10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-K

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

(Fee Required)

For the Fiscal Year Ended December 31, 2014

☐ 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	31750
Fitzgerald, Georgia	(Zip Code)
(Address of Principal Executive Offices)

(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  ☐No ☒

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  ☐ No  ☒

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 ☒ No ☐

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  ☒  No  ☐

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.    ☒

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    ☐	Accelerated Filer    ☐
Nonaccelerated Filer    ☐ (Do not check if a smaller reporting company)	Smaller Reporting Company    ☒

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

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, 2014:  $38,656,770 based on stock price of $6.31.

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 10, 2015.

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 2013 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

PART I			Page
	Forward Looking Statement Disclosure		3
	Item 1.	Business	5
	Item 1A.	Not Applicable	25
	Item 1B.	Not Applicable	25
	Item 2.	Properties	25
	Item 3.	Legal Proceedings	25
	Item 4.	Not Applicable	25
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
	Item 6.	Selected Financial Data	27
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
	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.

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-nine domestic banking offices and one corporate operations office and, at December 31, 2014, we had approximately $1.15 billion in total assets, $746.1 million in total loans, $979.3 million in total deposits and $99.0 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, 2014, the Company had a total of 311 full-time and 9 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.  The Company reinstated contributions in 2014.  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 was sold by the Treasury to the public through a modified dutch auction. This auction was part of the Treasury’s ongoing efforts to wind down its remaining TARP bank investments. On June 5, 2013, the Company’s Warrant for 500,000 shares of common stock was also sold by the Treasury to the public through an auction. Neither the sale of the Preferred Stock nor the sale of the Warrant to new investors resulted in any accounting entries and neither transaction had an impact of the Company’s capital position.

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

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 of Banking and Finance (DBF). 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

The Bank operated under a Memorandum of Understanding (“MOU”) from November 23, 2010 until October 1, 2013 when the MOU was lifted by regulatory agencies and replaced with a Board Resolution (BR) to ensure that the Bank’s overall condition remains satisfactory.  The BR was lifted by regulatory agencies effective October 22, 2014 and there are currently no agreements in place with regulatory agencies.

Prior to October 22, 2014, the BR required 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 was also required to obtain approval before any cash dividends can be paid.

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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.  While the Bank operated under a Board Resolution until October 22, 2014 when the Board Resolution was lifted, the Bank was required to obtain approval from the Georgia Department of Revenue and the FDIC before any dividends could be paid.  The Bank was granted approval by these regulators on November 15, 2014 to pay a dividend of $12 million to the Company.

As of December 31, 2014, 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. With approval of the $12 million dividend, the Company was able to reinstate payments on its Preferred Stock dividends and the interest due on its junior subordinated debentures.  As of December 31, 2014, the Company is current on all scheduled payments.

- 13 -

Part I (Continued)

Item 1 (Continued)

As of December 31, 2014, the Bank had sought regulatory approval three times 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 therefore declared and paid a cash dividend to the Company in the first quarter of 2013. On the third occasion, in the fourth quarter of 2014, the Bank’s request was approved.  The Bank therefore declared and paid a cash dividend to the Company in the fourth quarter of 2014.

The Company used the dividend proceeds for general corporate purposes and payment of dividends on its Preferred Stock and payment of interest on its junior subordinated debentures.  The Bank does not have to seek regulatory approval for dividends to the Company as long as the dividend payment does not exceed one-half of prior year earnings.  Any request that exceeds one-half of prior year Bank earnings would require regulatory approval.  The Company cannot give any assurances that such future requests will receive approval or whether such approvals will contain similar restrictions that the proceeds therefore may not be used to pay dividends on the Company’s equity securities or interest on its junior subordinated debentures.

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.

- 14 -

Part I (Continued)

Item 1 (Continued)

Current Capital Adequacy Requirements

Bank holding companies and banks are currently subject to various regulatory capital requirements administered by state and federal banking agencies that apply until the increased capital requirements of the new capital rules are effective and fully phased-in. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting, and other factors.  The current risk-based capital guidelines for bank holding companies and banks require capital ratios that vary based on the perceived degree of risk associated with a banking organization’s operations for both transactions reported on the balance sheet as assets, such as loans, and those recorded as off-balance sheet items, such as commitments, letters of credit and recourse arrangements. The risk-based capital ratio is determined by classifying assets and certain off-balance sheet financial instruments into weighted categories, with higher levels of capital being required for those categories perceived as representing greater risks and dividing its qualifying capital by its total risk-adjusted assets and off-balance sheet items. Bank holding companies and banks engaged in significant trading activity may also be subject to the market risk capital guidelines and be required to incorporate additional market and interest rate risk components into their risk-based capital standards.

The currently effective risk-based capital guidelines of the regulatory agencies were based upon the 1988 capital accord (“Basel I”) of the Basel Committee on Bank Supervision (“Basel Committee”), a committee of central banks and bank supervisors/regulators from the major industrialized countries that develops broad policy guidelines, which each country’s supervisors can use to determine the supervisory policies they apply to their home jurisdiction. In 2004, the Basel Committee proposed a new capital accord (“Basel II”) to replace Basel I that provided approaches for setting capital standards for credit risk and capital requirements for operational risk and refining the existing capital requirements for market risk exposures. U.S. banking regulators published a final rule for Basel II implementation for certain banks, but a definitive rule was not issued, and instead the new capital rules to implement Basel III were first proposed in 2010.

Under the current capital requirements, there are three fundamental capital ratios: a total risk-based capital ratio, a Tier 1 risk-based capital ratio, and a Tier 1 leverage ratio. To be deemed “well capitalized” a bank must have a total risk-based capital ratio, a Tier 1 risk-based capital ratio, and a Tier 1 leverage ratio of at least ten percent, six percent, and five percent, respectively. There is currently no Tier 1 leverage requirement for a holding company to be deemed well-capitalized. At December 31, 2014, the respective capital ratios of the Company and the Bank exceeded the minimum percentage requirements to be deemed “well-capitalized” for regulatory purposes.

- 15 -

Part I (Continued)

Item 1 (Continued)

	December 31, 2014
	Amount		Percent
Leverage Ratio
Actual	$	127,220		11.18	%
Well-Capitalized Requirement		56,886		5.00
Minimum Required (1)		45,509		4.00
Risk Based Capital:
Tier 1 Capital
Actual		127,220		16.78
Well-Capitalized Requirement		37,899		5.00
Minimum Required (1)		30,320		4.00
Total Capital
Actual		136,022		17.95
Well-Capitalized Requirement		75,799		10.00
Minimum Required (1)		60,639		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.

The federal banking agencies may require banks and bank holding companies subject to enforcement actions to maintain capital ratios in excess of the minimum ratios otherwise required to be deemed well capitalized, in which case institutions may no longer be deemed to be well capitalized and may therefore be subject to applicable restrictions.

Prompt Corrective Action Provisions

The Federal Deposit Insurance Act requires the federal bank regulatory agencies to take “prompt corrective action” with respect to a depository institution if that institution does not meet certain capital adequacy standards, including requiring the prompt submission of an acceptable capital restoration plan. Depending on the bank’s capital ratios, the agencies’ regulations define five categories in which an insured depository institution will be placed: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. At each successive lower capital category, an insured bank is subject to more restrictions, including restrictions on the bank’s activities, operational practices or the ability to pay dividends or executive bonuses. Based upon its capital levels, a bank that is classified as well-capitalized, adequately capitalized, or undercapitalized may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition, or an unsafe or unsound practice, warrants such treatment.

- 16 -

Part I (Continued)

Item 1 (Continued)

Legislative and Regulatory Developments

The implementation and effect of legislation and regulations enacted since 2008 in response to the U.S. economic downturn and financial industry instability continued in 2014 as modest recovery returned to many institutions in the banking sector. Many institutions, including the Company, have exited Treasury investments under the TARP, and certain provisions of the Dodd-Frank Act are effective and have been fully implemented, including the revisions in the deposit insurance assessment base for FDIC insurance and the permanent increase in coverage to $250,000; the permissibility of paying interest on business checking accounts; the removal of barriers to interstate branching and required disclosure and shareholder advisory votes on executive compensation. Action in 2013 to implement the final Dodd-Frank Act provisions included (i) final new capital rules, (ii) a final rule to implement the so called Volcker Rule restrictions on certain proprietary trading and investment activities and (iii) final rules and increased enforcement action by the CFPB.

The New Capital Rule and Minimum Capital Ratios

In July 2013, the federal bank regulatory agencies adopted final regulations which revised their risk-based and leverage capital requirements for banking organizations to meet requirements of the Dodd-Frank Act and to implement international agreements reached by the Basel Committee on Banking Supervision intended to improve both the quality and quantity of banking organizations’ capital (“Basel III”). Although many of the rules contained in these final regulations are applicable only to large, internationally active banks, some of them will apply on a phased-in basis to all banking organizations, including the Company and the Bank.

The following are among the new requirements that will be phased-in beginning January 1, 2015:

· an increase in the minimum Tier 1 capital ratio from 4.00% to 6.00% of risk-weighted assets;

· a new category and a required 4.50% of risk-weighted assets ratio is established for “common equity Tier 1” as a subset of Tier 1 capital limited to common equity;

· a minimum non-risk-based leverage ratio is set at 4.00% eliminating a 3.00% exception for higher rated banks;

· changes in the permitted composition of Tier 1 capital to exclude trust preferred securities, mortgage servicing rights and certain deferred tax assets and include unrealized gains and losses on available for sale debt and equity securities;

· the risk-weights of certain assets for purposes of calculating the risk-based capital ratios are changed for high volatility commercial real estate acquisition, development and construction loans, certain past due non-residential mortgage loans and certain mortgage-backed and other securities exposures;

· an additional “countercyclical capital buffer” is required for larger and more complex institutions; and

- 17 -

Part I (Continued)

Item 1 (Continued)

· The prompt corrective action standards will change when the new capital rule ratios become effective. Under the new standards, in order to be considered well-capitalized, the Bank would be required to meet the new common equity Tier 1 ratio of 6.5%, an increased Tier 1 ratio of 8% (increased from 6%), a total capital ratio of 10% (unchanged) and a leverage ratio of 5% (unchanged).

Management believes that, as of December 31, 2014, the Company and the Bank would meet all applicable capital requirements under the new capital rules on a fully phased-in basis if such requirements were currently in effect (see “Legislative and Regulatory Developments”).

An additional capital conservation buffer of 2.5% of risk weighted assets above the regulatory minimum capital ratios established under the new final capital rule will be phased-in from 2016 to 2019 and must be met to avoid limitations on the ability of the Bank to pay dividends, repurchase shares or pay discretionary bonuses. Including the capital conservation buffer of 2.5%, the new final capital rule would result in the following minimum ratios: (i) a Tier 1 capital ratio of 8.5%, (ii) a common equity Tier 1 capital ratio of 7.0%, 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 each year until fully implemented in January 2019. While the new final capital rule sets higher regulatory capital standards for the Company and the Bank, bank regulators may also continue their past policies of expecting banks to maintain additional capital beyond the new minimum requirements. The implementation of the new capital rules or more stringent requirements to maintain higher levels of capital or to maintain higher levels of liquid assets could adversely affect the Company’s net income and return on equity, restrict the ability to pay dividends or executive bonuses and require the raising of additional capital.

Final Volcker Rule

In December 2013, the federal bank regulatory agencies adopted final rules that implement a part of the Dodd-Frank Act commonly referred to as the “Volcker Rule.” Under these rules and subject to certain exceptions, banking entities, including the Company and the Bank, will be restricted from engaging in activities that are considered proprietary trading and from sponsoring or investing in certain entities, including hedge or private equity funds that are considered “covered funds.” These rules became effective on April 1, 2014. Certain collateralized debt obligations (“CDO”) securities backed by trust preferred securities were initially defined as covered funds subject to the investment prohibitions of the final rule. Action taken by the Federal Reserve in January 2014 exempted many such securities to address the concern that many community banks holding such CDO securities may have been required to recognize losses on those securities.

- 18 -

Part I (Continued)

Item 1 (Continued)

CFPB Actions

The Dodd-Frank Act provided for the creation of the CFPB as an independent entity within the Federal Reserve with broad rulemaking, supervisory and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, credit cards, and other consumer loans. The CFPB’s functions include investigating consumer complaints, conducting market research, rulemaking, supervising and examining bank consumer transactions, and enforcing rules related to consumer financial products and services. CFPB regulations and guidance apply to all financial institutions and banks with $10 billion or more in assets and are subject to examination by the CFPB. Banks with less than $10 billion in assets, including the Bank, will continue to be examined for compliance by their primary federal banking agency. Significant recent CFPB developments that may affect the Bank’s operations and compliance costs include:

· the issuance of final rules for residential mortgage lending, which became effective January 10, 2014, including definitions for “qualified mortgages” and detailed standards by which lenders must satisfy themselves of the borrower’s ability to repay the loan and revised forms of disclosure under the Truth in Lending Act and the Real Estate Settlement Procedures Act;

· the issuance of a policy report on arbitration clauses which could result in the restriction or prohibition of lenders including arbitration clauses in consumer financial services contracts;

· actions taken to regulate and supervise credit bureaus and debt collections; and

· positions taken by the CFPB on fair lending, including applying the disparate impact theory in auto financing, which could make it harder for lenders to charge different rates or apply different terms to loans to different customers.

Bank Holding Company Regulation

As contained in both federal and state banking laws and regulations, a wide range of requirements and restrictions apply to bank holding companies and their subsidiaries which:

· require periodic reports and such additional information as the Federal Reserve may require bank holding companies to meet or exceed minimum capital requirements (see “Legislative and Regulatory Developments” and “Current Capital Adequacy Requirements”);

· require that bank holding companies serve as a source of financial and managerial strength to subsidiary banks and commit resources as necessary to support each subsidiary bank. The source-of-strength doctrine most directly affects bank holding companies where a bank holding company’s subsidiary bank fails to maintain adequate capital levels. In such a situation, the subsidiary bank will be required by the Bank’s federal regulator to take “prompt corrective action” (see “Prompt Corrective Action Provisions”);

· limit dividends payable to shareholders and restrict the ability of bank holding companies to obtain dividends or other distributions from their subsidiary banks;

- 19 -

Part I (Continued)

Item 1 (Continued)

· require a bank holding company to terminate an activity or terminate control of or liquidate or divest certain subsidiaries, affiliates or investments if the Federal Reserve believes the activity or the control of the subsidiary or affiliate constitutes a significant risk to the financial safety, soundness or stability of any bank subsidiary;

· require the prior approval for changes in senior executive officer or directors and prohibit golden parachute payments, including change in control agreements, or new employment agreements with such payment terms, which are contingent upon termination when a bank holding company is deemed to be in troubled condition;

· regulate provisions of certain bank holding company debt, including the authority to impose interest ceilings and reserve requirements on such debt and require prior approval to purchase or redeem securities in certain situations; and

· require prior approval of acquisitions and mergers with other banks or bank holding companies and consider certain competitive, management, financial, and anti-money laundering compliance impact on the U.S.

Other Restrictions on the Company’s Activities

Subject to prior notice or Federal Reserve approval, bank holding companies may generally engage in, or acquire shares of companies engaged in, activities determined by the Federal Reserve to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. Bank holding companies that elect and retain “financial holding company” status pursuant to the Gramm-Leach-Bliley Act of 1999 (“GLBA”) may engage in these nonbanking activities and broader securities, insurance, merchant banking and other activities that are determined to be “financial in nature” or are incidental or complementary to activities that are financial in nature without prior Federal Reserve approval. Pursuant to the GLBA and the Dodd-Frank Act, in order to elect and retain financial holding company status, a bank holding company and all depository institution subsidiaries of that bank holding company must be well capitalized and well managed, and, except in limited circumstances, depository subsidiaries must be in satisfactory compliance with the Community Reinvestment Act (“CRA”), which requires banks to help meet the credit needs of the communities in which they operate. Failure to sustain compliance with these requirements or correct any non-compliance within a fixed time period could lead to the required divestiture of subsidiary banks or the termination of all activities that do not conform to those permissible for a bank holding company. The Company has not elected financial holding company status and neither Company nor the Bank has engaged in any activities determined by the Federal Reserve to be financial in nature or incidental or complementary to activities that are financial in nature.

Sarbanes-Oxley Act

The Company is subject to the accounting oversight and corporate governance requirements of the Sarbanes-Oxley Act of 2002, including, among other things, required executive certification of financial presentations, requirements for board audit committees and their members, and disclosure of controls and procedures and internal control over financial reporting.

- 20 -

Part I (Continued)

Item 1 (Continued)

Regulation of the Bank

As a Georgia-chartered commercial bank whose deposits are insured by the FDIC, the Bank is subject to regulation, supervision, and regular examination by the Georgia Department of Banking and Finance and by the FDIC as a nonmember state bank, as the Bank’s primary Federal regulator. Specific federal and state laws and regulations which are applicable to banks regulate, among other things, the scope of their business, their investments, their reserves against deposits, the timing of the availability of deposited funds, their activities relating to dividends, investments, loans, the nature and amount of and collateral for certain loans, servicing and foreclosing on loans, borrowings, capital requirements, certain check-clearing activities, branching, and mergers and acquisitions.

Enforcement Authority

The federal and Georgia regulatory structures give the bank regulatory agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. The regulatory agencies have adopted guidelines to assist in identifying and addressing potential safety and soundness concerns before an institution’s capital becomes impaired. The guidelines establish operational and managerial standards generally relating to: (1) internal controls, information systems, and internal audit systems; (2) loan documentation; (3) credit underwriting; (4) interest-rate exposure; (5) asset growth and asset quality; and (6) compensation, fees, and benefits. Further, the regulatory agencies have adopted safety and soundness guidelines for asset quality and for evaluating and monitoring earnings to ensure that earnings are sufficient for the maintenance of adequate capital and reserves. If, as a result of an examination, the DBF or the FDIC should determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, or other aspects of the Bank’s operations are unsatisfactory or that the Bank or its management is violating or has violated any law or regulation, the DBF and the FDIC, and separately the FDIC as insurer of the Bank’s deposits, have residual authority to:

· require affirmative action to correct any conditions resulting from any violation or practice;

· direct an increase in capital and the maintenance of higher specific minimum capital ratios, which may preclude the Bank from being deemed well capitalized and restrict its ability to accept certain brokered deposits;

· restrict the Bank’s growth geographically, by products and services, or by mergers and acquisitions, including bidding in FDIC receiverships for failed banks;

· enter into or issue informal or formal enforcement actions, including required Board resolutions, memoranda of understanding, written agreements and consent or cease and desist orders or prompt corrective action orders to take corrective action and cease unsafe and unsound practices;

· require prior approval of senior executive officer or director changes; remove officers and directors and assess civil monetary penalties; and

· terminate FDIC insurance, revoke the charter and/or take possession of and close and liquidate the Bank or appoint the FDIC as receiver.

- 21 -

Part I (Continued)

Item 1 (Continued)

Deposit Insurance

The FDIC is an independent federal agency that insures deposits through the Deposit Insurance Fund (the “DIF”) up to prescribed statutory limits of federally insured banks and savings institutions and safeguards the safety and soundness of the banking and savings industries. The amount of FDIC assessments paid by each DIF member institution is based on its relative risk of default as measured by regulatory capital ratios and other supervisory factors. The FDIC may terminate a depository institution’s deposit insurance upon a finding that the institution’s financial condition is unsafe or unsound or that the institution has engaged in unsafe or unsound practices that pose a risk to the DIF or that may prejudice the interest of the Bank’s depositors. The termination of deposit insurance for a bank would also result in the revocation of the Bank’s charter by the DBF. The Bank’s FDIC insurance expense totaled $966 thousand for 2014. We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance. If there are additional bank or financial institution failures or if the FDIC otherwise determines, we may be required to pay even higher FDIC premiums. Any future increases in FDIC insurance premiums may have a material and adverse effect on our earnings and could have a material adverse effect on the value of, or market for, our common stock.

Dividends

It is the Federal Reserve’s policy that bank holding companies should generally pay dividends on common stock only out of income available over the past year, and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. It is also the Federal Reserve’s policy that bank holding companies should not maintain dividend levels that undermine their ability to be a source of strength to its banking subsidiaries. The Federal Reserve has also discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.

The Bank is a legal entity that is separate and distinct from the Company. The Company is dependent on the performance of the Bank for funds which may be received as dividends from the Bank for use in the operation of the Company and the ability of the Company to pay dividends to shareholders. Subject to the regulatory restrictions which currently further restrict the ability of the Bank to declare and pay dividends under applicable Georgia law, future cash dividends by the Bank will depend upon management’s assessment of future capital requirements, contractual restrictions and other factors. When effective, the new minimum capital rule may restrict dividends by the Bank if the additional capital conservation buffer is not achieved.

Operations and Consumer Compliance Laws

The Bank must comply with numerous federal and state anti-money laundering and consumer protection and privacy statutes and implementing regulations, including the USA Patriot Act of 2001, GLBA, the Bank Secrecy Act, the Foreign Account Tax Compliance Act (effective 2013), the CRA, the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the National Flood Insurance Act, and various federal and state privacy protection laws. Noncompliance with these laws could subject the Bank to lawsuits and could also result in administrative penalties, including, fines and reimbursements. The Bank and the Company are also subject to federal and state laws prohibiting unfair or fraudulent business practices, untrue or misleading advertising and unfair competition.

- 22 -

Part I (Continued)

Item 1 (Continued)

These laws and regulations mandate certain disclosure and reporting requirements and regulate the manner in which financial institutions must deal with customers when taking deposits, making loans, servicing, collecting, and foreclosure of loans, and providing other services. Failure to comply with these laws and regulations can subject the Bank to various penalties, including but not limited to enforcement actions, injunctions, fines or criminal penalties, punitive damages to consumers, and the loss of certain contractual rights.

The Dodd-Frank Act provided for the creation of the CFPB as an independent entity within the Federal Reserve. The CFPB is a new regulatory agency for United States banks. The CFPB has broad rulemaking, supervisory, and enforcement authority over consumer financial products and services, including deposit products, residential mortgages, home-equity loans, credit cards, and other consumer loans. The CFPB’s functions include investigating consumer complaints, conducting market research, rulemaking, supervising and examining banks consumer transactions, and enforcing rules related to consumer financial products and services. Pursuant to the Dodd-Frank Act, banks (such as the Bank) with less than $10 billion in assets will continue to be examined for compliance with the consumer laws and the regulations of the CFPB by their primary federal banking agency.

The CFPB has adopted revisions to Regulation Z, which implements the Truth in Lending Act (“TILA”). The revisions took effect on January 10, 2014 and apply to all consumer mortgages (except home equity lines of credit, timeshare plans, reverse mortgages, or temporary loans). The revisions mandate specific underwriting criteria for home loans in order for creditors to make a reasonable, good faith determination of a consumer’s ability to repay and establish certain protections from liability under this requirement for “qualified mortgages” meeting certain standards. In particular, it will prevent banks from making “no doc” and “low doc” home loans, as the rules require that banks determine a consumer’s ability to pay based in part on verified and documented information. Because we do not originate “no doc” or “low doc” loans, we do not believe this regulation will have a significant effect on our operations.

Iran Sanctions Related Disclosure

Under the Iran Threat Reduction and Syrian Human Rights Act of 2012, which added Section 13(r) to the Securities Exchange Act of 1934, as amended, we are required to include certain disclosures in our periodic reports if we or any of our “affiliates” knowingly engaged in certain specified activities during the period covered by this Annual Report on Form 10-K. Because the SEC defines the term “affiliate” broadly, it includes any entity controlled by us as well as any person or entity that controls us or is under common control with us. We do not believe we and our consolidated subsidiaries have knowingly engaged in any transaction or dealing reportable under Section 13(r) of the Exchange Act during fiscal year 2014.

- 23 -

Part I (Continued)

Item 1 (Continued)

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.

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.

- 24 -

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.

Item3

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, 2014, 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.

- 25 -

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, 2014	High		Low		Close
Fourth Quarter		8.00		6.30		7.88
Third Quarter		7.13		6.00		6.70
Second Quarter		6.31		5.45		6.31
First Quarter		6.50		5.90		6.13
Year Ended December 31, 2013
Fourth Quarter		6.40		5.81		6.10
Third Quarter		7.47		5.85		5.85
Second Quarter		7.50		5.21		6.81
First Quarter		5.95		3.55		5.45

No cash dividends were paid on its common stock in 2013 or 2014.  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, 2014, the Company had approximately 1,898 common stockholders of record.

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, 2014.

- 26 -

Part II (Continued)

Item 6

Selected Financial Data

	Year Ended December 31,
	2014		2013		2012		2011		2010
	(Dollars in Thousands, except per share data)
Selected Balance Sheet Data
Total Assets	$	1,146,898	$	1,148,551	$	1,139,397	$	1,195,376	$	1,275,658
Total Loans, Net of Unearned Interest and Fees		745,733		750,857		746,816		716,264		813,189
Total Deposits		979,303		987,529		979,685		999,985		1,059,124
Investment Securities		274,624		263,295		268,342		303,937		303,886
Federal Home Loan Bank Stock		2,831		3,164		3,364		5,398		6,064
Stockholders’ Equity		99,027		89,954		95,759		96,613		92,959
Selected Income Statement Data
Interest Income		44,762		45,186		47,289		51,793		58,738
Interest Expense		6,799		7,497		11,016		16,806		21,523
Net Interest Income		37,963		37,689		36,273		34,987		37,215
Provision for Loan Losses		1,308		4,485		6,785		8,250		13,350
Other Income		9,125		8,377		9,733		9,951		10,006
Other Expense		34,980		34,617		35,379		33,051		33,856
Income (Loss) Before Tax		10,800		6,964		3,842		3,637		15
Income Tax Expense (Benefit)		3,268		2,335		1,201		1,104		(459	)
Net Income (Loss)		7,532		4,629		2,641		2,533		474
Preferred Stock Dividends		2,689		1,509		1,435		1,400		1,400
Net Income (Loss) Available to Common Stockholders	$	4,843	$	3,120	$	1,206	$	1,133	$	(926	)
Weighted Average Common Shares Outstanding		8,439		8,439		8,439		8,439		8,149
Shares Outstanding		8,439		8,439		8,439		8,439		8,443
Intangible Assets	$	152	$	188	$	224	$	259	$	295
Dividends Declared		-		-		-		-		-
Average Assets		1,128,052		1,118,071		1,139,814		1,205,891		1,269,607
Average Stockholders’ Equity		94,751		93,358		96,541		94,737		94,452
Net Charge-Offs		4,312		5,416		9,698		20,880		16,471
Reserve for Loan Losses		8,802		11,806		12,737		15,650		28,280
OREO		10,402		15,502		15,941		20,445		20,208
Nonperforming Loans		18,341		24,118		29,855		38,837		28,921
Nonperforming Assets		28,743		39,620		46,162		59,708		49,262
Average Interest-Earning Assets		1,057,608		1,048,185		1,066,333		1,132,523		1,199,216
Noninterest-Bearing Deposits		128,340		115,261		123,967		94,269		102,959

- 27 -

Part II (Continued)

Item 6 (Continued)

	Year Ended December 31,
	2014			2013			2012			2011			2010
	(Dollars in Thousands, except per share data)
Per Share Data:
Net Income (Loss) Per Common Share (Diluted)	$	0.57		$	0.37		$	0.14		$	0.13		$	(0.11	)
Common Book Value Per Share		8.42			7.34			8.05			8.17			7.75
Tangible Common Book Value Per Share		8.40			7.32			8.02			8.14			7.72
Dividends Per Common Share		0.00			0.00			0.00			0.00			0.00
Profitability Ratios:
Net Income (Loss) to Average Assets		0.43	%		0.28	%		0.11	%		0.09	%		(0.07	)%
Net Income (Loss) to Average Stockholders’ Equity		5.11			3.34			1.25			1.20			(0.98	)
Net Interest Margin		3.60			3.61			3.41			3.11			3.12
Loan Quality Ratios:
Net Charge-Offs to Total Loans		0.58			0.72			1.30			2.92			2.03
Reserve for Loan Losses to Total Loans and OREO		1.16			1.54			1.67			2.12			3.39
Nonperforming Assets to Total Loans and OREO		3.80			5.17			6.05			8.10			5.91
Reserve for Loan Losses to Nonperforming Loans		47.99			48.95			42.66			40.30			97.78
Reserve for Loan Losses to Total Nonperforming Assets		30.62			29.80			27.59			26.21			57.41
Liquidity Ratios:
Loans to Total Deposits (2)		76.15			76.03			76.23			71.63			76.78
Loans to Average Earning Assets (2)		70.51			71.63			70.04			63.24			67.81
Noninterest-Bearing Deposits to Total Deposits		13.11			11.67			12.65			9.43			9.72
Capital Adequacy Ratios:
Common Stockholders’ Equity to Total Assets		6.20			5.39			5.96			5.77			5.13
Total Stockholders’ Equity to Total Assets		8.63			7.83			8.40			8.08			7.29
Dividend Payout Ratio		0.00			0.00			0.00			0.00		NM		(1)

(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.

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 (OREO) 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, 2014 and 2013, and results of operations for each of the years in the three-year period ended December 31, 2014. 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 $4.84 million, or $0.57 per diluted common share in 2014, compared to $3.12 million, or $0.37 per diluted common share in 2013, and to $1.21 million, or $0.14 per diluted common share in 2012.

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

							$			%									$			%
	2014			2013			Variance			Variance				2013			2012		Variance			Variance
Taxable-equivalent net interest income	$	38,080		$	37,859		$	221			0.58	%	$	37,859		$	36,417		$	1,442			3.96	%
Taxable-equivalent adjustment		117			170			(53	)		(31.18	)		170			144			26			18.06
Net interest income		37,963			37,689			274			0.73			37,689			36,273			1,416			3.90
Provision for loan losses		1,308			4,485			(3,177	)		(70.84	)		4,485			6,785			(2,300	)		(33.90	)
Noninterest income		9,125			8,377			748			8.93			8,377			9,733			(1,356	)		(13.93	)
Noninterest expense		34,980			34,617			363			1.05			34,617			35,379			(762	)		(2.15	)
Income before income taxes	$	10,800		$	6,964		$	3,836			55.08		$	6,964		$	3,842		$	3,122			81.26
Income Taxes		3,268			2,335			933			39.96			2,335			1,201			1,134			94.42
Net income	$	7,532		$	4,629		$	2,903			62.71	%	$	4,629		$	2,641		$	1,988			75.27	%
Preferred stock dividends	$	2,689		$	1,509		$	1,180			78.20	%	$	1,509		$	1,435		$	74			5.16	%
Net income available to common shareholders	$	4,843		$	3,120		$	1,723			55.22	%	$	3,120		$	1,206		$	1,914			158.71	%
Net income available to common shareholders:
Basic	$	0.57		$	0.37		$	0.20			54.05	%	$	0.37		$	0.14		$	0.23			164.29	%
Diluted	$	0.57		$	0.37		$	0.20			54.05	%	$	0.37		$	0.14		$	0.23			164.29	%
Return on average assets (1)		0.43	%		0.28	%		0.15	%		53.57	%		0.28	%		0.11	%		0.17	%		154.55	%
Return on average common equity (1)		5.11	%		3.34	%		1.77	%		52.99	%		3.34	%		1.25	%		2.09	%		167.20	%

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

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Part II (Continued)

Item 7 (Continued)

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 80.62 percent of total revenue during 2014 and 81.82 percent during 2013.

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 moves similar to prime rate with interest rates currently at 0.25 percent and has been for the past four years.  We anticipate the Federal Reserves interest rate to remain flat the first part of 2015 with a potential increase the latter part of 2015.

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 2013 to 2014 (a)									Changes From 2012 to 2013 (a)
	Volume			Rate			Total			Volume			Rate			Total
Interest Income
Loans, Net-Taxable	$	(175	)	$	(1,484	)	$	(1,659	)	$	1,327		$	(1,908	)	$	(581	)
Investment Securities
Taxable		122			1,044			1,166			(145	)		(1,263	)		(1,408	)
Tax-Exempt		(22	)		(4	)		(26	)		(20	)		4			(16	)
Total Investment Securities		100			1,040			1,140			(165	)		(1,259	)		(1,424	)
Interest-Bearing Deposits in Other Banks		18			(3	)		15			(19	)		3			(16	)
Federal Funds Sold		(6	)		(1	)		(7	)		(60	)		-			(60	)
Other Interest - Earning Assets		(9	)		43			34			(18	)		22			4
Total Interest Income		(72	)		(405	)		(477	)		1,065			(3,142	)		(2,077	)
Interest Expense
Interest-Bearing Demand and Savings Deposits		100			(37	)		63			141			(64	)		77
Time Deposits		(263	)		(508	)		(771	)		(892	)		(2,101	)		(2,993	)
Total Interest Expense On Deposits		(163	)		(545	)		(708	)		(751	)		(2,165	)		(2,916	)
Other Interest-Bearing Liabilities
Federal Funds Purchased and Repurchase Agreements		-			-			-			(136	)		(430	)		(566	)
Subordinated Debentures		-			1			1			-			(37	)		(37	)
Other Debt		(9	)		18			9			-			-			-
Total Interest Expense		(9	)		19			10			(887	)		(2,632	)		(3,519	)
Net Interest Income (Loss)	$	100		$	121		$	221		$	1,952		$	(510	)	$	1,442

(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 15.6 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.  While the Federal Reserve rates have remained unchanged since 2008, we have seen the net interest margin change to 3.60 percent for 2014, compared to 3.61 percent for 2013 and to 3.41 percent for 2012.  We have seen our net interest margin reach a low of 3.47 percent for first quarter 2014 to a high of 3.73 percent for third quarter 2014.

