company is subject to certain regulatory restrictions that preclude the declaration of or payment of any dividends to its common stockholders, without prior approval from the Federal Reserve Bank.

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 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 classification 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 I capital to risk-weighted assets, and of Tier I capital to average assets.  The amounts and ratios as defined in regulations are presented hereafter.  Management believes, as of December 31, 2012, the Company meets all capital adequacy requirements to which it is subject 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.

The following table summarizes regulatory capital information as of December 31, 2012 and 2011 on a consolidated basis and for its wholly-owned subsidiary, as defined.

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2012	(In Thousands)
Total Capital to Risk-Weighted Assets
Consolidated	$	122,630		16.47	%	$	59,548		8.00	%		N/A		N/A
Colony Bank		123,463		16.61			59,474		8.00		$	74,342		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		113,283		15.22			29,774		4.00			N/A		N/A
Colony Bank		114,128		15.35			29,737		4.00			44,605		6.00
Tier I Capital to Average Assets
Consolidated		113,283		10.22			44,343		4.00			N/A		N/A
Colony Bank		114,128		10.31			44,282		4.00			55,352		5.00
As of December 31, 2011
Total Capital to Risk-Weighted Assets
Consolidated	$	118,913		16.50	%	$	57,658		8.00	%		N/A		N/A
Colony Bank		117,243		16.29			57,584		8.00		$	71,980		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		109,822		15.24			28,829		4.00			N/A		N/A
Colony Bank		108,163		15.03			28,792		4.00			43,188		6.00
Tier I Capital to Average Assets
Consolidated		109,822		9.51			46,185		4.00			N/A		N/A
Colony Bank		108,163		9.38			46,117		4.00			57,646		5.00

The Bank is currently subject to a memorandum of understanding (MOU) which requires, among other things, that the Bank maintain minimum capital ratios at specified levels higher than those otherwise required by applicable regulations as follows: Tier 1 capital to total average assets of 8 percent and total risk-based capital to total risk-weighted assets of 10 percent during the life of the MOU.  The MOU also requires that, prior to declaring or paying any cash dividend to the Company, the Bank must obtain written consent of its regulators.  Additional requirements of the MOU are discussed in Part 1, Item 1 of the Company's December 31, 2012 Form 10-K filed with the Securities Exchange Commission on March 12, 2013.  Failure to comply with the terms of the MOU could have an adverse impact on the Company's consolidated financial condition.

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Loans, Credit Quality Indicator (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 747,050,011	$ 716,321,321	$ 813,250,673
Loan balance for reviewing, minimum	50,000
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	55,684,492	48,986,102
Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,210,953	8,421,884	10,551,791
Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	53,808,056	58,545,820	72,309,231
Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,852,238	3,530,502	4,373,011
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	334,386,177	315,280,748	362,878,565
Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	203,844,522	193,637,817
Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	49,056,861	48,225,406	52,778,389
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	29,777,776	30,449,303
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,428,936	9,243,739
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	663,237,573	611,939,175
Pass [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	49,947,552	42,586,230
Pass [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,155,864	8,153,224
Pass [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	37,256,301	28,745,596
Pass [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,748,829	3,227,392
Pass [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	298,222,139	272,062,206
Pass [Member] | Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	183,222,020	175,099,480
Pass [Member] | Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	45,495,038	43,664,126
Pass [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	28,839,058	29,372,493
Pass [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,350,772	9,028,428
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	25,573,039	29,605,183
Special Mention [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,417,735	1,480,726
Special Mention [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Special Mention [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,663,588	2,814,113
Special Mention [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	103,409	303,110
Special Mention [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	9,759,473	14,789,290
Special Mention [Member] | Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	11,412,973	8,343,336
Special Mention [Member] | Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	913,487	1,413,476
Special Mention [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	293,467	361,714
Special Mention [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,907	99,418
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	58,239,399	74,776,963
Substandard [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,319,205	4,919,146
Substandard [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	55,089	268,660
Substandard [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	14,888,167	26,986,111
Substandard [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Substandard [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	26,404,565	28,429,252
Substandard [Member] | Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	9,209,529	10,195,001
Substandard [Member] | Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,648,336	3,147,804
Substandard [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	645,251	715,096
Substandard [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 69,257	$ 115,893

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Subordinated Debentures (Trust Preferred Securities) (Tables)

12 Months Ended

Dec. 31, 2012

Subordinated Debentures (Trust Preferred Securities) [Abstract]

Subordinated Debentures (Trust Preferred Securities)

								Total
				3-Month		Added		Interest			5-Year
Description	Date	Amount		Libor Rate		Points		Rate		Maturity	Call Option
(In Thousands)
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,500		0.30800		2.68		2.98800	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,000		0.31100		1.50		1.81100	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,000		0.31100		1.65		1.96100	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,000		0.31325		1.40		1.71325	9/14/2037	9/14/2012

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Earnings Per Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share

(23) Earnings Per Share

Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during each period.  Diluted earnings per share reflects the potential dilution of restricted stock and common stock warrants.  Net income available to common stockholders represents net income (loss) after preferred stock dividends.  The following table presents earnings per share for the years ended December 31, 2012, 2011 and 2010:

	2012		2011		2010
Numerator
Net Income (Loss) Available to Common Stockholders	$	1,205,913	$	1,133,595	$	(925,784	)
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,149,217
Dilutive Effect of Potential Common Stock
Restricted Stock		-		-		-
Stock Warrants		-		-		-
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,439,258		8,439,258		8,149,217
Earnings (Loss) Per Share - Basic	$	0.14	$	0.13	$	(0.11	)
Earnings (Loss) Per Share - Diluted	$	0.14	$	0.13	$	(0.11	)

For the years ended December 31, 2012 and 2011, respectively, the Company has excluded 500,000 and 501,855 common stock equivalents with strike prices that would cause them to be antidilutive.  Additionally, due to the net loss reported for the year ended December 31, 2010, the Company has excluded 505,283 shares of common stock equivalents because these would also have been antidilutive.

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Subsequent Event

12 Months Ended

Dec. 31, 2012

Subsequent Event [Abstract]

Subsequent Event

(24) Subsequent Event

On January 29, 2013, the Company's 28,000 shares of Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) was sold by the Treasury to the public through a modified dutch auction.  This auction is part of the Treasury's ongoing efforts to wind down its remaining TARP bank investments.  The sale of the Preferred Stock to new investors did not result in any accounting entries and does not change the Company's capital position.  The Treasury continues to hold the Warrant for 500,000 shares of common stock; however, the Company has notified the Treasury of its intentions to repurchase the warrant, although no price for the repurchase has been set.

Cumulative dividends on the Preferred Shares will continue to accrue at a rate of 5 percent per annum for the first five years from initial issuance and at a rate of 9 percent per annum thereafter.  The Preferred Stock continues to have no maturity date and ranks senior to the Company's Common Stock.  The Preferred Stock continues to be redeemable at the option of the Company at 100 percent of their liquidation preference, plus any accrued and unpaid dividends.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(1)  Summary of Significant Accounting Policies

Principles of Consolidation

Colony Bankcorp, Inc. (the Company) is a bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of Colony Bankcorp, Inc. and its wholly-owned subsidiary, Colony Bank, 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.

Nature of Operations

The Company provides a full range of retail and commercial banking services for consumers and small- to medium-size businesses located primarily in central, south and coastal Georgia. Colony Bank is headquartered in Fitzgerald, Georgia with banking offices in Albany, Ashburn, Broxton, Centerville, Chester, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, Pitts, Quitman, Rochelle, Savannah, Soperton, Sylvester, Thomaston, Tifton, Valdosta and Warner Robins.  Lending and investing activities are funded primarily by deposits gathered through its retail banking office network.

Use of Estimates

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.

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements and note disclosures have been reclassified to conform to statement presentations selected for 2012.  Such reclassifications had no effect on previously reported stockholders' equity or net income.

Concentrations of Credit Risk

Concentrations of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions.  The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market.  At December 31, 2012, approximately 87 percent of the Company's loan portfolio was concentrated in loans secured by real estate.  A substantial portion of borrowers' ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector.  The downturn of the housing and real estate market that began in 2007 resulted in an increase of problem loans secured by real estate, of which most are centered in the Company's larger MSA markets.  Declining collateral real estate values that secure land development, construction and speculative real estate loans in the Company's larger MSA markets have resulted in high loan loss provisions in recent years.  In addition, a large portion of the Company's foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions.  Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis.

The success of the Company is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves.  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 the Company 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.

At times, the Company may have cash and cash equivalents at financial institutions in excess of federal deposit insurance limits.  The Company places its cash and cash equivalents with high credit quality financial institutions whose credit rating is monitored by management to minimize credit risk.

Investment Securities

The Company classifies its investment securities as trading, available for sale or held to maturity.  Securities that are held principally for resale in the near term are classified as trading.  Trading securities are carried at fair value, with realized and unrealized gains and losses included in noninterest income.  Currently, no securities are classified as trading.  Securities acquired with both the intent and ability to be held to maturity are classified as held to maturity and reported at amortized cost.  All securities not classified as trading or held to maturity are considered available for sale.  Securities available for sale are reported at estimated fair value.  Unrealized gains and losses on securities available for sale are excluded from earnings and are reported, net of deferred taxes, in accumulated other comprehensive income (loss), a component of stockholders' equity.  Gains and losses from sales of securities available for sale are computed using the specific identification method.  Securities available for sale includes securities, which may be sold to meet liquidity needs arising from unanticipated deposit and loan fluctuations, changes in regulatory capital requirements, or unforeseen changes in market conditions.

The Company evaluates each held to maturity and available for sale security in a loss position for other-than-temporary impairment (OTTI).  In estimating other-than-temporary impairment losses, management considers such factors as the length of time and the extent to which the market value has been below cost, the financial condition of the issuer and the Company's intent to sell and whether it is more likely than not that the Company will be required to sell the security before anticipated recovery of the amortized cost basis.  If the Company intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery, the OTTI write-down is recognized in earnings.  If the Company does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in other comprehensive income (loss).

Federal Home Loan Bank Stock

Investment in stock of a Federal Home Loan Bank (FHLB) is required for every federally insured institution that utilizes its services.  FHLB stock is considered restricted, as defined in the accounting standards.  The FHLB stock is reported in the consolidated financial statements at cost.  Dividend income is recognized when earned.

Loans

Loans that the Company has the ability and intent to hold for the foreseeable future or until maturity are recorded at their principal amount outstanding, net of unearned interest and fees.  Loan origination fees, net of certain direct origination costs, are deferred and amortized over the estimated terms of the loans using the straight-line method.  Interest income on loans is recognized using the effective interest method.

A loan is considered to be delinquent when payments have not been made according to contractual terms, typically evidenced by nonpayment of a monthly installment by the due date.

When management believes there is sufficient doubt as to the collectibility of principal or interest on any loan or generally when loans are 90 days or more past due, the accrual of applicable interest is discontinued and the loan is designated as nonaccrual, unless the loan is well secured and in the process of collection.  Interest payments received on nonaccrual loans are either applied against principal or reported as income, according to management's judgment as to the collectibility of principal.  Loans are returned to an accrual status when factors indicating doubtful collectibility on a timely basis no longer exist.

Loans Modified in a Troubled Debt Restructuring (TDR)

Loans are considered to have been modified in a TDR when, due to a borrower's financial difficulty, the Company makes certain concessions to the borrower that it would not otherwise consider for new debt with similar risk characteristics.  Modifications may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of the collateral.  Generally, a nonaccrual loan that has been modified in a TDR remains on nonaccrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan.  However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period.  If the borrower's ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status. Once a loan is modified in a troubled debt restructuring, it is accounted for as an impaired loan, regardless of its accrual status, until the loan is paid in full, sold or charged off.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions.  This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revisions as more information becomes available.

The allowance consists of specific, historical and general components.  The specific component relates to loans that are classified as either doubtful, substandard or special mention.  For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.  The historical component covers nonclassified loans and is based on historical loss experience adjusted for qualitative factors.  A general component is maintained to cover uncertainties that could affect management's estimate of probable losses.  The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio.  General valuation allowances are based on internal and external qualitative risk factors such as (1) changes in the composition of the loan portfolio, (2) the extent of loan concentrations within the portfolio, (3) the effectiveness of the Company's lending policies, procedures and internal controls, (4) the experience, ability and effectiveness of the Company's lending management and staff, and (5) national and local economics and business conditions.

Loans identified as losses by management, internal loan review and/or Bank examiners are charged off.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed.  Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price or the fair value of the collateral if the loan is collateral dependent.

A significant portion of the Company's impaired loans are deemed to be collateral dependent.  Management therefore measures impairment on these loans based on the fair value of the collateral.  Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company or by senior members of the Company's credit administration staff.  The decision whether or not to obtain an external third-party appraisal usually depends on the type of property being evaluated.  External appraisals are usually obtained on more complex, income producing properties such as hotels, shopping centers and businesses.  Less complex properties such as residential lots, farm land and single family houses may be evaluated internally by senior credit administration staff.  When the Company does obtain appraisals from external third-parties, the values utilized in the impairment calculation are "as is" or current market values.  The appraisals, whether prepared internally or externally, may utilize a single valuation approach or a combination of approaches including the comparable sales, income and cost approach.  Appraised amounts used in the impairment calculation are typically discounted 10 percent to account for selling and marketing costs, if the repayment of the loan is to come from the sale of the collateral.  Although appraisals are not obtained each year on all impaired loans, the collateral values used in the impairment calculations are evaluated quarterly by management.  Based on management's knowledge of the collateral and the current real estate market conditions, appraised values may be further discounted to reflect facts and circumstances known to management since the initial appraisal was performed.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are typically significant and result in a level 3 classification of the inputs for determining fair value.  Because of the high degree of judgment required in estimating the fair value of collateral underlying impaired loans and because of the relationship between fair value and general economic conditions, we consider the fair value of impaired loans to be highly sensitive to changes in market conditions.

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:

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.

Intangible Assets

Intangible assets consist of core deposit intangibles acquired in connection with a business combination.  The core deposit intangible is initially recognized based on an independent valuation performed as of the consummation date.  The core deposit intangible is amortized by the straight-line method over the average remaining life of the acquired customer deposits.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered.  Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Statement of Cash Flows

For reporting cash flows, cash and cash equivalents include cash on hand, noninterest-bearing amounts due from banks, federal funds sold and securities purchased under agreement to resell.  Cash flows from demand deposits, NOW accounts, savings accounts, loans and certificates of deposit are reported net.

Securities Purchased Under Agreement to Resell and Securities Sold Under Agreements to Repurchase

The Company purchases certain securities under agreements to resell.  The amounts advanced under these agreements represent short-term loans and are reflected as assets in the consolidated balance sheets.

The Company sells securities under agreements to repurchase.  These repurchase agreements are treated as borrowings.  The obligations to repurchase securities sold are reflected as a liability and the securities underlying the agreements are reflected as assets in the consolidated balance sheets.

Advertising Costs

The Company expenses the cost of advertising in the periods in which those costs are incurred.

Income Taxes

The provision for income taxes is based upon income for financial statement purposes, adjusted for nontaxable income and nondeductible expenses.  Deferred income taxes have been provided when different accounting methods have been used in determining income for income tax purposes and for financial reporting purposes.

Deferred tax assets and liabilities are recognized based on future tax consequences attributable to differences arising from the financial statement carrying values of assets and liabilities and their tax bases.  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 direct write-off method for tax purposes).  In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with effects included in the income tax provision.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The Company and its subsidiary file a consolidated federal income tax return.  The subsidiary pays its proportional share of federal income taxes to the Company based on its taxable income.

The Company's federal and state income tax returns for tax years 2012, 2011, 2010 and 2009 are subject to examination by the Internal Revenue Service (IRS) and the Georgia Department of Revenue, generally for three years after filing.

Positions taken in the Company's tax returns may be subject to challenge by the taxing authorities upon examination.  Uncertain tax positions are initially recognized in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.  Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts.  The Company provides for interest and, in some cases, penalties on tax positions that may be challenged by the taxing authorities. Interest expense is recognized beginning in the first period that such interest would begin accruing.  Penalties are recognized in the period that the Company claims the position in the tax return.  Interest and penalties on income tax uncertainties are classified within income tax expense in the consolidated statements of operations.

Other Real Estate

Other real estate generally represents real estate acquired through foreclosure and is initially recorded at estimated fair value at the date of acquisition less the cost of disposal.  Losses from the acquisition of property in full or partial satisfaction of debt are recorded as loan losses.  Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and valuation allowances are recorded as necessary to reduce the carrying amount to fair value less estimated cost of disposal.  Routine holding costs and gains or losses upon disposition are included in foreclosed property expense.

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.  Such items are considered components of other comprehensive income (loss).  Accounting standards codification requires the presentation in the consolidated financial statements of net income and all items of other comprehensive income (loss) as total comprehensive income (loss).

Off-Balance Sheet Credit Related Financial Instruments

In the ordinary course of business, the Company has entered into commitments to extend credit, commercial letters of credit and standby letters of credit.  Such financial instruments are recorded on the balance sheet when they are funded.

Changes in Accounting Principles and Effects of New Accounting Pronouncements

Adoption of New Accounting Standards

ASU No. 2011-03, "Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements." ASU 2011-03 is intended to improve financial reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 removes from the assessment of effective control (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance guidance related to that criterion. ASU 2011-03 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements.

ASU 2011-04, "Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs." ASU 2011-04 amends Topic 820, "Fair Value Measurements and Disclosures," to converge the fair value measurement guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures. ASU 2011-04 became effective for the Company on January 1, 2012 and, aside from new disclosures included in Note 20 - Fair Value of Financial Instruments and Fair Value Measurements, did not have a significant impact on the Company's consolidated financial statements.