Taxable-equivalent net interest income for 2014 increased by $221 thousand, or 0.58 percent, compared to 2013 while taxable-equivalent net interest income for 2013 increased by $1.44 million, or 3.96 percent, compared to 2012.  The average volume of earning assets during 2014 increased $9.42 million compared to 2013 while over the same period the net interest margin dropped to 3.60 percent from 3.61 percent.  The average volume of earning assets during 2013 decreased $18.15 million compared to 2012 while over the same period the net interest margin increased to 3.61 percent from 3.41 percent.  The change in the net interest margin in 2014 and 2013 was primarily driven by reduction in the cost of funds.  The increase in average earning assets in 2014 was in securities and interest-bearing deposits.  The decline in average earning assets in 2013 affected each category of assets except loans, while the significant decrease was primarily in average investment securities.

The average volume of loans decreased $3.14 million in 2014 compared to 2013, and increased $22.76 million in 2013 compared to 2012.  The average yield on loans decreased 20 basis points in 2014 compared to 2013 and decreased 26 basis points in 2013 compared to 2012. The average volume of deposits increased $5.7 million while other borrowings decreased $331 thousand in 2014 compared to 2013.  The average volume of deposits decreased $16.38 million while other borrowings decreased $3.41 million in 2013 compared to 2012.  Demand deposits made up $5.8 million of the increase in average deposits in 2014 and interest-bearing deposits made up $27.1 million of the decrease in average deposits in 2013.

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Part II (Continued)

Item 7 (Continued)

Accordingly, the ratio of average interest-bearing deposits to total average deposits was 87.6 in 2014, 88.2 percent in 2013 and 89.5 percent in 2012. This deposit mix, combined with a general decrease in interest rates, had the effect of (i) decreasing the average cost of total deposits by 8 basis points in 2014 compared to 2013 and decreasing the average cost of total deposits by 29 basis points in 2013 compared to 2012, 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 3.49 percent in 2014 compared to 3.50 percent in 2013 and 3.27 percent in 2012. 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 $1.31 million in 2014 compared to $4.49 million in 2013 and $6.79 million in 2012.  See the section captioned “Allowance for Loan Losses” elsewhere in this discussion for further analysis of the provision for loan losses.

Noninterest Income

The components of noninterest income were as follows:

						$				%							$				%
	2014		2013			Variance			Variance				2013			2012	Variance			Variance
Service Charges on Deposit Accounts	$	4,568	$	4,691		$	(123	)		(2.62	)%	$	4,691		$	3,573	$	1,118			31.29	%
Other Charges, Commissions and Fees		2,469		1,725			744			43.13			1,725			1,515		210			13.86
Mortgage Fee Income		420		484			(64	)		(13.22	)		484			400		84			21.00
Securities Gains (Losses)		24		(364	)		388			(106.59	)		(364	)		2,837		(3,201	)		(112.83	)
Gain on Sale of SBA Loans		-		635			(635	)		(100.00	)		635			306		329			107.52
Other		1,644		1,206			438			36.32			1,206			1,102		104			9.44
Total	$	9,125	$	8,377		$	748			8.93	%	$	8,377		$	9,733	$	(1,356	)		(13.93	)%

Mortgage Fee Income.  The volume of mortgage loans has been sluggish in 2014 compared to the same period in 2013 which contributed to a slight decrease in mortgage fee income.  The increase in 2013 compared to 2012 was due to increased mortgage loan activity due to an initiative to increase mortgage lending opportunities given the low interest rate environment.

Other Charges, Commissions and Fees. Significant amounts impacting the comparable periods was primarily attributed to ATM and debit card interchange fees which increased $701 thousand in 2014 compared to 2013.

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Part II (Continued)

Item 7 (Continued)

Other.  Significant amounts impacting the comparable periods was primarily attributed to the income for bank owned life insurance which increased $217 thousand in 2014 compared to 2013.

Noninterest Expense

The components of noninterest expense were as follows:

					$				%						$				%
	2014		2013		Variance			Variance				2013		2012	Variance			Variance
Salaries and Employee Benefits	$	17,508	$	16,692	$	816			4.89	%	$	16,692	$	15,565	$	1,127			7.24	%
Occupancy and Equipment		4,063		3,795		268			7.06			3,795		3,878		(83	)		(2.14	)
Directors' Fees		392		417		(25	)		(6.00	)		417		465		(48	)		(10.32	)
Legal and Professional Fees		786		721		65			9.02			721		1,086		(365	)		(33.61	)
Foreclosed Property		2,701		3,918		(1,217	)		(31.06	)		3,918		5,613		(1,695	)		(30.20	)
FDIC Assessment		966		1,322		(356	)		(26.93	)		1,322		1,498		(176	)		(11.75	)
Advertising		652		508		144			28.35			508		423		85			20.09
Software		925		853		72			8.44			853		789		64			8.11
Telephone		736		778		(42	)		(5.40	)		778		745		33			4.43
ATM/Card Processing		866		641		225			35.10			641		511		130			25.44
Other		5,385		4,972		413			8.31			4,972		4,806		166			3.45
Total	$	34,980	$	34,617	$	363			4.05	%	$	34,617	$	35,379	$	(762	)		(2.15	)%

Salaries and Employee Benefits.  The increase in 2014 is primarily attributable to the Company reinstating their contribution to the profit sharing plan in the amount of $401,497 and the remainder of the increase is due to merit pay increases.

Foreclosed Property.  The decrease in foreclosed property and repossession expense for 2014 is primarily attributable to the decrease in the volume of OREO.

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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 $1.13 billion in 2014 compared to $1.12 billion in 2013 and $1.14 billion in 2012.

	2014				2013				2012
Sources of Funds:
Deposits:
Noninterest-Bearing	$	118,452	10.5	%	$	112,667	10.1	%	$	101,896	8.9	%
Interest-Bearing		840,608	74.5	%		840,646	75.2	%		867,794	76.1	%
Federal Funds Purchased and Repurchase Agreements		2	-	%		34	-	%		-	-	%
Subordinated Debentures and Other Borrowed Money		64,229	5.7	%		64,528	5.8	%		67,974	6.0	%
Other Noninterest-Bearing
Liabilities		10,010	0.9	%		6,838	0.6	%		5,609	0.5	%
Equity Capital		94,751	8.4	%		93,358	8.3	%		96,541	8.5	%
Total	$	1,128,052	100.0	%	$	1,118,071	100.0	%	$	1,139,814	100.0	%
Uses of Funds:
Loans (Net of Allowance)	$	730,643	64.8	%	$	731,280	65.4	%	$	706,091	62.0	%
Investment Securities		284,474	25.2	%		275,689	24.7	%		284,261	24.9	%
Federal Funds Sold		12,551	1.1	%		14,969	1.3	%		38,877	3.4	%
Interest-Bearing Deposits		16,193	1.4	%		9,625	0.9	%		17,046	1.5	%
Other Interest-Earning Assets		2,906	0.3	%		3,275	0.3	%		4,277	0.4	%
Other Noninterest-Earning Assets		81,285	7.2	%		83,233	7.4	%		89,262	7.8	%
Total	$	1,128,052	100.0	%	$	1,118,071	100.0	%	$	1,139,814	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 87.6 percent of total average deposits in 2014 compared to 88.2 percent 2013 and 89.5 percent in 2012.

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 decreased in 2014 as total loans were $746.1 million at December 31, 2014, down 0.68 percent, compared to loans of $751.2 million at December 31, 2013, while total loans at December 31, 2013, up 0.6 percent, compared to loans of $747.1 million at December 31, 2012.  See additional discussion regarding the Company’s loan portfolio in the section captioned “Loans” on the following page.  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.

	2014			2013			2012			2011			2010
Commercial and Agricultural
Commercial	$	50,960		$	48,107		$	55,684		$	48,986		$	53,220
Agricultural		16,689			10,666			6,211			8,422			10,552
Real Estate
Commercial Construction		51,259			52,739			53,808			58,546			72,309
Residential Construction		11,221			6,549			5,852			3,530			4,373
Commercial		332,231			341,783			334,386			315,281			362,878
Residential		203,753			206,258			203,845			193,638			207,472
Farmland		49,951			47,034			49,057			48,225			52,778
Consumer and Other
Consumer		22,820			25,676			29,778			30,449			33,564
Other		7,210			12,406			8,429			9,244			16,104
		746,094			751,218			747,050			716,321			813,250
Unearned Interest and Fees		(362	)		(360	)		(234	)		(57	)		(61	)
Allowances for Loan Losses		(8,802	)		(11,806	)		(12,737	)		(15,650	)		(28,280	)
Loans	$	736,930		$	739,052		$	734,079		$	700,614		$	784,909

The following table presents total loans as of December 31, 2014 according to maturity distribution and/or repricing opportunity on adjustable rate loans.

Maturity and Repricing Opportunity

One Year or Less	$	338,824
After One Year through Three Years		225,710
After Three Years through Five Years		127,257
Over Five Years		54,303
	$	746,094

Overview.  Loans totaled $746.1 million at December 31, 2014, down 0.68 percent from December 31, 2013 loans of $751.2 million.  The majority of the Company’s loan portfolio is comprised of the real estate loans.  Commercial and residential real estate which is primarily 1-4 family residential properties and nonfarm nonresidential properties, made up 71.84 percent and 72.95 percent of total loans, real estate construction loans made up 8.37 percent and 7.89 percent while commercial and agricultural loans made up 9.07 percent and 7.82 percent of total loans at December 31, 2014 and December 31, 2013, respectively.

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Part II (Continued)

Item 7 (Continued)

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.

Commercial purpose, commercial real estate, and agricultural 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 and Agricultural.  Commercial and agricultural loans at December 31, 2014 increased 15.1 percent to $67.6 million from December 31, 2013 at $58.8 million.  The Company’s commercial and agricultural 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.

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Part II (Continued)

Item 7 (Continued)

Industry Concentrations. As of December 31, 2014 and December 31, 2013, 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.

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, 2014, 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.  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, 2014 and December 31, 2013.

	December 31, 2014						December 31, 2013
	Number of		Period End Balances				Number of		Period End Balances
	Relationships		Committed		Outstanding		Relationships		Committed		Outstanding
Large Credit Relationships:
$10 million and greater		-	$	-	$	-		1	$	10,023	$	10,023
$5 million to $9.9 million		14		93,931		86,305		11		76,306		69,672

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, 2014. 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	$	257,277	$	210,273	$	110,129	$	52,347	$	630,026
Loans with floating interest rates		81,547		15,437		17,128		1,956		116,068
Total	$	338,824	$	225,710	$	127,257	$	54,303	$	746,094

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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:

	2014			2013			2012			2011			2010
Loans Accounted for on Nonaccrual	$	18,334		$	24,114		$	29,851		$	38,822		$	28,902
Loans Accruing Past Due 90 Days or More		7			4			4			15			19
Other Real Estate Foreclosed		10,402			15,502			15,941			20,445			20,208
Securities Accounted for on Nonaccrual		-			-			366			426			132
Total Nonperforming Assets	$	28,743		$	39,620		$	46,162		$	59,708		$	49,261
Nonperforming Assets by Segment
Construction and Land Development		9,655			17,323			23,832			35,467			21,962
1-4 Family Residential		8,237			5,926			7,153			4,589			4,966
Multifamily Residential		173			335			627			744			325
Nonfarm Residential		8,375			12,441			10,421			15,353			18,884
Farmland		1,449			1,629			2,413			676			2,051
Commercial and Consumer		854			1,966			1,716			2,879			1,073
Total Nonperforming Assets	$	28,743		$	39,620		$	46,162		$	59,708		$	49,261
Nonperforming Assets as a Percentage of:
Total Loans and Foreclosed Assets		3.80	%		5.17	%		6.05	%		8.10	%		5.91	%
Total Assets		2.51	%		3.45	%		4.05	%		4.99	%		3.86	%
Nonperforming Loans as a Percentage of:
Total Loans		2.46	%		3.21	%		4.00	%		5.42	%		3.56	%
Supplemental Data:
Trouble Debt Restructured Loans In Compliance with Modified Terms	$	19,229		$	20,715		$	24,870		$	29,839		$	26,556
Trouble Debt Restructured Loans Past Due 30-89 Days		757			435			1,377			611			1,048
Accruing Past Due Loans:
30-89 Days Past Due		9,701			9,366			14,911			7,161			19,740
90 or More Days Past Due		7			4			4			15			19
Total Accruing Past Due Loans	$	9,708		$	9,370		$	14,915		$	7,176		$	19,759
Allowance for Loan Losses	$	8,802		$	11,806		$	12,737		$	15,650		$	28,280
ALLL as a Percentage of:
Total Loans		1.18	%		1.57	%		1.70	%		2.18	%		3.48	%
Nonperforming Loans		47.99	%		48.95	%		42.66	%		40.30	%		97.78	%

Nonperforming assets include nonaccrual loans, loans past due 90 days or more, foreclosed real estate and nonaccrual securities.  Nonperforming assets at December 31, 2014 decreased 27.45 percent from December 31, 2013.

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Part II (Continued)

Item 7 (Continued)

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.

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 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 represents management’s best estimate of probable losses that have been incurred within the existing portfolio of loans.  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. Management utilizes its best judgment and information available in determining the allowance for loan losses; however, the determination of this estimate is inherently judgmental.  The ultimate adequacy of the allowance may be affected by a variety of factors beyond the Company’s control, including the performance of the Company’s loan portfolio, the economy, changes in interest rates, changes in collateral values and the view of the regulatory authorities toward loan classifications.

The Company’s methodology for determining the 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.

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Part II (Continued)

Item 7 (Continued)

The allowances established for probable losses on specific loans are the result of management’s quarterly review of substandard loans with an outstanding balance of $250,000 or more.  This review process usually involves regional credit officers along with local lending officers reviewing the loan for impairment.  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.  In the case of collateral dependent loans, collateral shortfall is most often based upon local market real estate value estimates.  This review process is performed at the subsidiary bank level and is reviewed at the parent Company level.

Once the loan becomes impaired, it is removed from the pool of loans covered by the general reserve and reviewed individually for exposure as described above.  In cases where the individual review reveals no exposure, no reserve is recorded for that loan, either through an individual reserve or through a general reserve.  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.  Those loans deemed uncollectible, are transferred to our problem loan department for workout, foreclosure and/or liquidation.  The problem loan department obtains a current appraisal on the property in order to record the fair market value (less selling expenses) when the property is foreclosed on and moved into other real estate.

The allowances established for the remainder of the loan portfolio are based on historical loss factors, adjusted for certain qualitative factors, which are applied to groups of loans with similar risk characteristics.  Real estate loans are segregated into thirteen separate groups with the remainder of loans grouped according to risk grade.  Most of the Company’s charge-offs during the past two years have been real estate dependent loans and we believe the segmentation of real estate loans into these thirteen groups provides more accuracy in determining the allowance for loan losses.  The historical loss ratios applied to these groups of loans are updated quarterly based on actual charge-off experience.    The historical loss ratios are further adjusted by qualitative factors including the following:  changes in the risk ratings of the loan portfolio, level of net charge-offs of, past due loan ratios, the value of collateral, portfolio loan quality indicators; portfolio growth rates, level of commercial real estate loans, loan concentrations; portfolio policies and procedures, underwriting standards, effectiveness of our loss recognition processes, collection and recovery practices; local economic business conditions; and the experience, ability, and depth of lending management and staff.

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.  Additional information about the Company’s allowance for loan losses is provided in the Notes to the Consolidated Financial Statements for Allowance for Loan Losses.

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Part II (Continued)

Item 7 (Continued)

The following table sets forth the breakdown of the allowance for loan losses by loan category for the periods indicated.  The allocation of the allowance to each category is subjective and is not necessarily indicative of future losses and does not restrict the use of the allowance to absorb losses in any other category.

	2014					2013					2012					2011					2010
	Reserve		%*			Reserve		%*			Reserve		%*			Reserve		%*			Reserve		%*
Commercial and Agricultural
Commercial	$	497		7	%		1,017		6	%		981		7	%		1,071		7	%		4,415		7	%
Agricultural		304		2	%		294		2	%		296		1	%		297		1	%		698		1	%
Real Estate
Commercial Construction		1,223		7	%		1,782		7	%		1,890		7	%		3,123		8	%		4,126		8	%
Residential Construction		138		1	%		138		1	%		138		1	%		138		1	%		520		1	%
Commercial		3,665		45	%		4,380		46	%		5,163		45	%		6,448		44	%		8,030		45	%
Residential		2,425		27	%		3,278		27	%		3,406		27	%		3,695		27	%		5,942		25	%
Farmland		104		7	%		312		6	%		291		7	%		365		7	%		944		7	%
Consumer and Other
Consumer		67		3	%		243		3	%		228		4	%		205		4	%		3,074		4	%
Other		379		1	%		362		2	%		344		1	%		308		1	%		531		2	%
	$	8,802		100	%	$	11,806		100	%	$	12,737		100	%	$	15,650		100	%	$	28,280		100	%

* Percentage represents the loan balance in each category expressed as a percentage of total end of period loans.

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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.

	2014			2013			2012			2011			2010
Allowance for Loan Losses at Beginning of Year	$	11,806		$	12,737		$	15,650		$	28,280		$	31,401
Charge-Offs
Commercial		625			121			653			842			469
Agricultural		-			34			3			455			256
Commercial Construction		1,543			2,071			4,106			6,957			4,648
Residential Construction		-			-			-			1			-
Commercial		1,327			2,873			4,326			12,492			7,459
Residential		1,034			706			961			1,705			2,930
Farmland		233			21			225			60			272
Consumer		342			398			169			223			549
Other		-			4			11			115			1,040
		5,104			6,228			10,454			22,850			17,623
Recoveries
Commercial		76			56			140			128			80
Agricultural		3			6			-			454			2
Commercial Construction		485			253			209			557			185
Residential Construction		-			-			-			-			-
Commercial		90			298			233			528			142
Residential		31			65			47			149			440
Farmland		20			22			5			1			7
Consumer		72			94			82			145			246
Other		15			18			40			8			50
		792			812			756			1,970			1,152
Net Charge-Offs		4,312			5,416			9,698			20,880			16,471
Provision for Loans Losses		1,308			4,485			6,785			8,250			13,350
Allowance for Loan Losses at End of Year	$	8,802		$	11,806		$	12,737		$	15,650		$	28,280
Ratio of Net Charge-Offs to Average Loans		0.58	%		0.73	%		1.34	%		2.74	%		1.90	%

The allowance for loan losses decreased from $11.81 million, or 1.57 percent of total loans at December 31, 2013 to $8.80 million, or 1.18 percent of total loans at December 31, 2014.  This decrease is consistent with the decrease in the Company’s level of nonperforming loans from $24.11 million at December 31, 2013  to $18.34 million at December 31, 2014.  The provision for loan losses reflects loan quality trends, including the level of net charge-offs or recoveries, among other factors.  Significant changes in the allowance during 2014 was the reduction in the provision for loan losses in 2014 to $1.31 million from $4.49 million in 2013, or a reduction of $3.18 million.  Significant changes  in the allowance during 2013 was the reduction in the net charge-offs in 2013 to $5.42 million from $9.70 million in 2012.  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.  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)

Investment Portfolio

The following table presents carrying values of investment securities held by the Company as of December 31, 2014, 2013 and 2012.

	2014		2013		2012
Obligations of States and Political Subdivisions	$	3,560	$	3,947	$	4,046
Corporate Obligations		-		-		1,105
Asset-Backed Securities		-		-		132
Investment Securities		3,560		3,947		5,283
Mortgage-Backed Securities		271,064		259,348		263,059
Total Investment Securities and Mortgage-Backed Securities	$	274,624	$	263,295	$	268,342

The following table represents expected maturities and weighted-average yields of investment securities held by the Company as of December 31, 2014.  (Mortgage-backed securities are based on the average life at the projected speed, while State and Political Subdivisions 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	$	1,957		0.28	%	$	180,678		1.65	%	$	83,916		1.75	%	$	4,513		2.71	%
Obligations of State and Political Subdivisions		747		2.39	%		1,388		3.42	%		1,425		2.47	%		-		-	%
Total Investment Portfolio	$	2,704		0.86	%	$	182,066		1.66	%	$	85,341		1.76	%	$	4,513		2.71	%

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, 2014, 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 stockholders’ equity.

The average yield of the securities portfolio was 1.71 percent in 2014 compared to 1.36 percent in 2013 and 1.82 percent in 2012.  The increase in the average yield from 2013 to 2014 was primarily attributed to the adjustment in amortization resulting from the deceleration of prepayment speeds.  The decrease in the average yield from 2012 to 2013 primarily resulted from the turnover of the securities portfolio resulting in the investment of new funds at lower rates.

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Part II (Continued)

Item 7 (Continued)

Deposits

The following table presents the average amount outstanding and the average rate paid on deposits by the Company for the years 2014, 2013 and 2012.

	2014					2013					2012
	Average Amount		Average Rate			Average Amount		Average Rate			Average Amount		Average Rate
Noninterest-Bearing Demand Deposits	$	118,452				$	112,667				$	101,896
Interest-Bearing Demand and Savings		394,615		0.35	%		366,974		0.36	%		329,984		0.38	%
Time Deposits		445,993		0.83	%		473,672		0.95	%		537,810		1.39	%
Total Deposits	$	959,060		0.53	%	$	953,313		0.61	%	$	969,690		0.90	%

The following table presents the maturities of the Company’s time deposits as of December 31, 2014.

	Time Deposits $100,000 or Greater		Time Deposits Less Than $100,000		Total
Months to Maturity
3 or Less	$	39,442	$	52,207	$	91,649
Over 3 through 6		32,458		38,813		71,271
Over 6 through 12		68,932		70,733		139,665
Over 12 Months		69,671		55,991		125,662
	$	210,503	$	217,744	$	428,247

Average deposits increased $5.75 million in 2014 compared to 2013 and decreased $16.38 million in 2013 compared to 2012.  The increase in 2014 included $27.64 million, or 7.53 percent in interest-bearing demand and savings deposits while, at the same time, noninterest bearing deposits increased $5.79 million, or 5.13 percent and time deposits decreased $27.68 million, or 5.84 percent.  The decrease in 2013 included $64.14 million, or 11.93 percent in time deposits while, at the same time, noninterest bearing deposits increased $10.77 million, or 10.57 percent and interest-bearing demand and savings deposits increased $36.99 million, or 11.21 percent.  Accordingly, the ratio of average noninterest-bearing deposits to total average deposits was 12.35 in 2014, 11.82 percent in 2013 and 10.51 percent in 2012.  The general decrease in market rates in 2014 had the effect of (i) decreasing the average cost of interest-bearing deposits by 8 basis points in 2014 compared to 2013 and (ii) mitigating a portion of the impact of decreasing yields on earning assets in the Company’s net interest income in 2014.  The general decrease in market rates in 2013 had the effect of (i) decreasing the average cost of interest-bearing deposits by 32 basis points in 2013 compared to 2012 and (ii) mitigating a portion of the impact of decreasing yields on earning assets in the Company’s net interest income in 2013.

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Part II (Continued)

Item 7 (Continued)

Total average interest-bearing deposits decreased $38 thousand, or 0.01 percent in 2014 compared to 2013 and decreased $27.1 million, or 3.1 percent in 2013 compared to 2012.  This decrease was primarily attributed to the decrease in time deposit accounts.

The Company supplements deposit sources with brokered deposits.  As of December 31, 2014, the Company had $26.3 million, or 2.69 percent of total deposits, in brokered certificates of deposit attracted by external third parties.  Additional information is provided in the Notes to Consolidated Financial Statements for Deposits.

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, 2014. 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		28,500		2,500		40,000
Operating Leases		129		113		-		-		242
Deposits with Stated Maturity Dates		302,585		98,219		27,317		126		428,247
		302,714		107,332		55,817		26,855		492,718
Other Commitments:
Loan Commitments		68,742		-		-		-		68,742
Standby Letters of Credit		1,762		-		-		-		1,762
		70,504		-		-		-		70,504
Total Contractual Obligations and Other Commitments	$	373,218	$	107,332	$	55,817	$	26,855	$	563,222

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.

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.

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Part II (Continued)

Item 7 (Continued)

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 loan losses.  Loan commitments outstanding at December 31, 2014 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, 2014 are included in the preceding table.

Capital and Liquidity

At December 31, 2014, shareholders’ equity totaled $99.0 million compared to $90.0 million at    December 31, 2013. In addition to net income of $7.5 million, other significant changes in shareholders’ equity during 2014 included $2.69 million of dividends declared on preferred stock. The accumulated other comprehensive loss component of stockholders’ equity totaled $(4.8) million at December 31, 2014 compared to $(9.1) million at December 31, 2013. 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, 2014 was 16.78 percent and total Tier 1 and 2 risk-based capital was 17.95 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, 2014 was 11.18 percent, which exceeds the required ratio standard of 4 percent.

For 2014, average capital was $94.8 million, representing 8.40 percent of average assets for the year.  This compares to 8.35 percent for 2013.

The Company did not pay any common stock dividends in 2014 or 2013.  The Company suspended dividend payments beginning in the third quarter of 2009.

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Part II (Continued)

Item 7 (Continued)

The Company declared dividends of $2,689 and $1,509 on preferred stock during 2014 and 2013, respectively.  On November 17, 2014 the Company reinstated dividend payments on the Preferred Stock and paid $5.5 million of accumulated dividends in arrears to the holders of the Preferred Stock.  Additional information is provided in the Notes to the Consolidated Financial Statements for Preferred Stock.

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, 2014, the available for sale bond portfolio totaled $274.6 million.  At December 31, 2013, the available for sale bond portfolio totaled $263.3 million.  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 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 76.2 percent as of December 31, 2014 and 76.1 percent as of December 31, 2013.  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, 2014 and December 31, 2013 were 73.2 percent and 73.1 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, 2014 and December 31, 2013, the Bank had $211 million and $221 million, respectively, in certificates of deposit of $100,000 or more.  These larger deposits represented 21.5 percent and 22.3 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, 2014, the Company had $26.3 million, or 2.69 percent of total deposits, in CDARS.  Additional information is provided in the Notes to the Consolidated Financial Statements regarding these brokered deposits.  Additionally, the Company uses external deposit listing services to obtain out-of-market certificates of deposit at competitive interest rates when funding is needed.  The deposits obtained from listing services are often referred to as wholesale or Internet CDs.  As of December 31, 2014, the Company had $21.4 million, or 2.2 percent of total deposits, in internet certificates of deposit obtained through deposit listing services.

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 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 borrowings 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

	2014								2013								2012
	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)	$	741,484		$	39,814		5.37	%	$	744,627		$	41,473		5.57	%	$	721,872		$	42,054		5.83	%
Investment Securities
Taxable		282,056			4,763		1.69			272,818			3,597		1.32			280,959			5,005		1.78
Tax-Exempt (2)		2,418			113		4.67			2,871			139		4.84			3,302			155		4.69
Total Investment Securities		284,474			4,876		1.71			275,689			3,736		1.36			284,261			5,160		1.82
Interest-Bearing Deposits		16,193			42		0.26			9,625			27		0.28			17,046			43		0.25
Federal Funds Sold		12,551			32		0.25			14,969			39		0.26			38,877			99		0.25
Other Interest-Earning Assets		2,906			115		3.96			3,275			81		2.47			4,277			77		1.80
Total Interest-Earning Assets		1,057,608			44,879		4.24			1,048,185			45,356		4.33			1,066,333			47,433		4.45
Noninterest-Earning Assets
Cash		9,698								19,401								18,474
Allowance for Loan Losses		(10,841	)							(13,347	)							(15,781	)
Other Assets		71,587								63,832								70,788
Total Noninterest-Earning Assets		70,444								69,886								73,481
Total Assets	$	1,128,052							$	1,118,071							$	1,139,814
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities
Interest-Bearing Demand and Savings	$	394,615		$	1,398		0.35	%	$	366,974		$	1,335		0.36	%	$	329,984		$	1,258		0.38	%
Other Time		445,993			3,715		0.83			473,672			4,486		0.95			537,810			7,479		1.39
Total Interest-Bearing Deposits		840,608			5,113		0.61			840,646			5,821		0.69			867,794			8,737		1.01
Other Interest-Bearing Liabilities
Other Borrowed Money		40,000			1,168		2.92			40,299			1,159		2.88			43,745			1,725		3.94
Subordinated Debentures		24,229			518		2.14			24,229			517		2.13			24,229			554		2.29
Federal Funds Purchased and Repurchase Agreements		2			-		-			34			-		-			-			-		-
Total Other Interest Bearing Liabilities		64,231			1,686		2.62			64,562			1,676		2.6			67,974			2,279		3.35
Total Interest-Bearing Liabilities		904,839			6,799		0.75			905,208			7,497		0.83			935,768			11,016		1.18
Noninterest-Bearing Liabilities and Stockholders' Equity
Demand Deposits		118,452								112,667								101,896
Other Liabilities		10,010								6,838								5,609
Stockholders' Equity		94,751								93,358								96,541
Total Noninterest-Bearing Liabilities and Stockholders' Equity		223,213								212,863								204,046
Total Liabilities and Stockholders' Equity	$	1,128,052							$	1,118,071							$	1,139,814
Interest Rate Spread							3.49	%							3.50	%							3.27	%
Net Interest Income				$	38,080							$	37,859							$	36,417
Net Interest Margin							3.60	%							3.61	%							3.41	%

(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 $79, $123 and $91 for 2014, 2013 and 2012, respectively, are included in interest on loans.  The adjustments are based on a federal tax rate of 34 percent.

(2) Taxable-equivalent adjustments totaling $38, $47 and $53 for 2014, 2013 and 2012 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, 2014.  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	$	21,206		$	-		$	21,206		$	-		$	-		$	21,206
Federal Funds Sold		20,132			-			20,132			-			-			20,132
Investment Securities		501			2,203			2,704			176,052			95,868			274,624
Loans, Net of Unearned Income		172,464			166,179			338,643			352,787			54,303			745,733
Other Interest- Earning Assets		2,830			-			2,830			-			-			2,830
Total Interest-Earning Assets		217,133			168,382			385,515			528,839			150,171			1,064,525
INTEREST-BEARING LIABILITIES:
Interest-Bearing Demand Deposits (1)		363,502			-			363,502			-			-			363,502
Savings (1)		59,215			-			59,215			-			-			59,215
Time Deposits		91,649			210,936			302,585			125,536			126			428,247
Other Borrowings (2)		5,000			-			5,000			35,000			-			40,000
Subordinated Debentures		24,229			-			24,229			-			-			24,229
Total Interest-Bearing Liabilities		543,595			210,936			754,531			160,536			126			915,193
Interest Rate-Sensitivity Gap		(326,462	)		(42,554	)		(369,016	)		368,303			150,045		$	149,332
Cumulative Interest-Sensitivity Gap	$	(326,462	)	$	(369,016	)	$	(369,016	)	$	(713	)	$	149,332
Interest Rate-Sensitivity Gap as Percentage of Interest-Earning Assets		(30.67	)%		(3.99	)%		(34.66	)%		34.59	%		14.10	%
Cumulative Interest Rate-Sensitivity as a Percentage of Interest-Earning  Assets		(30.67	)%		(34.66	)%		(34.66	)%		(0.07	)%		14.03	%

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

(2) Other borrowings such as FHLB advances consider the conversion date for repricing purposes and 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 $369 million, or 34.66 percent of total interest-earning assets at December 31, 2014.  In theory, this would indicate that at December 31, 2014, $369 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 policies for rate shock per basis point (bp) for earnings at risk for net interest income and for equity at risk.  The following table shows the policy limits with the rate shock for earnings at risk and equity at risk as of December 31, 2014.

	Rate  Shock			Policy  Limit			Immediate Shock (-) decrease bp			Immediate Shock (+) increase bp
Net Interest Income – Earnings at Risk		+/- 100	bp		+/- 10	%		- 1.57	%		-0.29	%
		+/- 200	bp		+/- 15	%		-7.20	%		-0.98	%
		+/- 300	bp		+/- 20	%		-9.17	%		-1.68	%
		+/- 400	bp		+/- 25	%		-9.74	%		-2.46	%
Equity at Risk		+/- 100	bp		+/- 10	%		-5.96	%		6.21	%
		+/- 200	bp		+/- 20	%		-21.60	%		10.50	%
		+/- 300	bp		+/- 30	%		-30.68	%		13.29	%
		+/- 400	bp		+/- 40	%		-30.90	%		21.12	%

- 56 -

Part II (Continued)

Item 7 (Continued)

The Company has established its one year gap to be 80 percent to 120 percent.  The most recent analysis as of December 31, 2014 indicates a one year gap of 0.96 percent.  The analysis reflects slight net interest margin compression in both a declining and increasing 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 2015.  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.

Return on Assets and Stockholder’s Equity

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

	Years Ended December 31
	2014			2013			2012
Return on Average Assets(1)		0.43	%		0.28	%		0.11	%
Return on Average Equity(1)		5.11	%		3.34	%		1.25	%
Equity to Assets		8.63	%		7.83	%		8.40	%
Common Stock 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 2015 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 2015.  These initiatives include new product lines and services.

- 57 -

Part II (Continued)

Item 7 (Continued)

Business

Regulatory Action

The Bank operated under a Memorandum of Understanding (“MOU”) from November 23, 2010 until October 1, 2013 when the MOU was lifted by regulatory agencies and replaced with a Board Resolution (BR) to ensure that the Bank’s overall condition remains satisfactory.  The BR was lifted by regulatory agencies effective October 22, 2014 and there are currently no agreements in place with regulatory agencies.

Prior to October 22, 2014, the BR required 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 was also required to obtain approval before any cash dividends can be paid.

- 58 -

Part II (Continued)

Item 7 (Continued)

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, 2014 and 2013

Consolidated Statements of Income - Years Ended December 31, 2014, 2013 and 2012

Consolidated Statements of Comprehensive Income - Years Ended December 31, 2014, 2013 and 2012

Consolidated Statements of Stockholders’ Equity - Years Ended December 31, 2014, 2013 and 2012

Consolidated Statements of Cash Flows - Years Ended December 31, 2014, 2013 and 2012

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, 2014 and 2013:

	Three Months Ended
	December 31			September 30		June 30		March 31
2014	($ in Thousands, Except Per Share Data)
Interest Income	$	11,158		$	11,400	$	11,251	$	10,953
Interest Expense		1,655			1,662		1,723		1,759
Net Interest Income		9,503			9,738		9,528		9,194
Provision for Loan Losses		-			500		481		327
Securities Gains		23			-		1		-
Noninterest Income		2,384			2,410		2,245		2,062
Noninterest Expense		9,289			8,534		8,291		8,866
Income Before Income Taxes		2,621			3,114		3,002		2,063
Provision for Income Taxes		643			1,033		986		606
Net Income	$	1,978			2,081		2,016		1,457
Preferred Stock Dividends		668			697		681		643
Net Income Available to Common Stockholders	$	1,310		$	1,384	$	1,335	$	814
Net Income Per Common Share
Basic	$	0.15		$	0.16	$	0.16	$	0.10
Diluted	$	0.15		$	0.16	$	0.16	$	0.10
2013
Interest Income	$	11,466		$	11,260	$	11,296	$	11,164
Interest Expense		1,772			1,766		1,841		2,118
Net Interest Income		9,694			9,494		9,455		9,046
Provision for Loan Losses		285			1,500		1,200		1,500
Securities Gains		(362	)		-		6		(8	)
Noninterest Income		2,380			2,109		2,034		2,218
Noninterest Expense		8,998			8,488		8,739		8,392
Income Before Income Taxes		2,429			1,615		1,556		1,364
Provision for Income Taxes		803			535		570		427
Net Income		1,626			1,080		986		937
Preferred Stock Dividends		385			379		375		370
Net Income Available to Common Stockholders	$	1,241		$	701	$	611	$	567
Net Income Per Common Share
Basic	$	0.15		$	0.08	$	0.07	$	0.07
Diluted	$	0.15		$	0.08	$	0.07	$	0.07

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, 2014, 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, 2014 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, 2014.

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 10, 2015

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, As Amended

-filed as Exhibit 99.1 to the Registrant’s 10-Q for the period ended June 30, 2014 (File No. 0-12436), filed with the Commission on August 4, 2014, 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, 2014 and 2013

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

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 10, 2015

Date

/s/ Terry L. Hester

Terry L. Hester

Executive Vice-President/Chief Financial Officer/Director

March 10, 2015

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 10, 2015
B. Gene Waldron, Director	Date
/s/ Mark H. Massee	March 10, 2015
Mark H. Massee, Director	Date

/s/ Jonathan W. R. Ross	March 10, 2015
Jonathan W. R. Ross, Director	Date
/s/ Frederick Dwozan	March 10, 2015
M. Frederick Dwozan, Director	Date

- 67 -

/s/ Davis W. King, Sr.	March 10, 2015
Davis W. King, Sr., Director	Date
/s/ Scott Lowell Downing	March 10, 2015
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 10, 2015

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, 2014 and 2013 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, 2014.  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 consolidated financial statements are free from material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated 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, 2014 and 2013, and the results of its operations and cash flows for each of the years in the three-year period ended December 31, 2014 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, 2014 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

	2014			2013
Cash and Cash Equivalents
Cash and Due from Banks	$	24,472,870		$	25,691,605
Federal Funds Sold		20,132,062			20,495,060
		44,604,932			46,186,665
Interest-Bearing Deposits		21,206,039			21,960,291
Investment Securities
Available for Sale, at Fair Value		274,594,586			263,257,890
Held to Maturity, at Cost (Fair Value of $29,923 and $37,309 as of December 31, 2014 and 2013, Respectively)		29,796			37,062
		274,624,382			263,294,952
Federal Home Loan Bank Stock, at Cost		2,830,800			3,163,900
Loans		746,093,809			751,218,462
Allowance for Loan Losses		(8,802,316	)		(11,805,986	)
Unearned Interest and Fees		(361,374	)		(360,522	)
		736,930,119			739,051,954
Premises and Equipment		24,960,445			24,876,469
Other Real Estate (Net of Allowance of $3,319,644 and $3,985,920 in 2014 and 2013, Respectively)		10,401,832			15,502,462
Other Intangible Assets		152,012			187,761
Other Assets		31,187,420			34,326,432
Total Assets	$	1,146,897,981		$	1,148,550,886

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

	2014			2013
Deposits
Noninterest-Bearing	$	128,339,763		$	115,260,701
Interest-Bearing		850,963,711			872,268,779
		979,303,474			987,529,480
Borrowed Money
Subordinated Debentures		24,229,000			24,229,000
Other Borrowed Money		40,000,000			40,000,000
		64,229,000			64,229,000
Other Liabilities		4,338,195			6,838,167
Commitments and Contingencies
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares		28,000,000			28,000,000
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2014 and 2013		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		38,287,934			33,444,913
Accumulated Other Comprehensive Loss, Net of Tax		(4,844,974	)		(9,075,026	)
		99,027,312			89,954,239
Total Liabilities and Stockholders’ Equity	$	1,146,897,981		$	1,148,550,886

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

	2014		2013			2012
Interest Income
Loans, Including Fees	$	39,735,615	$	41,350,195		$	41,963,113
Federal Funds Sold		32,100		39,199			99,273
Deposits with Other Banks		41,639		26,704			42,903
Investment Securities
U.S. Government Agencies		4,737,878		3,516,978			4,824,423
State, County and Municipal		99,736		123,972			206,483
Corporate Obligations		-		47,275			76,029
Dividends on Other Investments		115,134		81,398			77,203
		44,762,102		45,185,721			47,289,427
Interest Expense
Deposits		5,113,024		5,821,366			8,737,281
Federal Funds Purchased		19		116			-
Borrowed Money		1,685,744		1,675,164			2,279,469
		6,798,787		7,496,646			11,016,750
Net Interest Income		37,963,315		37,689,075			36,272,677
Provision for Loan Losses		1,308,000		4,485,000			6,784,767
Net Interest Income After Provision for Loan Losses		36,655,315		33,204,075			29,487,910
Noninterest Income
Service Charges on Deposits		4,567,716		4,690,599			3,572,897
Other Service Charges, Commissions and Fees		2,468,881		1,725,271			1,514,898
Mortgage Fee Income		419,963		484,396			400,009
Securities Gains (Losses)		23,735		(363,804	)		2,837,464
Gain on Sale of SBA Loans		-		635,190			305,924
Other		1,644,294		1,205,631			1,102,077
		9,124,589		8,377,283			9,733,269
Noninterest Expenses
Salaries and Employee Benefits		17,507,926		16,691,972			15,564,893
Occupancy and Equipment		4,062,844		3,794,524			3,878,268
Directors’ Fees		392,132		416,972			465,220
Legal and Professional Fees		785,683		721,322			1,085,881
Foreclosed Property		2,701,436		3,918,128			5,613,316
FDIC Assessment		965,898		1,321,981			1,497,974
Advertising		652,374		508,292			422,718
Software		925,489		852,475			789,226
Telephone		735,735		778,151			744,930
ATM/Card Processing		865,519		641,228			511,186
Other		5,384,956		4,972,404			4,805,418
		34,979,992		34,617,449			35,379,030
Income Before Income Taxes		10,799,912		6,963,909			3,842,149
Income Taxes		3,268,287		2,334,864			1,200,851
Net Income		7,531,625		4,629,045			2,641,298
Preferred Stock Dividends		2,688,604		1,508,761			1,435,385
Net Income Available to Common Stockholders	$	4,843,021	$	3,120,284		$	1,205,913
Net Income Per Share of Common Stock, Basic and Diluted	$	0.57	$	0.37		$	0.14
Cash Dividends Declared Per Share of Common Stock	$	0.00	$	0.00		$	0.00
Weighted Average Shares Outstanding, Basic and Diluted		8,439,258		8,439,258			8,439,258

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

	2014			2013			2012
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Other Comprehensive Income (Loss)
Gains (Losses) on Securities Arising During the Year		6,432,906			(13,886,854	)		(283,076	)
Tax Effect		(2,187,189	)		4,721,531			96,246
Realized Gains (Losses) on Sale of AFS Securities		(23,735	)		(2,819	)		(2,897,032	)
Tax Effect		8,070			959			984,991
Impairment Loss on Securities		-			366,623			59,568
Tax Effect		-			(124,652	)		(20,253	)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		4,230,052			(8,925,212	)		(2,059,556	)
Comprehensive Income (Loss)	$	11,761,677		$	(4,296,167	)	$	581,742

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, 2014, 2013 AND 2012

	Preferred Stock		Shares Issued		Common Stock		Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
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
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects													(8,925,212	)		(8,925,212	)
Accretion of Fair Value of Warrant		172,947								(172,947	)					-
Dividends on Preferred Shares										(1,508,761	)					(1,508,761	)
Net Income										4,629,045						4,629,045
Balance, December 31, 2013		28,000,000		8,439,258		8,439,258		29,145,094		33,444,913			(9,075,026	)		89,954,239
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects													4,230,052			4,230,052
Dividends on Preferred Shares										(2,688,604	)					(2,688,604	)
Net Income										7,531,625						7,531,625
Balance, December 31, 2014	$	28,000,000		8,439,258	$	8,439,258	$	29,145,094	$	38,287,934		$	(4,844,974	)	$	99,027,312

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

- 6 -

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2014			2013			2012
Cash Flows from Operating Activities
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Depreciation		1,595,253			1,527,392			1,676,820
Amortization and Accretion		1,312,857			2,667,404			4,180,158
Provision for Loan Losses		1,308,000			4,485,000			6,784,767
Deferred Income Taxes		1,932,950			2,178,222			1,204,439
Securities (Gains) Losses		(23,735	)		363,804			(2,837,464	)
(Gain) Loss on Sale of Premises and Equipment		(12,489	)		(677	)		1,148
Loss on Sale of Other Real Estate and Repossessions		828,411			1,565,091			1,839,196
Provision for Losses on Other Real Estate		1,006,827			1,321,418			2,702,709
Increase in Cash Surrender Value of Life Insurance		(590,674	)		(338,712	)		(185,341	)
Change In
Interest Receivable		55,786			285,033			250,755
Prepaid Expenses		(64,633	)		(168,060	)		1,741,834
Interest Payable		(1,099,756	)		385,285			74,637
Accrued Expenses and Accounts Payable		197,195			213,753			(95,972	)
Other		788,958			(243,543	)		2,827,648
		14,766,575			18,870,455			22,806,632
Cash Flows from Investing Activities
Interest-Bearing Deposits in Other Banks		754,252			(164,950	)		7,161,969
Purchase of Investment Securities
Available for Sale		(56,201,891	)		(132,419,073	)		(250,445,594	)
Proceeds from Sale of Investment Securities
Available for Sale		13,620,956			72,672,795			227,690,806
Proceeds from Maturities, Calls and Paydowns of Investment Securities
Available for Sale		36,440,646			48,330,382			54,006,594
Held to Maturity		12,968			11,623			14,019
Proceeds from Sale of Premises and Equipment		14,376			2,500			1,500
Net Loans to Customers		(3,156,342	)		(19,959,948	)		(50,126,252	)
Purchase of Premises and Equipment		(1,681,115	)		(1,489,579	)		(845,338	)
Proceeds from Sale of Other Real Estate and Repossessions		7,233,497			8,041,638			9,876,136
Proceeds from Sale of Federal Home Loan Bank Stock		333,100			200,400			2,033,900
Purchase of Bank-Owned Life Insurance		-			(10,000,000	)		-
		(2,629,553	)		(34,774,212	)		(632,260	)
Cash Flows from Financing Activities
Interest-Bearing Customer Deposits		(21,305,068	)		16,550,430			(49,998,012	)
Noninterest-Bearing Customer Deposits		13,079,062			(8,705,841	)		29,697,631
Proceeds from Other Borrowed Money		-			21,500,000			5,000,000
Principal Payments on Other Borrowed Money		-			(16,500,000	)		(41,000,000	)
Dividends Paid on Preferred Stock		(5,492,749	)		-			-
		(13,718,755	)		12,844,589			(56,300,381	)
Net Increase (Decrease) in Cash and Cash Equivalents		(1,581,733	)		(3,059,168	)		(34,126,009	)
Cash and Cash Equivalents, Beginning		46,186,665			49,245,833			83,371,842
Cash and Cash Equivalents, Ending	$	44,604,932		$	46,186,665		$	49,245,833

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

- 7 -

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 and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans.

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 2014.  Such reclassifications had no effect on previously reported stockholders’ equity or net income.

- 8 -

(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, 2014, 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.

- 9 -

(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.

- 11 -

(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 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 may not be 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.

- 12 -

(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, interest-bearing checking 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 2014, 2013, 2012 and 2011 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.

Bank-Owned Life Insurance

The Company has purchased life insurance on the lives of certain key members of management and directors.  The life insurance policies are recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement, if applicable.  Increases in the cash surrender value are recorded as other income in the consolidated statements of income.The cash surrender value of the insurance contracts is recorded in other assets on the consolidated balance sheets in the amount of $14,530,851 and $13,940,176 as of December 31, 2014 and 2013, respectively.

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.

- 14 -

(1) Summary of Significant Accounting Policies (Continued)

Changes in Accounting Principles and Effects of New Accounting Pronouncements

ASU 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. ASU 2014-01 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).  For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with ASC 970-323.   ASU 2014-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014, and will be applied retrospectively to all periods presented.  The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40):  Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The objective of this guidance is to clarify when an in-substance repossession or foreclosure occurs; that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Company’s consolidated financial statements.

ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective for the Company on January 1, 2017. The Company is still evaluating the potential impact on the Company's consolidated financial statements.

ASU 2014-11, Transfers and Servicing (Topic 860). ASU 2014-11 requires that repurchase-to-maturity transactions be accounted for as secured borrowings consistent with the accounting for other repurchase agreements. In addition, ASU 2014-11 requires separate accounting for repurchase financings, which entails the transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty. ASU 2014-11 requires entities to disclose certain information about transfers accounted for as sales in transactions that are economically similar to repurchase agreements. In addition, ASU 2014-11 requires disclosures related to collateral, remaining contractual tenor and of the potential risks associated with repurchase agreements, securities lending transactions and repurchase-to-maturity transactions. ASU 2014-11 is effective for the Company on January 1, 2015 and is not expected to have a significant impact on the Company’s consolidated financial statements.

- 15 -

(1) Summary of Significant Accounting Policies (Continued)

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

ASU 2014-14, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure. The amendments require a mortgage loan to be derecognized and a separate receivable to be recognized upon foreclosure if the loan has a government guarantee that is nonseparable from the loan before foreclosure, the creditor has the ability and intent to convey the real estate property to the guarantor, and any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Additionally, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor upon foreclosure. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2014. Management does not believe the amendments will have a material impact to the Company’s consolidated financial statements.

ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU 2014-15 explicitly requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist which raise substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures.  ASU 2014-15 is effective for annual periods ending after December 15, 2016, and annual and interim periods thereafter, with early adoption permitted.  The adoption of ASU 2014-15 is not expected to have a material effect on the Company’s consolidated financial statements or disclosures.

(2) Cash and Balances Due from Banks

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

	2014		2013
Cash on Hand and Cash Items	$	9,974,663	$	10,531,340
Noninterest-Bearing Deposits with Other Banks		14,498,207		15,160,265
	$	24,472,870	$	25,691,605

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 $1,278,000 and $1,252,000 at December 31, 2014 and 2013, respectively.

- 16 -

(3) Investment Securities

Investment securities as of December 31, 2014 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	278,419,055	$	155,902	$	(7,511,288	)	$	271,063,669
State, County and Municipal		3,516,400		27,181		(12,664	)		3,530,917
	$	281,935,455	$	183,083	$	(7,523,952	)	$	274,594,586
Securities Held to Maturity
State, County and Municipal	$	29,796	$	127	$	-		$	29,923

The amortized cost and fair value of investment securities as of December 31, 2014, 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	$	715,764	$	717,138	$	29,796	$	29,923
Due After One Year Through Five Years		718,836		730,598		-		-
Due After Five Years Through Ten Years		1,158,938		1,157,251		-		-
Due After Ten Years		922,862		925,930		-		-
		3,516,400		3,530,917		29,796		29,923
Mortgage-Backed Securities		278,419,055		271,063,669		-		-
	$	281,935,455	$	274,594,586	$	29,796	$	29,923

Investment securities as of December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	273,029,073	$	118,843	$	(13,799,858	)	$	259,348,058
State, County and Municipal		3,978,857		14,963		(83,988	)		3,909,832
	$	277,007,930	$	133,806	$	(13,883,846	)	$	263,257,890
Securities Held to Maturity
State, County and Municipal	$	37,062	$	247	$	-		$	37,309

- 17 -

(3) Investment Securities (Continued)

Proceeds from sales of investments available for sale were $13,620,956 in 2014, $72,672,795 in 2013 and $227,690,806 in 2012.  Gross realized gains totaled $67,601 in 2014, $442,124 in 2013 and $3,084,666 in 2012.  Gross realized gains of $1,800 in 2014 was due to a gain on a call for a held to maturity investment.  Gross realized losses totaled $45,666 in 2014, $805,928 in 2013 and $247,202 in 2012.

Investment securities having a carrying value totaling $135,531,563 and $112,912,815 as of December 31, 2014 and 2013, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at December 31, 2014 and 2013 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, 2014
U.S. Government Agencies
Mortgage-Backed	$	66,609,319	$	(396,896	)	$	183,645,552	$	(7,114,392	)	$	250,254,871	$	(7,511,288	)
State, County and Municipal		-		-			1,379,547		(12,664	)		1,379,547		(12,664	)
	$	66,609,319	$	(396,896	)	$	185,025,099	$	(7,127,056	)	$	251,634,418	$	(7,523,952	)
December 31, 2013
U.S. Government Agencies
Mortgage-Backed	$	190,063,827	$	(9,440,663	)	$	63,193,601	$	(4,359,195	)	$	253,257,428	$	(13,799,858	)
State, County and Municipal		1,647,043		(83,988	)		-		-			1,647,043		(83,988	)
	$	191,710,870	$	(9,524,651	)	$	63,193,601	$	(4,359,195	)	$	254,904,471	$	(13,883,846	)

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.

- 18 -

(3) Investment Securities (Continued)

At December 31, 2014, the debt securities with unrealized losses have depreciated 2.90 percent from the Company’s amortized cost basis. These securities are guaranteed by either the U.S. Government, other governments or U.S. corporations.  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, 2014 which was completely written off during prior years.  This investment is comprised of one issuance of a trust preferred security and has a book value of $0.  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, $366,623 and $59,568 were written off during the years ended December 31, 2013 and 2012, respectively.

(4) Loans

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

	2014		2013
Commercial and Agricultural
Commercial	$	50,960,265	$	48,107,448
Agricultural		16,689,444		10,665,938
Real Estate
Commercial Construction		51,258,970		52,738,783
Residential Construction		11,220,683		6,549,260
Commercial		332,230,847		341,783,538
Residential		203,752,620		206,257,927
Farmland		49,950,984		47,034,426
Consumer and Other
Consumer		22,820,314		25,675,560
Other		7,209,682		12,405,582
Total Loans	$	746,093,809	$	751,218,462

- 19 -

(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.

- 20 -

(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.

2014	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	46,230,110	$	2,905,361	$	1,824,794	$	50,960,265
Agricultural		16,504,404		27,101		157,939		16,689,444
Real Estate
Commercial Construction		45,063,306		1,740,488		4,455,176		51,258,970
Residential Construction		11,220,683		-		-		11,220,683
Commercial		309,828,039		11,220,166		11,182,642		332,230,847
Residential		180,549,640		10,582,704		12,620,276		203,752,620
Farmland		47,548,106		414,521		1,988,357		49,950,984
Consumer and Other
Consumer		22,114,932		248,997		456,385		22,820,314
Other		7,012,405		-		197,277		7,209,682
Total Loans	$	686,071,625	$	27,139,338	$	32,882,846	$	746,093,809
2013
Commercial and Agricultural
Commercial	$	41,759,281	$	2,770,284	$	3,577,883	$	48,107,448
Agricultural		10,637,705		16,830		11,403		10,665,938
Real Estate
Commercial Construction		42,668,320		1,512,301		8,558,162		52,738,783
Residential Construction		6,341,530		207,730		-		6,549,260
Commercial		317,567,749		10,759,954		13,455,835		341,783,538
Residential		182,977,361		13,523,478		9,757,088		206,257,927
Farmland		44,776,355		507,122		1,750,949		47,034,426
Consumer and Other
Consumer		24,608,175		320,473		746,912		25,675,560
Other		12,356,116		711		48,755		12,405,582
Total Loans	$	683,692,592	$	29,618,883	$	37,906,987	$	751,218,462

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 $250,000 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.

- 21 -

(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 such loans are considered past due.

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
2014	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	$	872,321	$	-	$	872,321	$	405,398	$	49,682,546	$	50,960,265
Agricultural		-		-		-		44,605		16,644,839	$	16,689,444
Real Estate
Commercial Construction		141,850		-		141,850		3,251,290		47,865,830	$	51,258,970
Residential Construction		-		-		-		-		11,220,683	$	11,220,683
Commercial		2,309,114		-		2,309,114		5,325,047		324,596,686	$	332,230,847
Residential		5,782,701		-		5,782,701		7,461,507		190,508,412	$	203,752,620
Farmland		281,967		-		281,967		1,449,226		48,219,791	$	49,950,984
Consumer and Other
Consumer		313,424		6,642		320,066		201,695		22,298,553	$	22,820,314
Other		-		-		-		195,497		7,014,185	$	7,209,682
Total Loans	$	9,701,377	$	6,642	$	9,708,019	$	18,334,265	$	718,051,525	$	746,093,809
2013
Commercial and Agricultural
Commercial	$	581,281	$	-	$	581,281	$	1,646,418	$	45,879,749	$	48,107,448
Agricultural		81,036		-		81,036		-		10,584,902		10,665,938
Real Estate
Commercial Construction		139,826		-		139,826		8,221,745		44,377,212		52,738,783
Residential Construction		-		-		-		-		6,549,260		6,549,260
Commercial		2,287,341		-		2,287,341		7,366,703		332,129,494		341,783,538
Residential		5,273,586		-		5,273,586		4,933,420		196,050,921		206,257,927
Farmland		350,718		-		350,718		1,629,611		45,054,097		47,034,426
Consumer and Other
Consumer		453,580		3,991		457,571		307,456		24,910,533		25,675,560
Other		198,451		-		198,451		9,146		12,197,985		12,405,582
Total Loans	$	9,365,819	$	3,991	$	9,369,810	$	24,114,499	$	717,734,153	$	751,218,462

- 22 -

(4) Loans (Continued)

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.  Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $591,900, $968,700 and $1,634,600 for the years ended December 31, 2014, 2013 and 2012, respectively.

The following table details impaired loan data as of December 31, 2014:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	310,447	$	308,817	$	-	$	679,267	$	9,248		$	17,973
Agricultural		50,163		44,605		-		50,959		(6,029	)		3,000
Commercial Construction		9,573,141		3,463,502		-		3,376,033		13,111			12,833
Commercial Real Estate		17,129,876		16,227,379		-		18,350,015		462,355			474,936
Residential Real Estate		9,136,987		7,600,073		-		5,690,573		312,024			306,859
Farmland		1,450,759		1,449,226		-		949,003		(8,518	)		17,273
Consumer		201,695		201,695		-		211,775		14,455			15,495
Other		206,894		195,497		-		197,519		5,874			10,677
		38,059,962		29,490,794		-		29,505,144		802,520			859,046
With An Allowance Recorded
Commercial		96,580		96,580		96,580		419,464		(299	)		-
Agricultural		-		-		-		-		-			-
Commercial Construction		207,308		136,369		53,947		1,528,817		375			375
Commercial Real Estate		6,135,238		6,135,238		456,941		6,415,086		60,629			50,468
Residential Real Estate		2,072,919		2,065,158		414,684		1,829,102		84,177			86,472
Farmland		396,048		396,048		28,962		529,555		13,077			12,210
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		8,908,093		8,829,393		1,051,114		10,722,024		157,959			149,525
Total
Commercial		407,027		405,397		96,580		1,098,731		8,949			17,973
Agricultural		50,163		44,605		-		50,959		(6,029	)		3,000
Commercial Construction		9,780,449		3,599,871		53,947		4,904,850		13,486			13,208
Commercial Real Estate		23,265,114		22,362,617		456,941		24,765,101		522,984			525,404
Residential Real Estate		11,209,906		9,665,231		414,684		7,519,675		396,201			393,331
Farmland		1,846,807		1,845,274		28,962		1,478,558		4,559			29,483
Consumer		201,695		201,695		-		211,775		14,455			15,495
Other		206,894		195,497		-		197,519		5,874			10,677
	$	46,968,055	$	38,320,187	$	1,051,114	$	40,227,168	$	960,479		$	1,008,571

- 23 -

(4) Loans (Continued)

The following table details impaired loan data as of December 31, 2013:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	305,272	$	305,272	$	-	$	216,057	$	24,494		$	25,193
Agricultural		-		-		-		9,803		-			-
Commercial Construction		7,856,411		4,750,157		-		4,105,370		34,908			41,164
Commercial Real Estate		20,120,403		19,252,946		-		13,198,988		493,940			503,392
Residential Real Estate		7,836,718		6,361,592		-		4,564,666		224,439			209,330
Farmland		302,629		302,629		-		1,858,654		803			869
Consumer		313,194		307,456		-		252,944		18,469			21,109
Other		9,146		9,146		-		2,287		556			575
		36,743,773		31,289,198		-		24,208,769		797,609			801,632
With An Allowance Recorded
Commercial		1,452,798		1,452,798		433,714		1,689,125		14,845			20,748
Agricultural		-		-		-		-		-			-
Commercial Construction		5,922,674		3,471,587		830,546		5,025,176		(159	)		-
Commercial Real Estate		5,874,473		5,874,473		423,685		11,072,314		157,536			148,495
Residential Real Estate		1,949,301		1,849,301		526,005		3,661,706		25,739			24,414
Farmland		1,326,982		1,326,982		85,500		663,903		44,638			46,930
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		16,526,228		13,975,141		2,299,450		22,112,224		242,599			240,587
Total
Commercial		1,758,070		1,758,070		433,714		1,905,182		39,339			45,941
Agricultural		-		-		-		9,803		-			-
Commercial Construction		13,779,085		8,221,744		830,546		9,130,546		34,749			41,164
Commercial Real Estate		25,994,876		25,127,419		423,685		24,271,302		651,476			651,887
Residential Real Estate		9,786,019		8,210,893		526,005		8,226,372		250,178			233,744
Farmland		1,629,611		1,629,611		85,500		2,522,557		45,441			47,799
Consumer		313,194		307,456		-		252,944		18,469			21,109
Other		9,146		9,146		-		2,287		556			575
	$	53,270,001	$	45,264,339	$	2,299,450	$	46,320,993	$	1,040,208		$	1,042,219

- 24 -

(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.

- 25 -

(4) Loans (Continued)

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, 2014.  The following tables present the number of loan contracts restructured during the 12 months ended December 31, 2014 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
2014	# of Contracts		Pre-Modification		Post-Modification
Farmland		1	$	400,778	$	400,778
Commercial Construction		1		349,976		349,976
Commercial Real Estate		1		1,771,395		1,775,407
Residential Real Estate		1		49,194		49,194
Total Loans		4	$	2,571,343	$	2,575,355
2013
Commercial		1	$	83,748	$	81,277
Commercial Construction		2		228,633		225,959
Commercial Real Estate		1		225,852		225,852
Residential Real Estate		4		1,885,700		1,764,399
Total Loans		8	$	2,423,933	$	2,297,487
2012
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

- 26 -

(4) Loans (Continued)

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

	2014				2013				2012
	# of Contracts		Recorded Investment		# of Contracts		Recorded Investment		# of Contracts		Recorded Investment
Commercial		-	$	-		1	$	81,277		-	$	-
Commercial Real Estate		-		-		-		-		1		203,291
Residential Real Estate		-		-		-		-		1		10,000
Total Loans		-	$	-		1	$	81,277		2	$	213,291

At December 31, 2014, all restructured loans were performing as agreed.  During 2013 and 2012, restructured loans totaling $81,277 and $10,000 failed to continue to perform as agreed and were charged off in August 2013 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:

	2014			2013			2012
Balance, Beginning of Year	$	11,805,986		$	12,736,921		$	15,649,594
Provision for Loan Losses		1,308,000			4,485,000			6,784,767
Loans Charged Off		(5,104,491	)		(6,227,716	)		(10,454,175	)
Recoveries of Loans Previously Charged Off		792,821			811,781			756,735
Balance, End of Year	$	8,802,316		$	11,805,986		$	12,736,921

- 27 -

(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.

2014	Beginning Balance		Charge-Offs			Recoveries		Provision		Ending Balance
Commercial and Agricultural
Commercial	$	1,017,073	$	(624,944	)	$	76,002	$	29,430	$	497,561
Agricultural		293,886		-			2,700		7,586		304,172
Real Estate
Commercial Construction		1,782,179		(1,543,099	)		485,005		498,610		1,222,695
Residential Construction		138,092		-			-		-		138,092
Commercial		4,379,276		(1,326,825	)		90,042		522,284		3,664,777
Residential		3,278,269		(1,033,966	)		31,127		149,897		2,425,327
Farmland		311,494		(233,580	)		20,000		5,886		103,800
Consumer and Other
Consumer		243,253		(342,077	)		72,477		93,261		66,914
Other		362,464		-			15,468		1,046		378,978
	$	11,805,986	$	(5,104,491	)	$	792,821	$	1,308,000	$	8,802,316
2013
Commercial and Agricultural
Commercial	$	981,021	$	(120,690	)	$	55,829	$	100,913	$	1,017,073
Agricultural		296,175		(34,502	)		6,200		26,013		293,886
Real Estate
Commercial Construction		1,890,200		(2,071,162	)		253,459		1,709,682		1,782,179
Residential Construction		138,092		-			-		-		138,092
Commercial		5,162,839		(2,872,408	)		297,984		1,790,861		4,379,276
Residential		3,405,947		(706,242	)		64,583		513,981		3,278,269
Farmland		290,526		(20,977	)		21,762		20,183		311,494
Consumer and Other
Consumer		227,774		(397,822	)		93,520		319,781		243,253
Other		344,347		(3,913	)		18,444		3,586		362,464
	$	12,736,921	$	(6,227,716	)	$	811,781	$	4,485,000	$	11,805,986

- 28 -

(5) Allowance for Loan Losses (Continued)

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

The loss history period used at December 31, 2014 and 2013 was based on the loss rate from the eight quarters ended September 30, 2014 and 2013, respectively.  During 2012, the Company changed its loss history period used in calculating the ALLL from a one-year average to a rolling eight-quarter average.   At December 31, 2012 the loss history period used was based on the annual loss rate from calendar year 2011 and the first three quarters of 2012.

During 2014 management changed its methodology for calculating the allowance for loan losses to better reflect the estimated losses inherent in the portfolio.  Specific changes included:

· Reducing the historical loss ratios by including loan loss recoveries in the calculation.  Previously, management only included the loan charge-off amount and did not consider the effect of subsequent recoveries.

· Reducing the balance of those loans which are guaranteed by government agencies, such as SBA loans.  Previously, the entire balance of such loans was considered in the calculation of the general reserves; however, beginning in 2014, only the non-guaranteed portion of these loans is subject to the loss calculation.

Management feels these changes better align the calculation of the allowance for loan losses with the direction of the loan portfolio.  These changes did not result in a significant change to the recorded allowance for loan loss balance.

During the third quarter of 2013, management implemented a change to its methodology for calculating the allowance for loan losses.  This change was intended to better reflect the current position of the loan portfolio.  Prior to the third quarter, the allowance for loan loss calculation incorporated a qualitative factor related to improvements in credit administration.  These improvements, which began in 2008, included organizational changes to credit administration, specifically related to managing past due loans, grading of loans, recognition of losses and underwriting of new loans.  Primary among the organizational changes was the appointment of experienced lending officers to oversee the lending function, as well as the appointment of a chief credit officer.  Management feels these organizational changes are now fully implemented, as evidenced by a lower charge-off rate, and therefore, the qualitative factor is no longer relevant.  The removal of this qualitative factor did not result in a significant adjustment to the recorded allowance for loan loss balance.

- 29 -

(5) Allowance for Loan Losses (Continued)

The Company determines its individual 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 balance of $250,000 or more, regardless of the loans impairment classification.  Effective March 31, 2013, management increased the dollar threshold of this review process from $50,000 to $250,000.  The threshold change resulted in loans totaling $4.1 million at December 31, 2013 being removed from the individual impairment review process and being placed in the collective review process.

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, therefore, makes specific allocations to the allowance for those loans if warranted.  The total of such loans is $9,356,253 and $6,664,935 as of December 31, 2014 and 2013, respectively.  Specific allowance allocations were made for these loans totaling $747,982 and $260,742 as of December 31, 2014 and 2013, respectively.  Since these loans are not considered impaired, both the loan balance and related specific allocation are included in the “Collectively Evaluated for Impairment” column of the following tables.

At December 31, 2014, impaired loans totaling $3,885,411 were below the $250,000 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.  Likewise, at December 31, 2013 and 2012, impaired loans totaling $2,821,199 and $1,026,624, respectively, were below the $250,000 and $50,000 review threshold and 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.