ASU 2011-05, "Comprehensive Income (Topic 220) - Presentation of Comprehensive Income." ASU 2011-05 amends Topic 220, "Comprehensive Income," to require that all nonowner changes in stockholders' equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders' equity was eliminated. ASU 2011-05 became effective for the Company on January 1, 2012; however, certain provisions related to the presentation of reclassification adjustments have been deferred by ASU 2011-12 "Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05," as further discussed below.

ASU 2011-12, "Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." ASU 2011-12 defers changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to redeliberate whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12. ASU 2011-12 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements.

Recently Issued But Not Yet Effective Accounting Standards

ASU 2011-11, "Balance Sheet (Topic 210) - "Disclosures about Offsetting Assets and Liabilities."  ASU 2011-11 amends Topic 210, "Balance Sheet," to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the consolidated balance sheet and/or subject to a master netting arrangement or similar agreement.  ASU No. 2013-01, "Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities," clarifies that ordinary trade receivables are not within the scope of ASU 2011-11.  ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013, and is not expected to have a significant impact on the Company's consolidated financial statements.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

Colony Bankcorp, Inc. (the Company) is a bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of Colony Bankcorp, Inc. and its wholly-owned subsidiary, Colony Bank, 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.

Nature of Operations

Nature of Operations

The Company provides a full range of retail and commercial banking services for consumers and small- to medium-size businesses located primarily in central, south and coastal Georgia. Colony Bank is headquartered in Fitzgerald, Georgia with banking offices in Albany, Ashburn, Broxton, Centerville, Chester, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, Pitts, Quitman, Rochelle, Savannah, Soperton, Sylvester, Thomaston, Tifton, Valdosta and Warner Robins.  Lending and investing activities are funded primarily by deposits gathered through its retail banking office network.

Use of Estimates

Use of Estimates

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.

Reclassifications

Reclassifications

In certain instances, amounts reported in prior years' consolidated financial statements and note disclosures have been reclassified to conform to statement presentations selected for 2012.  Such reclassifications had no effect on previously reported stockholders' equity or net income.

Concentrations of Credit Risk

Concentrations of Credit Risk

Concentrations of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions.  The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market.  At December 31, 2012, approximately 87 percent of the Company's loan portfolio was concentrated in loans secured by real estate.  A substantial portion of borrowers' ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector.  The downturn of the housing and real estate market that began in 2007 resulted in an increase of problem loans secured by real estate, of which most are centered in the Company's larger MSA markets.  Declining collateral real estate values that secure land development, construction and speculative real estate loans in the Company's larger MSA markets have resulted in high loan loss provisions in recent years.  In addition, a large portion of the Company's foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions.  Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis.

The success of the Company is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves.  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 the Company 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.

At times, the Company may have cash and cash equivalents at financial institutions in excess of federal deposit insurance limits.  The Company places its cash and cash equivalents with high credit quality financial institutions whose credit rating is monitored by management to minimize credit risk.

Investment Securities

Investment Securities

The Company classifies its investment securities as trading, available for sale or held to maturity.  Securities that are held principally for resale in the near term are classified as trading.  Trading securities are carried at fair value, with realized and unrealized gains and losses included in noninterest income.  Currently, no securities are classified as trading.  Securities acquired with both the intent and ability to be held to maturity are classified as held to maturity and reported at amortized cost.  All securities not classified as trading or held to maturity are considered available for sale.  Securities available for sale are reported at estimated fair value.  Unrealized gains and losses on securities available for sale are excluded from earnings and are reported, net of deferred taxes, in accumulated other comprehensive income (loss), a component of stockholders' equity.  Gains and losses from sales of securities available for sale are computed using the specific identification method.  Securities available for sale includes securities, which may be sold to meet liquidity needs arising from unanticipated deposit and loan fluctuations, changes in regulatory capital requirements, or unforeseen changes in market conditions.

The Company evaluates each held to maturity and available for sale security in a loss position for other-than-temporary impairment (OTTI).  In estimating other-than-temporary impairment losses, management considers such factors as the length of time and the extent to which the market value has been below cost, the financial condition of the issuer and the Company's intent to sell and whether it is more likely than not that the Company will be required to sell the security before anticipated recovery of the amortized cost basis.  If the Company intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery, the OTTI write-down is recognized in earnings.  If the Company does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in other comprehensive income (loss).

Federal Home Loan Bank Stock

Federal Home Loan Bank Stock

Investment in stock of a Federal Home Loan Bank (FHLB) is required for every federally insured institution that utilizes its services.  FHLB stock is considered restricted, as defined in the accounting standards.  The FHLB stock is reported in the consolidated financial statements at cost.  Dividend income is recognized when earned.

Loans

Loans

Loans that the Company has the ability and intent to hold for the foreseeable future or until maturity are recorded at their principal amount outstanding, net of unearned interest and fees.  Loan origination fees, net of certain direct origination costs, are deferred and amortized over the estimated terms of the loans using the straight-line method.  Interest income on loans is recognized using the effective interest method.

A loan is considered to be delinquent when payments have not been made according to contractual terms, typically evidenced by nonpayment of a monthly installment by the due date.

When management believes there is sufficient doubt as to the collectibility of principal or interest on any loan or generally when loans are 90 days or more past due, the accrual of applicable interest is discontinued and the loan is designated as nonaccrual, unless the loan is well secured and in the process of collection.  Interest payments received on nonaccrual loans are either applied against principal or reported as income, according to management's judgment as to the collectibility of principal.  Loans are returned to an accrual status when factors indicating doubtful collectibility on a timely basis no longer exist.

Loans Modified in a Troubled Debt Restructuring (TDR)

Loans Modified in a Troubled Debt Restructuring (TDR)

Loans are considered to have been modified in a TDR when, due to a borrower's financial difficulty, the Company makes certain concessions to the borrower that it would not otherwise consider for new debt with similar risk characteristics.  Modifications may include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of the collateral.  Generally, a nonaccrual loan that has been modified in a TDR remains on nonaccrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan.  However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period.  If the borrower's ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status. Once a loan is modified in a troubled debt restructuring, it is accounted for as an impaired loan, regardless of its accrual status, until the loan is paid in full, sold or charged off.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions.  This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revisions as more information becomes available.

The allowance consists of specific, historical and general components.  The specific component relates to loans that are classified as either doubtful, substandard or special mention.  For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.  The historical component covers nonclassified loans and is based on historical loss experience adjusted for qualitative factors.  A general component is maintained to cover uncertainties that could affect management's estimate of probable losses.  The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio.  General valuation allowances are based on internal and external qualitative risk factors such as (1) changes in the composition of the loan portfolio, (2) the extent of loan concentrations within the portfolio, (3) the effectiveness of the Company's lending policies, procedures and internal controls, (4) the experience, ability and effectiveness of the Company's lending management and staff, and (5) national and local economics and business conditions.

Loans identified as losses by management, internal loan review and/or Bank examiners are charged off.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed.  Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price or the fair value of the collateral if the loan is collateral dependent.

A significant portion of the Company's impaired loans are deemed to be collateral dependent.  Management therefore measures impairment on these loans based on the fair value of the collateral.  Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company or by senior members of the Company's credit administration staff.  The decision whether or not to obtain an external third-party appraisal usually depends on the type of property being evaluated.  External appraisals are usually obtained on more complex, income producing properties such as hotels, shopping centers and businesses.  Less complex properties such as residential lots, farm land and single family houses may be evaluated internally by senior credit administration staff.  When the Company does obtain appraisals from external third-parties, the values utilized in the impairment calculation are "as is" or current market values.  The appraisals, whether prepared internally or externally, may utilize a single valuation approach or a combination of approaches including the comparable sales, income and cost approach.  Appraised amounts used in the impairment calculation are typically discounted 10 percent to account for selling and marketing costs, if the repayment of the loan is to come from the sale of the collateral.  Although appraisals are not obtained each year on all impaired loans, the collateral values used in the impairment calculations are evaluated quarterly by management.  Based on management's knowledge of the collateral and the current real estate market conditions, appraised values may be further discounted to reflect facts and circumstances known to management since the initial appraisal was performed.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are typically significant and result in a level 3 classification of the inputs for determining fair value.  Because of the high degree of judgment required in estimating the fair value of collateral underlying impaired loans and because of the relationship between fair value and general economic conditions, we consider the fair value of impaired loans to be highly sensitive to changes in market conditions.

Premises and Equipment

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:

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.

Intangible Assets

Intangible Assets

Intangible assets consist of core deposit intangibles acquired in connection with a business combination.  The core deposit intangible is initially recognized based on an independent valuation performed as of the consummation date.  The core deposit intangible is amortized by the straight-line method over the average remaining life of the acquired customer deposits.

Transfers of Financial Assets

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered.  Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Statement of Cash Flows

Statement of Cash Flows

For reporting cash flows, cash and cash equivalents include cash on hand, noninterest-bearing amounts due from banks, federal funds sold and securities purchased under agreement to resell.  Cash flows from demand deposits, NOW accounts, savings accounts, loans and certificates of deposit are reported net.

Securities Purchased Under Agreement to Resell and Securities Sold Under Agreements to Repurchase

Securities Purchased Under Agreement to Resell and Securities Sold Under Agreements to Repurchase

The Company purchases certain securities under agreements to resell.  The amounts advanced under these agreements represent short-term loans and are reflected as assets in the consolidated balance sheets.

The Company sells securities under agreements to repurchase.  These repurchase agreements are treated as borrowings.  The obligations to repurchase securities sold are reflected as a liability and the securities underlying the agreements are reflected as assets in the consolidated balance sheets.

Advertising Costs

Advertising Costs

The Company expenses the cost of advertising in the periods in which those costs are incurred.

Income Taxes

Income Taxes

The provision for income taxes is based upon income for financial statement purposes, adjusted for nontaxable income and nondeductible expenses.  Deferred income taxes have been provided when different accounting methods have been used in determining income for income tax purposes and for financial reporting purposes.

Deferred tax assets and liabilities are recognized based on future tax consequences attributable to differences arising from the financial statement carrying values of assets and liabilities and their tax bases.  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 direct write-off method for tax purposes).  In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with effects included in the income tax provision.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The Company and its subsidiary file a consolidated federal income tax return.  The subsidiary pays its proportional share of federal income taxes to the Company based on its taxable income.

The Company's federal and state income tax returns for tax years 2012, 2011, 2010 and 2009 are subject to examination by the Internal Revenue Service (IRS) and the Georgia Department of Revenue, generally for three years after filing.

Positions taken in the Company's tax returns may be subject to challenge by the taxing authorities upon examination.  Uncertain tax positions are initially recognized in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.  Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts.  The Company provides for interest and, in some cases, penalties on tax positions that may be challenged by the taxing authorities. Interest expense is recognized beginning in the first period that such interest would begin accruing.  Penalties are recognized in the period that the Company claims the position in the tax return.  Interest and penalties on income tax uncertainties are classified within income tax expense in the consolidated statements of operations.

Other Real Estate

Other Real Estate

Other real estate generally represents real estate acquired through foreclosure and is initially recorded at estimated fair value at the date of acquisition less the cost of disposal.  Losses from the acquisition of property in full or partial satisfaction of debt are recorded as loan losses.  Properties are evaluated regularly to ensure the recorded amounts are supported by current fair values, and valuation allowances are recorded as necessary to reduce the carrying amount to fair value less estimated cost of disposal.  Routine holding costs and gains or losses upon disposition are included in foreclosed property expense.

Comprehensive Income

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.  Such items are considered components of other comprehensive income (loss).  Accounting standards codification requires the presentation in the consolidated financial statements of net income and all items of other comprehensive income (loss) as total comprehensive income (loss).

Off-Balance Sheet Credit Related Financial Instruments

Off-Balance Sheet Credit Related Financial Instruments

In the ordinary course of business, the Company has entered into commitments to extend credit, commercial letters of credit and standby letters of credit.  Such financial instruments are recorded on the balance sheet when they are funded.

Changes in Accounting Principles and Effects of New Accounting Pronouncements

Changes in Accounting Principles and Effects of New Accounting Pronouncements

Adoption of New Accounting Standards

ASU No. 2011-03, "Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements." ASU 2011-03 is intended to improve financial reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU 2011-03 removes from the assessment of effective control (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance guidance related to that criterion. ASU 2011-03 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements.

ASU 2011-04, "Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs." ASU 2011-04 amends Topic 820, "Fair Value Measurements and Disclosures," to converge the fair value measurement guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures. ASU 2011-04 became effective for the Company on January 1, 2012 and, aside from new disclosures included in Note 20 - Fair Value of Financial Instruments and Fair Value Measurements, did not have a significant impact on the Company's consolidated financial statements.

ASU 2011-05, "Comprehensive Income (Topic 220) - Presentation of Comprehensive Income." ASU 2011-05 amends Topic 220, "Comprehensive Income," to require that all nonowner changes in stockholders' equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders' equity was eliminated. ASU 2011-05 became effective for the Company on January 1, 2012; however, certain provisions related to the presentation of reclassification adjustments have been deferred by ASU 2011-12 "Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05," as further discussed below.

ASU 2011-12, "Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." ASU 2011-12 defers changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to redeliberate whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12. ASU 2011-12 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements.

Recently Issued But Not Yet Effective Accounting Standards

ASU 2011-11, "Balance Sheet (Topic 210) - "Disclosures about Offsetting Assets and Liabilities."  ASU 2011-11 amends Topic 210, "Balance Sheet," to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the consolidated balance sheet and/or subject to a master netting arrangement or similar agreement.  ASU No. 2013-01, "Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities," clarifies that ordinary trade receivables are not within the scope of ASU 2011-11.  ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013, and is not expected to have a significant impact on the Company's consolidated financial statements.

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Subsequent Event (Details) (Subsequent Event [Member])	12 Months Ended
	Dec. 31, 2012
Warrant [Member]
Subsequent Event [Line Items]
Treasury stock (in shares)	500,000
Cumulative Perpetual Preferred Stock, Series A [Member]
Subsequent Event [Line Items]
Cumulative Perpetual Preferred Stock, Series A sold by treasury (in shares)	28,000
Preferred shares accrue rate (in hundredths)	5.00%
Number of initial years for which a specified dividend rate is used	5 years
Preferred shares accrue rate after five years (in hundredths)	9.00%
Preferred shares redeemable at option (in hundredths)	100.00%

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2012

Intangible Assets [Abstract]

Core deposit intangible activity

The following is an analysis of the core deposit intangible activity for the years ended December 31:

	Core Deposit Intangible		Accumulated Amortization			Net Core Deposit Intangible
Core Deposit Intangible
Balance, December 31, 2010	$	1,056,693	$	(761,686	)	$	295,007
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2011		1,056,693		(797,435	)		259,258
Amortization Expense		-		(35,748	)		(35,748	)
Balance, December 31, 2012	$	1,056,693	$	(833,183	)	$	223,510

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Cash and Balances Due from Banks (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Cash and Due from Banks [Abstract]
Cash on Hand and Cash Items	$ 9,063,437	$ 9,271,705
Noninterest-Bearing Deposits with Other Banks	20,180,490	19,108,663
Cash and balances due from banks	29,243,927	28,380,368
Reserve balances	$ 6,065,000	$ 4,183,000

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Profit Sharing Plan (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Profit Sharing Plan [Abstract]
Total provision for contributions to the plan	$ 0	$ 0	$ 0

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CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2012	Dec. 31, 2011
Cash and Cash Equivalents
Cash and Due from Banks	$ 29,243,927	$ 28,380,368
Federal Funds Sold	20,001,906	54,991,474
Cash and Cash Equivalents	49,245,833	83,371,842
Interest-Bearing Deposits	21,795,341	28,957,310
Investment Securities
Available for Sale, at Fair Value	268,300,411	303,890,847
Held to Maturity, at Cost (Fair Value of $41,909 and $45,635 as of December 31, 2012 and 2011, Respectively)	41,467	46,111
Investment Securities	268,341,878	303,936,958
Federal Home Loan Bank Stock, at Cost	3,364,300	5,398,200
Loans	747,050,011	716,321,321
Allowance for Loan Losses	(12,736,921)	(15,649,594)
Unearned Interest and Fees	(233,927)	(57,646)
Loans, net	734,079,163	700,614,081
Premises and Equipment	24,916,106	25,750,235
Other Real Estate (Net of Allowance of $4,561,099 and $2,373,511 in 2012 and 2011, Respectively)	15,940,693	20,445,085
Other Intangible Assets	223,510	259,258
Other Assets	21,489,957	26,643,467
Total Assets	1,139,396,781	1,195,376,436
Deposits
Noninterest-Bearing	123,966,542	94,268,911
Interest-Bearing	855,718,349	905,716,361
Deposits	979,684,891	999,985,272
Borrowed Money
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	35,000,000	71,000,000
Borrowed Money	59,229,000	95,229,000
Other Liabilities	4,723,723	3,549,354
Commitments and Contingencies
Stockholders' Equity
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares	27,827,053	27,662,476
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 and 8,439,258 Shares as of December 31, 2012 and 2011, Respectively	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	30,497,576	29,456,240
Accumulated Other Comprehensive Income (Loss), Net of Tax	(149,814)	1,909,742
Stockholders' Equity	95,759,167	96,612,810
Total Liabilities and Stockholders' Equity	$ 1,139,396,781	$ 1,195,376,436

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Financial instrument outstanding with contract amount representing credit risk