	Ending Allowance Balance						Ending Loan Balance
2014	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	96,580	$	400,981	$	497,561	$	96,580	$	50,863,685	$	50,960,265
Agricultural		-		304,172		304,172		-		16,689,444		16,689,444
Real Estate
Commercial Construction		53,947		1,168,748		1,222,695		3,384,377		47,874,593		51,258,970
Residential Construction		-		138,092		138,092		-		11,220,683		11,220,683
Commercial		456,941		3,207,836		3,664,777		21,693,061		310,537,786		332,230,847
Residential		414,684		2,010,643		2,425,327		7,559,965		196,192,655		203,752,620
Farmland		28,962		74,838		103,800		1,700,793		48,250,191		49,950,984
Consumer and Other
Consumer		-		66,914		66,914		-		22,820,314		22,820,314
Other		-		378,978		378,978		-		7,209,682		7,209,682
Total End of Year Balance	$	1,051,114	$	7,751,202	$	8,802,316	$	34,434,776	$	711,659,033	$	746,093,809

- 30 -

(5) Allowance for Loan Losses (Continued)

	Ending Allowance Balance						Ending Loan Balance
2013	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	433,714	$	583,359	$	1,017,073	$	1,542,058	$	46,565,390	$	48,107,448
Agricultural		-		293,886		293,886		-		10,665,938		10,665,938
Real Estate
Commercial Construction		830,546		951,633		1,782,179		7,971,298		44,767,485		52,738,783
Residential Construction		-		138,092		138,092		-		6,549,260		6,549,260
Commercial		423,685		3,955,591		4,379,276		24,757,942		317,025,596		341,783,538
Residential		526,005		2,752,264		3,278,269		6,545,490		199,712,437		206,257,927
Farmland		85,500		225,994		311,494		1,617,206		45,417,220		47,034,426
Consumer and Other
Consumer		-		243,253		243,253		-		25,675,560		25,675,560
Other		-		362,464		362,464		9,146		12,396,436		12,405,582
Total End of Year Balance	$	2,299,450	$	9,506,536	$	11,805,986	$	42,443,140	$	708,775,322	$	751,218,462
2012
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

- 31 -

(6) Premises and Equipment

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

	2014			2013
Land	$	8,270,678		$	7,790,167
Building		23,894,943			23,832,454
Furniture, Fixtures and Equipment		12,243,988			13,846,579
Leasehold Improvements		990,626			970,346
Construction in Progress		14,090			236,591
		45,414,325			46,676,137
Accumulated Depreciation		(20,453,880	)		(21,799,668	)
	$	24,960,445		$	24,876,469

Depreciation charged to operations totaled $1,595,253 in 2014, $1,527,392 in 2013 and $1,676,820 in 2012.

Certain Company facilities and equipment are leased under various operating leases.  Rental expense approximated $613,000 for 2014, $490,000 for 2013 and $447,000 for 2012.

Future minimum rental payments as of December 31, 2014 are as follows:

Year Ending December 31	Amount
2015	$	129,457
2016		73,883
2017		38,500
	$	241,840

(7) Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at December 31, 2014, 2013 and 2012 was $10,401,832, $15,502,462 and $15,940,693, 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 2014, 2013 and 2012 as of December 31:

	2014			2013			2012
Balance, Beginning of Year	$	15,502,462		$	15,940,693		$	20,445,085
Additions		3,852,848			10,251,006			9,729,174
Sales of OREO		(7,102,136	)		(7,804,080	)		(9,711,890	)
Loss on Sale		(844,515	)		(1,563,739	)		(1,818,967	)
Provision for Losses		(1,006,827	)		(1,321,418	)		(2,702,709	)
Balance, End of Year	$	10,401,832		$	15,502,462		$	15,940,693

- 32 -

(8) Other 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, 2012	$	1,056,693	$	(833,183	)	$	223,510
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2013		1,056,693		(868,932	)		187,761
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2014	$	1,056,693	$	(904,681	)	$	152,012

Amortization expense related to the core deposit intangible was $35,749, $35,749 and $35,748 for the years ended December 31, 2014, 2013 and 2012.  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:

	2014		2013		2012
Current Federal (Benefit) Expense	$	1,335,337	$	156,642	$	(6,114	)
Deferred Federal Expense		1,932,950		2,178,222		1,204,439
Federal Income Tax Expense		3,268,287		2,334,864		1,198,325
Current State Income Tax  Expense		-		-		2,526
Federal and State Income Tax Expense	$	3,268,287	$	2,334,864	$	1,200,851

The federal income tax (benefit) expense of $3,268,287 in 2014, $2,334,864 in 2013 and $1,198,325 in 2012 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:

	2014			2013			2012
Statutory Federal Income Taxes	$	3,671,971		$	2,367,729		$	1,306,331
Tax-Exempt Interest		(74,138	)		(104,307	)		(89,983	)
Premiums on Officers’ Life Insurance		(186,712	)		(111,749	)		(59,603	)
Meal and Entertainment Disallowance		14,044			15,319			14,574
Other		(156,878	)		167,872			27,006
Actual Federal Income Taxes	$	3,268,287		$	2,334,864		$	1,198,325

- 33 -

(9) Income Taxes (Continued)

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

	2014			2013
Deferred Tax Assets
Allowance for Loan Losses	$	2,992,787		$	4,014,035
Other Real Estate		1,178,278			1,404,812
Deferred Compensation		287,365			303,380
Investments		340,000			340,000
Goodwill		256,714			301,238
Net Operating Loss Carryforward		-			730,484
Other		427,924			343,919
		5,483,068			7,437,868
Deferred Tax Liabilities
Premises and Equipment		(1,299,216	)		(1,322,377	)
Other		(4,185	)		(2,874	)
		(1,303,401	)		(1,325,251	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		2,495,896			4,550,362
Net Deferred Tax Assets	$	6,675,563		$	10,662,979

The deferred tax assets are included in Other Assets in the consolidated balance sheets.  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 as of December 31 follows.

	2014		2013			2012
Balance, Beginning	$	42,327	$	38,676		$	33,368
Positions Taken During the Current Year		-		7,247			11,794
Reductions Resulting from Lapse of Statutes of Limitation		42,327		(3,596	)		(6,486	)
Balance, Ending	$	-	$	42,327		$	38,676

The net decrease of $42,327 is included in income tax expense for the year ended December 31, 2014, while the net increase of $3,651 is included in income tax expense for the year ended December 31, 2013.

- 34 -

(10) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $511,387 and $400,552 as of December 31, 2014 and 2013, respectively.

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

	2014		2013
Interest-Bearing Demand	$	363,501,727	$	357,290,975
Savings		59,215,257		54,094,617
Time, $100,000 and Over		210,502,901		220,672,794
Other Time		217,743,826		240,210,393
	$	850,963,711	$	872,268,779

At December 31, 2014 and December 31, 2013, the Company had brokered deposits of $26,298,267 and $26,579,934, respectively.  All of these brokered deposits represent Certificate of Deposit Account Registry Service (CDARS) reciprocal deposits.  The CDARS deposits are ones in which customers placed core deposits into the CDARS program for FDIC insurance coverage and the Company receives reciprocal brokered deposits in a like amount.  The aggregate amount of short-term jumbo certificates of deposit, each with a minimum denomination of $100,000 was $140,832,026 and $148,388,694 as of December 31, 2014 and December 31, 2013, respectively.

As of December 31, 2014, the scheduled maturities of certificates of deposit are as follows:

Year	Amount
2015	$	302,584,884
2016		72,869,687
2017		25,349,468
2018		19,773,611
2019 and Thereafter		7,669,077
	$	428,246,727

(11) Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:

	2014		2013
Federal Home Loan Bank Advances	$	40,000,000	$	40,000,000

Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2017 to 2020 and interest rates ranging from 0.49 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, 2014, the book value of those loans pledged $101,128,937.  At December 31, 2014, the Company had remaining credit availability from the FHLB of $126,620,000.  The Company may be required to pledge additional qualifying collateral in order to utilize the full amount of the remaining credit line.

- 35 -

(11) Other Borrowed Money (Continued)

The aggregate stated maturities of other borrowed money at December 31, 2014 are as follows:

Year	Amount
2015	$	-
2016		-
2017		9,000,000
2018		20,500,000
2019 and Thereafter		10,500,000
	$	40,000,000

At December 31, 2014, $35,000,000 of FHLB advances are subject to fixed rates of interest, while the remaining $5,000,000 are subject to floating interest rates which will convert to fixed rates of interests next year.

The Company also has available federal funds lines of credit with various financial institutions totaling $43,500,000, of which there were none outstanding at December 31, 2014.

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, 2014, 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, 2014, 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

$

4,640

0.24260

2.68

2.92260

6/14/2034

6/17/2009

Colony Bankcorp Capital Trust I

4/13/2006

5,155

0.25510

1.50

1.75510

4/13/2036

4/13/2011

Colony Bankcorp Capital Trust II

3/12/2007

9,279

0.25660

1.65

1.90660

3/12/2037

3/12/2012

Colony Bankcorp Capital Trust III

9/14/2007

5,155

0.23260

1.40

1.63260

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 these offerings were used to fund certain acquisitions, pay off holding Company debt and inject capital into the bank subsidiary.

- 36 -

(12) Subordinated Debentures (Trust Preferred Securities) (Continued)

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.  On November 17, 2014, the Company reinstated interest payments on the Trust Preferred Securities and paid $1,069,695 to bring to current status.

(13) Preferred Stock

At December 31, 2014, the Company had 28,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) issued and outstanding with private investors.  The Company also had a warrant (the Warrant) to purchase up to 500,000 shares of the Company’s common stock outstanding with private investors.  Both the Preferred Stock and the Warrant originated in 2009 through transactions with the United States Department of the Treasury and were subsequently sold to the public through an auction process during 2013.

The Preferred Stock qualifies as Tier 1 capital and 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.  The Warrant may be exercised on or before January 9, 2019 at an exercise price of $8.40 per share.  No voting rights may be exercised with respect to the shares of the Warrant until the Warrant has been exercised.

The Preferred Stock requires a cumulative cash dividend be paid quarterly at a rate of 9 percent per annum.  Prior to January 9, 2014 the annual dividend rate for the Preferred Stock was 5 percent.  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 Preferred Stock.  On November 17, 2014, the Company reinstated dividend payments on the Preferred Stock and paid $5,492,749 of accumulated dividends in arrears to the holders of the Preferred Stock.

(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, the remaining shares which may be issued are 108,042 at December 31, 2014.  During 2014, 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 the shares, when issued, is amortized against earnings using the straight-line method over the restriction period, typically three years.

(15) Employee Benefit Plan

The Company offers a defined contribution 401(k) Profit Sharing Plan (the Plan) which covers substantially all employees who meet certain age and service requirements.  The Plan allows employees to make voluntary pre-tax salary deferrals to the Plan.  The Company, at its discretion, may elect to make an annual contribution to the Plan equal to a percentage of each participating employee’s salary.  Such discretionary contributions must be approved by the Company’s board of directors.  Employees are fully vested in the Company contributions after six years of service.  In 2014, the Company made a total contribution of $401,497 to the Plan.  The Company made no discretionary contributions in 2013 or 2012.

- 37 -

(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, 2014 and 2013, the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	2014		2013
Commitments to Extend Credit	$	68,742,000	$	65,688,000
Standby Letters of Credit		1,762,000		1,411,000

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.

- 38 -

(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 $845,192 and $892,294 as of December 31, 2014 and 2013, respectively.  Benefit payments under the contracts were $112,605 in 2014 and $188,240 in 2013.  Provisions charged to operations totaled $69,653 in 2014, $75,777 in 2013 and $82,250 in 2012.

The Company has purchased life insurance policies on the plans’ participants and uses the cash flow from these policies to partially fund the plan.  Fee income recognized with these plans totaled $167,911 in 2014, $164,073 in 2013 and $175,302 in 2012.

(18) Supplemental Cash Flow Information

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

	2014		2013		2012
Interest Expense	$	7,898,543	$	7,111,361	$	10,942,113
Income Taxes	$	113,000	$	173,883	$	-

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

	2014		2013			2012
Acquisitions of Real Estate Through Loan Foreclosures	$	3,852,848	$	10,251,006		$	9,729,174
Change In Unrealized Gain (Loss) on AFS Investment Securities	$	6,409,171	$	(13,523,050	)	$	(3,120,540	)

(19) Related Party Transactions

The following table reflects the activity and aggregate balance of direct and indirect loans to directors, executive officers or principal holders of equity securities of the Company. 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:

	2014			2013
Balance, Beginning	$	4,064,588		$	4,776,492
New Loans		6,406,713			7,610,259
Repayments		(7,237,352	)		(8,322,163	)
Balance, Ending	$	3,233,949		$	4,064,588

- 39 -

(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 and classified as Level 1.  If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable instruments and classified as Level 2.  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 and is classified as Level 1.

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.  Most loans are classified as Level 2, but impaired loans with a related allowance are classified as Level 3.

Bank-Owned Life Insurance - The carrying value of bank-owned life insurance policies approximates fair value and is classified as Level 1.

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.  Subordinated Debentures are classified as Level 1.

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.

- 40 -

(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:

	Carrying		Estimated		Level
2014	Amount		Fair Value		1		2		3
	(in Thousands)
Assets
Cash and Short-Term Investments	$	65,811	$	65,811	$	65,811	$	-	$	-
Investment Securities Available for Sale		274,595		274,595		-		273,647		948
Investment Securities Held to Maturity		30		30		-		30		-
Federal Home Loan Bank Stock		2,831		2,831		2,831		-		-
Loans, Net		736,930		738,948		-		731,170		7,778
Bank-Owned Life Insurance		14,531		14,531		14,531		-		-
Liabilities
Deposits		979,303		980,874		551,057		429,817		-
Subordinated Debentures		24,229		24,229		24,229		-		-
Other Borrowed Money		40,000		41,962		-		41,962		-
2013
Assets
Cash and Short-Term Investments	$	68,147	$	68,147	$	68,147	$	-	$	-
Investment Securities Available for Sale		263,258		263,258		-		262,317		941
Investment Securities Held to Maturity		37		37		-		37		-
Federal Home Loan Bank Stock		3,164		3,164		3,164		-		-
Loans, Net		739,052		741,112		-		729,436		11,676
Bank-Owned Life Insurance		10,165		10,165		10,165		-		-
Liabilities
Deposits		987,529		989,101		526,646		462,455		-
Subordinated Debentures		24,229		24,229		24,229		-		-
Other Borrowed Money		40,000		42,074		-		42,074		-

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.

- 41 -

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

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 on a recurring and nonrecurring basis, 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.

- 42 -

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

Fair Value Measurements (Continued)

Assets (Continued)

Impaired Loans -Impaired loans are those loans 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.

- 43 -

(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 and Nonrecurring 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, 2014 and 2013, 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, 2013.  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
2014	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	$	271,063,669	$	-	$	271,063,669	$	-
State, County and Municipal		3,530,917		-		2,582,527		948,390
	$	274,594,586	$	-	$	273,646,196	$	948,390
Nonrecurring
Impaired Loans	$	7,778,279	$	-	$	-	$	7,778,279
Other Real Estate	$	6,128,365	$	-	$	-	$	6,128,365
2013
Recurring
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	259,348,058	$	-	$	259,348,058	$	-
State, County and Municipal		3,909,832		-		2,968,567		941,265
	$	263,257,890	$	-	$	262,316,625		941,265
Nonrecurring
Impaired Loans	$	11,675,691	$	-	$	-	$	11,675,691
Other Real Estate	$	7,019,799	$	-	$	-	$	7,019,799

Liabilities

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

- 44 -

(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 tables present 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, 2014 and 2013.  These tables are comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2014		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Real Estate
Commercial Construction	$	82,422	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(22.00)% - 38.10% (8.05%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00% - 10.00% (5.00%)
Residential Real Estate		1,650,474	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(2.30)% - 191.70% (94.70%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00% - 10.00% (5.00%)
			Income Approach	Capitalization Rate	13.75%
Commercial Real Estate		5,678,297	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00% - 0.00% (0.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00% - 90.00% (45.00%)
			Income Approach	Capitalization Rate	11.00%
Farmland		367,086	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(8.30)% - 252.50% (122.10%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	10.00% - 50.00% (30.00%)
Other Real Estate Owned		6,128,365	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(40.00)% - 45.00% (2.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.33% - 69.36% (31.88%)
			Income Approach	Discount Rate	9.00%
				Capitalization Rate	10.00%

- 45 -

(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)

	December 31, 2013		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired Loans
Commercial	$	1,019,084	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-15.00% (7.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	10.00%-50.00% (30.00%)
Real Estate
Commercial Construction		2,641,041	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(16.00)%-28.00% (6.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-10.00% (5.00%)
			Income Approach	Capitalization Rate	8.50%
Residential Real Estate		1,323,296	Sales Comparison	Adjustment for Differences Between the Comparable Sales	0.00%-46.00% (23.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.00%-25.00% (12.50%)
Commercial Real Estate		5,450,788	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(27.20%)-216.80% (94.80%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	25.00%-90.00% (57.50%)
			Income Approach	Capitalization Rate	11.00%
Farmland		1,241,482	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(55.00%)-388.00% (166.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	10.00%-35.00% (22.50%)
Other Real Estate Owned		7,019,799	Sales Comparison	Adjustment for Differences Between the Comparable Sales	(10.00%)-319.10% (154.55%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions	0.36%-87.81% (29.99%)
			Income Approach	Discount Rate	10.00%

- 46 -

(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, 2014, 2013 and 2012:

	Available for Sale Securities
	2014		2013			2012
Balance, Beginning	$	941,265	$	1,138,238		$	1,122,427
Transfers into Level 3		-		-			788,933
Transfers out of Level 3		-		(41,908	)		-
Securities Purchased During the Year		-		-			-
Securities Called During the Year		-		-			(1,000,000	)
Loss on OTTI Impairment Included in Noninterest Income		-		(366,623	)		(59,568	)
Unrealized Gains Included in Other Comprehensive Income		7,125		211,558			78,201
Balance, Ending	$	948,390	$	941,265		$	1,138,238

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, 2013, the Company had transfers out of level 3 and into level 2.  The transfers out of level 3 were the result of increased market activity for these types of securities, as well as more current credit ratings on these securities.  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, 2014, 2013 or 2012.

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2014 and 2013:

December 31, 2014	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
State, County and Municipal	$	948,390	Discounted Cash Flow	Discount Rate or Yield		N/A*
December 31, 2013
State, County and Municipal	$	941,265	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.

- 47 -

(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.

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, 2014, 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.

- 48 -

(21) Regulatory Capital Matters (Continued)

The following table summarizes regulatory capital information as of December 31, 2014 and 2013 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, 2014	(In Thousands)
Total Capital to Risk-Weighted Assets
Consolidated	$	136,022		17.95	%	$	60,639		8.00	%		N/	A		N/	A
Colony Bank		127,833		16.89			60,542		8.00		$	75,678			10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		127,220		16.78			30,320		4.00			N/	A		N/	A
Colony Bank		119,031		15.73			30,271		4.00			45,407			6.00
Tier I Capital to Average Assets
Consolidated		127,220		11.18			45,509		4.00			N/	A		N/	A
Colony Bank		119,031		10.50			45,364		4.00			56,705			5.00
As of December 31, 2013
Total Capital to Risk-Weighted Assets
Consolidated	$	129,569		17.06	%	$	60,791		8.00	%		N/	A		N/	A
Colony Bank		131,024		17.29			60,638		8.00		$	75,797			10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		120,048		15.81			30,396		4.00			N/	A		N/	A
Colony Bank		121,521		16.03			30,319		4.00			45,478			6.00
Tier I Capital to Average Assets
Consolidated		120,048		10.57			45,419		4.00			N/	A		N/	A
Colony Bank		121,521		10.72			45,333		4.00			56,666			5.00

Effective October 22, 2014, the Board Resolution (BR) the bank had been operating under was lifted.  The BR required that, prior to declaring or paying any cash dividend to the Company, the Bank must obtain written consent of its regulators.  In November 2014, the Bank paid a $12,000,000 dividend to the Company.  This dividend was utilized to bring the interest payments of the Trust Preferred Securities and the dividend payments of the Preferred Stock to a current status and to fund holding company operations for the coming year.

- 49 -

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

The parent company’s balance sheets as of December 31, 2014 and 2013 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

	2014			2013
Cash	$	5,750,652		$	1,422,289
Premises and Equipment, Net		1,199,639			1,272,965
Investment in Subsidiary, at Equity		115,066,948			114,559,866
Other		1,708,380			1,221,285
Total Assets	$	123,725,619		$	118,476,405
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Dividends Payable	$	315,000		$	3,119,146
Other		154,307			1,174,020
		469,307			4,293,166
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		28,000,000			28,000,000
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2014 and 2013		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		38,287,934			33,444,913
Accumulated Other Comprehensive Loss, Net of Tax		(4,844,974	)		(9,075,026	)
		99,027,312			89,954,239
Total Liabilities and Stockholders’ Equity	$	123,725,619		$	118,476,405

- 50 -

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

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2014			2013		2012
Income
Dividends from Subsidiary	$	12,015,572		$	1,515,549	$	17,372
Management Fees		581,334			581,334		590,422
Other		100,269			96,953		101,397
	$	12,697,175			2,193,836		709,191
Expenses
Interest		517,381			516,641		554,004
Amortization		938			2,250		2,250
Salaries and Employee Benefits		782,152			748,149		735,919
Other		538,847			543,139		558,151
		1,839,318			1,810,179		1,850,324
Income (Loss) Before Taxes and Equity in Undistributed Earnings of Subsidiary		10,857,857			383,657		(1,141,133	)
Income Tax Benefits		396,738			406,518		365,691
Income (Loss) Before Equity in Undistributed Earnings of Subsidiary		11,254,595			790,175		(775,442	)
Equity in Undistributed Earnings of Subsidiary		(3,722,970	)		3,838,870		3,416,740
Net Income		7,531,625			4,629,045		2,641,298
Preferred Stock Dividends		2,688,604			1,508,761		1,435,385
Net Income Available to Common Stockholders	$	4,843,021		$	3,120,284	$	1,205,913

- 51 -

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

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31

	2014			2013			2012
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Other Comprehensive Income (Loss)
Gains (Losses) on Securities Arising During the Year		6,432,906			(13,886,854	)		(283,076	)
Tax Effect		(2,187,189	)		4,721,531			96,246
Realized Gains (Losses) on Sale of AFS Securities		(23,735	)		(2,819	)		(2,897,032	)
Tax Effect		8,070			959			984,991
Impairment Loss on Securities		-			366,623			59,568
Tax Effect		-			(124,652	)		(20,253	)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		4,230,052			(8,925,212	)		(2,059,556	)
Comprehensive Income (Loss)	$	11,761,677		$	(4,296,167	)	$	581,742

- 52 -

(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

	2014			2013			2012
Cash Flows from Operating Activities
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities
Depreciation and Amortization		75,347			80,711			93,427
Equity in Undistributed Earnings of Subsidiary		3,722,970			(3,838,870	)		(3,416,740	)
Change in Interest Payable		(1,069,695	)		516,641			529,922
Other		(437,115	)		(390,962	)		(405,379	)
		9,823,132			996,565			(557,472	)
Cash Flows from Investing Activities
Purchases of Premises and Equipment		(2,020	)		(68,708	)		-
Cash Flows from Financing Activities
Dividends Paid on Preferred Stock		(5,492,749	)		-			-
Increase (Decrease) in Cash		4,328,363			927,857			(557,472	)
Cash, Beginning		1,422,289			494,432			1,051,904
Cash, Ending	$	5,750,652		$	1,422,289		$	494,432

- 53 -

(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, 2014, 2013 and 2012:

	2014		2013		2012
Numerator
Net Income (Loss) Available to Common Stockholders	$	4,843,021	$	3,120,284	$	1,205,913
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,439,258
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		8,439,258
Earnings (Loss) Per Share - Basic	$	0.57	$	0.37	$	0.14
Earnings (Loss) Per Share - Diluted	$	0.57	$	0.37	$	0.14

For the years ended December 31, 2014, 2013 and 2012, respectively, the Company has excluded 500,000 shares of common stock equivalents because the strike price of the common stock equivalents would cause them to have an anti-dilutive effect.

- 54 -

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 10, 2015	/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 10, 2015	/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, 2014 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 10, 2015

/s/ Terry L. Hester

Terry L. Hester

Chief Financial and Accounting Officer

March 10, 2015

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.

XML

Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2014

Other 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, 2012	$	1,056,693	$	(833,183	)	$	223,510
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2013		1,056,693		(868,932	)		187,761
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2014	$	1,056,693	$	(904,681	)	$	152,012

XML

Loans (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 746,093,809	$ 751,218,462	$ 747,050,011
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	50,960,265	48,107,448	55,684,492
Agricultural [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	16,689,444	10,665,938	6,210,953
Commercial Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	51,258,970	52,738,783	53,808,056
Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	11,220,683	6,549,260	5,852,238
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	332,230,847	341,783,538	334,386,177
Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	203,752,620	206,257,927	203,844,522
Farmland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	49,950,984	47,034,426	49,056,861
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	22,820,314	25,675,560	29,777,776
Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 7,209,682	$ 12,405,582	$ 8,428,936

XML

Regulatory Capital Matters (Tables)

12 Months Ended

Dec. 31, 2014

Regulatory Capital Matters [Abstract]

Regulatory capital information

The following table summarizes regulatory capital information as of December 31, 2014 and 2013 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, 2014	(In Thousands)
Total Capital to Risk-Weighted Assets
Consolidated	$	136,022		17.95	%	$	60,639		8.00	%		N/	A		N/	A
Colony Bank		127,833		16.89			60,542		8.00		$	75,678			10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		127,220		16.78			30,320		4.00			N/	A		N/	A
Colony Bank		119,031		15.73			30,271		4.00			45,407			6.00
Tier I Capital to Average Assets
Consolidated		127,220		11.18			45,509		4.00			N/	A		N/	A
Colony Bank		119,031		10.50			45,364		4.00			56,705			5.00
As of December 31, 2013
Total Capital to Risk-Weighted Assets
Consolidated	$	129,569		17.06	%	$	60,791		8.00	%		N/	A		N/	A
Colony Bank		131,024		17.29			60,638		8.00		$	75,797			10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		120,048		15.81			30,396		4.00			N/	A		N/	A
Colony Bank		121,521		16.03			30,319		4.00			45,478			6.00
Tier I Capital to Average Assets
Consolidated		120,048		10.57			45,419		4.00			N/	A		N/	A
Colony Bank		121,521		10.72			45,333		4.00			56,666			5.00

XML

Restricted Stock - Unearned Compensation (Details) (Restricted Stock [Member])	12 Months Ended
	Dec. 31, 2014
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 available for issue (in shares)	108,042
Cost recognition period	3 years

XML

Loans, Credit Quality Indicator (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 746,093,809	$ 751,218,462	$ 747,050,011
Loan balance for reviewing high risk loans minimum	250,000	250,000	50,000
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	50,960,265	48,107,448	55,684,492
Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,689,444	10,665,938	6,210,953
Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	51,258,970	52,738,783	53,808,056
Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	11,220,683	6,549,260	5,852,238
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	332,230,847	341,783,538	334,386,177
Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	203,752,620	206,257,927	203,844,522
Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	49,950,984	47,034,426	49,056,861
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	22,820,314	25,675,560	29,777,776
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,209,682	12,405,582	8,428,936
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	686,071,625	683,692,592
Pass [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	46,230,110	41,759,281
Pass [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,504,404	10,637,705
Pass [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	45,063,306	42,668,320
Pass [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	11,220,683	6,341,530
Pass [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	309,828,039	317,567,749
Pass [Member] | Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	180,549,640	182,977,361
Pass [Member] | Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	47,548,106	44,776,355
Pass [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	22,114,932	24,608,175
Pass [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,012,405	12,356,116
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	27,139,338	29,618,883
Special Mention [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,905,361	2,770,284
Special Mention [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	27,101	16,830
Special Mention [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,740,488	1,512,301
Special Mention [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	207,730
Special Mention [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	11,220,166	10,759,954
Special Mention [Member] | Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	10,582,704	13,523,478
Special Mention [Member] | Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	414,521	507,122
Special Mention [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	248,997	320,473
Special Mention [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	711
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	32,882,846	37,906,987
Substandard [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,824,794	3,577,883
Substandard [Member] | Agricultural [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	157,939	11,403
Substandard [Member] | Commercial Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,455,176	8,558,162
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	11,182,642	13,455,835
Substandard [Member] | Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	12,620,276	9,757,088
Substandard [Member] | Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,988,357	1,750,949
Substandard [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	456,385	746,912
Substandard [Member] | Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 197,277	$ 48,755

XML

Fair Value of Financial Instruments and Fair Value Measurements, Quantitative Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Impaired Loans [Member] | Commercial [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value			1,019,084
Impaired Loans [Member] | Sales Comparison [Member] | Commercial [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)			10.00%
Impaired Loans [Member] | Sales Comparison [Member] | Commercial [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)			15.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)			50.00%
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)			(7.50%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)			(30.00%)
Real Estate [Member] | Commercial Construction [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	82,422		2,641,041
Real Estate [Member] | Residential Real Estate [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	1,650,474		1,323,296
Real Estate [Member] | Commercial Real Estate [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	5,678,297		5,450,788
Real Estate [Member] | Farmland [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	367,086		1,241,482
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)	(22.00%)		(16.00%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.00%		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)	38.10%		28.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	10.00%		10.00%
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)	(8.05%)		(6.00%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	(5.00%)		(5.00%)
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)	(2.30%)		0.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.00%		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)	191.70%		46.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	10.00%		25.00%
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)	(94.70%)		(23.00%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	(5.00%)		(12.50%)
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)	0.00%		(27.20%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.00%		25.00%
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)	0.00%		216.80%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	90.00%		90.00%
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)	0.00%		(94.80%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	(45.00%)		(57.50%)
Real Estate [Member] | Sales Comparison [Member] | Farmland [Member] | Nonrecurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	(8.30%)		(55.00%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	10.00%		10.00%
Real Estate [Member] | Sales Comparison [Member] | Farmland [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	252.50%		388.00%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	50.00%		35.00%
Real Estate [Member] | Sales Comparison [Member] | Farmland [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	(122.10%)		(166.50%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	(30.00%)		(22.50%)
Real Estate [Member] | Income Approach [Member] | Commercial Construction [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Capitalization Rate (in hundredths)			8.50%
Real Estate [Member] | Income Approach [Member] | Residential Real Estate [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Capitalization Rate (in hundredths)	13.75%
Real Estate [Member] | Income Approach [Member] | Commercial Real Estate [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Capitalization Rate (in hundredths)	11.00%		11.00%
Other Real Estate Owned [Member] | Nonrecurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	6,128,365		7,019,799
Other Real Estate Owned [Member] | Sales Comparison [Member] | Nonrecurring [Member] | Minimum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	(40.00%)		(10.00%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	0.33%		0.36%
Other Real Estate Owned [Member] | Sales Comparison [Member] | Nonrecurring [Member] | Maximum [Member]
Unobservable Inputs [Abstract]
Adjustment for Differences Between the Comparable Sales (in hundredths)	45.00%		319.10%
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	69.36%		87.81%
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)	(2.50%)		(154.55%)
Management Adjustments for Age of Appraisals and/or Current Market Conditions (in hundredths)	(31.88%)		(29.99%)
Other Real Estate Owned [Member] | Income Approach [Member] | Nonrecurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)	9.00%		10.00%
Capitalization Rate (in hundredths)	10.00%
State, County and Municipal [Member] | Recurring [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value	948,390		941,265
State, County and Municipal [Member] | Discounted Cash Flow Member] | Recurring [Member] | Weighted Average [Member]
Unobservable Inputs [Abstract]
Discount Rate (in hundredths)		[1]		[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.

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Activity of related party loans

A summary of activity of related party loans is shown below:

	2014			2013
Balance, Beginning	$	4,064,588		$	4,776,492
New Loans		6,406,713			7,610,259
Repayments		(7,237,352	)		(8,322,163	)
Balance, Ending	$	3,233,949		$	4,064,588

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Cash and Balances Due from Banks (Tables)

12 Months Ended

Dec. 31, 2014

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:

	2014		2013
Cash on Hand and Cash Items	$	9,974,663	$	10,531,340
Noninterest-Bearing Deposits with Other Banks		14,498,207		15,160,265
	$	24,472,870	$	25,691,605

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Regulatory Capital Matters (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Ratios [Abstract]
Dividends paid	$ 12,000,000
Consolidated [Member]
Total Capital to Risk-Weighted Assets [Abstract]
Actual Amount	136,022,000	129,569,000
For Capital Adequacy Purposes, Amount	60,639,000	60,791,000
Amount [Abstract]
Actual Amount	127,220,000	120,048,000
For Capital Adequacy Purposes, Amount	30,320,000	30,396,000
Ratios [Abstract]
Actual Ratio (in hundredths)	17.95%	17.06%
For Capital Adequacy Purposes, Ratio (in hundredths)	8.00%	8.00%
Actual Ratio (in hundredths)	16.78%	15.81%
For Capital Adequacy Purposes, Ratio (in hundredths)	4.00%	4.00%
Amount [Abstract]
Actual Amount	127,220,000	120,048,000
For Capital Adequacy Purposes, Amount	45,509,000	45,419,000
Ratios [Abstract]
Actual Ratio (in hundredths)	11.18%	10.57%
For Capital Adequacy Purposes, Ratio (in hundredths)	4.00%	4.00%
Colony Bank [Member]
Total Capital to Risk-Weighted Assets [Abstract]
Actual Amount	127,833,000	131,024,000
For Capital Adequacy Purposes, Amount	60,542,000	60,638,000
To be Well Capitalized Under Prompt Corrective Actions Provisions, Amount	75,678,000	75,797,000
Amount [Abstract]
Actual Amount	119,031,000	121,521,000
For Capital Adequacy Purposes, Amount	30,271,000	30,319,000
To be Well Capitalized Under Prompt Corrective Actions Provisions, Amount	45,407,000	45,478,000
Ratios [Abstract]
Actual Ratio (in hundredths)	16.89%	17.29%
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)	15.73%	16.03%
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	119,031,000	121,521,000
For Capital Adequacy Purposes, Amount	45,364,000	45,333,000
To be Well Capitalized Under Prompt Corrective Actions Provisions, Amount	$ 56,705,000	$ 56,666,000
Ratios [Abstract]
Actual Ratio (in hundredths)	10.50%	10.72%
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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Deferred Compensation Plan (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 Age	Dec. 31, 2013	Dec. 31, 2012
Deferred Compensation Plan [Abstract]
Minimum age requirement for deferred compensation	65
Accrued liabilities under the plan	$ 845,192	$ 892,294
Benefit payments under contracts	112,605	188,240
Benefit provision charged to operations	69,653	75,777	82,250
Fee income recognized with deferred compensation plans	$ 167,911	$ 164,073	$ 175,302

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Loans, Impaired Financing Receivable (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	$ 38,059,962	$ 36,743,773
Unpaid Contractual Principal Balance With An Allowance Recorded	8,908,093	16,526,228
Unpaid Contractual Principal Balance, Total	46,968,055	53,270,001
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	29,490,794	31,289,198
Impaired Balance With An Allowance Recorded	8,829,393	13,975,141
Impaired Balance, Total	38,320,187	45,264,339
Related Allowance [Abstract]
Related Allowance With An Allowance Recorded	1,051,114	2,299,450
Related Allowance, Total	1,051,114	2,299,450
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	29,505,144	24,208,769
Average Recorded Investment With An Allowance Recorded	10,722,024	22,112,224
Average Recorded Investment, Total	40,227,168	46,320,993
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	802,520	797,609
Interest Income Recognized With An Allowance Recorded	157,959	242,599
Interest Income Recognized, Total	960,479	1,040,208
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	859,046	801,632
Interest Income Collected With An Allowance Recorded	149,525	240,587
Interest Income Collected, Total	1,008,571	1,042,219
Commercial [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	310,447	305,272
Unpaid Contractual Principal Balance With An Allowance Recorded	96,580	1,452,798
Unpaid Contractual Principal Balance, Total	407,027	1,758,070
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	308,817	305,272
Impaired Balance With An Allowance Recorded	96,580	1,452,798
Impaired Balance, Total	405,397	1,758,070
Related Allowance [Abstract]
Related Allowance With An Allowance Recorded	96,580	433,714
Related Allowance, Total	96,580	433,714
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	679,267	216,057
Average Recorded Investment With An Allowance Recorded	419,464	1,689,125
Average Recorded Investment, Total	1,098,731	1,905,182
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	9,248	24,494
Interest Income Recognized With An Allowance Recorded	(299)	14,845
Interest Income Recognized, Total	8,949	39,339
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	17,973	25,193
Interest Income Collected With An Allowance Recorded	0	20,748
Interest Income Collected, Total	17,973	45,941
Agricultural [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	50,163	0
Unpaid Contractual Principal Balance With An Allowance Recorded	0	0
Unpaid Contractual Principal Balance, Total	50,163	0
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	44,605	0
Impaired Balance With An Allowance Recorded	0	0
Impaired Balance, Total	44,605	0
Related Allowance [Abstract]
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	50,959	9,803
Average Recorded Investment With An Allowance Recorded	0	0
Average Recorded Investment, Total	50,959	9,803
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	(6,029)	0
Interest Income Recognized With An Allowance Recorded	0	0
Interest Income Recognized, Total	(6,029)	0
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	3,000	0
Interest Income Collected With An Allowance Recorded	0	0
Interest Income Collected, Total	3,000	0
Commercial Construction [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	9,573,141	7,856,411
Unpaid Contractual Principal Balance With An Allowance Recorded	207,308	5,922,674
Unpaid Contractual Principal Balance, Total	9,780,449	13,779,085
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	3,463,502	4,750,157
Impaired Balance With An Allowance Recorded	136,369	3,471,587
Impaired Balance, Total	3,599,871	8,221,744
Related Allowance [Abstract]
Related Allowance With An Allowance Recorded	53,947	830,546
Related Allowance, Total	53,947	830,546
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	3,376,033	4,105,370
Average Recorded Investment With An Allowance Recorded	1,528,817	5,025,176
Average Recorded Investment, Total	4,904,850	9,130,546
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	13,111	34,908
Interest Income Recognized With An Allowance Recorded	375	(159)
Interest Income Recognized, Total	13,486	34,749
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	12,833	41,164
Interest Income Collected With An Allowance Recorded	375	0
Interest Income Collected, Total	13,208	41,164
Commercial Real Estate [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	17,129,876	20,120,403
Unpaid Contractual Principal Balance With An Allowance Recorded	6,135,238	5,874,473
Unpaid Contractual Principal Balance, Total	23,265,114	25,994,876
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	16,227,379	19,252,946
Impaired Balance With An Allowance Recorded	6,135,238	5,874,473
Impaired Balance, Total	22,362,617	25,127,419
Related Allowance [Abstract]
Related Allowance With An Allowance Recorded	456,941	423,685
Related Allowance, Total	456,941	423,685
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	18,350,015	13,198,988
Average Recorded Investment With An Allowance Recorded	6,415,086	11,072,314
Average Recorded Investment, Total	24,765,101	24,271,302
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	462,355	493,940
Interest Income Recognized With An Allowance Recorded	60,629	157,536
Interest Income Recognized, Total	522,984	651,476
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	474,936	503,392
Interest Income Collected With An Allowance Recorded	50,468	148,495
Interest Income Collected, Total	525,404	651,887
Residential Real Estate [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	9,136,987	7,836,718
Unpaid Contractual Principal Balance With An Allowance Recorded	2,072,919	1,949,301
Unpaid Contractual Principal Balance, Total	11,209,906	9,786,019
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	7,600,073	6,361,592
Impaired Balance With An Allowance Recorded	2,065,158	1,849,301
Impaired Balance, Total	9,665,231	8,210,893
Related Allowance [Abstract]
Related Allowance With An Allowance Recorded	414,684	526,005
Related Allowance, Total	414,684	526,005
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	5,690,573	4,564,666
Average Recorded Investment With An Allowance Recorded	1,829,102	3,661,706
Average Recorded Investment, Total	7,519,675	8,226,372
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	312,024	224,439
Interest Income Recognized With An Allowance Recorded	84,177	25,739
Interest Income Recognized, Total	396,201	250,178
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	306,859	209,330
Interest Income Collected With An Allowance Recorded	86,472	24,414
Interest Income Collected, Total	393,331	233,744
Farmland [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	1,450,759	302,629
Unpaid Contractual Principal Balance With An Allowance Recorded	396,048	1,326,982
Unpaid Contractual Principal Balance, Total	1,846,807	1,629,611
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	1,449,226	302,629
Impaired Balance With An Allowance Recorded	396,048	1,326,982
Impaired Balance, Total	1,845,274	1,629,611
Related Allowance [Abstract]
Related Allowance With An Allowance Recorded	28,962	85,500
Related Allowance, Total	28,962	85,500
Average Recorded Investment [Abstract]
Average Recorded Investment With No Related Allowance Recorded	949,003	1,858,654
Average Recorded Investment With An Allowance Recorded	529,555	663,903
Average Recorded Investment, Total	1,478,558	2,522,557
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	(8,518)	803
Interest Income Recognized With An Allowance Recorded	13,077	44,638
Interest Income Recognized, Total	4,559	45,441
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	17,273	869
Interest Income Collected With An Allowance Recorded	12,210	46,930
Interest Income Collected, Total	29,483	47,799
Consumer [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	201,695	313,194
Unpaid Contractual Principal Balance With An Allowance Recorded	0	0
Unpaid Contractual Principal Balance, Total	201,695	313,194
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	201,695	307,456
Impaired Balance With An Allowance Recorded	0	0
Impaired Balance, Total	201,695	307,456
Related Allowance [Abstract]
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	211,775	252,944
Average Recorded Investment With An Allowance Recorded	0	0
Average Recorded Investment, Total	211,775	252,944
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	14,455	18,469
Interest Income Recognized With An Allowance Recorded	0	0
Interest Income Recognized, Total	14,455	18,469
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	15,495	21,109
Interest Income Collected With An Allowance Recorded	0	0
Interest Income Collected, Total	15,495	21,109
Other [Member]
Unpaid Contractual Principal Balance [Abstract]
Unpaid Contractual Principal Balance With No Related Allowance Recorded	206,894	9,146
Unpaid Contractual Principal Balance With An Allowance Recorded	0	0
Unpaid Contractual Principal Balance, Total	206,894	9,146
Impaired Balance [Abstract]
Impaired Balance With No Related Allowance Recorded	195,497	9,146
Impaired Balance With An Allowance Recorded	0	0
Impaired Balance, Total	195,497	9,146
Related Allowance [Abstract]
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	197,519	2,287
Average Recorded Investment With An Allowance Recorded	0	0
Average Recorded Investment, Total	197,519	2,287
Interest Income Recognized [Abstract]
Interest Income Recognized With No Related Allowance Recorded	5,874	556
Interest Income Recognized With An Allowance Recorded	0	0
Interest Income Recognized, Total	5,874	556
Interest Income Collected [Abstract]
Interest Income Collected With No Related Allowance Recorded	10,677	575
Interest Income Collected With An Allowance Recorded	0	0
Interest Income Collected, Total	$ 10,677	$ 575

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Fair Value of Financial Instruments and Fair Value Measurements (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Assets [Abstract]
Investment Securities Available for Sale	$ 274,594,586	$ 263,257,890
Investment Securities Held to Maturity	29,923	37,309
Liabilities [Abstract]
Discounted rate to account for selling and marketing costs (in hundredths)	10.00%
Recurring [Member]
Assets [Abstract]
Investment Securities Available for Sale	274,594,586	263,257,890
Recurring [Member] | Carrying Amount [Member]
Assets [Abstract]
Cash and Short-Term Investments	65,811,000	68,147,000
Investment Securities Available for Sale	274,595,000	263,258,000
Investment Securities Held to Maturity	30,000	37,000
Federal Home Loan Bank Stock	2,831,000	3,164,000
Loans, Net	736,930,000	739,052,000
Bank-Owned Life Insurance	14,531,000	10,165,000
Liabilities [Abstract]
Deposits	979,303,000	987,529,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	40,000,000	40,000,000
Recurring [Member] | Estimated Fair Value [Member]
Assets [Abstract]
Cash and Short-Term Investments	65,811,000	68,147,000
Investment Securities Available for Sale	274,595,000	263,258,000
Investment Securities Held to Maturity	30,000	37,000
Federal Home Loan Bank Stock	2,831,000	3,164,000
Loans, Net	738,948,000	741,112,000
Bank-Owned Life Insurance	14,531,000	10,165,000
Liabilities [Abstract]
Deposits	980,874,000	989,101,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	41,962,000	42,074,000
Level 1 [Member] | Recurring [Member]
Assets [Abstract]
Cash and Short-Term Investments	65,811,000	68,147,000
Investment Securities Available for Sale	0	0
Investment Securities Held to Maturity	0	0
Federal Home Loan Bank Stock	2,831,000	3,164,000
Loans, Net	0	0
Bank-Owned Life Insurance	14,531,000	10,165,000
Liabilities [Abstract]
Deposits	551,057,000	526,646,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	0	0
Level 2 [Member] | Recurring [Member]
Assets [Abstract]
Cash and Short-Term Investments	0	0
Investment Securities Available for Sale	273,646,196	262,316,625
Investment Securities Held to Maturity	30,000	37,000
Federal Home Loan Bank Stock	0	0
Loans, Net	731,170,000	729,436,000
Bank-Owned Life Insurance	0	0
Liabilities [Abstract]
Deposits	429,817,000	462,455,000
Subordinated Debentures	0	0
Other Borrowed Money	41,962,000	42,074,000
Level 3 [Member] | Recurring [Member]
Assets [Abstract]
Cash and Short-Term Investments	0	0
Investment Securities Available for Sale	948,390	941,265
Investment Securities Held to Maturity	0	0
Federal Home Loan Bank Stock	0	0
Loans, Net	7,778,000	11,676,000
Bank-Owned Life Insurance	0	0
Liabilities [Abstract]
Deposits	0	0
Subordinated Debentures	0	0
Other Borrowed Money	$ 0	$ 0

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Earnings Per Share (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Numerator [Abstract]
Net Income (Loss) Available to Common Stockholders	$ 4,843,021	$ 3,120,284	$ 1,205,913
Denominator [Abstract]
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share (in shares)	8,439,258	8,439,258	8,439,258
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	8,439,258
Earnings (loss) Per Share - Basic (in dollars per share)	$ 0.57	$ 0.37	$ 0.14
Earnings (loss) Per Share - Diluted (in dollars per share)	$ 0.57	$ 0.37	$ 0.14
Shares of common stock equivalents excluded from calculation of diluted earnings per share (in shares)	500,000	500,000	500,000
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

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Fair Value of Financial Instruments and Fair Value Measurements, Recurring and Nonrecurring Basis (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities Available for Sale	$ 274,594,586	$ 263,257,890
Available-for-Sale Securities [Member]
Fair Value Measured Using Significant Unobservable Inputs (Level 3) [Roll Forward]
Balance, Beginning	941,265	1,138,238	1,122,427
Transfers into Level 3	0	0	788,933
Transfers out of Level 3	0	(41,908)	0
Securities Purchased During the Year	0	0	0
Securities Called During the Year	0	0	(1,000,000)
Loss on OTTI Impairment Included in Noninterest Income	0	(366,623)	(59,568)
Unrealized Gains Included in Other Comprehensive Income	7,125	211,558	78,201
Balance, Ending	948,390	941,265	1,138,238
Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government Agencies Mortgage-Backed	271,063,669	259,348,058
State, County & Municipal	3,530,917	3,909,832
Securities Available for Sale	274,594,586	263,257,890
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
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	271,063,669	259,348,058
State, County & Municipal	2,582,527	2,968,567
Securities Available for Sale	273,646,196	262,316,625
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	948,390	941,265
Securities Available for Sale	948,390	941,265
Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired Loans	7,778,279	11,675,691
Other Real Estate	6,128,365	7,019,799
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	7,778,279	11,675,691
Other Real Estate	$ 6,128,365	$ 7,019,799

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Employee Benefit Plan (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Employee Benefit Plan [Abstract]
Employee service period	6 years
Discretionary contributions by employer	$ 401,497	$ 0	$ 0

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2014

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:

	2014		2013		2012
Interest Expense	$	7,898,543	$	7,111,361	$	10,942,113
Income Taxes	$	113,000	$	173,883	$	-

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

	2014		2013			2012
Acquisitions of Real Estate Through Loan Foreclosures	$	3,852,848	$	10,251,006		$	9,729,174
Change In Unrealized Gain (Loss) on AFS Investment Securities	$	6,409,171	$	(13,523,050	)	$	(3,120,540	)

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings per share

The following table presents earnings per share for the years ended December 31, 2014, 2013 and 2012:

	2014		2013		2012
Numerator
Net Income (Loss) Available to Common Stockholders	$	4,843,021	$	3,120,284	$	1,205,913
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,439,258
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		8,439,258
Earnings (Loss) Per Share - Basic	$	0.57	$	0.37	$	0.14
Earnings (Loss) Per Share - Diluted	$	0.57	$	0.37	$	0.14

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Other Borrowed Money (Tables)

12 Months Ended

Dec. 31, 2014

Other Borrowed Money [Abstract]

Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:

	2014		2013
Federal Home Loan Bank Advances	$	40,000,000	$	40,000,000

Aggregate stated maturities of other borrowed money

The aggregate stated maturities of other borrowed money at December 31, 2014 are as follows:

Year	Amount
2015	$	-
2016		-
2017		9,000,000
2018		20,500,000
2019 and Thereafter		10,500,000
	$	40,000,000

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Related Party Transactions (Details) (Loans to directors, executive officers or principal holders [Member], USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Loans to directors, executive officers or principal holders [Member]
Activity of related party loans [Roll Forward]
Balance, Beginning	$ 4,064,588	$ 4,776,492
New Loans	6,406,713	7,610,259
Repayments	(7,237,352)	(8,322,163)
Balance, Ending	$ 3,233,949	$ 4,064,588

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2014

Premises and Equipment [Abstract]

Premises and equipment

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

	2014			2013
Land	$	8,270,678		$	7,790,167
Building		23,894,943			23,832,454
Furniture, Fixtures and Equipment		12,243,988			13,846,579
Leasehold Improvements		990,626			970,346
Construction in Progress		14,090			236,591
		45,414,325			46,676,137
Accumulated Depreciation		(20,453,880	)		(21,799,668	)
	$	24,960,445		$	24,876,469

Future minimum rental payments

Future minimum rental payments as of December 31, 2014 are as follows:

Year Ending December 31	Amount
2015	$	129,457
2016		73,883
2017		38,500
	$	241,840

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Cash and Balances Due from Banks (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Cash and Due from Banks [Abstract]
Cash on Hand and Cash Items	$ 9,974,663	$ 10,531,340
Noninterest-Bearing Deposits with Other Banks	14,498,207	15,160,265
Cash and balances due from banks	24,472,870	25,691,605
Reserve balances	$ 1,278,000	$ 1,252,000

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Other Borrowed Money (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Other Borrowed Money [Abstract]
Federal Home Loan Bank Advances	$ 40,000,000	$ 40,000,000
Federal Home Loan Bank advances, earliest maturity	2017
Federal Home Loan Bank advances, last maturity	2020
Interest rate on Federal Home Loan Bank Advances, Minimum (in hundredths)	0.49%
Interest rate on Federal Home Loan Bank Advances, Maximum (in hundredths)	4.75%
Book value of loans pledged	101,128,937
Remaining credit availability from FHLB	126,620,000
Aggregate stated maturities of other borrowed money [Abstract]
2015	0
2016	0
2017	9,000,000
2018	20,500,000
2019 and Thereafter	10,500,000
Federal Home Loan Bank Advances	40,000,000	40,000,000
Federal Home Loan Bank Advances subject to fixed rate	35,000,000
Federal Home Loan Bank Advances subject to floating rate	5,000,000
Federal funds lines of credit	43,500,000
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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Allowance for Loan Losses, evaluated for impairment (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Ending allowance balance [Abstract]
Individually evaluated for impairment	$ 1,051,114	$ 2,299,450	$ 4,272,107
Collectively evaluated for impairment	7,751,202	9,506,536	8,464,814
Total ending allowance balance	8,802,316	11,805,986	12,736,921	15,649,594
Ending loan balance [Abstract]
Individually evaluated for impairment	34,434,776	42,443,140	55,071,195
Collectively evaluated for impairment	711,659,033	708,775,322	691,978,816
Total Loans	746,093,809	751,218,462	747,050,011
Commercial [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	96,580	433,714	462,555
Collectively evaluated for impairment	400,981	583,359	518,466
Total ending allowance balance	497,561	1,017,073	981,021	1,070,560
Ending loan balance [Abstract]
Individually evaluated for impairment	96,580	1,542,058	2,512,133
Collectively evaluated for impairment	50,863,685	46,565,390	53,172,359
Total Loans	50,960,265	48,107,448	55,684,492
Agricultural [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	304,172	293,886	296,175
Total ending allowance balance	304,172	293,886	296,175	297,168
Ending loan balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	16,689,444	10,665,938	6,210,953
Total Loans	16,689,444	10,665,938	6,210,953
Commercial Construction [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	53,947	830,546	1,732,534
Collectively evaluated for impairment	1,168,748	951,633	157,666
Total ending allowance balance	1,222,695	1,782,179	1,890,200	3,122,594
Ending loan balance [Abstract]
Individually evaluated for impairment	3,384,377	7,971,298	13,892,135
Collectively evaluated for impairment	47,874,593	44,767,485	39,915,921
Total Loans	51,258,970	52,738,783	53,808,056
Residential Construction [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	138,092	138,092	138,092
Total ending allowance balance	138,092	138,092	138,092	138,092
Ending loan balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	11,220,683	6,549,260	5,852,238
Total Loans	11,220,683	6,549,260	5,852,238
Commercial Real Estate [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	456,941	423,685	1,236,526
Collectively evaluated for impairment	3,207,836	3,955,591	3,926,313
Total ending allowance balance	3,664,777	4,379,276	5,162,839	6,448,064
Ending loan balance [Abstract]
Individually evaluated for impairment	21,693,061	24,757,942	28,205,405
Collectively evaluated for impairment	310,537,786	317,025,596	306,180,772
Total Loans	332,230,847	341,783,538	334,386,177
Residential [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	414,684	526,005	840,492
Collectively evaluated for impairment	2,010,643	2,752,264	2,565,455
Total ending allowance balance	2,425,327	3,278,269	3,405,947	3,695,357
Ending loan balance [Abstract]
Individually evaluated for impairment	7,559,965	6,545,490	8,022,249
Collectively evaluated for impairment	196,192,655	199,712,437	195,822,273
Total Loans	203,752,620	206,257,927	203,844,522
Farmland [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	28,962	85,500	0
Collectively evaluated for impairment	74,838	225,994	290,526
Total ending allowance balance	103,800	311,494	290,526	364,663
Ending loan balance [Abstract]
Individually evaluated for impairment	1,700,793	1,617,206	2,393,775
Collectively evaluated for impairment	48,250,191	45,417,220	46,663,086
Total Loans	49,950,984	47,034,426	49,056,861
Consumer [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	66,914	243,253	227,774
Total ending allowance balance	66,914	243,253	227,774	205,154
Ending loan balance [Abstract]
Individually evaluated for impairment	0	0	28,007
Collectively evaluated for impairment	22,820,314	25,675,560	29,749,769
Total Loans	22,820,314	25,675,560	29,777,776
Other [Member]
Ending allowance balance [Abstract]
Individually evaluated for impairment	0	0	0
Collectively evaluated for impairment	378,978	362,464	344,347
Total ending allowance balance	378,978	362,464	344,347	307,942
Ending loan balance [Abstract]
Individually evaluated for impairment	0	9,146	17,491
Collectively evaluated for impairment	7,209,682	12,396,436	8,411,445
Total Loans	$ 7,209,682	$ 12,405,582	$ 8,428,936

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

12 Months Ended

Dec. 31, 2014

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:

	Carrying		Estimated		Level
2014	Amount		Fair Value		1		2		3
	(in Thousands)
Assets
Cash and Short-Term Investments	$	65,811	$	65,811	$	65,811	$	-	$	-
Investment Securities Available for Sale		274,595		274,595		-		273,647		948
Investment Securities Held to Maturity		30		30		-		30		-
Federal Home Loan Bank Stock		2,831		2,831		2,831		-		-
Loans, Net		736,930		738,948		-		731,170		7,778
Bank-Owned Life Insurance		14,531		14,531		14,531		-		-
Liabilities
Deposits		979,303		980,874		551,057		429,817		-
Subordinated Debentures		24,229		24,229		24,229		-		-
Other Borrowed Money		40,000		41,962		-		41,962		-
2013
Assets
Cash and Short-Term Investments	$	68,147	$	68,147	$	68,147	$	-	$	-
Investment Securities Available for Sale		263,258		263,258		-		262,317		941
Investment Securities Held to Maturity		37		37		-		37		-
Federal Home Loan Bank Stock		3,164		3,164		3,164		-		-
Loans, Net		739,052		741,112		-		729,436		11,676
Bank-Owned Life Insurance		10,165		10,165		10,165		-		-
Liabilities
Deposits		987,529		989,101		526,646		462,455		-
Subordinated Debentures		24,229		24,229		24,229		-		-
Other Borrowed Money		40,000		42,074		-		42,074		-

Assets and liabilities measured at fair value on a recurring and nonrecurring basis

Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring 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, 2014 and 2013, 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, 2013.  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
2014	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	$	271,063,669	$	-	$	271,063,669	$	-
State, County and Municipal		3,530,917		-		2,582,527		948,390
	$	274,594,586	$	-	$	273,646,196	$	948,390
Nonrecurring
Impaired Loans	$	7,778,279	$	-	$	-	$	7,778,279
Other Real Estate	$	6,128,365	$	-	$	-	$	6,128,365
2013
Recurring
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	259,348,058	$	-	$	259,348,058	$	-
State, County and Municipal		3,909,832		-		2,968,567		941,265
	$	263,257,890	$	-	$	262,316,625		941,265
Nonrecurring
Impaired Loans	$	11,675,691	$	-	$	-	$	11,675,691
Other Real Estate	$	7,019,799	$	-	$	-	$	7,019,799

Quantitative information for financial instruments measured at fair value

The following tables present 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, 2014 and 2013.  These tables are comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2014		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Real Estate
Commercial Construction	$	82,422	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(22.00)% - 38.10% (8.05%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 10.00% (5.00%)
Residential Real Estate		1,650,474	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(2.30)% - 191.70% (94.70%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 10.00% (5.00%)
			Income Approach	Capitalization Rate		13.75%
Commercial Real Estate		5,678,297	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00% - 0.00% (0.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 90.00% (45.00%)
			Income Approach	Capitalization Rate		11.00%
Farmland		367,086	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(8.30)% - 252.50% (122.10%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		10.00% - 50.00% (30.00%)
Other Real Estate Owned		6,128,365	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(40.00)% - 45.00% (2.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.33% - 69.36% (31.88%)
			Income Approach	Discount Rate		9.00%
				Capitalization Rate		10.00%

	December 31, 2013		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired Loans
Commercial	$	1,019,084	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00% - 15.00% (7.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		10.00% - 50.00% (30.00%)
Real Estate
Commercial Construction		2,641,041	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(16.00)% - 28.00% (6.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 10.00% (5.00%)
			Income Approach	Capitalization Rate		8.50%
Residential Real Estate		1,323,296	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00% - 46.00% (23.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 25.00% (12.50%)
Commercial Real Estate		5,450,788	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(27.20%) - 216.80% (94.80%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		25.00% - 90.00% (57.50%)
			Income Approach	Capitalization Rate		11.00%
Farmland		1,241,482	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(55.00%) - 388.00% (166.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		10.00%-35.00% (22.50%)
Other Real Estate Owned		7,019,799	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(10.00%) - 319.10% (154.55%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.36% - 87.81% (29.99%)
			Income Approach	Discount Rate		10.00%

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, 2014, 2013 and 2012:

	Available for Sale Securities
	2014		2013			2012
Balance, Beginning	$	941,265	$	1,138,238		$	1,122,427
Transfers into Level 3		-		-			788,933
Transfers out of Level 3		-		(41,908	)		-
Securities Purchased During the Year		-		-			-
Securities Called During the Year		-		-			(1,000,000	)
Loss on OTTI Impairment Included in Noninterest Income		-		(366,623	)		(59,568	)
Unrealized Gains Included in Other Comprehensive Income		7,125		211,558			78,201
Balance, Ending	$	948,390	$	941,265		$	1,138,238

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2014 and 2013:

December 31, 2014	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
State, County and Municipal	$	948,390	Discounted Cash Flow	Discount Rate or Yield		N/A*
December 31, 2013
State, County and Municipal	$	941,265	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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Cash and Balances Due from Banks

12 Months Ended

Dec. 31, 2014

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:

	2014		2013
Cash on Hand and Cash Items	$	9,974,663	$	10,531,340
Noninterest-Bearing Deposits with Other Banks		14,498,207		15,160,265
	$	24,472,870	$	25,691,605

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 $1,278,000 and $1,252,000 at December 31, 2014 and 2013, respectively.

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Premises and Equipment (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Premises and equipment [Abstract]
Premises and Equipment, Gross	$ 45,414,325	$ 46,676,137
Accumulated Depreciation	(20,453,880)	(21,799,668)
Premises and Equipment	24,960,445	24,876,469
Depreciation	1,595,253	1,527,392	1,676,820
Rental expense	613,000	490,000	447,000
Future minimum rental payments [Abstract]
2015	129,457
2016	73,883
2017	38,500
Total future minimum payments	241,840
Land [Member]
Premises and equipment [Abstract]
Premises and Equipment, Gross	8,270,678	7,790,167
Building [Member]
Premises and equipment [Abstract]
Premises and Equipment, Gross	23,894,943	23,832,454
Furniture, Fixtures and Equipment [Member]
Premises and equipment [Abstract]
Premises and Equipment, Gross	12,243,988	13,846,579
Leasehold Improvements [Member]
Premises and equipment [Abstract]
Premises and Equipment, Gross	990,626	970,346
Construction in Progress [Member]
Premises and equipment [Abstract]
Premises and Equipment, Gross	$ 14,090	$ 236,591

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Subordinated Debentures (Trust Preferred Securities) (Tables)

12 Months Ended

Dec. 31, 2014

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

$

4,640

0.24260

2.68

2.92260

6/14/2034

6/17/2009

Colony Bankcorp Capital Trust I

4/13/2006

5,155

0.25510

1.50

1.75510

4/13/2036

4/13/2011

Colony Bankcorp Capital Trust II

3/12/2007

9,279

0.25660

1.65

1.90660

3/12/2037

3/12/2012

Colony Bankcorp Capital Trust III

9/14/2007

5,155

0.23260

1.40

1.63260

9/14/2037

9/14/2012

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Financial Information of Colony Bankcorp, Inc (Parent Only)

12 Months Ended

Dec. 31, 2014

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, 2014 and 2013 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

	2014			2013
Cash	$	5,750,652		$	1,422,289
Premises and Equipment, Net		1,199,639			1,272,965
Investment in Subsidiary, at Equity		115,066,948			114,559,866
Other		1,708,380			1,221,285
Total Assets	$	123,725,619		$	118,476,405
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Dividends Payable	$	315,000		$	3,119,146
Other		154,307			1,174,020
		469,307			4,293,166
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		28,000,000			28,000,000
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2014 and 2013		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		38,287,934			33,444,913
Accumulated Other Comprehensive Loss, Net of Tax		(4,844,974	)		(9,075,026	)
		99,027,312			89,954,239
Total Liabilities and Stockholders’ Equity	$	123,725,619		$	118,476,405

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2014			2013		2012
Income
Dividends from Subsidiary	$	12,015,572		$	1,515,549	$	17,372
Management Fees		581,334			581,334		590,422
Other		100,269			96,953		101,397
	$	12,697,175			2,193,836		709,191
Expenses
Interest		517,381			516,641		554,004
Amortization		938			2,250		2,250
Salaries and Employee Benefits		782,152			748,149		735,919
Other		538,847			543,139		558,151
		1,839,318			1,810,179		1,850,324
Income (Loss) Before Taxes and Equity in Undistributed Earnings of Subsidiary		10,857,857			383,657		(1,141,133	)
Income Tax Benefits		396,738			406,518		365,691
Income (Loss) Before Equity in Undistributed Earnings of Subsidiary		11,254,595			790,175		(775,442	)
Equity in Undistributed Earnings of Subsidiary		(3,722,970	)		3,838,870		3,416,740
Net Income		7,531,625			4,629,045		2,641,298
Preferred Stock Dividends		2,688,604			1,508,761		1,435,385
Net Income Available to Common Stockholders	$	4,843,021		$	3,120,284	$	1,205,913

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31

	2014			2013			2012
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Other Comprehensive Income (Loss)
Gains (Losses) on Securities Arising During the Year		6,432,906			(13,886,854	)		(283,076	)
Tax Effect		(2,187,189	)		4,721,531			96,246
Realized Gains (Losses) on Sale of AFS Securities		(23,735	)		(2,819	)		(2,897,032	)
Tax Effect		8,070			959			984,991
Impairment Loss on Securities		-			366,623			59,568
Tax Effect		-			(124,652	)		(20,253	)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		4,230,052			(8,925,212	)		(2,059,556	)
Comprehensive Income (Loss)	$	11,761,677		$	(4,296,167	)	$	581,742

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2014			2013			2012
Cash Flows from Operating Activities
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities
Depreciation and Amortization		75,347			80,711			93,427
Equity in Undistributed Earnings of Subsidiary		3,722,970			(3,838,870	)		(3,416,740	)
Change in Interest Payable		(1,069,695	)		516,641			529,922
Other		(437,115	)		(390,962	)		(405,379	)
		9,823,132			996,565			(557,472	)
Cash Flows from Investing Activities
Purchases of Premises and Equipment		(2,020	)		(68,708	)		-
Cash Flows from Financing Activities
Dividends Paid on Preferred Stock		(5,492,749	)		-			-
Increase (Decrease) in Cash		4,328,363			927,857			(557,472	)
Cash, Beginning		1,422,289			494,432			1,051,904
Cash, Ending	$	5,750,652		$	1,422,289		$	494,432

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Regulatory Capital Matters

12 Months Ended

Dec. 31, 2014

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.

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, 2014, 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, 2014 and 2013 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, 2014	(In Thousands)
Total Capital to Risk-Weighted Assets
Consolidated	$	136,022		17.95	%	$	60,639		8.00	%		N/	A		N/	A
Colony Bank		127,833		16.89			60,542		8.00		$	75,678			10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		127,220		16.78			30,320		4.00			N/	A		N/	A
Colony Bank		119,031		15.73			30,271		4.00			45,407			6.00
Tier I Capital to Average Assets
Consolidated		127,220		11.18			45,509		4.00			N/	A		N/	A
Colony Bank		119,031		10.50			45,364		4.00			56,705			5.00
As of December 31, 2013
Total Capital to Risk-Weighted Assets
Consolidated	$	129,569		17.06	%	$	60,791		8.00	%		N/	A		N/	A
Colony Bank		131,024		17.29			60,638		8.00		$	75,797			10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		120,048		15.81			30,396		4.00			N/	A		N/	A
Colony Bank		121,521		16.03			30,319		4.00			45,478			6.00
Tier I Capital to Average Assets
Consolidated		120,048		10.57			45,419		4.00			N/	A		N/	A
Colony Bank		121,521		10.72			45,333		4.00			56,666			5.00

Effective October 22, 2014, the Board Resolution (BR) the bank had been operating under was lifted.  The BR required that, prior to declaring or paying any cash dividend to the Company, the Bank must obtain written consent of its regulators.  In November 2014, the Bank paid a $12,000,000 dividend to the Company.  This dividend was utilized to bring the interest payments of the Trust Preferred Securities and the dividend payments of the Preferred Stock to a current status and to fund holding company operations for the coming year.