At December 31, 2012 and 2011, the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	2012		2011
Commitments to Extend Credit	$	64,147,000	$	39,966,000
Standby Letters of Credit		1,141,000		1,327,000

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $)	Preferred Stock [Member]	Common Stock [Member]	Paid-in Capital [Member]	Retained Earnings [Member]	Restricted Stock - Unearned Compensation [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2009	$ 27,356,964	$ 7,229,163	$ 25,392,913	$ 29,553,941	$ (158,548)	$ (99,809)	$ 89,274,624
Balance (in shares) at Dec. 31, 2009		7,229,163
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Common Stock		1,216,545	3,861,710				5,078,255
Issuance of Common Stock (in shares)		1,216,545
Forfeiture of Restricted Stock		(2,750)	(27,570)		30,320		0
Forfeiture of Restricted Stock (in shares)		(2,750)
Tax Loss on Restricted Stock			(55,966)				(55,966)
Amortization of Unearned Compensation					87,434		87,434
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects						(499,980)	(499,980)
Accretion of Fair Value of Warrant	148,946			(148,946)			0
Dividends on Preferred Shares				(1,400,000)			(1,400,000)
Net Income				474,216			474,216
Balance at Dec. 31, 2010	27,505,910	8,442,958	29,171,087	28,479,211	(40,794)	(599,789)	92,958,583
Balance (in shares) at Dec. 31, 2010		8,442,958
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Forfeiture of Restricted Stock		(3,700)	(25,993)		29,693		0
Forfeiture of Restricted Stock (in shares)		(3,700)
Amortization of Unearned Compensation					11,101		11,101
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects						2,509,531	2,509,531
Accretion of Fair Value of Warrant	156,566			(156,566)			0
Dividends on Preferred Shares				(1,400,000)			(1,400,000)
Net Income				2,533,595			2,533,595
Balance at Dec. 31, 2011	27,662,476	8,439,258	29,145,094	29,456,240	0	1,909,742	96,612,810
Balance (in shares) at Dec. 31, 2011		8,439,258
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects						(2,059,556)	(2,059,556)
Accretion of Fair Value of Warrant	164,577			(164,577)			0
Dividends on Preferred Shares				(1,435,385)			(1,435,385)
Net Income				2,641,298			2,641,298
Balance at Dec. 31, 2012	$ 27,827,053	$ 8,439,258	$ 29,145,094	$ 30,497,576	$ 0	$ (149,814)	$ 95,759,167
Balance (in shares) at Dec. 31, 2012		8,439,258

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Loans, Troubled Debt Restructuring (Details) (USD $)	1 Months Ended
	Jan. 31, 2012	Dec. 31, 2011	Mar. 31, 2011	Dec. 31, 2012
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, # of Contracts		23		7
Troubled Debt Restructurings, Pre-Modification		$ 27,003,321		$ 1,247,169
Troubled Debt Restructurings, Post-Modification		20,335,408		1,244,198
Troubled Debt Restructurings That Subsequently Defaulted, # of Contracts		7		2
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment		7,973,756		213,291
Number of restructured loans failed to continue to perform as agreed		3
Amount of restructured loans charged off	10,000	51,998	999,133
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, # of Contracts		3		1
Troubled Debt Restructurings, Pre-Modification		3,240,469		107,749
Troubled Debt Restructurings, Post-Modification		1,541,882		107,749
Troubled Debt Restructurings That Subsequently Defaulted, # of Contracts		1
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment		1,175,922
Commercial Construction [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, # of Contracts		3
Troubled Debt Restructurings, Pre-Modification		1,430,147
Troubled Debt Restructurings, Post-Modification		1,430,101
Troubled Debt Restructurings That Subsequently Defaulted, # of Contracts		3
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment		4,475,473
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, # of Contracts		9		1
Troubled Debt Restructurings, Pre-Modification		20,827,349		56,835
Troubled Debt Restructurings, Post-Modification		15,906,547		56,835
Troubled Debt Restructurings That Subsequently Defaulted, # of Contracts		3		1
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment		2,322,361		203,291
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, # of Contracts		8		5
Troubled Debt Restructurings, Pre-Modification		1,505,356		1,082,585
Troubled Debt Restructurings, Post-Modification		1,456,878		1,079,614
Troubled Debt Restructurings That Subsequently Defaulted, # of Contracts				1
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment				$ 10,000

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Investment Securities (Tables)

12 Months Ended

Dec. 31, 2012

Investment Securities [Abstract]

Investment securities

Investment securities as of December 31, 2012 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	263,186,852	$	833,920	$	(961,698	)	$	263,059,074
State, County and Municipal		3,973,926		34,670		(4,586	)		4,004,010
Corporate Obligations		1,000,000		104,900		-			1,104,900
Asset-Backed Securities		366,623		-		(234,196	)		132,427
	$	268,527,401	$	973,490	$	(1,200,480	)	$	268,300,411
Securities Held to Maturity
State, County and Municipal	$	41,467	$	442	$	-		$	41,909

Investment securities as of December 31, 2011 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	291,096,606	$	3,152,095	$	(187,902	)	$	294,060,799
State, County and Municipal		7,474,500		132,226		(23,035	)		7,583,691
Corporate Obligations		2,000,000		123,930		(10,000	)		2,113,930
Asset-Backed Securities		426,191		-		(293,764	)		132,427
	$	300,997,297	$	3,408,251	$	(514,701	)	$	303,890,847
Securities Held to Maturity
State, County and Municipal	$	46,111	$	-	$	(476	)	$	45,635

Amortized cost and fair value of investment securities by contractual maturity

The amortized cost and fair value of investment securities as of December 31, 2012, by contractual maturity, are shown hereafter.  Expected maturities may differ from contractual maturities for certain investments because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.  This is often the case with mortgage-backed securities, which are disclosed separately in the table below.

	Securities
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in One Year or Less	$	125,000	$	125,665	$	-	$	-
Due After One Year Through Five Years		2,758,034		2,892,955		41,467		41,909
Due After Five Years Through Ten Years		1,882,647		1,882,228		-		-
Due After Ten Years		574,868		340,489		-		-
		5,340,549		5,241,337		41,467		41,909
Mortgage-Backed Securities		263,186,852		263,059,074		-		-
	$	268,527,401	$	268,300,411	$	41,467	$	41,909

Invested securities in a continuous unrealized loss position

Information pertaining to securities with gross unrealized losses at December 31, 2012 and 2011 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2012
U.S. Government Agencies
Mortgage-Backed	$	142,103,991	$	(961,698	)	$	-	$	-		$	142,103,991	$	(961,698	)
State, County and Municipal		1,430,512		(4,586	)		-		-			1,430,512		(4,586	)
Asset-Backed Securities		-		-			132,427		(234,196	)		132,427		(234,196	)
	$	143,534,503	$	(966,284	)	$	132,427	$	(234,196	)	$	143,666,930	$	(1,200,480	)
December 31, 2011
U.S. Government Agencies Mortgage-Backed	$	26,439,317	$	(187,902	)	$	-	$	-		$	26,439,317	$	(187,902	)
State, County and Municipal		1,224,119		(21,704	)		73,193		(1,807	)		1,297,312		(23,511	)
Corporate Obligations		-		-			990,000		(10,000	)		990,000		(10,000	)
Asset-Backed Securities		-		-			132,427		(293,764	)		132,427		(293,764	)
	$	27,663,436	$	(209,606	)	$	1,195,620	$	(305,571	)	$	28,859,056	$	(515,177	)

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Intangible Assets (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Finite-Lived Intangible Assets, Net [Abstract]
Annual rate of amortization expense till 2019	$ 35,749
Core Deposit Intangible [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Acquired intangible asset gross beginning balance	1,056,693	1,056,693
Accumulated amortization beginning balance	(797,435)	(761,686)
Acquired intangible asset net beginning balance	259,258	295,007
Amortization expense	(35,748)	(35,749)	35,749
Acquired intangible asset gross ending balance	1,056,693	1,056,693	1,056,693
Accumulated amortization ending balance	(833,183)	(797,435)	(761,686)
Acquired intangible asset net ending balance	$ 223,510	$ 259,258	$ 295,007

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Profit Sharing Plan

12 Months Ended

Dec. 31, 2012

Profit Sharing Plan [Abstract]

Profit Sharing Plan

(15) 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 Company has not made any provisions for contributions to the plan for 2012, 2011 and 2010.

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Loans (Tables)

12 Months Ended

Dec. 31, 2012

Loans [Abstract]

Loans segregated by class of loans

The following table presents the composition of loans, segregated by class of loans, as of December 31:

	2012		2011
Commercial and Agricultural
Commercial	$	55,684,492	$	48,986,102
Agricultural		6,210,953		8,421,884
Real Estate
Commercial Construction		53,808,056		58,545,820
Residential Construction		5,852,238		3,530,502
Commercial		334,386,177		315,280,748
Residential		203,844,522		193,637,817
Farmland		49,056,861		48,225,406
Consumer and Other
Consumer		29,777,776		30,449,303
Other		8,428,936		9,243,739
Total Loans	$	747,050,011	$	716,321,321

Loan portfolio by credit quality indicator (risk grade)

The following tables present the loan portfolio by credit quality indicator (risk grade) as of December 31. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes.

2012	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	49,947,552	$	1,417,735	$	4,319,205	$	55,684,492
Agricultural		6,155,864		-		55,089		6,210,953
Real Estate
Commercial Construction		37,256,301		1,663,588		14,888,167		53,808,056
Residential Construction		5,748,829		103,409		-		5,852,238
Commercial		298,222,139		9,759,473		26,404,565		334,386,177
Residential		183,222,020		11,412,973		9,209,529		203,844,522
Farmland		45,495,038		913,487		2,648,336		49,056,861
Consumer and Other
Consumer		28,839,058		293,467		645,251		29,777,776
Other		8,350,772		8,907		69,257		8,428,936
Total Loans	$	663,237,573	$	25,573,039	$	58,239,399	$	747,050,011
2011
Commercial and Agricultural
Commercial	$	42,586,230	$	1,480,726	$	4,919,146	$	48,986,102
Agricultural		8,153,224		-		268,660		8,421,884
Real Estate
Commercial Construction		28,745,596		2,814,113		26,986,111		58,545,820
Residential Construction		3,227,392		303,110		-		3,530,502
Commercial		272,062,206		14,789,290		28,429,252		315,280,748
Residential		175,099,480		8,343,336		10,195,001		193,637,817
Farmland		43,664,126		1,413,476		3,147,804		48,225,406
Consumer and Other
Consumer		29,372,493		361,714		715,096		30,449,303
Other		9,028,428		99,418		115,893		9,243,739
Total Loans	$	611,939,175	$	29,605,183	$	74,776,963	$	716,321,321

Age analysis of past due loans and nonaccrual loans, segregated by class of loans

The following table represents an age analysis of past due loans and nonaccrual loans, segregated by class of loans, as of December 31:

	Accruing Loans
2012	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	797,612	$	-	$	797,612	$	1,033,371	$	53,853,509	$	55,684,492
Agricultural		28,228		-		28,228		39,213		6,143,512		6,210,953
Real Estate
Commercial Construction		1,309,618		-		1,309,618		14,032,580		38,465,858		53,808,056
Residential Construction		-		-		-		-		5,852,238		5,852,238
Commercial		3,771,106		-		3,771,106		6,629,789		323,985,282		334,386,177
Residential		8,223,174		-		8,223,174		5,429,971		190,191,377		203,844,522
Farmland		140,095		-		140,095		2,413,104		46,503,662		49,056,861
Consumer and Other
Consumer		636,888		4,355		641,243		255,216		28,881,317		29,777,776
Other		4,557		-		4,557		17,491		8,406,888		8,428,936
Total Loans	$	14,911,278	$	4,355	$	14,915,633	$	29,850,735	$	702,283,643	$	747,050,011
2011
Commercial and Agricultural
Commercial	$	644,899	$	-	$	644,899	$	2,102,522	$	46,238,681	$	48,986,102
Agricultural		-		-		-		85,670		8,336,214		8,421,884
Real Estate
Commercial Construction		513,905		-		513,905		23,578,263		34,453,652		58,545,820
Residential Construction		33,541		-		33,541		-		3,496,961		3,530,502
Commercial		2,930,743		-		2,930,743		9,193,650		303,156,355		315,280,748
Residential		2,251,009		15,160		2,266,169		3,110,032		188,261,616		193,637,817
Farmland		376,426		-		376,426		486,683		47,362,297		48,225,406
Consumer and Other
Consumer		410,041		-		410,041		221,360		29,817,902		30,449,303
Other		-		-		-		43,452		9,200,287		9,243,739
Total Loans	$	7,160,564	$	15,160	$	7,175,724	$	38,821,632	$	670,323,965	$	716,321,321

Impaired loan data

The following table details impaired loan data as of December 31, 2012:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	1,508,236	$	1,041,938	$	-	$	1,052,916	$	27,407	$	28,410
Agricultural		39,213		39,213		-		58,056		-		-
Commercial Construction		10,624,917		6,414,986		-		9,194,360		27,377		51,820
Commercial Real Estate		16,565,971		15,505,907		-		26,482,274		430,339		420,549
Residential Real Estate		4,450,128		4,131,707		-		3,096,151		89,139		123,101
Farmland		2,828,539		2,413,103		-		2,326,180		42,588		55,258
Consumer		297,356		255,216		-		228,181		10,441		12,920
Other		17,491		17,491		-		24,414		1,191		1,291
		36,331,851		29,819,561		-		42,462,532		628,482		693,349
With An Allowance Recorded
Commercial		1,493,432		1,493,432		462,555		942,673		91,888		87,611
Agricultural		-		-		-		-		-		-
Commercial Construction		8,266,649		7,617,594		1,732,534		10,533,468		-		-
Commercial Real Estate		12,758,884		12,745,422		1,236,526		6,398,364		383,356		366,423
Residential Real Estate		5,514,994		4,421,809		840,492		4,288,062		144,661		117,266
Farmland		-		-		-		64,862		-		-
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
		28,033,959		26,278,257		4,272,107		22,227,429		619,905		571,300
Total
Commercial		3,001,668		2,535,370		462,555		1,995,589		119,295		116,021
Agricultural		39,213		39,213		-		58,056		-		-
Commercial Construction		18,891,566		14,032,580		1,732,534		19,727,828		27,377		51,820
Commercial Real Estate		29,324,855		28,251,329		1,236,526		32,880,638		813,695		786,972
Residential Real Estate		9,965,122		8,553,516		840,492		7,384,213		233,800		240,367
Farmland		2,828,539		2,413,103		-		2,391,042		42,588		55,258
Consumer		297,356		255,216		-		228,181		10,441		12,920
Other		17,491		17,491		-		24,414		1,191		1,291
	$	64,365,810	$	56,097,818	$	4,272,107	$	64,689,961	$	1,248,387	$	1,264,649

The following table details impaired loan data as of December 31, 2011:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	1,742,961	$	1,580,140	$	-	$	946,466	$	60,078		$	65,346
Agricultural		85,670		85,670		-		208,162		(4,024	)		-
Commercial Construction		17,699,542		12,799,454		-		13,309,517		116,077			143,443
Commercial Real Estate		34,686,574		29,384,623		-		27,027,403		832,590			834,161
Residential Real Estate		2,600,919		1,933,669		-		3,176,244		88,419			80,334
Farmland		277,656		227,233		-		342,280		66,273			66,273
Consumer		228,688		215,956		-		184,372		10,732			12,203
Other		51,666		43,452		-		39,621		1,107			1,606
		57,373,676		46,270,197		-		45,234,065		1,171,252			1,203,366
With An Allowance Recorded
Commercial		775,506		775,506		308,211		213,898		15,086			19,171
Agricultural		-		-		-		-		-			-
Commercial Construction		14,035,742		11,489,233		2,693,571		10,470,491		13,759			61,012
Commercial Real Estate		6,429,874		6,429,874		2,060,815		6,556,769		181,799			197,132
Residential Real Estate		4,771,867		4,041,950		674,998		3,858,609		97,383			96,534
Farmland		298,893		259,450		11,878		64,862		(17,958	)		-
Consumer		5,404		5,404		1,632		3,987		607			724
Other		-		-		-		19,566		-			-
		26,317,286		23,001,417		5,751,105		21,188,182		290,676			374,573
Total
Commercial		2,518,467		2,355,646		308,211		1,160,364		75,164			84,517
Agricultural		85,670		85,670		-		208,162		(4,024	)		-
Commercial Construction		31,735,284		24,288,687		2,693,571		23,780,008		129,836			204,455
Commercial Real Estate		41,116,448		35,814,497		2,060,815		33,584,172		1,014,389			1,031,293
Residential Real Estate		7,372,786		5,975,619		674,998		7,034,853		185,802			176,868
Farmland		576,549		486,683		11,878		407,142		48,315			66,273
Consumer		234,092		221,360		1,632		188,359		11,339			12,927
Other		51,666		43,452		-		59,187		1,107			1,606
	$	83,690,962	$	69,271,614	$	5,751,105	$	66,422,247	$	1,461,928		$	1,577,939

Loans modified in troubled debt restructuring

Troubled Debt Restructurings
2012	# of Contracts		Pre-Modification		Post-Modification
Commercial		1	$	107,749	$	107,749
Commercial Real Estate		1		56,835		56,835
Residential Real Estate		5		1,082,585		1,079,614
Total Loans		7	$	1,247,169	$	1,244,198

Troubled Debt Restructurings
2011	# of Contracts		Pre-Modification		Post-Modification
Commercial		3	$	3,240,469	$	1,541,882
Commercial Construction		3		1,430,147		1,430,101
Commercial Real Estate		9		20,827,349		15,906,547
Residential Real Estate		8		1,505,356		1,456,878
Total Loans		23	$	27,003,321	$	20,335,408

Troubled debt restructurings that subsequently defaulted as of December 31 are as follows:

2012	# of Contracts		Recorded Investment
Residential Real Estate		1	$	10,000
Commercial Real Estate		1		203,291
Total Loans		2	$	213,291
2011
Commercial		1	$	1,175,922
Commercial Construction		3		4,475,473
Commercial Real Estate		3		2,322,361
Total Loans		7	$	7,973,756

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Deferred Compensation Plan

12 Months Ended

Dec. 31, 2012

Deferred Compensation Plan [Abstract]

Deferred Compensation Plan

(17) Deferred Compensation Plan

Colony Bank, the wholly-owned subsidiary, has deferred compensation plans covering certain former directors and certain officers choosing to participate through individual deferred compensation contracts.  In accordance with terms of the contracts, the Bank is committed to pay the participant's deferred compensation over a specified number of years, beginning at age 65.  In the event of a participant's death before age 65, payments are made to the participant's named beneficiary over a specified number of years, beginning on the first day of the month following the death of the participant.