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Loans, Past Due (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	$ 9,701,377	$ 9,365,819
Accruing Loans 90 Days or More Past Due	6,642	3,991
Total Accruing Loans Past Due	9,708,019	9,369,810
Nonaccrual Loans	18,334,265	24,114,499
Current Loans	718,051,525	717,734,153
Total Loans	746,093,809	751,218,462	747,050,011
Interest income	591,900	968,700	1,634,600
Commercial [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	872,321	581,281
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	872,321	581,281
Nonaccrual Loans	405,398	1,646,418
Current Loans	49,682,546	45,879,749
Total Loans	50,960,265	48,107,448	55,684,492
Agricultural [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	0	81,036
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	0	81,036
Nonaccrual Loans	44,605	0
Current Loans	16,644,839	10,584,902
Total Loans	16,689,444	10,665,938	6,210,953
Commercial Construction [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	141,850	139,826
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	141,850	139,826
Nonaccrual Loans	3,251,290	8,221,745
Current Loans	47,865,830	44,377,212
Total Loans	51,258,970	52,738,783	53,808,056
Residential Construction [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	0	0
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	0	0
Nonaccrual Loans	0	0
Current Loans	11,220,683	6,549,260
Total Loans	11,220,683	6,549,260	5,852,238
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	2,309,114	2,287,341
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	2,309,114	2,287,341
Nonaccrual Loans	5,325,047	7,366,703
Current Loans	324,596,686	332,129,494
Total Loans	332,230,847	341,783,538	334,386,177
Residential [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	5,782,701	5,273,586
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	5,782,701	5,273,586
Nonaccrual Loans	7,461,507	4,933,420
Current Loans	190,508,412	196,050,921
Total Loans	203,752,620	206,257,927	203,844,522
Farmland [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	281,967	350,718
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	281,967	350,718
Nonaccrual Loans	1,449,226	1,629,611
Current Loans	48,219,791	45,054,097
Total Loans	49,950,984	47,034,426	49,056,861
Consumer [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	313,424	453,580
Accruing Loans 90 Days or More Past Due	6,642	3,991
Total Accruing Loans Past Due	320,066	457,571
Nonaccrual Loans	201,695	307,456
Current Loans	22,298,553	24,910,533
Total Loans	22,820,314	25,675,560	29,777,776
Other [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Accruing Loans 30 to 89 Days Past Due	0	198,451
Accruing Loans 90 Days or More Past Due	0	0
Total Accruing Loans Past Due	0	198,451
Nonaccrual Loans	195,497	9,146
Current Loans	7,014,185	12,197,985
Total Loans	$ 7,209,682	$ 12,405,582	$ 8,428,936

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies [Abstract]

Financial instrument outstanding with contract amount representing credit risk

At December 31, 2014 and 2013, the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	2014		2013
Commitments to Extend Credit	$	68,742,000	$	65,688,000
Standby Letters of Credit		1,762,000		1,411,000

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Earnings Per Share

12 Months Ended

Dec. 31, 2014

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, 2014, 2013 and 2012:

	2014		2013		2012
Numerator
Net Income (Loss) Available to Common Stockholders	$	4,843,021	$	3,120,284	$	1,205,913
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,439,258
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		8,439,258
Earnings (Loss) Per Share - Basic	$	0.57	$	0.37	$	0.14
Earnings (Loss) Per Share - Diluted	$	0.57	$	0.37	$	0.14

For the years ended December 31, 2014, 2013 and 2012, respectively, the Company has excluded 500,000 shares of common stock equivalents because the strike price of the common stock equivalents would cause them to have an anti-dilutive effect.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

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 and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans.

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 2014.  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, 2014, 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 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 may not be 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, interest-bearing checking 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 2014, 2013, 2012 and 2011 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.

Bank-Owned Life Insurance

Bank-Owned Life Insurance

The Company has purchased life insurance on the lives of certain key members of management and directors.  The life insurance policies are recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement, if applicable.  Increases in the cash surrender value are recorded as other income in the consolidated statements of income.The cash surrender value of the insurance contracts is recorded in other assets on the consolidated balance sheets in the amount of $14,530,851 and $13,940,176 as of December 31, 2014 and 2013, respectively.

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

ASU 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. ASU 2014-01 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).  For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with ASC 970-323.   ASU 2014-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014, and will be applied retrospectively to all periods presented.  The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40):  Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The objective of this guidance is to clarify when an in-substance repossession or foreclosure occurs; that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Company’s consolidated financial statements.

ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective for the Company on January 1, 2017. The Company is still evaluating the potential impact on the Company's consolidated financial statements.

ASU 2014-11, Transfers and Servicing (Topic 860). ASU 2014-11 requires that repurchase-to-maturity transactions be accounted for as secured borrowings consistent with the accounting for other repurchase agreements. In addition, ASU 2014-11 requires separate accounting for repurchase financings, which entails the transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty. ASU 2014-11 requires entities to disclose certain information about transfers accounted for as sales in transactions that are economically similar to repurchase agreements. In addition, ASU 2014-11 requires disclosures related to collateral, remaining contractual tenor and of the potential risks associated with repurchase agreements, securities lending transactions and repurchase-to-maturity transactions. ASU 2014-11 is effective for the Company on January 1, 2015 and is not expected to have a significant impact on the Company’s consolidated financial statements.

ASU 2014-14, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure. The amendments require a mortgage loan to be derecognized and a separate receivable to be recognized upon foreclosure if the loan has a government guarantee that is nonseparable from the loan before foreclosure, the creditor has the ability and intent to convey the real estate property to the guarantor, and any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Additionally, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor upon foreclosure. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2014. Management does not believe the amendments will have a material impact to the Company’s consolidated financial statements.

ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU 2014-15 explicitly requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist which raise substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures.  ASU 2014-15 is effective for annual periods ending after December 15, 2016, and annual and interim periods thereafter, with early adoption permitted.  The adoption of ASU 2014-15 is not expected to have a material effect on the Company’s consolidated financial statements or disclosures.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

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 and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans.

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 2014.  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, 2014, 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 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 may not be 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, interest-bearing checking 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 2014, 2013, 2012 and 2011 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.

Bank-Owned Life Insurance

The Company has purchased life insurance on the lives of certain key members of management and directors.  The life insurance policies are recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement, if applicable.  Increases in the cash surrender value are recorded as other income in the consolidated statements of income.The cash surrender value of the insurance contracts is recorded in other assets on the consolidated balance sheets in the amount of $14,530,851 and $13,940,176 as of December 31, 2014 and 2013, respectively.

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

ASU 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. ASU 2014-01 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met.  Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit).  For those investments in qualified affordable housing projects not accounted for using the proportional amortization method, the investment should be accounted for as an equity method investment or a cost method investment in accordance with ASC 970-323.   ASU 2014-01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014, and will be applied retrospectively to all periods presented.  The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

ASU No. 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40):  Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The objective of this guidance is to clarify when an in-substance repossession or foreclosure occurs; that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Company’s consolidated financial statements.

ASU 2014-09, Revenue from Contracts with Customers (Topic 606).  ASU 2014-09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is effective for the Company on January 1, 2017. The Company is still evaluating the potential impact on the Company's consolidated financial statements.

ASU 2014-11, Transfers and Servicing (Topic 860). ASU 2014-11 requires that repurchase-to-maturity transactions be accounted for as secured borrowings consistent with the accounting for other repurchase agreements. In addition, ASU 2014-11 requires separate accounting for repurchase financings, which entails the transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty. ASU 2014-11 requires entities to disclose certain information about transfers accounted for as sales in transactions that are economically similar to repurchase agreements. In addition, ASU 2014-11 requires disclosures related to collateral, remaining contractual tenor and of the potential risks associated with repurchase agreements, securities lending transactions and repurchase-to-maturity transactions. ASU 2014-11 is effective for the Company on January 1, 2015 and is not expected to have a significant impact on the Company’s consolidated financial statements.

ASU 2014-14, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure. The amendments require a mortgage loan to be derecognized and a separate receivable to be recognized upon foreclosure if the loan has a government guarantee that is nonseparable from the loan before foreclosure, the creditor has the ability and intent to convey the real estate property to the guarantor, and any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Additionally, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor upon foreclosure. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2014. Management does not believe the amendments will have a material impact to the Company’s consolidated financial statements.

ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  ASU 2014-15 explicitly requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist which raise substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures.  ASU 2014-15 is effective for annual periods ending after December 15, 2016, and annual and interim periods thereafter, with early adoption permitted.  The adoption of ASU 2014-15 is not expected to have a material effect on the Company’s consolidated financial statements or disclosures.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Significant Accounting Policies [Abstract]

Estimated useful lives and methods of depreciation

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

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income tax expense

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

	2014		2013		2012
Current Federal (Benefit) Expense	$	1,335,337	$	156,642	$	(6,114	)
Deferred Federal Expense		1,932,950		2,178,222		1,204,439
Federal Income Tax Expense		3,268,287		2,334,864		1,198,325
Current State Income Tax  Expense		-		-		2,526
Federal and State Income Tax Expense	$	3,268,287	$	2,334,864	$	1,200,851

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 $3,268,287 in 2014, $2,334,864 in 2013 and $1,198,325 in 2012 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:

	2014			2013			2012
Statutory Federal Income Taxes	$	3,671,971		$	2,367,729		$	1,306,331
Tax-Exempt Interest		(74,138	)		(104,307	)		(89,983	)
Premiums on Officers’ Life Insurance		(186,712	)		(111,749	)		(59,603	)
Meal and Entertainment Disallowance		14,044			15,319			14,574
Other		(156,878	)		167,872			27,006
Actual Federal Income Taxes	$	3,268,287		$	2,334,864		$	1,198,325

Deferred tax assets and liabilities

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

	2014			2013
Deferred Tax Assets
Allowance for Loan Losses	$	2,992,787		$	4,014,035
Other Real Estate		1,178,278			1,404,812
Deferred Compensation		287,365			303,380
Investments		340,000			340,000
Goodwill		256,714			301,238
Net Operating Loss Carryforward		-			730,484
Other		427,924			343,919
		5,483,068			7,437,868
Deferred Tax Liabilities
Premises and Equipment		(1,299,216	)		(1,322,377	)
Other		(4,185	)		(2,874	)
		(1,303,401	)		(1,325,251	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		2,495,896			4,550,362
Net Deferred Tax Assets	$	6,675,563		$	10,662,979

Unrecognized taxes

The deferred tax assets are included in Other Assets in the consolidated balance sheets.  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 as of December 31 follows.

	2014		2013			2012
Balance, Beginning	$	42,327	$	38,676		$	33,368
Positions Taken During the Current Year		-		7,247			11,794
Reductions Resulting from Lapse of Statutes of Limitation		42,327		(3,596	)		(6,486	)
Balance, Ending	$	-	$	42,327		$	38,676

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Investment Securities (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 Security	Dec. 31, 2013	Dec. 31, 2012
Securities Available for Sale [Abstract]
Amortized Cost	$ 281,935,455	$ 277,007,930
Gross Unrealized Gains	183,083	133,806
Gross Unrealized Losses	(7,523,952)	(13,883,846)
Fair Value	274,594,586	263,257,890
Securities Held to Maturity [Abstract]
Amortized Cost	29,796	37,062
Fair Value	29,923	37,309
Available-for-sale Amortized Cost [Abstract]
Due in One Year or Less	715,764
Due After One Year Through Five Years	718,836
Due After Five Years Through Ten Years	1,158,938
Due After Ten Years	922,862
Total	3,516,400
Mortgage-Backed Securities	278,419,055
Amortized Cost	281,935,455
Available-for-sale Fair Value [Abstract]
Due in One Year or Less	717,138
Due After One Year Through Five Years	730,598
Due After Five Years Through Ten Years	1,157,251
Due After Ten Years	925,930
Total	3,530,917
Mortgage-Backed Securities	271,063,669
Fair Value	274,594,586
Held-to-maturity Amortized Cost [Abstract]
Due in One Year or Less	29,796
Due After One Year Through Five Years	0
Due After Five Years Through Ten Years	0
Due After Ten Years	0
Total	29,796
Mortgage-Backed Securities	0
Amortized Cost	29,796	37,062
Held-to-maturity Fair Value [Abstract]
Due in One Year or Less	29,923
Due After One Year Through Five Years	0
Due After Five Years Through Ten Years	0
Due After Ten Years	0
Total	29,923
Mortgage-Backed Securities	0
Fair Value	29,923	37,309
Proceeds from sale of investment securities available for sale	13,620,956	72,672,795	227,690,806
Available-for-sale securities, gross realized gains	67,601	442,124	3,084,666
Gross realized gains on held to maturity investment	1,800
Available-for-sale securities, gross realized losses	45,666	805,928	247,202
Investment securities pledged	135,531,563	112,912,815
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value	66,609,319	191,710,870
Less Than 12 Months, Gross Unrealized Losses	(396,896)	(9,524,651)
12 Months or Greater, Fair value	185,025,099	63,193,601
12 Months or Greater, Gross Unrealized Losses	(7,127,056)	(4,359,195)
Total, Fair Value	251,634,418	254,904,471
Total, Gross Unrealized Losses	(7,523,952)	(13,883,846)
Debt securities with unrealized losses, depreciated (in hundredths)	2.90%
Number of asset-backed security owned	1
Number of issuance of trust preferred security	1
Book value of trust preferred security	0
Other than temporary impairment written off		366,623	59,568
US Government Agencies Mortgage-Backed [Member]
Securities Available for Sale [Abstract]
Amortized Cost	278,419,055	273,029,073
Gross Unrealized Gains	155,902	118,843
Gross Unrealized Losses	(7,511,288)	(13,799,858)
Fair Value	271,063,669	259,348,058
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value	66,609,319	190,063,827
Less Than 12 Months, Gross Unrealized Losses	(396,896)	(9,440,663)
12 Months or Greater, Fair value	183,645,552	63,193,601
12 Months or Greater, Gross Unrealized Losses	(7,114,392)	(4,359,195)
Total, Fair Value	250,254,871	253,257,428
Total, Gross Unrealized Losses	(7,511,288)	(13,799,858)
State, County and Municipal [Member]
Securities Available for Sale [Abstract]
Amortized Cost	3,516,400	3,978,857
Gross Unrealized Gains	27,181	14,963
Gross Unrealized Losses	(12,664)	(83,988)
Fair Value	3,530,917	3,909,832
Securities Held to Maturity [Abstract]
Amortized Cost	29,796	37,062
Gross Unrealized Gains	127	247
Gross Unrealized Losses	0	0
Fair Value	29,923	37,309
Held-to-maturity Amortized Cost [Abstract]
Amortized Cost	29,796	37,062
Held-to-maturity Fair Value [Abstract]
Fair Value	29,923	37,309
Continuous unrealized loss position [Abstract]
Less Than 12 Months, Fair value	0	1,647,043
Less Than 12 Months, Gross Unrealized Losses	0	(83,988)
12 Months or Greater, Fair value	1,379,547	0
12 Months or Greater, Gross Unrealized Losses	(12,664)	0
Total, Fair Value	1,379,547	1,647,043
Total, Gross Unrealized Losses	$ (12,664)	$ (83,988)

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Commitments and Contingencies (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Contract Amount [Abstract]
Commitments to Extend Credit	$ 68,742,000	$ 65,688,000
Standby Letters of Credit	$ 1,762,000	$ 1,411,000
Expiration period of letter of credit issued	1 year

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CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2014	Dec. 31, 2013
Cash and Cash Equivalents
Cash and Due from Banks	$ 24,472,870	$ 25,691,605
Federal Funds Sold	20,132,062	20,495,060
Cash and Cash Equivalents	44,604,932	46,186,665
Interest-Bearing Deposits	21,206,039	21,960,291
Investment Securities
Available for Sale, at Fair Value	274,594,586	263,257,890
Held to Maturity, at Cost (Fair Value of $29,923 and $37,309 as of December 31, 2014 and 2013, Respectively)	29,796	37,062
Investment Securities	274,624,382	263,294,952
Federal Home Loan Bank Stock, at Cost	2,830,800	3,163,900
Loans	746,093,809	751,218,462
Allowance for Loan Losses	(8,802,316)	(11,805,986)
Unearned Interest and Fees	(361,374)	(360,522)
Loans, net	736,930,119	739,051,954
Premises and Equipment	24,960,445	24,876,469
Other Real Estate (Net of Allowance of $3,319,644 and $3,985,920 in 2014 and 2013, Respectively)	10,401,832	15,502,462
Other Intangible Assets	152,012	187,761
Other Assets	31,187,420	34,326,432
Total Assets	1,146,897,981	1,148,550,886
Deposits
Noninterest-Bearing	128,339,763	115,260,701
Interest-Bearing	850,963,711	872,268,779
Deposits	979,303,474	987,529,480
Borrowed Money
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	40,000,000	40,000,000
Borrowed Money	64,229,000	64,229,000
Other Liabilities	4,338,195	6,838,167
Commitments and Contingencies
Stockholders' Equity
Preferred Stock, Stated Value $1,000; Authorized 10,000,000 Shares, Issued 28,000 Shares	28,000,000	28,000,000
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2014 and 2013	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	38,287,934	33,444,913
Accumulated Other Comprehensive Loss, Net of Tax	(4,844,974)	(9,075,026)
Stockholders' Equity	99,027,312	89,954,239
Total Liabilities and Stockholders' Equity	$ 1,146,897,981	$ 1,148,550,886

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2014

Supplemental Cash Flow Information [Abstract ]

Cash payments

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

	2014		2013		2012
Interest Expense	$	7,898,543	$	7,111,361	$	10,942,113
Income Taxes	$	113,000	$	173,883	$	-

Noncash financing and investing activities

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

	2014		2013			2012
Acquisitions of Real Estate Through Loan Foreclosures	$	3,852,848	$	10,251,006		$	9,729,174
Change In Unrealized Gain (Loss) on AFS Investment Securities	$	6,409,171	$	(13,523,050	)	$	(3,120,540	)

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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]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2011	$ 27,662,476	$ 8,439,258	$ 29,145,094	$ 29,456,240	$ 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	(149,814)	95,759,167
Balance (in shares) at Dec. 31, 2012		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					(8,925,212)	(8,925,212)
Accretion of Fair Value of Warrant	172,947			(172,947)		0
Dividends on Preferred Shares				(1,508,761)		(1,508,761)
Net Income				4,629,045		4,629,045
Balance at Dec. 31, 2013	28,000,000	8,439,258	29,145,094	33,444,913	(9,075,026)	89,954,239
Balance (in shares) at Dec. 31, 2013		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					4,230,052	4,230,052
Dividends on Preferred Shares				(2,688,604)		(2,688,604)
Net Income				7,531,625		7,531,625
Balance at Dec. 31, 2014	$ 28,000,000	$ 8,439,258	$ 29,145,094	$ 38,287,934	$ (4,844,974)	$ 99,027,312
Balance (in shares) at Dec. 31, 2014		8,439,258

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Allowance for Loan Losses (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Changes in allowance for loan losses [Roll Forward]
Balance, Beginning of Year	$ 11,805,986	$ 12,736,921	$ 15,649,594
Provision for Loan Losses	1,308,000	4,485,000	6,784,767
Loans Charged Off	(5,104,491)	(6,227,716)	(10,454,175)
Recoveries of Loans Previously Charged Off	792,821	811,781	756,735
Balance, End of Year	$ 8,802,316	$ 11,805,986	$ 12,736,921

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Loans (Tables)

12 Months Ended

Dec. 31, 2014

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:

	2014		2013
Commercial and Agricultural
Commercial	$	50,960,265	$	48,107,448
Agricultural		16,689,444		10,665,938
Real Estate
Commercial Construction		51,258,970		52,738,783
Residential Construction		11,220,683		6,549,260
Commercial		332,230,847		341,783,538
Residential		203,752,620		206,257,927
Farmland		49,950,984		47,034,426
Consumer and Other
Consumer		22,820,314		25,675,560
Other		7,209,682		12,405,582
Total Loans	$	746,093,809	$	751,218,462

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.

2014	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	46,230,110	$	2,905,361	$	1,824,794	$	50,960,265
Agricultural		16,504,404		27,101		157,939		16,689,444
Real Estate
Commercial Construction		45,063,306		1,740,488		4,455,176		51,258,970
Residential Construction		11,220,683		-		-		11,220,683
Commercial		309,828,039		11,220,166		11,182,642		332,230,847
Residential		180,549,640		10,582,704		12,620,276		203,752,620
Farmland		47,548,106		414,521		1,988,357		49,950,984
Consumer and Other
Consumer		22,114,932		248,997		456,385		22,820,314
Other		7,012,405		-		197,277		7,209,682
Total Loans	$	686,071,625	$	27,139,338	$	32,882,846	$	746,093,809
2013
Commercial and Agricultural
Commercial	$	41,759,281	$	2,770,284	$	3,577,883	$	48,107,448
Agricultural		10,637,705		16,830		11,403		10,665,938
Real Estate
Commercial Construction		42,668,320		1,512,301		8,558,162		52,738,783
Residential Construction		6,341,530		207,730		-		6,549,260
Commercial		317,567,749		10,759,954		13,455,835		341,783,538
Residential		182,977,361		13,523,478		9,757,088		206,257,927
Farmland		44,776,355		507,122		1,750,949		47,034,426
Consumer and Other
Consumer		24,608,175		320,473		746,912		25,675,560
Other		12,356,116		711		48,755		12,405,582
Total Loans	$	683,692,592	$	29,618,883	$	37,906,987	$	751,218,462

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
2014	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	$	872,321	$	-	$	872,321	$	405,398	$	49,682,546	$	50,960,265
Agricultural		-		-		-		44,605		16,644,839	$	16,689,444
Real Estate
Commercial Construction		141,850		-		141,850		3,251,290		47,865,830	$	51,258,970
Residential Construction		-		-		-		-		11,220,683	$	11,220,683
Commercial		2,309,114		-		2,309,114		5,325,047		324,596,686	$	332,230,847
Residential		5,782,701		-		5,782,701		7,461,507		190,508,412	$	203,752,620
Farmland		281,967		-		281,967		1,449,226		48,219,791	$	49,950,984
Consumer and Other
Consumer		313,424		6,642		320,066		201,695		22,298,553	$	22,820,314
Other		-		-		-		195,497		7,014,185	$	7,209,682
Total Loans	$	9,701,377	$	6,642	$	9,708,019	$	18,334,265	$	718,051,525	$	746,093,809
2013
Commercial and Agricultural
Commercial	$	581,281	$	-	$	581,281	$	1,646,418	$	45,879,749	$	48,107,448
Agricultural		81,036		-		81,036		-		10,584,902		10,665,938
Real Estate
Commercial Construction		139,826		-		139,826		8,221,745		44,377,212		52,738,783
Residential Construction		-		-		-		-		6,549,260		6,549,260
Commercial		2,287,341		-		2,287,341		7,366,703		332,129,494		341,783,538
Residential		5,273,586		-		5,273,586		4,933,420		196,050,921		206,257,927
Farmland		350,718		-		350,718		1,629,611		45,054,097		47,034,426
Consumer and Other
Consumer		453,580		3,991		457,571		307,456		24,910,533		25,675,560
Other		198,451		-		198,451		9,146		12,197,985		12,405,582
Total Loans	$	9,365,819	$	3,991	$	9,369,810	$	24,114,499	$	717,734,153	$	751,218,462

Impaired loan data

The following table details impaired loan data as of December 31, 2014:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	310,447	$	308,817	$	-	$	679,267	$	9,248		$	17,973
Agricultural		50,163		44,605		-		50,959		(6,029	)		3,000
Commercial Construction		9,573,141		3,463,502		-		3,376,033		13,111			12,833
Commercial Real Estate		17,129,876		16,227,379		-		18,350,015		462,355			474,936
Residential Real Estate		9,136,987		7,600,073		-		5,690,573		312,024			306,859
Farmland		1,450,759		1,449,226		-		949,003		(8,518	)		17,273
Consumer		201,695		201,695		-		211,775		14,455			15,495
Other		206,894		195,497		-		197,519		5,874			10,677
		38,059,962		29,490,794		-		29,505,144		802,520			859,046
With An Allowance Recorded
Commercial		96,580		96,580		96,580		419,464		(299	)		-
Agricultural		-		-		-		-		-			-
Commercial Construction		207,308		136,369		53,947		1,528,817		375			375
Commercial Real Estate		6,135,238		6,135,238		456,941		6,415,086		60,629			50,468
Residential Real Estate		2,072,919		2,065,158		414,684		1,829,102		84,177			86,472
Farmland		396,048		396,048		28,962		529,555		13,077			12,210
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		8,908,093		8,829,393		1,051,114		10,722,024		157,959			149,525
Total
Commercial		407,027		405,397		96,580		1,098,731		8,949			17,973
Agricultural		50,163		44,605		-		50,959		(6,029	)		3,000
Commercial Construction		9,780,449		3,599,871		53,947		4,904,850		13,486			13,208
Commercial Real Estate		23,265,114		22,362,617		456,941		24,765,101		522,984			525,404
Residential Real Estate		11,209,906		9,665,231		414,684		7,519,675		396,201			393,331
Farmland		1,846,807		1,845,274		28,962		1,478,558		4,559			29,483
Consumer		201,695		201,695		-		211,775		14,455			15,495
Other		206,894		195,497		-		197,519		5,874			10,677
	$	46,968,055	$	38,320,187	$	1,051,114	$	40,227,168	$	960,479		$	1,008,571

The following table details impaired loan data as of December 31, 2013:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	305,272	$	305,272	$	-	$	216,057	$	24,494		$	25,193
Agricultural		-		-		-		9,803		-			-
Commercial Construction		7,856,411		4,750,157		-		4,105,370		34,908			41,164
Commercial Real Estate		20,120,403		19,252,946		-		13,198,988		493,940			503,392
Residential Real Estate		7,836,718		6,361,592		-		4,564,666		224,439			209,330
Farmland		302,629		302,629		-		1,858,654		803			869
Consumer		313,194		307,456		-		252,944		18,469			21,109
Other		9,146		9,146		-		2,287		556			575
		36,743,773		31,289,198		-		24,208,769		797,609			801,632
With An Allowance Recorded
Commercial		1,452,798		1,452,798		433,714		1,689,125		14,845			20,748
Agricultural		-		-		-		-		-			-
Commercial Construction		5,922,674		3,471,587		830,546		5,025,176		(159	)		-
Commercial Real Estate		5,874,473		5,874,473		423,685		11,072,314		157,536			148,495
Residential Real Estate		1,949,301		1,849,301		526,005		3,661,706		25,739			24,414
Farmland		1,326,982		1,326,982		85,500		663,903		44,638			46,930
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		16,526,228		13,975,141		2,299,450		22,112,224		242,599			240,587
Total
Commercial		1,758,070		1,758,070		433,714		1,905,182		39,339			45,941
Agricultural		-		-		-		9,803		-			-
Commercial Construction		13,779,085		8,221,744		830,546		9,130,546		34,749			41,164
Commercial Real Estate		25,994,876		25,127,419		423,685		24,271,302		651,476			651,887
Residential Real Estate		9,786,019		8,210,893		526,005		8,226,372		250,178			233,744
Farmland		1,629,611		1,629,611		85,500		2,522,557		45,441			47,799
Consumer		313,194		307,456		-		252,944		18,469			21,109
Other		9,146		9,146		-		2,287		556			575
	$	53,270,001	$	45,264,339	$	2,299,450	$	46,320,993	$	1,040,208		$	1,042,219

Loans modified in troubled debt restructuring

Troubled Debt Restructurings
2014	# of Contracts		Pre-Modification		Post-Modification
Farmland		1	$	400,778	$	400,778
Commercial Construction		1		349,976		349,976
Commercial Real Estate		1		1,771,395		1,775,407
Residential Real Estate		1		49,194		49,194
Total Loans		4	$	2,571,343	$	2,575,355
2013
Commercial		1	$	83,748	$	81,277
Commercial Construction		2		228,633		225,959
Commercial Real Estate		1		225,852		225,852
Residential Real Estate		4		1,885,700		1,764,399
Total Loans		8	$	2,423,933	$	2,297,487
2012
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 that subsequently defaulted as of December 31 are as follows:

	2014				2013				2012
	# of Contracts		Recorded Investment		# of Contracts		Recorded Investment		# of Contracts		Recorded Investment
Commercial		-	$	-		1	$	81,277		-	$	-
Commercial Real Estate		-		-		-		-		1		203,291
Residential Real Estate		-		-		-		-		1		10,000
Total Loans		-	$	-		1	$	81,277		2	$	213,291

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Income Taxes (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Expense [Abstract]
Current Federal (Benefit) Expense	$ 1,335,337	$ 156,642	$ (6,114)
Deferred Federal Expense	1,932,950	2,178,222	1,204,439
Federal Income Tax Expense	3,268,287	2,334,864	1,198,325
Current State Income Tax Expense	0	0	2,526
Federal and State Income Tax Expense	3,268,287	2,334,864	1,200,851
Difference between financial statement tax expense and amount computed by applying the federal statutory rates to income before income taxes [Abstract]
Statutory Federal Income Taxes	3,671,971	2,367,729	1,306,331
Tax-Exempt Interest	(74,138)	(104,307)	(89,983)
Premiums on Officers' Life Insurance	(186,712)	(111,749)	(59,603)
Meal and Entertainment Disallowance	14,044	15,319	14,574
Other	(156,878)	167,872	27,006
Federal Income Tax Expense	3,268,287	2,334,864	1,198,325
Deferred Tax Assets [Abstract]
Allowance for Loan Losses	2,992,787	4,014,035
Other Real Estate	1,178,278	1,404,812
Deferred Compensation	287,365	303,380
Investments	340,000	340,000
Goodwill	256,714	301,238
Net Operating Loss Carryforward	0	730,484
Other	427,924	343,919
Total Deferred Tax Assets	5,483,068	7,437,868
Deferred Tax Liabilities [Abstract]
Premises and Equipment	(1,299,216)	(1,322,377)
Other	(4,185)	(2,874)
Total Deferred Tax Liabilities	(1,303,401)	(1,325,251)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)	2,495,896	4,550,362
Net Deferred Tax Assets	6,675,563	10,662,979
Unrecognized Taxes [Abstract]
Balance, Beginning	42,327	38,676	33,368
Position Taken During the Current Year	0	7,247	11,794
Reductions Resulting from Lapse of Statutes of Limitation	42,327	(3,596)	(6,486)
Balance, Ending	0	42,327	38,676
Net increase (decrease) in income tax expense	$ (42,327)	$ 3,651

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Employee Benefit Plan

12 Months Ended

Dec. 31, 2014

Employee Benefit Plan [Abstract]

Employee Benefit Plan

(15) Employee Benefit Plan

The Company offers a defined contribution 401(k) Profit Sharing Plan (the Plan) which covers substantially all employees who meet certain age and service requirements.  The Plan allows employees to make voluntary pre-tax salary deferrals to the Plan.  The Company, at its discretion, may elect to make an annual contribution to the Plan equal to a percentage of each participating employee’s salary.  Such discretionary contributions must be approved by the Company’s board of directors.  Employees are fully vested in the Company contributions after six years of service.  In 2014, the Company made a total contribution of $401,497 to the Plan.  The Company made no discretionary contributions in 2013 or 2012.

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Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2014

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:

	2014			2013			2012
Balance, Beginning of Year	$	11,805,986		$	12,736,921		$	15,649,594
Provision for Loan Losses		1,308,000			4,485,000			6,784,767
Loans Charged Off		(5,104,491	)		(6,227,716	)		(10,454,175	)
Recoveries of Loans Previously Charged Off		792,821			811,781			756,735
Balance, End of Year	$	8,802,316		$	11,805,986		$	12,736,921

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.

2014	Beginning Balance		Charge-Offs			Recoveries		Provision		Ending Balance
Commercial and Agricultural
Commercial	$	1,017,073	$	(624,944	)	$	76,002	$	29,430	$	497,561
Agricultural		293,886		-			2,700		7,586		304,172
Real Estate
Commercial Construction		1,782,179		(1,543,099	)		485,005		498,610		1,222,695
Residential Construction		138,092		-			-		-		138,092
Commercial		4,379,276		(1,326,825	)		90,042		522,284		3,664,777
Residential		3,278,269		(1,033,966	)		31,127		149,897		2,425,327
Farmland		311,494		(233,580	)		20,000		5,886		103,800
Consumer and Other
Consumer		243,253		(342,077	)		72,477		93,261		66,914
Other		362,464		-			15,468		1,046		378,978
	$	11,805,986	$	(5,104,491	)	$	792,821	$	1,308,000	$	8,802,316
2013
Commercial and Agricultural
Commercial	$	981,021	$	(120,690	)	$	55,829	$	100,913	$	1,017,073
Agricultural		296,175		(34,502	)		6,200		26,013		293,886
Real Estate
Commercial Construction		1,890,200		(2,071,162	)		253,459		1,709,682		1,782,179
Residential Construction		138,092		-			-		-		138,092
Commercial		5,162,839		(2,872,408	)		297,984		1,790,861		4,379,276
Residential		3,405,947		(706,242	)		64,583		513,981		3,278,269
Farmland		290,526		(20,977	)		21,762		20,183		311,494
Consumer and Other
Consumer		227,774		(397,822	)		93,520		319,781		243,253
Other		344,347		(3,913	)		18,444		3,586		362,464
	$	12,736,921	$	(6,227,716	)	$	811,781	$	4,485,000	$	11,805,986

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

Allowance for loan losses, segregated by impairment methodology

At December 31, 2014, impaired loans totaling $3,885,411 were below the $250,000 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.  Likewise, at December 31, 2013 and 2012, impaired loans totaling $2,821,199 and $1,026,624, respectively, were below the $250,000 and $50,000 review threshold and 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.