Liabilities accrued under the plans totaled $1,007,490 and $1,135,956 as of December 31, 2012 and 2011, respectively.  Benefit payments under the contracts were $203,904 in 2012 and $196,501 in 2011.  Provisions charged to operations totaled $82,250 in 2012, $98,901 in 2011 and $154,553 in 2010.

Fee income recognized with deferred compensation plans totaled $175,302 in 2012, $154,210 in 2011 and $182,685 in 2010.

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Other Borrowed Money (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Other Borrowed Money [Abstract]
Federal Home Loan Bank Advances	$ 35,000,000	$ 71,000,000
Federal Home Loan Bank advances, earliest maturity	2017
Federal Home Loan Bank advances, last maturity	2019
Interest rate on Federal Home Loan Bank Advances, Minimum (in hundredths)	0.56%
Interest rate on Federal Home Loan Bank Advances, Maximum (in hundredths)	4.75%
Book value of loans pledged	76,000,000
Remaining credit availability from FHLB	129,190,000
Aggregate stated maturities of other borrowed money [Abstract]
2017	9,000,000
2018 and Thereafter	26,000,000
Federal funds lines of credit	43,000,000
Federal funds lines of credit outstanding	0
Federal Reserve Bank of Atlanta [Member]
Short-term Debt [Line Items]
Borrowing outstanding	0
Repurchase Agreements [Member]
Short-term Debt [Line Items]
Available repurchase agreement line of credit	$ 50,000,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash Flows from Operating Activities
Net Income	$ 2,641,298	$ 2,533,595	$ 474,216
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Depreciation	1,676,820	1,790,041	2,140,735
Amortization and Accretion	4,180,158	3,487,124	4,043,795
Provision for Loan Losses	6,784,767	8,250,000	13,350,000
Deferred Income Taxes	1,204,439	867,006	639,607
Securities Gains	(2,837,464)	(2,923,601)	(2,617,062)
Loss on Sale of Premises and Equipment	1,148	3,668	28,146
Loss on Sale of Other Real Estate and Repossessions	1,839,196	1,106,479	1,827,704
Provision for Losses on Other Real Estate	2,702,709	1,411,061	1,293,174
Increase in Cash Surrender Value of Life Insurance	(185,341)	(174,289)	(56,024)
Change In
Interest Receivable	250,755	739,423	1,325,068
Prepaid Expenses	1,741,834	1,861,810	2,006,032
Interest Payable	74,637	(398,903)	(452,764)
Accrued Expenses and Accounts Payable	(95,972)	(405,612)	(148,591)
Other	2,827,648	(2,987,906)	3,500,575
Cash Flow from Operating Activities	22,806,632	15,159,896	27,354,611
Cash Flows from Investing Activities
Interest-Bearing Deposits in Other Banks	7,161,969	21,769,424	(44,247,933)
Purchase of Investment Securities Available for Sale	(250,445,594)	(381,284,748)	(380,490,982)
Proceeds from Sale of Investment Securities Available for Sale	227,690,806	342,672,937	286,387,727
Proceeds from Maturities, Calls and Paydowns of Investment Securities Available for Sale	54,006,594	41,978,769	55,648,274
Held for Maturity	14,019	12,565	14,001
Proceeds from Sale of Premises and Equipment	1,500	1,605	0
Net Loans to Customers	(50,126,252)	63,267,200	88,105,734
Purchase of Premises and Equipment	(845,338)	(397,825)	(490,256)
Proceeds from Sale of Other Real Estate and Repossessions	9,876,136	9,991,792	9,866,063
Proceeds from Sale of Federal Home Loan Bank Stock	2,033,900	665,300	281,900
Cash Flow from Investing Activities	(632,260)	98,677,019	15,074,528
Cash Flows from Financing Activities
Interest-Bearing Customer Deposits	(49,998,012)	(50,448,220)	(17,183,061)
Noninterest-Bearing Customer Deposits	29,697,631	(8,690,512)	18,720,584
Proceeds from Other Borrowed Money	5,000,000	0	23,076,010
Principal Payments on Other Borrowed Money	(41,000,000)	(4,076,010)	(39,000,000)
Dividends Paid on Preferred Stock	0	(1,400,000)	(1,400,000)
Issuance of Common Stock	0	0	5,078,255
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase	0	(20,000,000)	(20,000,000)
Net Cash Flows from Financing Activities	(56,300,381)	(84,614,742)	(30,708,212)
Net Increase (Decrease) in Cash and Cash Equivalents	(34,126,009)	29,222,173	11,720,927
Cash and Cash Equivalents, Beginning	83,371,842	54,149,669	42,428,742
Cash and Cash Equivalents, Ending	$ 49,245,833	$ 83,371,842	$ 54,149,669

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Investment Securities
Held to Maturity, Fair Value	$ 41,909	$ 45,635
Other Real Estate, Allowance	$ 4,561,099	$ 2,373,511
Stockholders' Equity
Preferred Stock, Par Value (in dollars per share)	$ 1,000	$ 1,000
Preferred Stock, Authorized (in shares)	10,000,000	10,000,000
Preferred Stock, Issued (in shares)	28,000	28,000
Common Stock, Par Value (in dollars per share)	$ 1	$ 1
Common Stock, Authorized (in shares)	20,000,000	20,000,000
Common Stock, Issued (in shares)	8,439,258	8,439,258

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Deposits

12 Months Ended

Dec. 31, 2012

Deposits [Abstract]

Deposits

(10) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $389,331 and $147,398 as of December 31, 2012 and 2011, respectively.

Components of interest-bearing deposits as of December 31 are as follows:

	2012		2011
Interest-Bearing Demand	$	314,030,843	$	284,870,972
Savings		48,777,743		41,230,662
Time, $100,000 and Over		211,244,750		247,589,188
Other Time		281,665,013		332,025,539
	$	855,718,349	$	905,716,361

At December 31, 2012 and 2011, the Company had brokered deposits of $28,229,608 and $28,157,961, respectively.  Of the brokered deposits at December 31, 2012 and 2011, $28,229,608 and $28,157,961 represented Certificate of Deposits Account Registry Service (CDARS) reciprocal deposits in which customers placed core deposits into the CDARS program for FDIC insurance coverage and the Company received reciprocal brokered deposits in a like amount.  Thus, brokered deposits less the reciprocal deposits totaled $0 at December 31, 2012 and 2011.  The aggregate amount of short-term jumbo certificates of deposit, each with a minimum denomination of $100,000, was approximately $161,530,500 and $190,876,500 as of December 31, 2012 and 2011, respectively.

As of December 31, 2012, the scheduled maturities of certificates of deposit are as follows:

Year	Amount
2013	$	388,484,260
2014		59,082,678
2015		28,380,949
2016		8,169,838
2017 and Thereafter		8,792,038
	$	492,909,763

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Mar. 12, 2013	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	COLONY BANKCORP INC
Entity Central Index Key	0000711669
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 28,778,233
Entity Common Stock, Shares Outstanding		8,439,258
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2012

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Other Borrowed Money

12 Months Ended

Dec. 31, 2012

Other Borrowed Money [Abstract]

Other Borrowed Money

(11) Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:

	2012		2011
Federal Home Loan Bank Advances	$	35,000,000	$	71,000,000

Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2017 to 2019 and interest rates ranging from 0.56 percent to 4.75 percent.  As collateral on the outstanding FHLB advances, the Company has provided a blanket lien on its portfolio of qualifying residential first mortgage loans and commercial loans.  At December 31, 2012, the book value of those loans pledged approximated $76,000,000.  At December 31, 2012, the Company had remaining credit availability from the FHLB of approximately $129,190,000.  The Company may be required to pledge additional qualifying collateral in order to utilize the full amount of the remaining credit line.

Other borrowed money of $9,000,000 matures in 2017, with the remainder of $26,000,000 maturing in 2018 and thereafter.

The Company also has available federal funds lines of credit with various financial institutions totaling $43,000,000, of which there were none outstanding at December 31, 2012.

The Company has the ability to borrow funds from the Federal Reserve Bank (FRB) of Atlanta utilizing the discount window.  The discount window is an instrument of monetary policy that allows eligible institutions to borrow money from the FRB on a short-term basis to meet temporary liquidity shortages caused by internal or external disruptions.  At December 31, 2012, the Company had borrowing capacity available under this arrangement, with no outstanding balances.  The Company would be required to pledge certain available-for-sale investment securities as collateral under this agreement.

In addition, at December 31, 2012, the Company had an available repurchase agreement line of credit with a third party totaling $50,000,000.  Use of this credit facility is subject to the underwriting and risk management policies of the third party in effect at the time of the request.  Such policies may take into consideration current market conditions, the current financial condition of the Company and the ability of the Company to provide adequate securities as collateral for the transaction, among other factors.

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Regulatory Capital Matters (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Ratios [Abstract]
Tier 1 capital to total average assets (in hundredths)	8.00%
Total risk-based capital to total risk-weighted assets (in hundredths)	10.00%
Consolidated [Member]
Total Capital to Risk-Weighted Assets [Abstract]
Actual Amount	$ 122,630	$ 118,913
For Capital Adequacy Purposes, Amount	59,548	57,658
Amount [Abstract]
Actual Amount	113,283	109,822
For Capital Adequacy Purposes, Amount	29,774	28,829
Ratios [Abstract]
Actual Ratio (in hundredths)	16.47%	16.50%
For Capital Adequacy Purposes, Ratio (in hundredths)	8.00%	8.00%
Actual Ratio (in hundredths)	15.22%	15.24%
For Capital Adequacy Purposes, Ratio (in hundredths)	4.00%	4.00%
Amount [Abstract]
Actual Amount	113,283	109,822
For Capital Adequacy Purposes, Amount	44,343	46,185
Ratios [Abstract]
Actual Ratio (in hundredths)	10.22%	9.51%
For Capital Adequacy Purposes, Ratio (in hundredths)	4.00%	4.00%
Colony Bank [Member]
Total Capital to Risk-Weighted Assets [Abstract]
Actual Amount	123,463	117,243
For Capital Adequacy Purposes, Amount	59,474	57,584
To be Well Capitalized Under Prompt Corrective Actions Provisions, Amount	74,342	71,980
Amount [Abstract]
Actual Amount	114,128	108,163
For Capital Adequacy Purposes, Amount	29,737	28,792
To be Well Capitalized Under Prompt Corrective Actions Provisions, Amount	44,605	43,188
Ratios [Abstract]
Actual Ratio (in hundredths)	16.61%	16.29%
For Capital Adequacy Purposes, Ratio (in hundredths)	8.00%	8.00%
To be Well Capitalized Under Prompt Corrective Actions Provisions, Ratio (in hundredths)	10.00%	10.00%
Actual Ratio (in hundredths)	15.35%	15.03%
For Capital Adequacy Purposes, Ratio (in hundredths)	4.00%	4.00%
To be Well Capitalized Under Prompt Corrective Actions Provisions, Ratio (in hundredths)	6.00%	6.00%
Amount [Abstract]
Actual Amount	114,128	108,163
For Capital Adequacy Purposes, Amount	44,282	46,117
To be Well Capitalized Under Prompt Corrective Actions Provisions, Amount	$ 55,352	$ 57,646
Ratios [Abstract]
Actual Ratio (in hundredths)	10.31%	9.38%
For Capital Adequacy Purposes, Ratio (in hundredths)	4.00%	4.00%
To be Well Capitalized Under Prompt Corrective Actions Provisions, Ratio (in hundredths)	5.00%	5.00%

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Interest Income
Loans, Including Fees	$ 41,963,113	$ 44,460,149	$ 51,728,665
Federal Funds Sold and Securities Purchased Under Agreements to Resell	99,273	114,794	95,428
Deposits with Other Banks	42,903	45,646	38,085
Investment Securities
U. S. Government Agencies	4,824,423	6,873,296	6,613,030
State, County and Municipal	206,483	160,892	103,133
Corporate Obligations	76,029	91,034	137,831
Dividends on Other Investments	77,203	47,001	21,547
Interest Income	47,289,427	51,792,812	58,737,719
Interest Expense
Deposits	8,737,281	12,950,229	17,212,312
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase	0	337,711	721,044
Borrowed Money	2,279,469	3,517,633	3,589,847
Interest Expense	11,016,750	16,805,573	21,523,203
Net Interest Income	36,272,677	34,987,239	37,214,516
Provision for Loan Losses	6,784,767	8,250,000	13,350,000
Net Interest Income After Provision for Loan Losses	29,487,910	26,737,239	23,864,516
Noninterest Income
Service Charges on Deposits	3,572,897	3,244,536	3,597,416
Other Service Charges, Commissions and Fees	1,514,898	1,311,758	1,139,935
Mortgage Fee Income	400,009	265,636	313,005
Securities Gains	2,837,464	2,923,601	2,617,062
Gain on Sale of SBA Loans	305,924	946,732	1,004,585
Other	1,102,077	1,258,813	1,334,846
Noninterest Income	9,733,269	9,951,076	10,006,849
Noninterest Expenses
Salaries and Employee Benefits	15,564,893	14,632,693	14,096,698
Occupancy and Equipment	3,878,268	3,997,667	4,422,152
Directors' Fees	465,220	466,075	495,950
Legal and Professional Fees	1,085,881	1,186,884	1,369,864
Foreclosed Property	5,613,316	4,045,245	4,943,530
FDIC Assessment	1,497,974	1,828,799	1,866,956
Advertising	422,718	508,329	743,278
Software	789,226	660,120	630,543
Telephone	744,930	735,758	703,786
Other	5,316,604	4,989,267	4,583,606
Noninterest Expense	35,379,030	33,050,837	33,856,363
Income Before Income Taxes (Benefits)	3,842,149	3,637,478	15,002
Income Taxes (Benefits)	1,200,851	1,103,883	(459,214)
Net Income	2,641,298	2,533,595	474,216
Preferred Stock Dividends	1,435,385	1,400,000	1,400,000
Net Income (Loss) Available to Common Stockholders	$ 1,205,913	$ 1,133,595	$ (925,784)
Net Income (Loss) Per Share of Common Stock
Basic (in dollars per share)	$ 0.14	$ 0.13	$ (0.11)
Diluted (in dollars per share)	$ 0.14	$ 0.13	$ (0.11)
Cash Dividends Declared Per Share of Common Stock (in dollars per share)	$ 0.00	$ 0.00	$ 0.00
Weighted Average Shares Outstanding (in shares)	8,439,258	8,439,258	8,149,217

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Allowance for Loan Losses

12 Months Ended

Dec. 31, 2012

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses

(5)  Allowance for Loan Losses

Changes in the allowance for loan losses for the years ended December 31 are as follows:

	December 31
	2012			2011			2010
Balance, Beginning of Year	$	15,649,594		$	28,280,077		$	31,400,641
Provision for Loan Losses		6,784,767			8,250,000			13,350,000
Loans Charged Off		(10,454,175	)		(22,850,673	)		(17,622,454	)
Recoveries of Loans Previously Charged Off		756,735			1,970,190			1,151,890
Balance, End of Year	$	12,736,921		$	15,649,594		$	28,280,077

The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the years ended December 31.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other loan categories and periodically may result in reallocation within the provision categories.