	Ending Allowance Balance						Ending Loan Balance
2014	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	96,580	$	400,981	$	497,561	$	96,580	$	50,863,685	$	50,960,265
Agricultural		-		304,172		304,172		-		16,689,444		16,689,444
Real Estate
Commercial Construction		53,947		1,168,748		1,222,695		3,384,377		47,874,593		51,258,970
Residential Construction		-		138,092		138,092		-		11,220,683		11,220,683
Commercial		456,941		3,207,836		3,664,777		21,693,061		310,537,786		332,230,847
Residential		414,684		2,010,643		2,425,327		7,559,965		196,192,655		203,752,620
Farmland		28,962		74,838		103,800		1,700,793		48,250,191		49,950,984
Consumer and Other
Consumer		-		66,914		66,914		-		22,820,314		22,820,314
Other		-		378,978		378,978		-		7,209,682		7,209,682
Total End of Year Balance	$	1,051,114	$	7,751,202	$	8,802,316	$	34,434,776	$	711,659,033	$	746,093,809

	Ending Allowance Balance						Ending Loan Balance
2013	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	433,714	$	583,359	$	1,017,073	$	1,542,058	$	46,565,390	$	48,107,448
Agricultural		-		293,886		293,886		-		10,665,938		10,665,938
Real Estate
Commercial Construction		830,546		951,633		1,782,179		7,971,298		44,767,485		52,738,783
Residential Construction		-		138,092		138,092		-		6,549,260		6,549,260
Commercial		423,685		3,955,591		4,379,276		24,757,942		317,025,596		341,783,538
Residential		526,005		2,752,264		3,278,269		6,545,490		199,712,437		206,257,927
Farmland		85,500		225,994		311,494		1,617,206		45,417,220		47,034,426
Consumer and Other
Consumer		-		243,253		243,253		-		25,675,560		25,675,560
Other		-		362,464		362,464		9,146		12,396,436		12,405,582
Total End of Year Balance	$	2,299,450	$	9,506,536	$	11,805,986	$	42,443,140	$	708,775,322	$	751,218,462
2012
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

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Deferred Compensation Plan

12 Months Ended

Dec. 31, 2014

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 $845,192 and $892,294 as of December 31, 2014 and 2013, respectively.  Benefit payments under the contracts were $112,605 in 2014 and $188,240 in 2013.  Provisions charged to operations totaled $69,653 in 2014, $75,777 in 2013 and $82,250 in 2012.

The Company has purchased life insurance policies on the plans’ participants and uses the cash flow from these policies to partially fund the plan.  Fee income recognized with these plans totaled $167,911 in 2014, $164,073 in 2013 and $175,302 in 2012.

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Subordinated Debentures (Trust Preferred Securities) (Details) (Trust Preferred Securities [Member], USD $)	12 Months Ended
	Dec. 31, 2014 Period
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Number of deferred consecutive quarterly periods without default or penalty, maximum	20
Interest paid	$ 1,069,695
Colony Bankcorp Statutory Trust III [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Jun. 17, 2004
Amount	4,640,000
Total Interest rate (in hundredths)	2.9226%
Maturity	Jun. 14, 2034
5 Years Call Option	Jun. 17, 2009
Colony Bankcorp Statutory Trust III [Member] | LIBOR [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
3 month Libor Rate (in hundredths)	0.2426%
Added Points (in hundredths)	2.68%
Colony Bankcorp Capital Trust I [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Apr. 13, 2006
Amount	5,155,000
Total Interest rate (in hundredths)	1.7551%
Maturity	Apr. 13, 2036
5 Years Call Option	Apr. 13, 2011
Colony Bankcorp Capital Trust I [Member] | LIBOR [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
3 month Libor Rate (in hundredths)	0.2551%
Added Points (in hundredths)	1.50%
Colony Bankcorp Capital Trust II [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Mar. 12, 2007
Amount	9,279,000
Total Interest rate (in hundredths)	1.9066%
Maturity	Mar. 12, 2037
5 Years Call Option	Mar. 12, 2012
Colony Bankcorp Capital Trust II [Member] | LIBOR [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
3 month Libor Rate (in hundredths)	0.2566%
Added Points (in hundredths)	1.65%
Colony Bankcorp Capital Trust III [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Date	Sep. 14, 2007
Amount	$ 5,155,000
Total Interest rate (in hundredths)	1.6326%
Maturity	Sep. 14, 2037
5 Years Call Option	Sep. 14, 2012
Colony Bankcorp Capital Trust III [Member] | LIBOR [Member]
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
3 month Libor Rate (in hundredths)	0.2326%
Added Points (in hundredths)	1.40%

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash Flows from Operating Activities
Net Income	$ 7,531,625	$ 4,629,045	$ 2,641,298
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Depreciation	1,595,253	1,527,392	1,676,820
Amortization and Accretion	1,312,857	2,667,404	4,180,158
Provision for Loan Losses	1,308,000	4,485,000	6,784,767
Deferred Income Taxes	1,932,950	2,178,222	1,204,439
Securities (Gains) Losses	(23,735)	363,804	(2,837,464)
(Gain) Loss on Sale of Premises and Equipment	(12,489)	(677)	1,148
Loss on Sale of Other Real Estate and Repossessions	828,411	1,565,091	1,839,196
Provision for Losses on Other Real Estate	1,006,827	1,321,418	2,702,709
Increase in Cash Surrender Value of Life Insurance	(590,674)	(338,712)	(185,341)
Change In
Interest Receivable	55,786	285,033	250,755
Prepaid Expenses	(64,633)	(168,060)	1,741,834
Interest Payable	(1,099,756)	385,285	74,637
Accrued Expenses and Accounts Payable	197,195	213,753	(95,972)
Other	788,958	(243,543)	2,827,648
Cash Flow from Operating Activities	14,766,575	18,870,455	22,806,632
Cash Flows from Investing Activities
Interest-Bearing Deposits in Other Banks	754,252	(164,950)	7,161,969
Purchase of Investment Securities Available for Sale	(56,201,891)	(132,419,073)	(250,445,594)
Proceeds from Sale of Investment Securities Available for Sale	13,620,956	72,672,795	227,690,806
Proceeds from Maturities, Calls and Paydowns of Investment Securities
Available for Sale	36,440,646	48,330,382	54,006,594
Held to Maturity	12,968	11,623	14,019
Proceeds from Sale of Premises and Equipment	14,376	2,500	1,500
Net Loans to Customers	(3,156,342)	(19,959,948)	(50,126,252)
Purchase of Premises and Equipment	(1,681,115)	(1,489,579)	(845,338)
Proceeds from Sale of Other Real Estate and Repossessions	7,233,497	8,041,638	9,876,136
Proceeds from Sale of Federal Home Loan Bank Stock	333,100	200,400	2,033,900
Purchase of Bank-Owned Life Insurance	0	(10,000,000)	0
Cash Flow from Investing Activities	(2,629,553)	(34,774,212)	(632,260)
Cash Flows from Financing Activities
Interest-Bearing Customer Deposits	(21,305,068)	16,550,430	(49,998,012)
Noninterest-Bearing Customer Deposits	13,079,062	(8,705,841)	29,697,631
Proceeds from Other Borrowed Money	0	21,500,000	5,000,000
Principal Payments on Other Borrowed Money	0	(16,500,000)	(41,000,000)
Dividends Paid on Preferred Stock	(5,492,749)	0	0
Net Cash Flows from Financing Activities	(13,718,755)	12,844,589	(56,300,381)
Net Increase (Decrease) in Cash and Cash Equivalents	(1,581,733)	(3,059,168)	(34,126,009)
Cash and Cash Equivalents, Beginning	46,186,665	49,245,833	83,371,842
Cash and Cash Equivalents, Ending	$ 44,604,932	$ 46,186,665	$ 49,245,833

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Investment Securities
Held to Maturity, Fair Value	$ 29,923	$ 37,309
Other Real Estate, Valuation Allowance	$ 3,319,644	$ 3,985,920
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, 2014

Deposits [Abstract]

Deposits

(10) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $511,387 and $400,552 as of December 31, 2014 and 2013, respectively.

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

	2014		2013
Interest-Bearing Demand	$	363,501,727	$	357,290,975
Savings		59,215,257		54,094,617
Time, $100,000 and Over		210,502,901		220,672,794
Other Time		217,743,826		240,210,393
	$	850,963,711	$	872,268,779

At December 31, 2014 and December 31, 2013, the Company had brokered deposits of $26,298,267 and $26,579,934, respectively.  All of these brokered deposits represent Certificate of Deposit Account Registry Service (CDARS) reciprocal deposits.  The CDARS deposits are ones in which customers placed core deposits into the CDARS program for FDIC insurance coverage and the Company receives reciprocal brokered deposits in a like amount.  The aggregate amount of short-term jumbo certificates of deposit, each with a minimum denomination of $100,000 was $140,832,026 and $148,388,694 as of December 31, 2014 and December 31, 2013, respectively.

As of December 31, 2014, the scheduled maturities of certificates of deposit are as follows:

Year	Amount
2015	$	302,584,884
2016		72,869,687
2017		25,349,468
2018		19,773,611
2019 and Thereafter		7,669,077
	$	428,246,727

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 10, 2015	Jun. 30, 2014
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			$ 38,656,770
Entity Common Stock, Shares Outstanding		8,439,258
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014

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Other Borrowed Money

12 Months Ended

Dec. 31, 2014

Other Borrowed Money [Abstract]

Other Borrowed Money

(11) Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:

	2014		2013
Federal Home Loan Bank Advances	$	40,000,000	$	40,000,000

Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2017 to 2020 and interest rates ranging from 0.49 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, 2014, the book value of those loans pledged $101,128,937.  At December 31, 2014, the Company had remaining credit availability from the FHLB of $126,620,000.  The Company may be required to pledge additional qualifying collateral in order to utilize the full amount of the remaining credit line.

The aggregate stated maturities of other borrowed money at December 31, 2014 are as follows:

Year	Amount
2015	$	-
2016		-
2017		9,000,000
2018		20,500,000
2019 and Thereafter		10,500,000
	$	40,000,000

At December 31, 2014, $35,000,000 of FHLB advances are subject to fixed rates of interest, while the remaining $5,000,000 are subject to floating interest rates which will convert to fixed rates of interests next year.

The Company also has available federal funds lines of credit with various financial institutions totaling $43,500,000, of which there were none outstanding at December 31, 2014.

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, 2014, 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, 2014, 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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Financial Information of Colony Bankcorp, Inc (Parent Only) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
ASSETS [Abstract]
Cash	$ 9,974,663	$ 10,531,340
Premises and Equipment, Net	24,960,445	24,876,469
Other	31,187,420	34,326,432
Total Assets	1,146,897,981	1,148,550,886
Liabilities [Abstract]
Other	4,338,195	6,838,167
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	28,000,000	28,000,000
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2014 and 2013	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	38,287,934	33,444,913
Accumulated Other Comprehensive Loss, Net of Tax	(4,844,974)	(9,075,026)
Stockholders' Equity	99,027,312	89,954,239
Total Liabilities and Stockholders' Equity	1,146,897,981	1,148,550,886
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	17,507,926	16,691,972	15,564,893
Income Before Income Taxes	10,799,912	6,963,909	3,842,149
Income Tax Benefits	(3,268,287)	(2,334,864)	(1,200,851)
Net Income	7,531,625	4,629,045	2,641,298
Preferred Stock Dividends	2,688,604	1,508,761	1,435,385
Net Income Available to Common Stockholders	4,843,021	3,120,284	1,205,913
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net Income	7,531,625	4,629,045	2,641,298
Investment Securities Available for Sale [Abstract]
Gains (Losses) on Securities Arising During the Year	6,432,906	(13,886,854)	(283,076)
Tax Effect	(2,187,189)	4,721,531	96,246
Realized Gains (Losses) on Sale of AFS Securities	(23,735)	(2,819)	(2,897,032)
Tax Effect	8,070	959	984,991
Impairment Loss on Securities	0	366,623	59,568
Tax Effect	0	(124,652)	(20,253)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	4,230,052	(8,925,212)	(2,059,556)
Comprehensive Income (Loss)	11,761,677	(4,296,167)	581,742
Cash Flows from Operating Activities [Abstract]
Net Income	7,531,625	4,629,045	2,641,298
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities [Abstract]
Change in Interest Payable	(1,099,756)	385,285	74,637
Cash Flow from Operating Activities	14,766,575	18,870,455	22,806,632
Cash Flows from Investing Activities [Abstract]
Purchases of Premises and Equipment	(1,681,115)	(1,489,579)	(845,338)
Cash Flows from Financing Activities [Abstract]
Dividends Paid on Preferred Stock	(5,492,749)	0	0
Net Increase (Decrease) in Cash and Cash Equivalents	(1,581,733)	(3,059,168)	(34,126,009)
Cash and Cash Equivalents, Beginning	46,186,665	49,245,833	83,371,842
Cash and Cash Equivalents, Ending	44,604,932	46,186,665	49,245,833
Colony Bankcorp, Inc. [Member]
ASSETS [Abstract]
Cash	5,750,652	1,422,289
Premises and Equipment, Net	1,199,639	1,272,965
Investment in Subsidiary, at Equity	115,066,948	114,559,866
Other	1,708,380	1,221,285
Total Assets	123,725,619	118,476,405
Liabilities [Abstract]
Dividends Payable	315,000	3,119,146
Other	154,307	1,174,020
Liabilities Total	469,307	4,293,166
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	28,000,000	28,000,000
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2014 and 2013	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	38,287,934	33,444,913
Accumulated Other Comprehensive Loss, Net of Tax	(4,844,974)	(9,075,026)
Stockholders' Equity	99,027,312	89,954,239
Total Liabilities and Stockholders' Equity	123,725,619	118,476,405
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	12,015,572	1,515,549	17,372
Management Fees	581,334	581,334	590,422
Other	100,269	96,953	101,397
Income total	12,697,175	2,193,836	709,191
Expenses [Abstract]
Interest	517,381	516,641	554,004
Amortization	938	2,250	2,250
Salaries and Employee Benefits	782,152	748,149	735,919
Other	538,847	543,139	558,151
Expenses total	1,839,318	1,810,179	1,850,324
Income Before Income Taxes	10,857,857	383,657	(1,141,133)
Income Tax Benefits	396,738	406,518	365,691
Income (Loss) Before Equity in Undistributed Earnings of Subsidiary	11,254,595	790,175	(775,442)
Equity in Undistributed Earnings of Subsidiary	(3,722,970)	3,838,870	3,416,740
Net Income	7,531,625	4,629,045	2,641,298
Preferred Stock Dividends	2,688,604	1,508,761	1,435,385
Net Income Available to Common Stockholders	4,843,021	3,120,284	1,205,913
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net Income	7,531,625	4,629,045	2,641,298
Investment Securities Available for Sale [Abstract]
Gains (Losses) on Securities Arising During the Year	6,432,906	(13,886,854)	(283,076)
Tax Effect	(2,187,189)	4,721,531	96,246
Realized Gains (Losses) on Sale of AFS Securities	(23,735)	(2,819)	(2,897,032)
Tax Effect	8,070	959	984,991
Impairment Loss on Securities	0	366,623	59,568
Tax Effect	0	(124,652)	(20,253)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	4,230,052	(8,925,212)	(2,059,556)
Comprehensive Income (Loss)	11,761,677	(4,296,167)	581,742
Cash Flows from Operating Activities [Abstract]
Net Income	7,531,625	4,629,045	2,641,298
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities [Abstract]
Depreciation and Amortization	75,347	80,711	93,427
Equity in Undistributed Earnings of Subsidiary	3,722,970	(3,838,870)	(3,416,740)
Change in Interest Payable	(1,069,695)	516,641	529,922
Other	(437,115)	(390,962)	(405,379)
Cash Flow from Operating Activities	9,823,132	996,565	(557,472)
Cash Flows from Investing Activities [Abstract]
Purchases of Premises and Equipment	(2,020)	(68,708)	0
Cash Flows from Financing Activities [Abstract]
Dividends Paid on Preferred Stock	(5,492,749)	0	0
Net Increase (Decrease) in Cash and Cash Equivalents	4,328,363	927,857	(557,472)
Cash and Cash Equivalents, Beginning	1,422,289	494,432	1,051,904
Cash and Cash Equivalents, Ending	$ 5,750,652	$ 1,422,289	$ 494,432

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Interest Income
Loans, Including Fees	$ 39,735,615	$ 41,350,195	$ 41,963,113
Federal Funds Sold	32,100	39,199	99,273
Deposits with Other Banks	41,639	26,704	42,903
Investment Securities
U. S. Government Agencies	4,737,878	3,516,978	4,824,423
State, County and Municipal	99,736	123,972	206,483
Corporate Obligations	0	47,275	76,029
Dividends on Other Investments	115,134	81,398	77,203
Interest Income	44,762,102	45,185,721	47,289,427
Interest Expense
Deposits	5,113,024	5,821,366	8,737,281
Federal Funds Purchased	19	116	0
Borrowed Money	1,685,744	1,675,164	2,279,469
Interest Expense	6,798,787	7,496,646	11,016,750
Net Interest Income	37,963,315	37,689,075	36,272,677
Provision for Loan Losses	1,308,000	4,485,000	6,784,767
Net Interest Income After Provision for Loan Losses	36,655,315	33,204,075	29,487,910
Noninterest Income
Service Charges on Deposits	4,567,716	4,690,599	3,572,897
Other Service Charges, Commissions and Fees	2,468,881	1,725,271	1,514,898
Mortgage Fee Income	419,963	484,396	400,009
Securities Gains (Losses)	23,735	(363,804)	2,837,464
Gain on Sale of SBA Loans	0	635,190	305,924
Other	1,644,294	1,205,631	1,102,077
Noninterest Income	9,124,589	8,377,283	9,733,269
Noninterest Expenses
Salaries and Employee Benefits	17,507,926	16,691,972	15,564,893
Occupancy and Equipment	4,062,844	3,794,524	3,878,268
Directors' Fees	392,132	416,972	465,220
Legal and Professional Fees	785,683	721,322	1,085,881
Foreclosed Property	2,701,436	3,918,128	5,613,316
FDIC Assessment	965,898	1,321,981	1,497,974
Advertising	652,374	508,292	422,718
Software	925,489	852,475	789,226
Telephone	735,735	778,151	744,930
ATM/Card Processing	865,519	641,228	511,186
Other	5,384,956	4,972,404	4,805,418
Noninterest Expense	34,979,992	34,617,449	35,379,030
Income Before Income Taxes	10,799,912	6,963,909	3,842,149
Income Taxes	3,268,287	2,334,864	1,200,851
Net Income	7,531,625	4,629,045	2,641,298
Preferred Stock Dividends	2,688,604	1,508,761	1,435,385
Net Income Available to Common Stockholders	$ 4,843,021	$ 3,120,284	$ 1,205,913
Net Income Per Share of Common Stock, Basic and Diluted (in dollars per share)	$ 0.57	$ 0.37	$ 0.14
Cash Dividends Declared Per Share of Common Stock (in dollars per share)	$ 0	$ 0	$ 0
Weighted Average Shares Outstanding, Basic and Diluted (in shares)	8,439,258	8,439,258	8,439,258

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Allowance for Loan Losses

12 Months Ended

Dec. 31, 2014

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:

	2014			2013			2012
Balance, Beginning of Year	$	11,805,986		$	12,736,921		$	15,649,594
Provision for Loan Losses		1,308,000			4,485,000			6,784,767
Loans Charged Off		(5,104,491	)		(6,227,716	)		(10,454,175	)
Recoveries of Loans Previously Charged Off		792,821			811,781			756,735
Balance, End of Year	$	8,802,316		$	11,805,986		$	12,736,921

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.

2014	Beginning Balance		Charge-Offs			Recoveries		Provision		Ending Balance
Commercial and Agricultural
Commercial	$	1,017,073	$	(624,944	)	$	76,002	$	29,430	$	497,561
Agricultural		293,886		-			2,700		7,586		304,172
Real Estate
Commercial Construction		1,782,179		(1,543,099	)		485,005		498,610		1,222,695
Residential Construction		138,092		-			-		-		138,092
Commercial		4,379,276		(1,326,825	)		90,042		522,284		3,664,777
Residential		3,278,269		(1,033,966	)		31,127		149,897		2,425,327
Farmland		311,494		(233,580	)		20,000		5,886		103,800
Consumer and Other
Consumer		243,253		(342,077	)		72,477		93,261		66,914
Other		362,464		-			15,468		1,046		378,978
	$	11,805,986	$	(5,104,491	)	$	792,821	$	1,308,000	$	8,802,316
2013
Commercial and Agricultural
Commercial	$	981,021	$	(120,690	)	$	55,829	$	100,913	$	1,017,073
Agricultural		296,175		(34,502	)		6,200		26,013		293,886
Real Estate
Commercial Construction		1,890,200		(2,071,162	)		253,459		1,709,682		1,782,179
Residential Construction		138,092		-			-		-		138,092
Commercial		5,162,839		(2,872,408	)		297,984		1,790,861		4,379,276
Residential		3,405,947		(706,242	)		64,583		513,981		3,278,269
Farmland		290,526		(20,977	)		21,762		20,183		311,494
Consumer and Other
Consumer		227,774		(397,822	)		93,520		319,781		243,253
Other		344,347		(3,913	)		18,444		3,586		362,464
	$	12,736,921	$	(6,227,716	)	$	811,781	$	4,485,000	$	11,805,986

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

The loss history period used at December 31, 2014 and 2013 was based on the loss rate from the eight quarters ended September 30, 2014 and 2013, respectively.  During 2012, the Company changed its loss history period used in calculating the ALLL from a one-year average to a rolling eight-quarter average.   At December 31, 2012 the loss history period used was based on the annual loss rate from calendar year 2011 and the first three quarters of 2012.

During 2014 management changed its methodology for calculating the allowance for loan losses to better reflect the estimated losses inherent in the portfolio.  Specific changes included:

· Reducing the historical loss ratios by including loan loss recoveries in the calculation.  Previously, management only included the loan charge-off amount and did not consider the effect of subsequent recoveries.

· Reducing the balance of those loans which are guaranteed by government agencies, such as SBA loans.  Previously, the entire balance of such loans was considered in the calculation of the general reserves; however, beginning in 2014, only the non-guaranteed portion of these loans is subject to the loss calculation.

Management feels these changes better align the calculation of the allowance for loan losses with the direction of the loan portfolio.  These changes did not result in a significant change to the recorded allowance for loan loss balance.

During the third quarter of 2013, management implemented a change to its methodology for calculating the allowance for loan losses.  This change was intended to better reflect the current position of the loan portfolio.  Prior to the third quarter, the allowance for loan loss calculation incorporated a qualitative factor related to improvements in credit administration.  These improvements, which began in 2008, included organizational changes to credit administration, specifically related to managing past due loans, grading of loans, recognition of losses and underwriting of new loans.  Primary among the organizational changes was the appointment of experienced lending officers to oversee the lending function, as well as the appointment of a chief credit officer.  Management feels these organizational changes are now fully implemented, as evidenced by a lower charge-off rate, and therefore, the qualitative factor is no longer relevant.  The removal of this qualitative factor did not result in a significant adjustment to the recorded allowance for loan loss balance.

The Company determines its individual 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 balance of $250,000 or more, regardless of the loans impairment classification.  Effective March 31, 2013, management increased the dollar threshold of this review process from $50,000 to $250,000.  The threshold change resulted in loans totaling $4.1 million at December 31, 2013 being removed from the individual impairment review process and being placed in the collective review process.

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, therefore, makes specific allocations to the allowance for those loans if warranted.  The total of such loans is $9,356,253 and $6,664,935 as of December 31, 2014 and 2013, respectively.  Specific allowance allocations were made for these loans totaling $747,982 and $260,742 as of December 31, 2014 and 2013, respectively.  Since these loans are not considered impaired, both the loan balance and related specific allocation are included in the “Collectively Evaluated for Impairment” column of the following tables.

At December 31, 2014, impaired loans totaling $3,885,411 were below the $250,000 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.  Likewise, at December 31, 2013 and 2012, impaired loans totaling $2,821,199 and $1,026,624, respectively, were below the $250,000 and $50,000 review threshold and 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.

	Ending Allowance Balance						Ending Loan Balance
2014	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	96,580	$	400,981	$	497,561	$	96,580	$	50,863,685	$	50,960,265
Agricultural		-		304,172		304,172		-		16,689,444		16,689,444
Real Estate
Commercial Construction		53,947		1,168,748		1,222,695		3,384,377		47,874,593		51,258,970
Residential Construction		-		138,092		138,092		-		11,220,683		11,220,683
Commercial		456,941		3,207,836		3,664,777		21,693,061		310,537,786		332,230,847
Residential		414,684		2,010,643		2,425,327		7,559,965		196,192,655		203,752,620
Farmland		28,962		74,838		103,800		1,700,793		48,250,191		49,950,984
Consumer and Other
Consumer		-		66,914		66,914		-		22,820,314		22,820,314
Other		-		378,978		378,978		-		7,209,682		7,209,682
Total End of Year Balance	$	1,051,114	$	7,751,202	$	8,802,316	$	34,434,776	$	711,659,033	$	746,093,809

	Ending Allowance Balance						Ending Loan Balance
2013	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	433,714	$	583,359	$	1,017,073	$	1,542,058	$	46,565,390	$	48,107,448
Agricultural		-		293,886		293,886		-		10,665,938		10,665,938
Real Estate
Commercial Construction		830,546		951,633		1,782,179		7,971,298		44,767,485		52,738,783
Residential Construction		-		138,092		138,092		-		6,549,260		6,549,260
Commercial		423,685		3,955,591		4,379,276		24,757,942		317,025,596		341,783,538
Residential		526,005		2,752,264		3,278,269		6,545,490		199,712,437		206,257,927
Farmland		85,500		225,994		311,494		1,617,206		45,417,220		47,034,426
Consumer and Other
Consumer		-		243,253		243,253		-		25,675,560		25,675,560
Other		-		362,464		362,464		9,146		12,396,436		12,405,582
Total End of Year Balance	$	2,299,450	$	9,506,536	$	11,805,986	$	42,443,140	$	708,775,322	$	751,218,462
2012
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

XML

Loans

12 Months Ended

Dec. 31, 2014

Loans [Abstract]

Loans

(4) Loans

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

	2014		2013
Commercial and Agricultural
Commercial	$	50,960,265	$	48,107,448
Agricultural		16,689,444		10,665,938
Real Estate
Commercial Construction		51,258,970		52,738,783
Residential Construction		11,220,683		6,549,260
Commercial		332,230,847		341,783,538
Residential		203,752,620		206,257,927
Farmland		49,950,984		47,034,426
Consumer and Other
Consumer		22,820,314		25,675,560
Other		7,209,682		12,405,582
Total Loans	$	746,093,809	$	751,218,462

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.

2014	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	46,230,110	$	2,905,361	$	1,824,794	$	50,960,265
Agricultural		16,504,404		27,101		157,939		16,689,444
Real Estate
Commercial Construction		45,063,306		1,740,488		4,455,176		51,258,970
Residential Construction		11,220,683		-		-		11,220,683
Commercial		309,828,039		11,220,166		11,182,642		332,230,847
Residential		180,549,640		10,582,704		12,620,276		203,752,620
Farmland		47,548,106		414,521		1,988,357		49,950,984
Consumer and Other
Consumer		22,114,932		248,997		456,385		22,820,314
Other		7,012,405		-		197,277		7,209,682
Total Loans	$	686,071,625	$	27,139,338	$	32,882,846	$	746,093,809
2013
Commercial and Agricultural
Commercial	$	41,759,281	$	2,770,284	$	3,577,883	$	48,107,448
Agricultural		10,637,705		16,830		11,403		10,665,938
Real Estate
Commercial Construction		42,668,320		1,512,301		8,558,162		52,738,783
Residential Construction		6,341,530		207,730		-		6,549,260
Commercial		317,567,749		10,759,954		13,455,835		341,783,538
Residential		182,977,361		13,523,478		9,757,088		206,257,927
Farmland		44,776,355		507,122		1,750,949		47,034,426
Consumer and Other
Consumer		24,608,175		320,473		746,912		25,675,560
Other		12,356,116		711		48,755		12,405,582
Total Loans	$	683,692,592	$	29,618,883	$	37,906,987	$	751,218,462

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 $250,000 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 such loans are considered past due.

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
2014	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	$	872,321	$	-	$	872,321	$	405,398	$	49,682,546	$	50,960,265
Agricultural		-		-		-		44,605		16,644,839	$	16,689,444
Real Estate
Commercial Construction		141,850		-		141,850		3,251,290		47,865,830	$	51,258,970
Residential Construction		-		-		-		-		11,220,683	$	11,220,683
Commercial		2,309,114		-		2,309,114		5,325,047		324,596,686	$	332,230,847
Residential		5,782,701		-		5,782,701		7,461,507		190,508,412	$	203,752,620
Farmland		281,967		-		281,967		1,449,226		48,219,791	$	49,950,984
Consumer and Other
Consumer		313,424		6,642		320,066		201,695		22,298,553	$	22,820,314
Other		-		-		-		195,497		7,014,185	$	7,209,682
Total Loans	$	9,701,377	$	6,642	$	9,708,019	$	18,334,265	$	718,051,525	$	746,093,809
2013
Commercial and Agricultural
Commercial	$	581,281	$	-	$	581,281	$	1,646,418	$	45,879,749	$	48,107,448
Agricultural		81,036		-		81,036		-		10,584,902		10,665,938
Real Estate
Commercial Construction		139,826		-		139,826		8,221,745		44,377,212		52,738,783
Residential Construction		-		-		-		-		6,549,260		6,549,260
Commercial		2,287,341		-		2,287,341		7,366,703		332,129,494		341,783,538
Residential		5,273,586		-		5,273,586		4,933,420		196,050,921		206,257,927
Farmland		350,718		-		350,718		1,629,611		45,054,097		47,034,426
Consumer and Other
Consumer		453,580		3,991		457,571		307,456		24,910,533		25,675,560
Other		198,451		-		198,451		9,146		12,197,985		12,405,582
Total Loans	$	9,365,819	$	3,991	$	9,369,810	$	24,114,499	$	717,734,153	$	751,218,462

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.  Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $591,900, $968,700 and $1,634,600 for the years ended December 31, 2014, 2013 and 2012, respectively.

The following table details impaired loan data as of December 31, 2014:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	310,447	$	308,817	$	-	$	679,267	$	9,248		$	17,973
Agricultural		50,163		44,605		-		50,959		(6,029	)		3,000
Commercial Construction		9,573,141		3,463,502		-		3,376,033		13,111			12,833
Commercial Real Estate		17,129,876		16,227,379		-		18,350,015		462,355			474,936
Residential Real Estate		9,136,987		7,600,073		-		5,690,573		312,024			306,859
Farmland		1,450,759		1,449,226		-		949,003		(8,518	)		17,273
Consumer		201,695		201,695		-		211,775		14,455			15,495
Other		206,894		195,497		-		197,519		5,874			10,677
		38,059,962		29,490,794		-		29,505,144		802,520			859,046
With An Allowance Recorded
Commercial		96,580		96,580		96,580		419,464		(299	)		-
Agricultural		-		-		-		-		-			-
Commercial Construction		207,308		136,369		53,947		1,528,817		375			375
Commercial Real Estate		6,135,238		6,135,238		456,941		6,415,086		60,629			50,468
Residential Real Estate		2,072,919		2,065,158		414,684		1,829,102		84,177			86,472
Farmland		396,048		396,048		28,962		529,555		13,077			12,210
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		8,908,093		8,829,393		1,051,114		10,722,024		157,959			149,525
Total
Commercial		407,027		405,397		96,580		1,098,731		8,949			17,973
Agricultural		50,163		44,605		-		50,959		(6,029	)		3,000
Commercial Construction		9,780,449		3,599,871		53,947		4,904,850		13,486			13,208
Commercial Real Estate		23,265,114		22,362,617		456,941		24,765,101		522,984			525,404
Residential Real Estate		11,209,906		9,665,231		414,684		7,519,675		396,201			393,331
Farmland		1,846,807		1,845,274		28,962		1,478,558		4,559			29,483
Consumer		201,695		201,695		-		211,775		14,455			15,495
Other		206,894		195,497		-		197,519		5,874			10,677
	$	46,968,055	$	38,320,187	$	1,051,114	$	40,227,168	$	960,479		$	1,008,571

The following table details impaired loan data as of December 31, 2013:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	305,272	$	305,272	$	-	$	216,057	$	24,494		$	25,193
Agricultural		-		-		-		9,803		-			-
Commercial Construction		7,856,411		4,750,157		-		4,105,370		34,908			41,164
Commercial Real Estate		20,120,403		19,252,946		-		13,198,988		493,940			503,392
Residential Real Estate		7,836,718		6,361,592		-		4,564,666		224,439			209,330
Farmland		302,629		302,629		-		1,858,654		803			869
Consumer		313,194		307,456		-		252,944		18,469			21,109
Other		9,146		9,146		-		2,287		556			575
		36,743,773		31,289,198		-		24,208,769		797,609			801,632
With An Allowance Recorded
Commercial		1,452,798		1,452,798		433,714		1,689,125		14,845			20,748
Agricultural		-		-		-		-		-			-
Commercial Construction		5,922,674		3,471,587		830,546		5,025,176		(159	)		-
Commercial Real Estate		5,874,473		5,874,473		423,685		11,072,314		157,536			148,495
Residential Real Estate		1,949,301		1,849,301		526,005		3,661,706		25,739			24,414
Farmland		1,326,982		1,326,982		85,500		663,903		44,638			46,930
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		16,526,228		13,975,141		2,299,450		22,112,224		242,599			240,587
Total
Commercial		1,758,070		1,758,070		433,714		1,905,182		39,339			45,941
Agricultural		-		-		-		9,803		-			-
Commercial Construction		13,779,085		8,221,744		830,546		9,130,546		34,749			41,164
Commercial Real Estate		25,994,876		25,127,419		423,685		24,271,302		651,476			651,887
Residential Real Estate		9,786,019		8,210,893		526,005		8,226,372		250,178			233,744
Farmland		1,629,611		1,629,611		85,500		2,522,557		45,441			47,799
Consumer		313,194		307,456		-		252,944		18,469			21,109
Other		9,146		9,146		-		2,287		556			575
	$	53,270,001	$	45,264,339	$	2,299,450	$	46,320,993	$	1,040,208		$	1,042,219

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, 2014.  The following tables present the number of loan contracts restructured during the 12 months ended December 31, 2014 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
2014	# of Contracts		Pre-Modification		Post-Modification
Farmland		1	$	400,778	$	400,778
Commercial Construction		1		349,976		349,976
Commercial Real Estate		1		1,771,395		1,775,407
Residential Real Estate		1		49,194		49,194
Total Loans		4	$	2,571,343	$	2,575,355
2013
Commercial		1	$	83,748	$	81,277
Commercial Construction		2		228,633		225,959
Commercial Real Estate		1		225,852		225,852
Residential Real Estate		4		1,885,700		1,764,399
Total Loans		8	$	2,423,933	$	2,297,487
2012
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 that subsequently defaulted as of December 31 are as follows:

	2014				2013				2012
	# of Contracts		Recorded Investment		# of Contracts		Recorded Investment		# of Contracts		Recorded Investment
Commercial		-	$	-		1	$	81,277		-	$	-
Commercial Real Estate		-		-		-		-		1		203,291
Residential Real Estate		-		-		-		-		1		10,000
Total Loans		-	$	-		1	$	81,277		2	$	213,291

At December 31, 2014, all restructured loans were performing as agreed.  During 2013 and 2012, restructured loans totaling $81,277 and $10,000 failed to continue to perform as agreed and were charged off in August 2013 and January 2012, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

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, 2014 and 2013, the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	2014		2013
Commitments to Extend Credit	$	68,742,000	$	65,688,000
Standby Letters of Credit		1,762,000		1,411,000

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, 2014

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

$

4,640

0.24260

2.68

2.92260

6/14/2034

6/17/2009

Colony Bankcorp Capital Trust I

4/13/2006

5,155

0.25510

1.50

1.75510

4/13/2036

4/13/2011

Colony Bankcorp Capital Trust II

3/12/2007

9,279

0.25660

1.65

1.90660

3/12/2037

3/12/2012

Colony Bankcorp Capital Trust III

9/14/2007

5,155

0.23260

1.40

1.63260

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 these offerings were used to fund certain acquisitions, pay off holding Company debt and inject capital into the bank subsidiary.