2012	Beginning Balance		Charge-Offs			Recoveries		Provision			Ending Balance
Commercial and Agricultural
Commercial	$	1,070,560	$	(653,389	)	$	139,802	$	424,048		$	981,021
Agricultural		297,168		(3,028	)		-		2,035			296,175
Real Estate
Commercial Construction		3,122,594		(4,106,124	)		209,352		2,664,378			1,890,200
Residential Construction		138,092		-			-		-			138,092
Commercial		6,448,064		(4,325,642	)		232,880		2,807,537			5,162,839
Residential		3,695,357		(960,620	)		47,690		623,520			3,405,947
Farmland		364,663		(224,725	)		4,716		145,872			290,526
Consumer and Other
Consumer		205,154		(169,249	)		81,956		109,913			227,774
Other		307,942		(11,398	)		40,339		7,464			344,347
	$	15,649,594	$	(10,454,175	)	$	756,735	$	6,784,767		$	12,736,921
2011
Commercial and Agricultural
Commercial	$	4,414,817	$	(841,887	)	$	127,490	$	(2,629,860	)	$	1,070,560
Agricultural		698,637		(455,165	)		454,453		(400,757	)		297,168
Real Estate
Commercial Construction		4,126,043		(6,957,181	)		557,168		5,396,564			3,122,594
Residential Construction		519,766		(481	)		-		(381,193	)		138,092
Commercial		8,029,525		(12,492,097	)		527,996		10,382,640			6,448,064
Residential		5,941,696		(1,704,887	)		149,173		(690,625	)		3,695,357
Farmland		944,323		(60,447	)		411		(519,624	)		364,663
Consumer and Other
Consumer		3,074,220		(222,878	)		145,279		(2,791,467	)		205,154
Other		531,050		(115,650	)		8,220		(115,678	)		307,942
	$	28,280,077	$	(22,850,673	)	$	1,970,190	$	8,250,000		$	15,649,594

2010	Beginning Balance		Charge-Offs			Recoveries		Provision		Ending Balance
Commercial and Agricultural
Commercial	$	3,930,760	$	(469,214	)	$	80,181	$	873,090	$	4,414,817
Agricultural		779,337		(255,627	)		1,377		173,550		698,637
Real Estate
Commercial Construction		7,402,484		(4,648,124	)		184,868		1,186,815		4,126,043
Residential Construction		447,676		-			-		72,090		519,766
Commercial		8,790,443		(7,459,619	)		141,931		6,556,770		8,029,525
Residential		5,025,839		(2,929,668	)		439,940		3,405,585		5,941,696
Farmland		942,019		(271,750	)		7,639		266,415		944,323
Consumer and Other
Consumer		2,826,058		(548,834	)		245,641		551,355		3,074,220
Other		1,256,025		(1,039,618	)		50,313		264,330		531,050
	$	31,400,641	$	(17,622,454	)	$	1,151,890	$	13,350,000	$	28,280,077

In 2012, the Company refined its methodology used in estimating the amount of the Allowance for Loan and Lease Losses (ALLL).  Management has been proactive in identifying problem loans, assessing exposure and providing sufficient reserves to cover the exposures.  The ALLL was increased in anticipation of identified exposures resulting in confirmed losses.  When losses were confirmed, they were promptly charged off.  As a result, losses for the years 2009, 2010 and 2011 were very high.  During this period and in 2012, newer loans granted were made subject to higher underwriting standards and more conservative appraisals.  Because of the prompt recognition of losses that drove the excessive charge-off history, management now believes the remaining losses incurred in the current portfolio, including newer loans made, will be less than unadjusted loss history factors will suggest.  Considering the major losses taken, along with organizational and staffing changes, the validity of qualitative factors in determining adjustments of loss history needed to be reviewed.  Recognizing the importance of credit administration and the role of personnel involved in granting, approving, administering, monitoring and collecting loans, management concluded that greater weight should be placed on factors associated with those activities.  Additionally, during the year ended December 31, 2012, management reviewed the appropriateness of continuing to use a one-year annual loss rate to determine losses incurred in the loan portfolio segments of loans collectively reviewed for impairment.  Consideration was given to the trends in losses incurred over prior quarters and economic indicators impacting the Company.  Management concluded that the one-year charge-off history should be expanded to include quarters from the current year.  Thus, the annualized loss rates used for the December 31, 2012 allowance for loan loss calculation were based on an expanded period that includes all four quarters of 2011 and the first three quarters of 2012. The effect of these changes on the ALLL resulted in a reduction in the ALLL estimate of $2,154,639.  Management believes the adjustments made will result in a better estimation of losses incurred in the portfolio.

The Company determines its individual loan reserves during its quarterly review of substandard loans.  This process involves reviewing all loans with a risk grade of 6 or greater and an outstanding relationship balance of $50,000 or more, regardless of the loan's impairment classification.  Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on nonimpaired loans.  Management considers those loans graded substandard, but not classified as impaired, to be higher risk loans and will make specific allocations of the allowance to those loans if warranted.  Since these loans are not considered impaired, they are included in the "Collectively Evaluated for Impairment" column of the following tables.  At December 31, 2012 and 2011, substandard loans, not classified as impaired, for which a specific allocation was made totaled $10,795,911 and $16,746,384, respectively.  The specific allocation associated with these loans for December 31, 2012 and 2011 was $898,773 and $1,926,438.  At December 31, 2012, 2011 and 2010, impaired loans totaling $1,026,624, $995,168 and $976,971, respectively, were below the $50,000 review threshold and were not individually reviewed for impairment.  Those loans were subject to the bank's general loan loss reserve methodology and are included in the "Collectively Evaluated for Impairment" column of the following tables.  The following tables present breakdowns of the allowance for loan losses, segregated by impairment methodology for December 31, 2012 and 2011:

	Ending Allowance Balance						Ending Loan Balance
2012	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	462,555	$	518,466	$	981,021	$	2,512,133	$	53,172,359	$	55,684,492
Agricultural		-		296,175		296,175		-		6,210,953		6,210,953
Real Estate
Commercial Construction		1,732,534		157,666		1,890,200		13,892,135		39,915,921		53,808,056
Residential Construction		-		138,092		138,092		-		5,852,238		5,852,238
Commercial		1,236,526		3,926,313		5,162,839		28,205,405		306,180,772		334,386,177
Residential		840,492		2,565,455		3,405,947		8,022,249		195,822,273		203,844,522
Farmland		-		290,526		290,526		2,393,775		46,663,086		49,056,861
Consumer and Other
Consumer		-		227,774		227,774		28,007		29,749,769		29,777,776
Other		-		344,347		344,347		17,491		8,411,445		8,428,936
Total End of Year Balance	$	4,272,107	$	8,464,814	$	12,736,921	$	55,071,195	$	691,978,816	$	747,050,011

	Ending Allowance Balance						Ending Loan Balance
2011	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	308,211	$	762,349	$	1,070,560	$	2,237,878	$	46,748,224	$	48,986,102
Agricultural		-		297,168		297,168		-		8,421,884		8,421,884
Real Estate
Commercial Construction		2,693,571		429,023		3,122,594		24,212,519		34,333,301		58,545,820
Residential Construction		-		138,092		138,092		-		3,530,502		3,530,502
Commercial		2,060,815		4,387,249		6,448,064		35,715,026		279,565,722		315,280,748
Residential		674,998		3,020,359		3,695,357		5,614,744		188,023,073		193,637,817
Farmland		11,878		352,785		364,663		486,683		47,738,723		48,225,406
Consumer and Other
Consumer		1,632		203,522		205,154		9,596		30,439,707		30,449,303
Other		-		307,942		307,942		-		9,243,739		9,243,739
Total End of Year Balance	$	5,751,105	$	9,898,489	$	15,649,594	$	68,276,446	$	648,044,875	$	716,321,321

	Ending Allowance Balance						Ending Loan Balance
2010	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	336,011	$	4,078,806	$	4,414,817	$	2,131,375	$	51,088,966	$	53,220,341
Agricultural		-		698,637		698,637		274,679		10,277,112		10,551,791
Real Estate
Commercial Construction		3,501,117		624,926		4,126,043		28,392,107		43,917,124		72,309,231
Residential Construction		-		519,766		519,766		194,881		4,178,130		4,373,011
Commercial		7,539,533		489,992		8,029,525		58,562,946		304,315,619		362,878,565
Residential		1,561,952		4,379,744		5,941,696		13,645,907		193,825,906		207,471,813
Farmland		-		944,323		944,323		1,416,538		51,361,851		52,778,389
Consumer and Other
Consumer		3,033		3,071,187		3,074,220		76,420		33,487,443		33,563,863
Other		-		531,050		531,050		113,002		15,990,667		16,103,669
Total End of Year Balance	$	12,941,646	$	15,338,431	$	28,280,077	$	104,807,855	$	708,442,818	$	813,250,673

XML

Loans

12 Months Ended

Dec. 31, 2012

Loans [Abstract]

Loans

(4)  Loans

The following table presents the composition of loans, segregated by class of loans, as of December 31:

	2012		2011
Commercial and Agricultural
Commercial	$	55,684,492	$	48,986,102
Agricultural		6,210,953		8,421,884
Real Estate
Commercial Construction		53,808,056		58,545,820
Residential Construction		5,852,238		3,530,502
Commercial		334,386,177		315,280,748
Residential		203,844,522		193,637,817
Farmland		49,056,861		48,225,406
Consumer and Other
Consumer		29,777,776		30,449,303
Other		8,428,936		9,243,739
Total Loans	$	747,050,011	$	716,321,321

Commercial and agricultural loans are extended to a diverse group of businesses within the Company's market area.  These loans are often underwritten based on the borrower's ability to service the debt from income from the business.  Real estate construction loans often require loan funds to be advanced prior to completion of the project.  Due to uncertainties inherent in estimating construction costs, changes in interest rates and other economic conditions, these loans often pose a higher risk than other types of loans.  Consumer loans are originated at the bank level.  These loans are generally smaller loan amounts spread across many individual borrowers to help minimize risk.

Credit Quality Indicators.  As part of the ongoing monitoring of the credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (1) the risk grade assigned to commercial and consumer loans, (2) the level of classified commercial loans, (3) net charge-offs, (4) nonperforming loans, and (5) the general economic conditions in the Company's geographic markets.

The Company uses a risk grading matrix to assign a risk grade to each of its loans.  Loans are graded on a scale of 1 to 8.  A description of the general characteristics of the grades is as follows:

• Grades 1 and 2 - Borrowers with these assigned grades range in risk from virtual absence of risk to minimal risk.  Such loans may be secured by Company-issued and controlled certificates of deposit or properly margined equity securities or bonds.  Other loans comprising these grades are made to companies that have been in existence for a long period of time with many years of consecutive profits and strong equity, good liquidity, excellent debt service ability and unblemished past performance, or to exceptionally strong individuals with collateral of unquestioned value that fully secures the loans.  Loans in this category fall into the "pass" classification.

• Grades 3 and 4 - Loans assigned these "pass" risk grades are made to borrowers with acceptable credit quality and risk.  The risk ranges from loans with no significant weaknesses in repayment capacity and collateral protection to acceptable loans with one or more risk factors considered to be more than average.

• Grade 5 - This grade includes "special mention" loans on management's watch list and is intended to be used on a temporary basis for pass grade loans where risk-modifying action is intended in the short-term.

• Grade 6 - This grade includes "substandard" loans in accordance with regulatory guidelines.  This category includes borrowers with well-defined weaknesses that jeopardize the payment of the debt in accordance with the agreed terms.  Loans considered to be impaired are assigned this grade, and these loans often have assigned loss allocations as part of the allowance for loan and lease losses.  Generally, loans on which interest accrual has been stopped would be included in this grade.

• Grades 7 and 8 - These grades correspond to regulatory classification definitions of "doubtful" and "loss," respectively.  In practice, any loan with these grades would be for a very short period of time, and generally the Company has no loans with these assigned grades.  Management manages the Company's problem loans in such a way that uncollectible loans or uncollectible portions of loans are charged off immediately with any residual, collectible amounts assigned a risk grade of 6.

The following tables present the loan portfolio by credit quality indicator (risk grade) as of December 31. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes.

2012	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	49,947,552	$	1,417,735	$	4,319,205	$	55,684,492
Agricultural		6,155,864		-		55,089		6,210,953
Real Estate
Commercial Construction		37,256,301		1,663,588		14,888,167		53,808,056
Residential Construction		5,748,829		103,409		-		5,852,238
Commercial		298,222,139		9,759,473		26,404,565		334,386,177
Residential		183,222,020		11,412,973		9,209,529		203,844,522
Farmland		45,495,038		913,487		2,648,336		49,056,861
Consumer and Other
Consumer		28,839,058		293,467		645,251		29,777,776
Other		8,350,772		8,907		69,257		8,428,936
Total Loans	$	663,237,573	$	25,573,039	$	58,239,399	$	747,050,011
2011
Commercial and Agricultural
Commercial	$	42,586,230	$	1,480,726	$	4,919,146	$	48,986,102
Agricultural		8,153,224		-		268,660		8,421,884
Real Estate
Commercial Construction		28,745,596		2,814,113		26,986,111		58,545,820
Residential Construction		3,227,392		303,110		-		3,530,502
Commercial		272,062,206		14,789,290		28,429,252		315,280,748
Residential		175,099,480		8,343,336		10,195,001		193,637,817
Farmland		43,664,126		1,413,476		3,147,804		48,225,406
Consumer and Other
Consumer		29,372,493		361,714		715,096		30,449,303
Other		9,028,428		99,418		115,893		9,243,739
Total Loans	$	611,939,175	$	29,605,183	$	74,776,963	$	716,321,321

A loan's risk grade is assigned at the inception of the loan and is based on the financial strength of the borrower and the type of collateral.  Loan risk grades are subject to reassessment at various times throughout the year as part of the Company's ongoing loan review process.  Loans with an assigned risk grade of 6 or below and an outstanding balance of $50,000 or more are reassessed on a quarterly basis.  During this reassessment process individual reserves may be identified and placed against certain loans which are not considered impaired.

In assessing the overall economic condition of the markets in which it operates, the Company monitors the unemployment rates for its major service areas.  The unemployment rates are reviewed on a quarterly basis as part of the allowance for loan loss determination.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.  Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provision.  Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due.  Nonaccrual loans totaled $29,850,735 and $38,821,632 as of December 31, 2012 and 2011, respectively, and total recorded investment in loans past due 90 days or more and still accruing interest totaled $4,355 and $15,160, respectively.  During its review of impaired loans, the Company determined the majority of its exposures on these loans were known losses.  As a result, the exposures were charged off, reducing the specific allowances on impaired loans.

The following table represents an age analysis of past due loans and nonaccrual loans, segregated by class of loans, as of December 31:

	Accruing Loans
2012	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	797,612	$	-	$	797,612	$	1,033,371	$	53,853,509	$	55,684,492
Agricultural		28,228		-		28,228		39,213		6,143,512		6,210,953
Real Estate
Commercial Construction		1,309,618		-		1,309,618		14,032,580		38,465,858		53,808,056
Residential Construction		-		-		-		-		5,852,238		5,852,238
Commercial		3,771,106		-		3,771,106		6,629,789		323,985,282		334,386,177
Residential		8,223,174		-		8,223,174		5,429,971		190,191,377		203,844,522
Farmland		140,095		-		140,095		2,413,104		46,503,662		49,056,861
Consumer and Other
Consumer		636,888		4,355		641,243		255,216		28,881,317		29,777,776
Other		4,557		-		4,557		17,491		8,406,888		8,428,936
Total Loans	$	14,911,278	$	4,355	$	14,915,633	$	29,850,735	$	702,283,643	$	747,050,011
2011
Commercial and Agricultural
Commercial	$	644,899	$	-	$	644,899	$	2,102,522	$	46,238,681	$	48,986,102
Agricultural		-		-		-		85,670		8,336,214		8,421,884
Real Estate
Commercial Construction		513,905		-		513,905		23,578,263		34,453,652		58,545,820
Residential Construction		33,541		-		33,541		-		3,496,961		3,530,502
Commercial		2,930,743		-		2,930,743		9,193,650		303,156,355		315,280,748
Residential		2,251,009		15,160		2,266,169		3,110,032		188,261,616		193,637,817
Farmland		376,426		-		376,426		486,683		47,362,297		48,225,406
Consumer and Other
Consumer		410,041		-		410,041		221,360		29,817,902		30,449,303
Other		-		-		-		43,452		9,200,287		9,243,739
Total Loans	$	7,160,564	$	15,160	$	7,175,724	$	38,821,632	$	670,323,965	$	716,321,321

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $1,634,600, $1,639,800 and $1,621,700 for the years ended December 31, 2012, 2011 and 2010, respectively.

The following table details impaired loan data as of December 31, 2012:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	1,508,236	$	1,041,938	$	-	$	1,052,916	$	27,407	$	28,410
Agricultural		39,213		39,213		-		58,056		-		-
Commercial Construction		10,624,917		6,414,986		-		9,194,360		27,377		51,820
Commercial Real Estate		16,565,971		15,505,907		-		26,482,274		430,339		420,549
Residential Real Estate		4,450,128		4,131,707		-		3,096,151		89,139		123,101
Farmland		2,828,539		2,413,103		-		2,326,180		42,588		55,258
Consumer		297,356		255,216		-		228,181		10,441		12,920
Other		17,491		17,491		-		24,414		1,191		1,291
		36,331,851		29,819,561		-		42,462,532		628,482		693,349
With An Allowance Recorded
Commercial		1,493,432		1,493,432		462,555		942,673		91,888		87,611
Agricultural		-		-		-		-		-		-
Commercial Construction		8,266,649		7,617,594		1,732,534		10,533,468		-		-
Commercial Real Estate		12,758,884		12,745,422		1,236,526		6,398,364		383,356		366,423
Residential Real Estate		5,514,994		4,421,809		840,492		4,288,062		144,661		117,266
Farmland		-		-		-		64,862		-		-
Consumer		-		-		-		-		-		-
Other		-		-		-		-		-		-
		28,033,959		26,278,257		4,272,107		22,227,429		619,905		571,300
Total
Commercial		3,001,668		2,535,370		462,555		1,995,589		119,295		116,021
Agricultural		39,213		39,213		-		58,056		-		-
Commercial Construction		18,891,566		14,032,580		1,732,534		19,727,828		27,377		51,820
Commercial Real Estate		29,324,855		28,251,329		1,236,526		32,880,638		813,695		786,972
Residential Real Estate		9,965,122		8,553,516		840,492		7,384,213		233,800		240,367
Farmland		2,828,539		2,413,103		-		2,391,042		42,588		55,258
Consumer		297,356		255,216		-		228,181		10,441		12,920
Other		17,491		17,491		-		24,414		1,191		1,291
	$	64,365,810	$	56,097,818	$	4,272,107	$	64,689,961	$	1,248,387	$	1,264,649

The following table details impaired loan data as of December 31, 2011:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	1,742,961	$	1,580,140	$	-	$	946,466	$	60,078		$	65,346
Agricultural		85,670		85,670		-		208,162		(4,024	)		-
Commercial Construction		17,699,542		12,799,454		-		13,309,517		116,077			143,443
Commercial Real Estate		34,686,574		29,384,623		-		27,027,403		832,590			834,161
Residential Real Estate		2,600,919		1,933,669		-		3,176,244		88,419			80,334
Farmland		277,656		227,233		-		342,280		66,273			66,273
Consumer		228,688		215,956		-		184,372		10,732			12,203
Other		51,666		43,452		-		39,621		1,107			1,606
		57,373,676		46,270,197		-		45,234,065		1,171,252			1,203,366
With An Allowance Recorded
Commercial		775,506		775,506		308,211		213,898		15,086			19,171
Agricultural		-		-		-		-		-			-
Commercial Construction		14,035,742		11,489,233		2,693,571		10,470,491		13,759			61,012
Commercial Real Estate		6,429,874		6,429,874		2,060,815		6,556,769		181,799			197,132
Residential Real Estate		4,771,867		4,041,950		674,998		3,858,609		97,383			96,534
Farmland		298,893		259,450		11,878		64,862		(17,958	)		-
Consumer		5,404		5,404		1,632		3,987		607			724
Other		-		-		-		19,566		-			-
		26,317,286		23,001,417		5,751,105		21,188,182		290,676			374,573
Total
Commercial		2,518,467		2,355,646		308,211		1,160,364		75,164			84,517
Agricultural		85,670		85,670		-		208,162		(4,024	)		-
Commercial Construction		31,735,284		24,288,687		2,693,571		23,780,008		129,836			204,455
Commercial Real Estate		41,116,448		35,814,497		2,060,815		33,584,172		1,014,389			1,031,293
Residential Real Estate		7,372,786		5,975,619		674,998		7,034,853		185,802			176,868
Farmland		576,549		486,683		11,878		407,142		48,315			66,273
Consumer		234,092		221,360		1,632		188,359		11,339			12,927
Other		51,666		43,452		-		59,187		1,107			1,606
	$	83,690,962	$	69,271,614	$	5,751,105	$	66,422,247	$	1,461,928		$	1,577,939

At December 31, 2010, the average recorded investment in impaired loans was $28,700,626 and the interest income recognized and collected on impaired loans was $484,984 and $694,764, respectively.

Troubled Debt Restructurings (TDRs) are troubled loans on which the original terms of the loan have been modified in favor of the borrower due to deterioration in the borrower's financial condition.  Each potential loan modification is reviewed individually and the terms of the loan are modified to meet the borrower's specific circumstances at a point in time.  Not all loan modifications are TDRs.  Loan modifications are reviewed and approved by the Company's senior lending staff, who then determine whether the loan meets the criteria for a TDR.  Generally, the types of concessions granted to borrowers that are evaluated in determining whether a loan is classified as a TDR include:

• Interest rate reductions - Occur when the stated interest rate is reduced to a nonmarket rate or a rate the borrower would not be able to obtain elsewhere under similar circumstances.

• Amortization or maturity date changes - Result when the amortization period of the loan is extended beyond what is considered a normal amortization period for loans of similar type with similar collateral.

• Principal reductions - These are often the result of commercial real estate loan workouts where two new notes are created.  The primary note is underwritten based upon our normal underwriting standards and is structured so that the projected cash flows are sufficient to repay the contractual principal and interest of the newly restructured note.  The terms of the secondary note vary by situation and often involve that note being charged off, or the principal and interest payments being deferred until after the primary note has been repaid.  In situations where a portion of the note is charged off during modification, there is often no specific reserve allocated to those loans.  This is due to the fact that the amount of the charge-off usually represents the excess of the original loan balance over the collateral value and the Company has determined there is no additional exposure on those loans.

As discussed in Note 1, Summary of Significant Accounting Policies, once a loan is identified as a TDR, it is accounted for as an impaired loan.  The Company had no unfunded commitments to lend to a customer that has a troubled debt restructured loan as of December 31, 2012.  The following tables present the number of loan contracts restructured during the 12 months ended December 31, 2012 and the pre- and post-modification recorded investment as well as the number of contracts and the recorded investment for those TDRs modified during the previous 12 months which subsequently defaulted during the period.  Loans modified in a troubled debt restructuring are considered to be in default once the loan becomes 90 days past due.

Troubled Debt Restructurings
2012	# of Contracts		Pre-Modification		Post-Modification
Commercial		1	$	107,749	$	107,749
Commercial Real Estate		1		56,835		56,835
Residential Real Estate		5		1,082,585		1,079,614
Total Loans		7	$	1,247,169	$	1,244,198

Troubled Debt Restructurings
2011	# of Contracts		Pre-Modification		Post-Modification
Commercial		3	$	3,240,469	$	1,541,882
Commercial Construction		3		1,430,147		1,430,101
Commercial Real Estate		9		20,827,349		15,906,547
Residential Real Estate		8		1,505,356		1,456,878
Total Loans		23	$	27,003,321	$	20,335,408

Troubled debt restructurings that subsequently defaulted as of December 31 are as follows:

2012	# of Contracts		Recorded Investment
Residential Real Estate		1	$	10,000
Commercial Real Estate		1		203,291
Total Loans		2	$	213,291
2011
Commercial		1	$	1,175,922
Commercial Construction		3		4,475,473
Commercial Real Estate		3		2,322,361
Total Loans		7	$	7,973,756

At December 31, 2012 and 2011, all restructured loans were performing as agreed.  However, three restructured loans totaling $999,133, $51,998 and $10,000 at December 31, 2011 failed to continue to perform as agreed and, as a result, the loans were charged off in March 2011, December 2011 and January 2012, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(16) Commitments and Contingencies

Credit-Related Financial Instruments.  The Company is a party to credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments include commitments to extend credit, standby letters of credit and commercial letters of credit.  Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company's exposure to credit loss is represented by the contractual amount of these commitments.  The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments.

At December 31, 2012 and 2011, the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	2012		2011
Commitments to Extend Credit	$	64,147,000	$	39,966,000
Standby Letters of Credit		1,141,000		1,327,000

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  The commitments for equity lines of credit may expire without being drawn upon.  Therefore, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if it is deemed necessary by the Company, is based on management's credit evaluation of the customer.

Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers.  These lines of credit are uncollateralized and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed.

Standby and performance letters of credit are conditional lending commitments issued by the Company to guarantee the performance of a customer to a third party.  Those letters of credit are primarily issued to support public and private borrowing arrangements.  Essentially all letters of credit issued have expiration dates within one year.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

Legal Contingencies.  In the ordinary course of business, there are various legal proceedings pending against Colony and its subsidiary.  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.

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Subordinated Debentures (Trust Preferred Securities)

12 Months Ended

Dec. 31, 2012

Subordinated Debentures (Trust Preferred Securities) [Abstract]

Subordinated Debentures (Trust Preferred Securities)

(12) Subordinated Debentures (Trust Preferred Securities)

								Total
				3-Month		Added		Interest			5-Year
Description	Date	Amount		Libor Rate		Points		Rate		Maturity	Call Option
(In Thousands)
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,500		0.30800		2.68		2.98800	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,000		0.31100		1.50		1.81100	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,000		0.31100		1.65		1.96100	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,000		0.31325		1.40		1.71325	9/14/2037	9/14/2012

The Trust Preferred Securities are recorded as subordinated debentures on the consolidated balance sheets, but subject to certain limitations, qualify as Tier 1 Capital for regulatory capital purposes.  The proceeds from the offering were used to fund the cash portion of the Quitman acquisition, pay off holding Company debt, and inject capital into bank subsidiaries.

On February 13, 2012, the Company announced the suspension of the quarterly interest payments on the Trust Preferred Securities.  Under the terms of the trust documents, the Company may defer payments of interest for up to 20 consecutive quarterly periods without default or penalty.  The regularly scheduled interest payments will continue to be accrued for payment in the future and reported as an expense in the current period.  At December 31, 2012, accrued but unpaid interest expense totaled $553,127.

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Intangible Assets

12 Months Ended

Dec. 31, 2012

Intangible Assets [Abstract]

Intangible Assets

(8)  Intangible Assets

The following is an analysis of the core deposit intangible activity for the years ended December 31:

	Core Deposit Intangible		Accumulated Amortization			Net Core Deposit Intangible
Core Deposit Intangible
Balance, December 31, 2010	$	1,056,693	$	(761,686	)	$	295,007
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2011		1,056,693		(797,435	)		259,258
Amortization Expense		-		(35,748	)		(35,748	)
Balance, December 31, 2012	$	1,056,693	$	(833,183	)	$	223,510

Amortization expense related to the core deposit intangible was $35,748, $35,749 and $35,749 for the years ended December 31, 2012, 2011 and 2010.  Amortizations expense will continue at an annual rate of approximately $35,749 through the first quarter of 2019, at which point the core deposit will be fully amortized.

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Allowance for Loan Losses (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Allowance for loan losses by portfolio [Roll Forward]
Balance, Beginning of Year	$ 15,649,594	$ 28,280,077	$ 31,400,641
Provision for Loan Losses	6,784,767	8,250,000	13,350,000
Loans Charged Off	(10,454,175)	(22,850,673)	(17,622,454)
Recoveries of Loans Previously Charged Off	756,735	1,970,190	1,151,890
Balance, End of Year	$ 12,736,921	$ 15,649,594	$ 28,280,077

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Premises and Equipment

12 Months Ended

Dec. 31, 2012

Premises and Equipment [Abstract]

Premises and Equipment

(6)  Premises and Equipment

Premises and equipment are comprised of the following as of December 31:

	2012			2011
Land	$	7,780,167		$	7,780,167
Building		23,758,761			23,662,849
Furniture, Fixtures and Equipment		12,923,699			12,982,160
Leasehold Improvements		948,260			994,637
Construction in Progress		-			77,366
		45,410,887			45,497,179
Accumulated Depreciation		(20,494,781	)		(19,746,944	)
	$	24,916,106		$	25,750,235

Depreciation charged to operations totaled $1,676,820 in 2012, $1,790,041 in 2011 and $2,140,735 in 2010.

Certain Company facilities and equipment are leased under various operating leases.  Rental expense approximated $447,000 for 2012, $376,000 for 2011 and $377,000 for 2010.

Future minimum rental payments as of December 31, 2012 are as follows:

Year Ending December 31	Amount
2013	$	131,978
2014		52,138
2015		42,000
2016 and After		84,000
	$	310,116

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Other Real Estate Owned

12 Months Ended

Dec. 31, 2012

Other Real Estate Owned [Abstract]

Other Real Estate Owned

(7)  Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at December 31, 2012, 2011 and 2010 was $15,940,693, $20,445,805 and $20,207,806, respectively.  All of the Company's other real estate owned represents properties acquired through foreclosure or deed in lieu of foreclosure.  The following table details the change in OREO during 2012, 2011 and 2010.

	December 31
	2012			2011			2010
Balance, Beginning of Year	$	20,445,085		$	20,207,806		$	19,705,044
Additions		9,729,174			12,555,622			13,159,402
Sales of OREO		(9,711,890	)		(9,804,669	)		(9,531,210	)
Loss on Sale		(1,818,967	)		(1,102,613	)		(1,832,256	)
Provision for Losses		(2,702,709	)		(1,411,061	)		(1,293,174	)
Balance, End of Year	$	15,940,693		$	20,445,085		$	20,207,806

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

(9)  Income Taxes

The components of income tax (benefit) expense for the years ended December 31 are as follows:

	2012			2011			2010
Current Federal (Benefit) Expense	$	(3,588	)	$	311,174		$	(1,037,717	)
Deferred Federal (Benefit) Expense		1,204,439			867,006			639,607
Federal Income Tax (Benefit) Expense		1,198,325			1,178,180			(398,110	)
Current State Income Tax (Benefit) Expense		2,526			(74,297	)		(61,104	)
	$	1,200,851		$	1,103,883		$	(459,214	)

The federal income tax (benefit) expense of $1,200,851 in 2012, $1,178,180 in 2011 and $(398,110) in 2010 is different than the income taxes computed by applying the federal statutory rates to income before income taxes.  The reasons for the differences are as follows:

	2012			2011			2010
Statutory Federal Income Taxes	$	1,306,331		$	1,228,538		$	5,101
Tax-Exempt Interest		(94,891	)		(126,468	)		(117,586	)
Interest Expense Disallowance		4,908			8,751			8,400
Premiums on Officers' Life Insurance		(59,603	)		(52,431	)		(134,106	)
Meal and Entertainment Disallowance		25,567			20,693			24,972
Other		16,013			99,097			(184,891	)
Actual Federal Income Taxes	$	1,198,325		$	1,178,180		$	(398,110	)

Deferred taxes in the accompanying consolidated balance sheets as of December 31 include the following:

	2012			2011
Deferred Tax Assets
Allowance for Loan Losses	$	4,330,553		$	5,320,862
Other Real Estate		1,668,653			1,012,326
Deferred Compensation		342,547			386,225
Restricted Stock		-			508,547
Goodwill		345,762			392,124
Net Operating Loss Carryforward		2,310,708			2,992,777
Other		529,706			559,836
		9,527,929			11,172,697
Deferred Tax Liabilities
Premises and Equipment		(1,232,905	)		(1,195,334	)
Vested Restricted Stock		-			(476,540	)
Other		(4,185	)		(4,185	)
		(1,237,090	)		(1,676,059	)
Deferred Tax Assets (Liabilities) on   Unrealized Securities Gains (Losses)		77,177			(983,807	)
Net Deferred Tax Assets	$	8,368,016		$	8,512,831

As discussed in Note 1, certain positions taken in the Company's tax returns may be subject to challenge by the taxing authorities.  An analysis of activity related to unrecognized taxes follows as of December 31, 2012 and 2011.

	2012			2011
Balance, Beginning	$	33,368		$	78,121
Positions Taken During the Current Year		11,794			14,275
Reductions Resulting from Lapse of Statutes of Limitation		(6,486	)		(59,028	)
Balance, Ending	$	38,676		$	33,368

The net increase (decrease) of $5,308 and $(44,753) is included in income tax expense for the years ended December 31, 2012 and 2011, respectively.

The Company has cumulative federal net operation loss carryforwards of $4,299,505 at December 31, 2012 that expire beginning in 2021.

The Company considers the determination of the deferred tax asset amount and the need for any valuation reserve to be a critical accounting policy that requires significant judgment.  The Company has, in its judgment, made reasonable assumptions and considered both positive and negative evidence relating to the ultimate realization of deferred tax assets.  Based upon this evaluation, the Company determined that a valuation allowance on its deferred tax asset was not required as of December 31, 2012.

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Other Real Estate Owned (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Other Real Estate [Roll Forward]
Balance, Beginning	$ 20,445,085	$ 20,207,806	$ 19,705,044
Additions	9,729,174	12,555,622	13,159,402
Sales of OREO	(9,711,890)	(9,804,669)	(9,531,210)
Loss on Sale	(1,818,967)	(1,102,613)	(1,832,256)
Provision for Losses	(2,702,709)	(1,411,061)	(1,293,174)
Balance, Ending	$ 15,940,693	$ 20,445,085	$ 20,207,806

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Income Taxes (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Tax Expense [Abstract]
Current Federal (Benefit) Expense	$ (3,588)	$ 311,174	$ (1,037,717)
Deferred Federal (Benefit) Expense	1,204,439	867,006	639,607
Federal Income Tax (Benefit) Expense	1,198,325	1,178,180	(398,110)
Current State Income Tax (Benefit) Expense	2,526	(74,297)	(61,104)
Income Tax Expense	1,200,851	1,103,883	(459,214)
Difference between financial statement tax expense and amount computed by applying the federal statutory rates to income before income taxes
Statutory Federal Income Taxes	1,306,331	1,228,538	5,101
Tax-Exempt Interest	(94,891)	(126,468)	(117,586)
Interest Expense Disallowance	4,908	8,751	8,400
Premiums on Officers' Life Insurance	(59,603)	(52,431)	(134,106)
Meal and Entertainment Disallowance	25,567	20,693	24,972
Other	16,013	99,097	(184,891)
Actual Federal Income Taxes	1,198,325	1,178,180	(398,110)
Deferred Tax Assets [Abstract]
Allowance for Loan Losses	4,330,553	5,320,862
Other Real Estate	1,668,653	1,012,326
Deferred Compensation	342,547	386,225
Restricted Stock	0	508,547
Goodwill	345,762	392,124
Net Operating Loss Carryforward	2,310,708	2,992,777
Other	529,706	559,836
Total Deferred Tax Assets	9,527,929	11,172,697
Deferred Tax Liabilities [Abstract]
Premises and Equipment	(1,232,905)	(1,195,334)
Vested Restricted Stock	0	(476,540)
Other	(4,185)	(4,185)
Total Deferred Tax Liabilities	(1,237,090)	(1,676,059)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)	77,177	(983,807)
Net Deferred Tax Assets	8,368,016	8,512,831
Unrecognized Taxes [Abstract]
Balance, Beginning	33,368	78,121
Position Taken During the Current Year	11,794	14,275
Reductions Resulting from Lapse of Statutes of Limitation	(6,486)	(59,028)
Balance, Ending	38,676	33,368	78,121
Net reduction in income tax benefits	5,308	(44,753)
Cumulative federal net operating Loss Carryforwards	$ 4,299,505
Cumulative federal net operating Loss Carryforwards expires	2021