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.  On November 17, 2014, the Company reinstated interest payments on the Trust Preferred Securities and paid $1,069,695 to bring to current status.

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Other Intangible Assets

12 Months Ended

Dec. 31, 2014

Other Intangible Assets [Abstract]

Other Intangible Assets

(8) Other 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, 2012	$	1,056,693	$	(833,183	)	$	223,510
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2013		1,056,693		(868,932	)		187,761
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2014	$	1,056,693	$	(904,681	)	$	152,012

Amortization expense related to the core deposit intangible was $35,749, $35,749 and $35,748 for the years ended December 31, 2014, 2013 and 2012.  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, by class of loan (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	$ 11,805,986	$ 12,736,921	$ 15,649,594
Charge-Offs	(5,104,491)	(6,227,716)	(10,454,175)
Recoveries	792,821	811,781	756,735
Provision	1,308,000	4,485,000	6,784,767
Ending Balance	8,802,316	11,805,986	12,736,921
Loan balance for reviewing high risk loans minimum	250,000	250,000	50,000
Financing receivable transfer from individual impairment review to collective impairment review		4,100,000
Impaired loans below the $250,000 review threshold	3,885,411	2,821,199
Amount of impaired loans below old individual impairment review level of $50,000			1,026,624
Substandard [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Substandard loans, not classified as impaired	9,356,253	6,664,935
Specific allocation associated with Substandard loans	747,982	260,742
Commercial [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	1,017,073	981,021	1,070,560
Charge-Offs	(624,944)	(120,690)	(653,389)
Recoveries	76,002	55,829	139,802
Provision	29,430	100,913	424,048
Ending Balance	497,561	1,017,073	981,021
Agricultural [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	293,886	296,175	297,168
Charge-Offs	0	(34,502)	(3,028)
Recoveries	2,700	6,200	0
Provision	7,586	26,013	2,035
Ending Balance	304,172	293,886	296,175
Commercial Construction [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	1,782,179	1,890,200	3,122,594
Charge-Offs	(1,543,099)	(2,071,162)	(4,106,124)
Recoveries	485,005	253,459	209,352
Provision	498,610	1,709,682	2,664,378
Ending Balance	1,222,695	1,782,179	1,890,200
Residential Construction [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	138,092	138,092	138,092
Charge-Offs	0	0	0
Recoveries	0	0	0
Provision	0	0	0
Ending Balance	138,092	138,092	138,092
Commercial Real Estate [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	4,379,276	5,162,839	6,448,064
Charge-Offs	(1,326,825)	(2,872,408)	(4,325,642)
Recoveries	90,042	297,984	232,880
Provision	522,284	1,790,861	2,807,537
Ending Balance	3,664,777	4,379,276	5,162,839
Residential [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	3,278,269	3,405,947	3,695,357
Charge-Offs	(1,033,966)	(706,242)	(960,620)
Recoveries	31,127	64,583	47,690
Provision	149,897	513,981	623,520
Ending Balance	2,425,327	3,278,269	3,405,947
Farmland [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	311,494	290,526	364,663
Charge-Offs	(233,580)	(20,977)	(224,725)
Recoveries	20,000	21,762	4,716
Provision	5,886	20,183	145,872
Ending Balance	103,800	311,494	290,526
Consumer [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	243,253	227,774	205,154
Charge-Offs	(342,077)	(397,822)	(169,249)
Recoveries	72,477	93,520	81,956
Provision	93,261	319,781	109,913
Ending Balance	66,914	243,253	227,774
Other [Member]
Activity in allowance for loan losses, segregated by class of loan [Roll Forward]
Beginning Balance	362,464	344,347	307,942
Charge-Offs	0	(3,913)	(11,398)
Recoveries	15,468	18,444	40,339
Provision	1,046	3,586	7,464
Ending Balance	$ 378,978	$ 362,464	$ 344,347

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Premises and Equipment

12 Months Ended

Dec. 31, 2014

Premises and Equipment [Abstract]

Premises and Equipment

(6) Premises and Equipment

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

	2014			2013
Land	$	8,270,678		$	7,790,167
Building		23,894,943			23,832,454
Furniture, Fixtures and Equipment		12,243,988			13,846,579
Leasehold Improvements		990,626			970,346
Construction in Progress		14,090			236,591
		45,414,325			46,676,137
Accumulated Depreciation		(20,453,880	)		(21,799,668	)
	$	24,960,445		$	24,876,469

Depreciation charged to operations totaled $1,595,253 in 2014, $1,527,392 in 2013 and $1,676,820 in 2012.

Certain Company facilities and equipment are leased under various operating leases.  Rental expense approximated $613,000 for 2014, $490,000 for 2013 and $447,000 for 2012.

Future minimum rental payments as of December 31, 2014 are as follows:

Year Ending December 31	Amount
2015	$	129,457
2016		73,883
2017		38,500
	$	241,840

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Other Real Estate Owned

12 Months Ended

Dec. 31, 2014

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, 2014, 2013 and 2012 was $10,401,832, $15,502,462 and $15,940,693, 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 2014, 2013 and 2012 as of December 31:

	2014			2013			2012
Balance, Beginning of Year	$	15,502,462		$	15,940,693		$	20,445,085
Additions		3,852,848			10,251,006			9,729,174
Sales of OREO		(7,102,136	)		(7,804,080	)		(9,711,890	)
Loss on Sale		(844,515	)		(1,563,739	)		(1,818,967	)
Provision for Losses		(1,006,827	)		(1,321,418	)		(2,702,709	)
Balance, End of Year	$	10,401,832		$	15,502,462		$	15,940,693

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income Taxes

(9) Income Taxes

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

	2014		2013		2012
Current Federal (Benefit) Expense	$	1,335,337	$	156,642	$	(6,114	)
Deferred Federal Expense		1,932,950		2,178,222		1,204,439
Federal Income Tax Expense		3,268,287		2,334,864		1,198,325
Current State Income Tax  Expense		-		-		2,526
Federal and State Income Tax Expense	$	3,268,287	$	2,334,864	$	1,200,851

The federal income tax (benefit) expense of $3,268,287 in 2014, $2,334,864 in 2013 and $1,198,325 in 2012 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:

	2014			2013			2012
Statutory Federal Income Taxes	$	3,671,971		$	2,367,729		$	1,306,331
Tax-Exempt Interest		(74,138	)		(104,307	)		(89,983	)
Premiums on Officers’ Life Insurance		(186,712	)		(111,749	)		(59,603	)
Meal and Entertainment Disallowance		14,044			15,319			14,574
Other		(156,878	)		167,872			27,006
Actual Federal Income Taxes	$	3,268,287		$	2,334,864		$	1,198,325

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

	2014			2013
Deferred Tax Assets
Allowance for Loan Losses	$	2,992,787		$	4,014,035
Other Real Estate		1,178,278			1,404,812
Deferred Compensation		287,365			303,380
Investments		340,000			340,000
Goodwill		256,714			301,238
Net Operating Loss Carryforward		-			730,484
Other		427,924			343,919
		5,483,068			7,437,868
Deferred Tax Liabilities
Premises and Equipment		(1,299,216	)		(1,322,377	)
Other		(4,185	)		(2,874	)
		(1,303,401	)		(1,325,251	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		2,495,896			4,550,362
Net Deferred Tax Assets	$	6,675,563		$	10,662,979

The deferred tax assets are included in Other Assets in the consolidated balance sheets.  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 as of December 31 follows.

	2014		2013			2012
Balance, Beginning	$	42,327	$	38,676		$	33,368
Positions Taken During the Current Year		-		7,247			11,794
Reductions Resulting from Lapse of Statutes of Limitation		42,327		(3,596	)		(6,486	)
Balance, Ending	$	-	$	42,327		$	38,676

The net decrease of $42,327 is included in income tax expense for the year ended December 31, 2014, while the net increase of $3,651 is included in income tax expense for the year ended December 31, 2013.

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Other Intangible Assets (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Analysis of core deposit intangible activity [Abstract]
Annual rate of amortization expense till 2019	$ 35,749
Core Deposit Intangible [Member]
Analysis of core deposit intangible activity [Abstract]
Acquired intangible asset, Gross Beginning Balance	1,056,693	1,056,693
Accumulated Amortization, Beginning Balance	(868,932)	(833,183)
Acquired intangible asset, Net Beginning Balance	187,761	223,510
Amortization Expense	(35,749)	(35,749)	35,748
Acquired intangible asset, Gross Ending Balance	1,056,693	1,056,693	1,056,693
Accumulated Amortization, Ending Balance	(904,681)	(868,932)	(833,183)
Acquired intangible asset, Net Ending Balance	$ 152,012	$ 187,761	$ 223,510

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Deposits (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Deposits [Abstract]
Aggregate amount of overdrawn deposit accounts reclassified as loan balances	$ 511,387	$ 400,552
Components of interest-bearing deposits [Abstract]
Interest-Bearing Demand	363,501,727	357,290,975
Savings	59,215,257	54,094,617
Time, $100,000 and Over	210,502,901	220,672,794
Other Time	217,743,826	240,210,393
Total Interest bearing Deposits	850,963,711	872,268,779
Brokered deposits balances	26,298,267	26,579,934
Certificates of deposits, $100,000 or more	140,832,026	148,388,694
Scheduled maturities of certificates of deposits [Abstract]
2015	302,584,884
2016	72,869,687
2017	25,349,468
2018	19,773,611
2019 and Thereafter	7,669,077
Total	$ 428,246,727

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Other Real Estate Owned (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Other Real Estate [Roll Forward]
Balance, Beginning of Year	$ 15,502,462	$ 15,940,693	$ 20,445,085
Additions	3,852,848	10,251,006	9,729,174
Sales of OREO	(7,102,136)	(7,804,080)	(9,711,890)
Loss on Sale	(844,515)	(1,563,739)	(1,818,967)
Provision for Losses	(1,006,827)	(1,321,418)	(2,702,709)
Balance, Ending of Year	$ 10,401,832	$ 15,502,462	$ 15,940,693

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Investment Securities (Tables)

12 Months Ended

Dec. 31, 2014

Investment Securities [Abstract]

Investment securities

Investment securities as of December 31, 2014 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	278,419,055	$	155,902	$	(7,511,288	)	$	271,063,669
State, County and Municipal		3,516,400		27,181		(12,664	)		3,530,917
	$	281,935,455	$	183,083	$	(7,523,952	)	$	274,594,586
Securities Held to Maturity
State, County and Municipal	$	29,796	$	127	$	-		$	29,923

Amortized cost and fair value of investment securities by contractual maturity

The amortized cost and fair value of investment securities as of December 31, 2014, 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	$	715,764	$	717,138	$	29,796	$	29,923
Due After One Year Through Five Years		718,836		730,598		-		-
Due After Five Years Through Ten Years		1,158,938		1,157,251		-		-
Due After Ten Years		922,862		925,930		-		-
		3,516,400		3,530,917		29,796		29,923
Mortgage-Backed Securities		278,419,055		271,063,669		-		-
	$	281,935,455	$	274,594,586	$	29,796	$	29,923

Investment securities as of December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	273,029,073	$	118,843	$	(13,799,858	)	$	259,348,058
State, County and Municipal		3,978,857		14,963		(83,988	)		3,909,832
	$	277,007,930	$	133,806	$	(13,883,846	)	$	263,257,890
Securities Held to Maturity
State, County and Municipal	$	37,062	$	247	$	-		$	37,309

Invested securities in a continuous unrealized loss position

Information pertaining to securities with gross unrealized losses at December 31, 2014 and 2013 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, 2014
U.S. Government Agencies
Mortgage-Backed	$	66,609,319	$	(396,896	)	$	183,645,552	$	(7,114,392	)	$	250,254,871	$	(7,511,288	)
State, County and Municipal		-		-			1,379,547		(12,664	)		1,379,547		(12,664	)
	$	66,609,319	$	(396,896	)	$	185,025,099	$	(7,127,056	)	$	251,634,418	$	(7,523,952	)
December 31, 2013
U.S. Government Agencies
Mortgage-Backed	$	190,063,827	$	(9,440,663	)	$	63,193,601	$	(4,359,195	)	$	253,257,428	$	(13,799,858	)
State, County and Municipal		1,647,043		(83,988	)		-		-			1,647,043		(83,988	)
	$	191,710,870	$	(9,524,651	)	$	63,193,601	$	(4,359,195	)	$	254,904,471	$	(13,883,846	)

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Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
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 (in hundredths)	10.00%
Income Taxes [Abstract]
Probability of uncertain tax positions of being realized upon settlement, minimum (in hundredths)	50.00%
Bank-Owned Life Insurance [Abstract]
Cash surrender value of insurance contracts	$ 14,530,851	$ 13,940,176
Banking Premises [Member]
Property, Plant and Equipment [Line Items]
Methods	Straight-Line and Accelerated
Banking Premises [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of the assets	15 years
Banking Premises [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of the assets	40 years
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Methods	Straight-Line and Accelerated
Furniture and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of the assets	5 years
Furniture and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful lives of the assets	10 years

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Restricted Stock - Unearned Compensation

12 Months Ended

Dec. 31, 2014

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, the remaining shares which may be issued are 108,042 at December 31, 2014.  During 2014, 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 the shares, when issued, is amortized against earnings using the straight-line method over the restriction period, typically three years.

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Related Party Transactions

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions

(19) Related Party Transactions

The following table reflects the activity and aggregate balance of direct and indirect loans to directors, executive officers or principal holders of equity securities of the Company. 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:

	2014			2013
Balance, Beginning	$	4,064,588		$	4,776,492
New Loans		6,406,713			7,610,259
Repayments		(7,237,352	)		(8,322,163	)
Balance, Ending	$	3,233,949		$	4,064,588

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

12 Months Ended

Dec. 31, 2014

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

Balance Sheets

COLONY BANKCORP, INC. (PARENT ONLY)

BALANCE SHEETS

DECEMBER 31

ASSETS

	2014			2013
Cash	$	5,750,652		$	1,422,289
Premises and Equipment, Net		1,199,639			1,272,965
Investment in Subsidiary, at Equity		115,066,948			114,559,866
Other		1,708,380			1,221,285
Total Assets	$	123,725,619		$	118,476,405
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Dividends Payable	$	315,000		$	3,119,146
Other		154,307			1,174,020
		469,307			4,293,166
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		28,000,000			28,000,000
Common Stock, Par Value $1; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of December 31, 2014 and 2013		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		38,287,934			33,444,913
Accumulated Other Comprehensive Loss, Net of Tax		(4,844,974	)		(9,075,026	)
		99,027,312			89,954,239
Total Liabilities and Stockholders’ Equity	$	123,725,619		$	118,476,405

Statements of Operations

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2014			2013		2012
Income
Dividends from Subsidiary	$	12,015,572		$	1,515,549	$	17,372
Management Fees		581,334			581,334		590,422
Other		100,269			96,953		101,397
	$	12,697,175			2,193,836		709,191
Expenses
Interest		517,381			516,641		554,004
Amortization		938			2,250		2,250
Salaries and Employee Benefits		782,152			748,149		735,919
Other		538,847			543,139		558,151
		1,839,318			1,810,179		1,850,324
Income (Loss) Before Taxes and Equity in Undistributed Earnings of Subsidiary		10,857,857			383,657		(1,141,133	)
Income Tax Benefits		396,738			406,518		365,691
Income (Loss) Before Equity in Undistributed Earnings of Subsidiary		11,254,595			790,175		(775,442	)
Equity in Undistributed Earnings of Subsidiary		(3,722,970	)		3,838,870		3,416,740
Net Income		7,531,625			4,629,045		2,641,298
Preferred Stock Dividends		2,688,604			1,508,761		1,435,385
Net Income Available to Common Stockholders	$	4,843,021		$	3,120,284	$	1,205,913

Statements of Comprehensive Income (Loss)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31

	2014			2013			2012
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Other Comprehensive Income (Loss)
Gains (Losses) on Securities Arising During the Year		6,432,906			(13,886,854	)		(283,076	)
Tax Effect		(2,187,189	)		4,721,531			96,246
Realized Gains (Losses) on Sale of AFS Securities		(23,735	)		(2,819	)		(2,897,032	)
Tax Effect		8,070			959			984,991
Impairment Loss on Securities		-			366,623			59,568
Tax Effect		-			(124,652	)		(20,253	)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		4,230,052			(8,925,212	)		(2,059,556	)
Comprehensive Income (Loss)	$	11,761,677		$	(4,296,167	)	$	581,742

Statements of Cash Flows

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2014			2013			2012
Cash Flows from Operating Activities
Net Income	$	7,531,625		$	4,629,045		$	2,641,298
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities
Depreciation and Amortization		75,347			80,711			93,427
Equity in Undistributed Earnings of Subsidiary		3,722,970			(3,838,870	)		(3,416,740	)
Change in Interest Payable		(1,069,695	)		516,641			529,922
Other		(437,115	)		(390,962	)		(405,379	)
		9,823,132			996,565			(557,472	)
Cash Flows from Investing Activities
Purchases of Premises and Equipment		(2,020	)		(68,708	)		-
Cash Flows from Financing Activities
Dividends Paid on Preferred Stock		(5,492,749	)		-			-
Increase (Decrease) in Cash		4,328,363			927,857			(557,472	)
Cash, Beginning		1,422,289			494,432			1,051,904
Cash, Ending	$	5,750,652		$	1,422,289		$	494,432

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Deposits (Tables)

12 Months Ended

Dec. 31, 2014

Deposits [Abstract]

Components of interest-bearing deposits

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

	2014		2013
Interest-Bearing Demand	$	363,501,727	$	357,290,975
Savings		59,215,257		54,094,617
Time, $100,000 and Over		210,502,901		220,672,794
Other Time		217,743,826		240,210,393
	$	850,963,711	$	872,268,779

Scheduled maturities of certificates of deposits

As of December 31, 2014, the scheduled maturities of certificates of deposit are as follows:

Year	Amount
2015	$	302,584,884
2016		72,869,687
2017		25,349,468
2018		19,773,611
2019 and Thereafter		7,669,077
	$	428,246,727

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net Income	$ 7,531,625	$ 4,629,045	$ 2,641,298
Investment Securities Available for Sale
Gains (Losses) on Securities Arising During the Year	6,432,906	(13,886,854)	(283,076)
Tax Effect	(2,187,189)	4,721,531	96,246
Realized Gains (Losses) on sale of AFS Securities	(23,735)	(2,819)	(2,897,032)
Tax Effect	8,070	959	984,991
Impairment Loss on Securities	0	366,623	59,568
Tax Effect	0	(124,652)	(20,253)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	4,230,052	(8,925,212)	(2,059,556)
Comprehensive Income (Loss)	$ 11,761,677	$ (4,296,167)	$ 581,742

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Investment Securities

12 Months Ended

Dec. 31, 2014

Investment Securities [Abstract]

Investment Securities

(3) Investment Securities

Investment securities as of December 31, 2014 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	278,419,055	$	155,902	$	(7,511,288	)	$	271,063,669
State, County and Municipal		3,516,400		27,181		(12,664	)		3,530,917
	$	281,935,455	$	183,083	$	(7,523,952	)	$	274,594,586
Securities Held to Maturity
State, County and Municipal	$	29,796	$	127	$	-		$	29,923

The amortized cost and fair value of investment securities as of December 31, 2014, 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	$	715,764	$	717,138	$	29,796	$	29,923
Due After One Year Through Five Years		718,836		730,598		-		-
Due After Five Years Through Ten Years		1,158,938		1,157,251		-		-
Due After Ten Years		922,862		925,930		-		-
		3,516,400		3,530,917		29,796		29,923
Mortgage-Backed Securities		278,419,055		271,063,669		-		-
	$	281,935,455	$	274,594,586	$	29,796	$	29,923

Investment securities as of December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	273,029,073	$	118,843	$	(13,799,858	)	$	259,348,058
State, County and Municipal		3,978,857		14,963		(83,988	)		3,909,832
	$	277,007,930	$	133,806	$	(13,883,846	)	$	263,257,890
Securities Held to Maturity
State, County and Municipal	$	37,062	$	247	$	-		$	37,309

Proceeds from sales of investments available for sale were $13,620,956 in 2014, $72,672,795 in 2013 and $227,690,806 in 2012.  Gross realized gains totaled $67,601 in 2014, $442,124 in 2013 and $3,084,666 in 2012.  Gross realized gains of $1,800 in 2014 was due to a gain on a call for a held to maturity investment.  Gross realized losses totaled $45,666 in 2014, $805,928 in 2013 and $247,202 in 2012.

Investment securities having a carrying value totaling $135,531,563 and $112,912,815 as of December 31, 2014 and 2013, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at December 31, 2014 and 2013 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, 2014
U.S. Government Agencies
Mortgage-Backed	$	66,609,319	$	(396,896	)	$	183,645,552	$	(7,114,392	)	$	250,254,871	$	(7,511,288	)
State, County and Municipal		-		-			1,379,547		(12,664	)		1,379,547		(12,664	)
	$	66,609,319	$	(396,896	)	$	185,025,099	$	(7,127,056	)	$	251,634,418	$	(7,523,952	)
December 31, 2013
U.S. Government Agencies
Mortgage-Backed	$	190,063,827	$	(9,440,663	)	$	63,193,601	$	(4,359,195	)	$	253,257,428	$	(13,799,858	)
State, County and Municipal		1,647,043		(83,988	)		-		-			1,647,043		(83,988	)
	$	191,710,870	$	(9,524,651	)	$	63,193,601	$	(4,359,195	)	$	254,904,471	$	(13,883,846	)

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, 2014, the debt securities with unrealized losses have depreciated 2.90 percent from the Company’s amortized cost basis. These securities are guaranteed by either the U.S. Government, other governments or U.S. corporations.  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, 2014 which was completely written off during prior years.  This investment is comprised of one issuance of a trust preferred security and has a book value of $0.  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, $366,623 and $59,568 were written off during the years ended December 31, 2013 and 2012, respectively.

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Loans, Troubled Debt Restructuring (Details) (USD $)	1 Months Ended		12 Months Ended
	Aug. 31, 2013	Jan. 31, 2012	Dec. 31, 2014 Security	Dec. 31, 2013 Security	Dec. 31, 2012 Security
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, Number of Contracts			4	8	7
Troubled Debt Restructurings, Pre-Modification			$ 2,571,343	$ 2,423,933	$ 1,247,169
Troubled Debt Restructurings, Post-Modification			2,575,355	2,297,487	1,244,198
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts			0	1	2
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment			0	81,277	213,291
Amount of restructured loans charged off	81,277	10,000
Farmland [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, Number of Contracts			1
Troubled Debt Restructurings, Pre-Modification			400,778
Troubled Debt Restructurings, Post-Modification			400,778
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, Number of Contracts				1	1
Troubled Debt Restructurings, Pre-Modification				83,748	107,749
Troubled Debt Restructurings, Post-Modification				81,277	107,749
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts			0	1	0
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment			0	81,277	0
Commercial Construction [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, Number of Contracts			1	2
Troubled Debt Restructurings, Pre-Modification			349,976	228,633
Troubled Debt Restructurings, Post-Modification			349,976	225,959
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, Number of Contracts			1	1	1
Troubled Debt Restructurings, Pre-Modification			1,771,395	225,852	56,835
Troubled Debt Restructurings, Post-Modification			1,775,407	225,852	56,835
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts			0	0	1
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment			0	0	203,291
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Troubled Debt Restructurings, Number of Contracts			1	4	5
Troubled Debt Restructurings, Pre-Modification			49,194	1,885,700	1,082,585
Troubled Debt Restructurings, Post-Modification			49,194	1,764,399	1,079,614
Troubled Debt Restructurings That Subsequently Defaulted, Number of Contracts			0	0	1
Troubled Debt Restructurings That Subsequently Defaulted, Recorded Investment			$ 0	$ 0	$ 10,000

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Preferred Stock (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Class of Stock [Line Items]
Warrants to purchase shares (in shares)	500,000
Liquidation preference (in dollars per share)	$ 1,000
Exercise price (in dollars per share)	$ 8.40
Preferred stock dividend rate for first five years (in hundredths)	5.00%
Preferred stock dividend rate thereafter five years (in hundredths)	9.00%
Dividends Paid on Preferred Stock	$ (5,492,749)	$ 0	$ 0
Cumulative Perpetual Preferred Stock, Series A [Member]
Class of Stock [Line Items]
Shares issued for cash during period (in shares)	28,000

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Fair Value of Financial Instruments and Fair Value Measurements

12 Months Ended

Dec. 31, 2014

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 and classified as Level 1.  If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable instruments and classified as Level 2.  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 and is classified as Level 1.

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.  Most loans are classified as Level 2, but impaired loans with a related allowance are classified as Level 3.

Bank-Owned Life Insurance - The carrying value of bank-owned life insurance policies approximates fair value and is classified as Level 1.

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.  Subordinated Debentures are classified as Level 1.

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.

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

	Carrying		Estimated		Level
2014	Amount		Fair Value		1		2		3
	(in Thousands)
Assets
Cash and Short-Term Investments	$	65,811	$	65,811	$	65,811	$	-	$	-
Investment Securities Available for Sale		274,595		274,595		-		273,647		948
Investment Securities Held to Maturity		30		30		-		30		-
Federal Home Loan Bank Stock		2,831		2,831		2,831		-		-
Loans, Net		736,930		738,948		-		731,170		7,778
Bank-Owned Life Insurance		14,531		14,531		14,531		-		-
Liabilities
Deposits		979,303		980,874		551,057		429,817		-
Subordinated Debentures		24,229		24,229		24,229		-		-
Other Borrowed Money		40,000		41,962		-		41,962		-
2013
Assets
Cash and Short-Term Investments	$	68,147	$	68,147	$	68,147	$	-	$	-
Investment Securities Available for Sale		263,258		263,258		-		262,317		941
Investment Securities Held to Maturity		37		37		-		37		-
Federal Home Loan Bank Stock		3,164		3,164		3,164		-		-
Loans, Net		739,052		741,112		-		729,436		11,676
Bank-Owned Life Insurance		10,165		10,165		10,165		-		-
Liabilities
Deposits		987,529		989,101		526,646		462,455		-
Subordinated Debentures		24,229		24,229		24,229		-		-
Other Borrowed Money		40,000		42,074		-		42,074		-

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 on a recurring and nonrecurring basis, 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 loans 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 and Nonrecurring 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, 2014 and 2013, 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, 2013.  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
2014	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	$	271,063,669	$	-	$	271,063,669	$	-
State, County and Municipal		3,530,917		-		2,582,527		948,390
	$	274,594,586	$	-	$	273,646,196	$	948,390
Nonrecurring
Impaired Loans	$	7,778,279	$	-	$	-	$	7,778,279
Other Real Estate	$	6,128,365	$	-	$	-	$	6,128,365
2013
Recurring
Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	259,348,058	$	-	$	259,348,058	$	-
State, County and Municipal		3,909,832		-		2,968,567		941,265
	$	263,257,890	$	-	$	262,316,625		941,265
Nonrecurring
Impaired Loans	$	11,675,691	$	-	$	-	$	11,675,691
Other Real Estate	$	7,019,799	$	-	$	-	$	7,019,799

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 tables present 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, 2014 and 2013.  These tables are comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2014		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Real Estate
Commercial Construction	$	82,422	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(22.00)% - 38.10% (8.05%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 10.00% (5.00%)
Residential Real Estate		1,650,474	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(2.30)% - 191.70% (94.70%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 10.00% (5.00%)
			Income Approach	Capitalization Rate		13.75%
Commercial Real Estate		5,678,297	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00% - 0.00% (0.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 90.00% (45.00%)
			Income Approach	Capitalization Rate		11.00%
Farmland		367,086	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(8.30)% - 252.50% (122.10%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		10.00% - 50.00% (30.00%)
Other Real Estate Owned		6,128,365	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(40.00)% - 45.00% (2.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.33% - 69.36% (31.88%)
			Income Approach	Discount Rate		9.00%
				Capitalization Rate		10.00%

	December 31, 2013		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Impaired Loans
Commercial	$	1,019,084	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00% - 15.00% (7.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		10.00% - 50.00% (30.00%)
Real Estate
Commercial Construction		2,641,041	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(16.00)% - 28.00% (6.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 10.00% (5.00%)
			Income Approach	Capitalization Rate		8.50%
Residential Real Estate		1,323,296	Sales Comparison	Adjustment for Differences Between the Comparable Sales		0.00% - 46.00% (23.00%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.00% - 25.00% (12.50%)
Commercial Real Estate		5,450,788	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(27.20%) - 216.80% (94.80%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		25.00% - 90.00% (57.50%)
			Income Approach	Capitalization Rate		11.00%
Farmland		1,241,482	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(55.00%) - 388.00% (166.50%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		10.00%-35.00% (22.50%)
Other Real Estate Owned		7,019,799	Sales Comparison	Adjustment for Differences Between the Comparable Sales		(10.00%) - 319.10% (154.55%)
				Management Adjustments for Age of Appraisals and/or Current Market Conditions		0.36% - 87.81% (29.99%)
			Income Approach	Discount Rate		10.00%

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, 2014, 2013 and 2012:

	Available for Sale Securities
	2014		2013			2012
Balance, Beginning	$	941,265	$	1,138,238		$	1,122,427
Transfers into Level 3		-		-			788,933
Transfers out of Level 3		-		(41,908	)		-
Securities Purchased During the Year		-		-			-
Securities Called During the Year		-		-			(1,000,000	)
Loss on OTTI Impairment Included in Noninterest Income		-		(366,623	)		(59,568	)
Unrealized Gains Included in Other Comprehensive Income		7,125		211,558			78,201
Balance, Ending	$	948,390	$	941,265		$	1,138,238

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, 2013, the Company had transfers out of level 3 and into level 2.  The transfers out of level 3 were the result of increased market activity for these types of securities, as well as more current credit ratings on these securities.  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, 2014, 2013 or 2012.

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2014 and 2013:

December 31, 2014	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
State, County and Municipal	$	948,390	Discounted Cash Flow	Discount Rate or Yield		N/A*
December 31, 2013
State, County and Municipal	$	941,265	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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Supplemental Cash Flow Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash payments [Abstract]
Interest Expense	$ 7,898,543	$ 7,111,361	$ 10,942,113
Income Taxes	113,000	173,883	0
Noncash financing and investing activities [Abstract]
Acquisitions of Real Estate Through Loan Foreclosures	3,852,848	10,251,006	9,729,174
Change In Unrealized Gain (Loss) on AFS Investment Securities	$ 6,409,171	$ (13,523,050)	$ (3,120,540)

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Other Real Estate Owned (Tables)

12 Months Ended

Dec. 31, 2014

Other Real Estate Owned [Abstract]

Change in other real estate owned

The following table details the change in OREO during 2014, 2013 and 2012 as of December 31:

	2014			2013			2012
Balance, Beginning of Year	$	15,502,462		$	15,940,693		$	20,445,085
Additions		3,852,848			10,251,006			9,729,174
Sales of OREO		(7,102,136	)		(7,804,080	)		(9,711,890	)
Loss on Sale		(844,515	)		(1,563,739	)		(1,818,967	)
Provision for Losses		(1,006,827	)		(1,321,418	)		(2,702,709	)
Balance, End of Year	$	10,401,832		$	15,502,462		$	15,940,693

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Preferred Stock

12 Months Ended

Dec. 31, 2014

Preferred Stock [Abstract]

Preferred Stock

(13) Preferred Stock

At December 31, 2014, the Company had 28,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) issued and outstanding with private investors.  The Company also had a warrant (the Warrant) to purchase up to 500,000 shares of the Company’s common stock outstanding with private investors.  Both the Preferred Stock and the Warrant originated in 2009 through transactions with the United States Department of the Treasury and were subsequently sold to the public through an auction process during 2013.

The Preferred Stock qualifies as Tier 1 capital and 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.  The Warrant may be exercised on or before January 9, 2019 at an exercise price of $8.40 per share.  No voting rights may be exercised with respect to the shares of the Warrant until the Warrant has been exercised.

The Preferred Stock requires a cumulative cash dividend be paid quarterly at a rate of 9 percent per annum.  Prior to January 9, 2014 the annual dividend rate for the Preferred Stock was 5 percent.  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 Preferred Stock.  On November 17, 2014, the Company reinstated dividend payments on the Preferred Stock and paid $5,492,749 of accumulated dividends in arrears to the holders of the Preferred Stock.