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Premises and Equipment (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Premises and equipment [Line Items]
Premises and Equipment, Gross	$ 45,410,887	$ 45,497,179
Accumulated Depreciation	(20,494,781)	(19,746,944)
Premises and Equipment	24,916,106	25,750,235
Depreciation	1,676,820	1,790,041	2,140,735
Rental expense	447,000	376,000	377,000
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2013	131,978
2014	52,138
2015	42,000
2016 and After	84,000
Total future minimum payments	310,116
Land [Member]
Premises and equipment [Line Items]
Premises and Equipment, Gross	7,780,167	7,780,167
Building [Member]
Premises and equipment [Line Items]
Premises and Equipment, Gross	23,758,761	23,662,849
Furniture and Equipment [Member]
Premises and equipment [Line Items]
Premises and Equipment, Gross	12,923,699	12,982,160
Leasehold Improvements [Member]
Premises and equipment [Line Items]
Premises and Equipment, Gross	948,260	994,637
Construction in Progress [Member]
Premises and equipment [Line Items]
Premises and Equipment, Gross	$ 0	$ 77,366

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Cash and Balances Due from Banks (Tables)

12 Months Ended

Dec. 31, 2012

Cash and Balances Due from Banks [Abstract]

Cash and Balances Due from Banks

Components of cash and balances due from banks are as follows as of December 31:

	2012		2011
Cash on Hand and Cash Items	$	9,063,437	$	9,271,705
Noninterest-Bearing Deposits with Other Banks		20,180,490		19,108,663
	$	29,243,927	$	28,380,368

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Earnings per share

Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during each period.  Diluted earnings per share reflects the potential dilution of restricted stock and common stock warrants.  Net income available to common stockholders represents net income (loss) after preferred stock dividends.  The following table presents earnings per share for the years ended December 31, 2012, 2011 and 2010:

	2012		2011		2010
Numerator
Net Income (Loss) Available to Common Stockholders	$	1,205,913	$	1,133,595	$	(925,784	)
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,149,217
Dilutive Effect of Potential Common Stock
Restricted Stock		-		-		-
Stock Warrants		-		-		-
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,439,258		8,439,258		8,149,217
Earnings (Loss) Per Share - Basic	$	0.14	$	0.13	$	(0.11	)
Earnings (Loss) Per Share - Diluted	$	0.14	$	0.13	$	(0.11	)

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Restricted Stock - Unearned Compensation

12 Months Ended

Dec. 31, 2012

Restricted Stock - Unearned Compensation [Abstract]

Restricted Stock - Unearned Compensation

(14) Restricted Stock - Unearned Compensation

In April 2004, the stockholders of Colony Bankcorp, Inc. adopted a restricted stock grant plan which awards certain executive officers common shares of the Company.  The maximum number of shares which may be subject to restricted stock awards (split-adjusted) is 143,500.  To date, 53,256 shares have been issued under this plan and 17,798 shares have been forfeited; thus, remaining shares which may be issued are 108,042 at December 31, 2012.  During 2012, there were no shares of restricted stock issued or forfeited. The shares are recorded at fair market value (on the date granted) as a separate component of stockholders' equity.  The cost of these shares is being amortized against earnings using the straight-line method over three years (the restriction period).

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

(19) Related Party Transactions

The aggregate balance of direct and indirect loans to directors, executive officers or principal holders of equity securities of the Company was $4,776,492 as of December 31, 2012 and $5,504,230 as of December 31, 2011. All such loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and do not involve more than a normal risk of collectibility.  A summary of activity of related party loans is shown below:

	2012			2011
Balance, Beginning	$	5,504,230		$	9,797,492
New Loans		8,075,835			15,455,299
Repayments		(10,510,517	)		(17,871,362	)
Transactions Due to Changes in Directors		1,706,944			(1,877,199	)
Balance, Ending	$	4,776,492		$	5,504,230

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Regulatory Capital Matters (Tables)

12 Months Ended

Dec. 31, 2012

Regulatory Capital Matters [Abstract]

Regulatory capital information

The following table summarizes regulatory capital information as of December 31, 2012 and 2011 on a consolidated basis and for its wholly-owned subsidiary, as defined.

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2012	(In Thousands)
Total Capital to Risk-Weighted Assets
Consolidated	$	122,630		16.47	%	$	59,548		8.00	%		N/A		N/A
Colony Bank		123,463		16.61			59,474		8.00		$	74,342		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		113,283		15.22			29,774		4.00			N/A		N/A
Colony Bank		114,128		15.35			29,737		4.00			44,605		6.00
Tier I Capital to Average Assets
Consolidated		113,283		10.22			44,343		4.00			N/A		N/A
Colony Bank		114,128		10.31			44,282		4.00			55,352		5.00
As of December 31, 2011
Total Capital to Risk-Weighted Assets
Consolidated	$	118,913		16.50	%	$	57,658		8.00	%		N/A		N/A
Colony Bank		117,243		16.29			57,584		8.00		$	71,980		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		109,822		15.24			28,829		4.00			N/A		N/A
Colony Bank		108,163		15.03			28,792		4.00			43,188		6.00
Tier I Capital to Average Assets
Consolidated		109,822		9.51			46,185		4.00			N/A		N/A
Colony Bank		108,163		9.38			46,117		4.00			57,646		5.00

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income tax expense

The components of income tax (benefit) expense for the years ended December 31 are as follows:

	2012			2011			2010
Current Federal (Benefit) Expense	$	(3,588	)	$	311,174		$	(1,037,717	)
Deferred Federal (Benefit) Expense		1,204,439			867,006			639,607
Federal Income Tax (Benefit) Expense		1,198,325			1,178,180			(398,110	)
Current State Income Tax (Benefit) Expense		2,526			(74,297	)		(61,104	)
	$	1,200,851		$	1,103,883		$	(459,214	)

Difference between financial statement tax expense and amount computed by applying statutory federal tax rate to income before income taxes

The federal income tax (benefit) expense of $1,200,851 in 2012, $1,178,180 in 2011 and $(398,110) in 2010 is different than the income taxes computed by applying the federal statutory rates to income before income taxes.  The reasons for the differences are as follows:

	2012			2011			2010
Statutory Federal Income Taxes	$	1,306,331		$	1,228,538		$	5,101
Tax-Exempt Interest		(94,891	)		(126,468	)		(117,586	)
Interest Expense Disallowance		4,908			8,751			8,400
Premiums on Officers' Life Insurance		(59,603	)		(52,431	)		(134,106	)
Meal and Entertainment Disallowance		25,567			20,693			24,972
Other		16,013			99,097			(184,891	)
Actual Federal Income Taxes	$	1,198,325		$	1,178,180		$	(398,110	)

Deferred tax assets and liabilities

Deferred taxes in the accompanying consolidated balance sheets as of December 31 include the following:

	2012			2011
Deferred Tax Assets
Allowance for Loan Losses	$	4,330,553		$	5,320,862
Other Real Estate		1,668,653			1,012,326
Deferred Compensation		342,547			386,225
Restricted Stock		-			508,547
Goodwill		345,762			392,124
Net Operating Loss Carryforward		2,310,708			2,992,777
Other		529,706			559,836
		9,527,929			11,172,697
Deferred Tax Liabilities
Premises and Equipment		(1,232,905	)		(1,195,334	)
Vested Restricted Stock		-			(476,540	)
Other		(4,185	)		(4,185	)
		(1,237,090	)		(1,676,059	)
Deferred Tax Assets (Liabilities) on   Unrealized Securities Gains (Losses)		77,177			(983,807	)
Net Deferred Tax Assets	$	8,368,016		$	8,512,831

Unrecognized taxes

As discussed in Note 1, certain positions taken in the Company's tax returns may be subject to challenge by the taxing authorities.  An analysis of activity related to unrecognized taxes follows as of December 31, 2012 and 2011.

	2012			2011
Balance, Beginning	$	33,368		$	78,121
Positions Taken During the Current Year		11,794			14,275
Reductions Resulting from Lapse of Statutes of Limitation		(6,486	)		(59,028	)
Balance, Ending	$	38,676		$	33,368

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net Income	$ 2,641,298	$ 2,533,595	$ 474,216
Other Comprehensive Income, Net of Tax
Gains (Losses) on Securities Arising During the Year	(186,830)	4,439,108	1,227,281
Reclassification Adjustment	(1,872,726)	(1,929,577)	(1,727,261)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	(2,059,556)	2,509,531	(499,980)
Comprehensive Income (Loss)	$ 581,742	$ 5,043,126	$ (25,764)

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Investment Securities

12 Months Ended

Dec. 31, 2012

Investment Securities [Abstract]

Investment Securities

(3)  Investment Securities

Investment securities as of December 31, 2012 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	263,186,852	$	833,920	$	(961,698	)	$	263,059,074
State, County and Municipal		3,973,926		34,670		(4,586	)		4,004,010
Corporate Obligations		1,000,000		104,900		-			1,104,900
Asset-Backed Securities		366,623		-		(234,196	)		132,427
	$	268,527,401	$	973,490	$	(1,200,480	)	$	268,300,411
Securities Held to Maturity
State, County and Municipal	$	41,467	$	442	$	-		$	41,909

The amortized cost and fair value of investment securities as of December 31, 2012, by contractual maturity, are shown hereafter.  Expected maturities may differ from contractual maturities for certain investments because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.  This is often the case with mortgage-backed securities, which are disclosed separately in the table below.

	Securities
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in One Year or Less	$	125,000	$	125,665	$	-	$	-
Due After One Year Through Five Years		2,758,034		2,892,955		41,467		41,909
Due After Five Years Through Ten Years		1,882,647		1,882,228		-		-
Due After Ten Years		574,868		340,489		-		-
		5,340,549		5,241,337		41,467		41,909
Mortgage-Backed Securities		263,186,852		263,059,074		-		-
	$	268,527,401	$	268,300,411	$	41,467	$	41,909

Investment securities as of December 31, 2011 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	291,096,606	$	3,152,095	$	(187,902	)	$	294,060,799
State, County and Municipal		7,474,500		132,226		(23,035	)		7,583,691
Corporate Obligations		2,000,000		123,930		(10,000	)		2,113,930
Asset-Backed Securities		426,191		-		(293,764	)		132,427
	$	300,997,297	$	3,408,251	$	(514,701	)	$	303,890,847
Securities Held to Maturity
State, County and Municipal	$	46,111	$	-	$	(476	)	$	45,635

Proceeds from sales of investments available for sale were $227,690,806 in 2012, $342,672,937 in 2011 and $286,387,727 in 2010.  Gross realized gains totaled $3,084,666 in 2012, $2,978,193 in 2011 and $2,617,062 in 2010.  Gross realized losses totaled $247,202 in 2012, $54,592 in 2011 and $0 in 2010.

Nonaccrual securities are securities for which principal and interest are doubtful of collection in accordance with original terms and for which accruals of interest have been discontinued due to payment delinquency.  Fair value of securities on nonaccrual status totaled $132,427 as of December 31, 2012 and 2011.

Investment securities having a carrying value totaling $117,450,817 and $136,838,456 as of December 31, 2012 and 2011, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at December 31, 2012 and 2011 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2012
U.S. Government Agencies
Mortgage-Backed	$	142,103,991	$	(961,698	)	$	-	$	-		$	142,103,991	$	(961,698	)
State, County and Municipal		1,430,512		(4,586	)		-		-			1,430,512		(4,586	)
Asset-Backed Securities		-		-			132,427		(234,196	)		132,427		(234,196	)
	$	143,534,503	$	(966,284	)	$	132,427	$	(234,196	)	$	143,666,930	$	(1,200,480	)
December 31, 2011
U.S. Government Agencies Mortgage-Backed	$	26,439,317	$	(187,902	)	$	-	$	-		$	26,439,317	$	(187,902	)
State, County and Municipal		1,224,119		(21,704	)		73,193		(1,807	)		1,297,312		(23,511	)
Corporate Obligations		-		-			990,000		(10,000	)		990,000		(10,000	)
Asset-Backed Securities		-		-			132,427		(293,764	)		132,427		(293,764	)
	$	27,663,436	$	(209,606	)	$	1,195,620	$	(305,571	)	$	28,859,056	$	(515,177	)

Management evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At December 31, 2012, the debt securities with unrealized losses have depreciated 0.84 percent from the Company's amortized cost basis. These securities are guaranteed by either the U.S. Government, other governments or U.S. corporations, except for asset-backed securities.  In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer's financial condition.  The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.  As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other than temporary.  However, the Company did own one asset-backed security at December 31, 2012 which has been in a continuous unrealized loss position for more than 12 months.  This investment is comprised of one issuance of a trust preferred security, has a book value of $366,623 and an unrealized loss of $234,196.  Management evaluates this investment on a quarterly basis utilizing a third-party valuation model.  The results of this model revealed other-than-temporary impairment and as a result, $59,568, $53,058 and $520,751 were written off during the years ended December 31, 2012, 2011 and 2009, respectively.  The Company does not intend to sell this investment, nor does the Company consider it likely that it will be required to sell the investment prior to recovery of the remaining fair value.

XML

Loans, Impaired Financing Receivable (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	$ 36,331,851	$ 57,373,676
Unpaid Contractual Principal Balance With An Allowance Recorded	28,033,959	26,317,286
Unpaid Contractual Principal Balance, Total	64,365,810	83,690,962
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	29,819,561	46,270,197
Impaired Balance With An Allowance Recorded	26,278,257	23,001,417
Impaired Balance, Total	56,097,818	69,271,614
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	4,272,107	5,751,105
Related Allowance, Total	4,272,107	5,751,105
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	42,462,532	45,234,065
Average Recorded Investment With An Allowance Recorded	22,227,429	21,188,182
Average Recorded Investment, Total	64,689,961	66,422,247	28,700,626
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	628,482	1,171,252
Interest Income Recognized With An Allowance Recorded	619,905	290,676
Interest Income Recognized, Total	1,248,387	1,461,928	484,984
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	693,349	1,203,366
Interest Income Collected With An Allowance Recorded	571,300	374,573
Interest Income Collected, Total	1,264,649	1,577,939	694,764
Commercial [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	1,508,236	1,742,961
Unpaid Contractual Principal Balance With An Allowance Recorded	1,493,432	775,506
Unpaid Contractual Principal Balance, Total	3,001,668	2,518,467
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	1,041,938	1,580,140
Impaired Balance With An Allowance Recorded	1,493,432	775,506
Impaired Balance, Total	2,535,370	2,355,646
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	462,555	308,211
Related Allowance, Total	462,555	308,211
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	1,052,916	946,466
Average Recorded Investment With An Allowance Recorded	942,673	213,898
Average Recorded Investment, Total	1,995,589	1,160,364
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	27,407	60,078
Interest Income Recognized With An Allowance Recorded	91,888	15,086
Interest Income Recognized, Total	119,295	75,164
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	28,410	65,346
Interest Income Collected With An Allowance Recorded	87,611	19,171
Interest Income Collected, Total	116,021	84,517
Agricultural [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	39,213	85,670
Unpaid Contractual Principal Balance With An Allowance Recorded	0	0
Unpaid Contractual Principal Balance, Total	39,213	85,670
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	39,213	85,670
Impaired Balance With An Allowance Recorded	0	0
Impaired Balance, Total	39,213	85,670
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	0	0
Related Allowance, Total	0	0
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	58,056	208,162
Average Recorded Investment With An Allowance Recorded	0	0
Average Recorded Investment, Total	58,056	208,162
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	0	(4,024)
Interest Income Recognized With An Allowance Recorded	0	0
Interest Income Recognized, Total	0	(4,024)
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	0	0
Interest Income Collected With An Allowance Recorded	0	0
Interest Income Collected, Total	0	0
Commercial Construction [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	10,624,917	17,699,542
Unpaid Contractual Principal Balance With An Allowance Recorded	8,266,649	14,035,742
Unpaid Contractual Principal Balance, Total	18,891,566	31,735,284
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	6,414,986	12,799,454
Impaired Balance With An Allowance Recorded	7,617,594	11,489,233
Impaired Balance, Total	14,032,580	24,288,687
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	1,732,534	2,693,571
Related Allowance, Total	1,732,534	2,693,571
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	9,194,360	13,309,517
Average Recorded Investment With An Allowance Recorded	10,533,468	10,470,491
Average Recorded Investment, Total	19,727,828	23,780,008
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	27,377	116,077
Interest Income Recognized With An Allowance Recorded	0	13,759
Interest Income Recognized, Total	27,377	129,836
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	51,820	143,443
Interest Income Collected With An Allowance Recorded	0	61,012
Interest Income Collected, Total	51,820	204,455
Commercial Real Estate [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	16,565,971	34,686,574
Unpaid Contractual Principal Balance With An Allowance Recorded	12,758,884	6,429,874
Unpaid Contractual Principal Balance, Total	29,324,855	41,116,448
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	15,505,907	29,384,623
Impaired Balance With An Allowance Recorded	12,745,422	6,429,874
Impaired Balance, Total	28,251,329	35,814,497
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	1,236,526	2,060,815
Related Allowance, Total	1,236,526	2,060,815
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	26,482,274	27,027,403
Average Recorded Investment With An Allowance Recorded	6,398,364	6,556,769
Average Recorded Investment, Total	32,880,638	33,584,172
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	430,339	832,590
Interest Income Recognized With An Allowance Recorded	383,356	181,799
Interest Income Recognized, Total	813,695	1,014,389
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	420,549	834,161
Interest Income Collected With An Allowance Recorded	366,423	197,132
Interest Income Collected, Total	786,972	1,031,293
Residential Real Estate [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	4,450,128	2,600,919
Unpaid Contractual Principal Balance With An Allowance Recorded	5,514,994	4,771,867
Unpaid Contractual Principal Balance, Total	9,965,122	7,372,786
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	4,131,707	1,933,669
Impaired Balance With An Allowance Recorded	4,421,809	4,041,950
Impaired Balance, Total	8,553,516	5,975,619
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	840,492	674,998
Related Allowance, Total	840,492	674,998
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	3,096,151	3,176,244
Average Recorded Investment With An Allowance Recorded	4,288,062	3,858,609
Average Recorded Investment, Total	7,384,213	7,034,853
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	89,139	88,419
Interest Income Recognized With An Allowance Recorded	144,661	97,383
Interest Income Recognized, Total	233,800	185,802
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	123,101	80,334
Interest Income Collected With An Allowance Recorded	117,266	96,534
Interest Income Collected, Total	240,367	176,868
Farmland [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	2,828,539	277,656
Unpaid Contractual Principal Balance With An Allowance Recorded	0	298,893
Unpaid Contractual Principal Balance, Total	2,828,539	576,549
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	2,413,103	227,233
Impaired Balance With An Allowance Recorded	0	259,450
Impaired Balance, Total	2,413,103	486,683
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	0	11,878
Related Allowance, Total	0	11,878
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	2,326,180	342,280
Average Recorded Investment With An Allowance Recorded	64,862	64,862
Average Recorded Investment, Total	2,391,042	407,142
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	42,588	66,273
Interest Income Recognized With An Allowance Recorded	0	(17,958)
Interest Income Recognized, Total	42,588	48,315
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	55,258	66,273
Interest Income Collected With An Allowance Recorded	0	0
Interest Income Collected, Total	55,258	66,273
Consumer [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	297,356	228,688
Unpaid Contractual Principal Balance With An Allowance Recorded	0	5,404
Unpaid Contractual Principal Balance, Total	297,356	234,092
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	255,216	215,956
Impaired Balance With An Allowance Recorded	0	5,404
Impaired Balance, Total	255,216	221,360
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	0	1,632
Related Allowance, Total	0	1,632
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	228,181	184,372
Average Recorded Investment With An Allowance Recorded	0	3,987
Average Recorded Investment, Total	228,181	188,359
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	10,441	10,732
Interest Income Recognized With An Allowance Recorded	0	607
Interest Income Recognized, Total	10,441	11,339
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	12,920	12,203
Interest Income Collected With An Allowance Recorded	0	724
Interest Income Collected, Total	12,920	12,927
Other [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	17,491	51,666
Unpaid Contractual Principal Balance With An Allowance Recorded	0	0
Unpaid Contractual Principal Balance, Total	17,491	51,666
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	17,491	43,452
Impaired Balance With An Allowance Recorded	0	0
Impaired Balance, Total	17,491	43,452
Related Allowance [Abstract]
Impaired Financing Receivable With No Related Allowance Recorded	0	0
Related Allowance With An Allowance Recorded	0	0
Related Allowance, Total	0	0
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	24,414	39,621
Average Recorded Investment With An Allowance Recorded	0	19,566
Average Recorded Investment, Total	24,414	59,187
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	1,191	1,107
Interest Income Recognized With An Allowance Recorded	0	0
Interest Income Recognized, Total	1,191	1,107
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	1,291	1,606
Interest Income Collected With An Allowance Recorded	0	0
Interest Income Collected, Total	$ 1,291	$ 1,606

XML

Earnings Per Share (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Numerator [Abstract]
Net Income (Loss) Available to Common Stockholders	$ 1,205,913	$ 1,133,595	$ (925,784)
Denominator [Abstract]
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share (in shares)	8,439,258	8,439,258	8,149,217
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share (in shares)	8,439,258	8,439,258	8,149,217
Earnings (loss) Per Share - Basic (in dollars per share)	$ 0.14	$ 0.13	$ (0.11)
Earnings (loss) Per Share - Diluted (in dollars per share)	$ 0.14	$ 0.13	$ (0.11)
Shares of common stock equivalents excluded from calculation of diluted earnings per share (in shares)	500,000	501,855	505,283
Restricted Stock [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Dilutive Effect of Potential Common Stock (in shares)	0	0	0
Stock Warrants [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Dilutive Effect of Potential Common Stock (in shares)	0	0	0

XML

Subordinated Debentures (Trust Preferred Securities) (Details) (USD $)	12 Months Ended
	Dec. 31, 2012
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Number of deferred consecutive quarterly periods without default or penalty, maximum	20
Accrued but unpaid interest expense	$ 553,127
Colony Bankcorp Statutory Trust III [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Jun. 17, 2004
Amount	4,500,000
3 month Libor Rate (in hundredths)	0.308%
Added Points (in hundredths)	2.68%
Total Interest rate (in hundredths)	2.988%
Maturity	Jun. 14, 2034
5 Years Call Option	Jun. 17, 2009
Colony Bankcorp Capital Trust I [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Apr. 13, 2006
Amount	5,000,000
3 month Libor Rate (in hundredths)	0.311%
Added Points (in hundredths)	1.50%
Total Interest rate (in hundredths)	1.811%
Maturity	Apr. 13, 2036
5 Years Call Option	Apr. 13, 2011
Colony Bankcorp Capital Trust II [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Mar. 12, 2007
Amount	9,000,000
3 month Libor Rate (in hundredths)	0.311%
Added Points (in hundredths)	1.65%
Total Interest rate (in hundredths)	1.961%
Maturity	Mar. 12, 2037
5 Years Call Option	Mar. 12, 2012
Colony Bankcorp Capital Trust III [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Sep. 14, 2007
Amount	$ 5,000,000
3 month Libor Rate (in hundredths)	0.31325%
Added Points (in hundredths)	1.40%
Total Interest rate (in hundredths)	1.71325%
Maturity	Sep. 14, 2037
5 Years Call Option	Sep. 14, 2012

XML

Fair Value of Financial Instruments and Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

Fair Value of Financial Instruments and Fair Value Measurements

(20) Fair Value of Financial Instruments and Fair Value Measurements

Generally accepted accounting standards in the U.S. require disclosure of fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value.  The assumptions used in the estimation of the fair value of Colony Bankcorp, Inc. and Subsidiary's financial instruments are detailed hereafter.  Where quoted prices are not available, fair values are based on estimates using discounted cash flows and other valuation techniques.  The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.  The following disclosures should not be considered a surrogate of the liquidation value of the Company, but rather a good-faith estimate of the increase or decrease in value of financial instruments held by the Company since purchase, origination or issuance.

Cash and Short-Term Investments - For cash, due from banks, bank-owned deposits and federal funds sold, the carrying amount is a reasonable estimate of fair value and is classified level 1.

Investment Securities - Fair values for investment securities are based on quoted market prices where available.  If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable instruments.  If a comparable is not available, the investment securities are classified as level 3.

Federal Home Loan Bank Stock - The fair value of Federal Home Loan Bank stock approximates carrying value.

Loans - The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings.  For variable rate loans, the carrying amount is a reasonable estimate of fair value.

Deposit Liabilities - The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date and is classified as level 1.  The fair value of fixed maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities and is classified as level 2.

Subordinated Debentures - Fair value approximates carrying value due to the variable interest rates of the subordinated debentures.

Other Borrowed Money - The fair value of other borrowed money is calculated by discounting contractual cash flows using an estimated interest rate based on current rates available to the Company for debt of similar remaining maturities and collateral terms. Other borrowed money is classified as level 2 due to their expected maturities.

Disclosures of the fair value of financial assets and financial liabilities, including those of financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis, are required in the financial statements.

The carrying amount and estimated fair values of the Company's financial instruments as of December 31 are as follows:

	2012										2011
	Carrying		Estimated		Level						Carrying		Estimated
	Amount		Fair Value			1		2		3	Amount		Fair Value
	(in Thousands)
Assets
Cash and Short-Term Investments	$	71,041	$	71,041	$	71,041	$	-	$	-	$	112,329	$	112,329
Investment Securities Available for Sale		268,300		268,300		-		267,162		1,138		303,891		303,891
Investment Securities Held to Maturity		41		42		-		42		-		46		46
Federal Home Loan Bank Stock		3,364		3,364		3,364		-		-		5,398		5,398
Loans, Net		734,079		735,115		-		713,109		22,006		700,614		702,438
Liabilities
Deposits		979,685		982,215		486,775		495,440		-		999,985		1,003,648
Subordinated Debentures		24,229		24,229		24,229		-		-		24,229		24,229
Other Borrowed Money		35,000		38,424		-		38,424		-		71,000		74,720

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument.  Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on many judgments.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.  Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment.  In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Fair Value Measurements

Generally accepted accounting principles related to Fair Value Measurements define fair value, establish a framework for measuring fair value, establish a three-level valuation hierarchy for disclosure of fair value measurement and enhance disclosure requirements for fair value measurements.  The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.  The three levels are defined as follows:

• Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 inputs to the valuation methodology are unobservable and represent the Company's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

Following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:

Assets

Securities -Where quoted prices are available in an active market, securities are classified within level 1 of the valuation hierarchy.  Level 1 inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow.  Examples of such instruments, which would generally be classified within level 2 of the valuation hierarchy, include certain collateralized mortgage and debt obligations and certain high-yield debt securities.  In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within level 3 of the valuation hierarchy.  When measuring fair value, the valuation techniques available under the market approach, income approach and/or cost approach are used.  The Company's evaluations are based on market data and the Company employs combinations of these approaches for its valuation methods depending on the asset class.

Impaired loans -Impaired loans are those that are not accounted for under ASC Subtopic 310-40, Troubled Debt Restructurings by Creditors, in which the Company has measured impairment generally based on the fair value of the loan's collateral.  Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds.  These assets are included as level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

Other Real Estate - Other real estate owned assets are adjusted to fair value less estimated selling costs upon transfer of the loans to other real estate owned.  Typically, an external, third-party appraisal is performed on the collateral upon transfer into the other real estate owned account to determine the asset's fair value.  Subsequent adjustments to the collateral's value may be based upon either updated third-party appraisals or management's knowledge of the collateral and the current real estate market conditions.   Appraised amounts used in determining the asset's fair value, whether internally or externally prepared, are discounted 10 percent to account for selling and marketing costs.  Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are typically significant and result in a level 3 classification of the inputs for determining fair value.  Because of the high degree of judgment required in estimating the fair value of other real estate owned assets and because of the relationship between fair value and general economic conditions, we consider the fair value of other real estate owned assets to be highly sensitive to changes in market conditions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis -The following table presents the recorded amount of the Company's assets measured at fair value on a recurring and nonrecurring basis as of December 31, 2012 and 2011, aggregated by the level in the fair value hierarchy within which those measurements fall.  The table below includes only impaired loans with a specific reserve and only other real estate properties with a valuation allowance at December 31, 2012.  Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
2012	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	263,059,074	$	-	$	263,059,074	$	-
State, County and Municipal		4,004,010		-		2,998,199		1,005,811
Corporate Obligations		1,104,900		-		1,104,900		-
Asset-Backed Securities		132,427		-		-		132,427
	$	268,300,411	$	-	$	267,162,173	$	1,138,238
Nonrecurring
Impaired Loans	$	22,006,150	$	-	$	-	$	22,006,150
Other Real Estate	$	8,817,204	$	-	$	-	$	8,817,204
2011
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	294,060,799	$	-	$	294,060,799	$	-
State, County and Municipal		7,583,691		-		7,583,691		-
Corporate Obligations		2,113,930		-		1,123,930		990,000
Asset-Backed Securities		132,427		-		-		132,427
	$	303,890,847	$	-	$	302,768,420	$	1,122,427
Nonrecurring
Impaired Loans	$	17,250,312	$	-	$	-	$	17,250,312
Other Real Estate	$	5,094,081	$	-	$	-	$	5,094,081

Liabilities

The Company did not identify any liabilities that are required to be presented at fair value.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at December 31, 2012.  This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2012	Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired Loans
Commercial	$  1,030,877	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(45.00%)-80.00% (17.50%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-80.00% (40.00%)
		Income Approach	Capitalization Rate	8.50%
Real Estate
Commercial Construction	5,885,060	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-45.00% (22.50%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)
		Income Approach	Discount Rate	7.94%
Residential Real Estate	3,581,317	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-24.00% (12.00%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)
		Income Approach	Capitalization Rate	8.90%
Commercial Real Estate	11,508,896	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(7.40%)-73.70% (32.95%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-40.00% (20.00%)
		Income Approach	Capitalization Rate	9.50%
			Discount Rate	5.13%
Other Real Estate Owned	8,817,204	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(35.00%)-129.50% (47.25%)
			Management Adjustments for Age of Appraisals and/or Current Market Conditions	3.10%-61.32% (32.33%)
		Income Approach	Discount Rate	3.00%

The following table presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the years ended December 31, 2012, 2011 and 2010.

	Available for Sale Securities
	2012			2011			2010
Balance, Beginning	$	1,122,427		$	1,016,997		$	982,427
Total Realized/Unrealized Gains (Losses) Included In Purchases, Sales, Issuances and Settlements
Transfers into Level 3		788,933			-			-
Securities Purchased During the Year		208,245			-			-
Securities Called During the Year		(1,000,000	)		-			-
Unrealized Gains Included in Other Comprehensive Income		78,201			158,488			34,570
Loss on OTTI Impairment Included in Noninterest Income		(59,568	)		(53,058	)		-
Balance, Ending	$	1,138,238		$	1,122,427		$	1,016,997

The Company's policy is to recognize transfers in and transfers out of levels 1, 2 and 3 as of the end of a reporting period.  During the year ended December 31, 2012, the Company transferred certain state, county and municipal securities out of level 2 and into level 3.  The transfers into level 3 were the result of decreased market activity for these types of securities, as well as a lack of current credit ratings on these securities.  There were no gains or losses recognized as a result of the transfers.  There were no transfers of securities between level 1 and level 2 for the years ended December 31, 2012, 2011 or 2010.

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2012.

	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Asset-Back Securities	$	132,427	Discounted Cash Flow	Discount Rate	2.95%-3.42% (3.19%)
State, County and Municipal		1,005,811	Discounted Cash Flow	Discount Rate or Yield	N/A*

*  The Company relies on a third-party pricing service to value its municipal securities.  The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.

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Deferred Compensation Plan (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Deferred Compensation Plan [Abstract]
Minimum age requirement for deferred compensation	65
Accrued liabilities under the plan	$ 1,007,490	$ 1,135,956
Benefit payments under contracts	203,904	196,501
Benefit provision charged to operations	82,250	98,901	154,553
Fee income recognized with deferred compensation plans	$ 175,302	$ 154,210	$ 182,685

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Premises and Equipment [Abstract]

Premises and equipment

Premises and equipment are comprised of the following as of December 31:

	2012			2011
Land	$	7,780,167		$	7,780,167
Building		23,758,761			23,662,849
Furniture, Fixtures and Equipment		12,923,699			12,982,160
Leasehold Improvements		948,260			994,637
Construction in Progress		-			77,366
		45,410,887			45,497,179
Accumulated Depreciation		(20,494,781	)		(19,746,944	)
	$	24,916,106		$	25,750,235

Future minimum rental payments

Future minimum rental payments as of December 31, 2012 are as follows:

Year Ending December 31	Amount
2013	$	131,978
2014		52,138
2015		42,000
2016 and After		84,000
	$	310,116

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Preferred Stock

12 Months Ended

Dec. 31, 2012

Preferred Stock [Abstract]

Preferred Stock

(13) Preferred Stock

On January 9, 2009, the Company issued to the United States Department of the Treasury (Treasury), in exchange for aggregate consideration of $28.0 million, (i) 28,000 shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, (the Preferred Stock), and (ii) a warrant (the Warrant) to purchase up to 500,000 shares (the Warrant Common Stock) of the Company's common stock.

The Preferred Stock qualifies as Tier 1 capital and pays cumulative cash dividends quarterly at a rate of 5 percent per annum for the first five years, and 9 percent per annum thereafter.  The Preferred Stock is nonvoting, other than class voting rights on certain matters that could adversely affect the Preferred Stock.  The Preferred Stock may be redeemed by the Company at the liquidation preference of $1,000 per share plus any accrued and unpaid dividends.  Accrued and unpaid dividends on the Preferred Stock must be declared and set aside for the benefit of the holders of the Preferred Stock before any dividend may be declared on common stock.

On February 13, 2012, the Company announced the suspension of dividends on the Preferred Stock.  At December 31, 2012, there were accumulated dividends in arrears of $1.61 million, approximately $57 per share, including related accrued interest.  The Company may defer dividend payments for up to an aggregate of six dividend periods, whether consecutive or not, without default or penalty under the terms of the agreement.  Failure to pay dividends for six periods would trigger board appointment rights for the holder of the Preferred Stock.

Upon receipt of the aggregate consideration from the Treasury on January 9, 2009, the Company allocated the $28,000,000 proceeds on a pro rata basis to the Preferred Stock and the Warrant based on relative fair values.  As a result, the Company allocated $27,220,000 of the aggregate proceeds to the Preferred Stock, and $780,000 was allocated to the Warrant.  The discount recorded on the Preferred Stock that resulted from allocating a portion of the proceeds to the Warrant is being accreted directly to retained earnings over a 5-year period applying a level yield.

The Warrant may be exercised on or before January 9, 2019 at an exercise price of $8.40 per share.  The Treasury may not exercise voting power with respect to any shares of Warrant Common Stock until the Warrant has been exercised.

As discussed in Note 24, Subsequent Event, the Preferred Stock was sold by the Treasury at public auction on January 29, 2013.