10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES

EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016	COMMISSION FILE NUMBER 0-12436
COLONY BANKCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
GEORGIA	58-1492391
(STATE OR OTHER JURISDICTION OF	(I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)	IDENTIFICATION NUMBER)
115 SOUTH GRANT STREET, FITZGERALD, GEORGIA 31750
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES
229/426-6000
REGISTRANT’S TELEPHONE NUMBER INCLUDING AREA CODE

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED REPORTS REQUIRED TO BE FILED BY SECTIONS 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.

YES  X     NO

INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS SUBMITTED ELECTRONICALLY AND POSTED ON ITS CORPORATE WEB SITE, IF ANY, EVERY INTERACTIVE DATA FILE REQUIRED TO BE SUBMITTED AND POSTED PURSUANT TO RULE 405 OF REGULATION S-T (§232.405 OF THIS CHAPTER) DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO SUBMIT AND POST SUCH FILES).

YES  X     NO

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A LARGE ACCELERATED FILER, AN ACCELERATED FILER, A NON-ACCELERATED FILER OR A SMALLER REPORTING COMPANY. SEE DEFINITIONS OF “ACCELERATED FILER”, “LARGE ACCELERATED FILER” AND “SMALLER REPORTING COMPANY” IN RULE 12b-2 OF THE EXCHANGE ACT.

LARGE ACCELERATED FILER	ACCELERATED FILER
NON-ACCELERATED FILER	SMALLER REPORTING COMPANY   X
(DO NOT CHECK IF A SMALLER REPORTING COMPANY)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT).

YES          NO  X

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER’S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.

CLASS	OUTSTANDING AT NOVEMBER 1, 2016
COMMON STOCK, $1 PAR VALUE	8,439,258

TABLE OF CONTENTS

		Page
PART I – Financial Information
Forward Looking Statement Disclosure		3
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 4.	Controls and Procedures	55
PART II – Other Information
Item 6.	Exhibits	56
Signatures		59

2

Forward Looking Statement Disclosure

Certain statements contained in this Quarterly 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; (ii) 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, terrorism or cyberterrorism.

● 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.

● 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).

3

PART 1. FINANCIAL INFORMATION

ITEM 1 

FINANCIAL STATEMENTS

THE FOLLOWING FINANCIAL STATEMENTS ARE PROVIDED FOR COLONY BANKCORP, INC. AND ITS WHOLLY-OWNED SUBSIDIARY BANK, COLONY BANK

A. CONSOLIDATED BALANCE SHEETS – SEPTEMBER 30, 2016 (UNAUDITED) AND DECEMBER 31, 2015 (AUDITED).

B. CONSOLIDATED STATEMENTS OF INCOME – FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015 (UNAUDITED).

C. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015 (UNAUDITED).

D. CONSOLIDATED STATEMENTS OF CASH FLOWS – FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015 (UNAUDITED).

THE CONSOLIDATED FINANCIAL STATEMENTS FURNISHED HAVE NOT BEEN AUDITED BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, BUT REFLECT, IN THE OPINION OF MANAGEMENT, ALL ADJUSTMENTS (CONSISTING SOLELY OF NORMAL RECURRING ADJUSTMENTS) NECESSARY FOR A FAIR PRESENTATION OF THE RESULTS OF OPERATIONS FOR THE PERIODS PRESENTED.

THE RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2016 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED FOR THE FULL YEAR.

4

PART 1 (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2016 AND DECEMBER 31, 2015

(DOLLARS IN THOUSANDS)

ASSETS	September 30, 2016			December 31, 2015
	(Unaudited)			(Audited)
Cash and Cash Equivalents
Cash and Due from Banks	$	17,803		$	22,257
Interest-Bearing Deposits		13,872			38,615
Investment Securities
Available for Sale, at Fair Value		286,089			296,149
Federal Home Loan Bank Stock, at Cost		3,010			2,731
Loans		776,117			758,636
Allowance for Loan Losses		(9,203	)		(8,604	)
Unearned Interest and Fees		(382	)		(357	)
		766,532			749,675
Premises and Equipment		27,745			26,454
Other Real Estate (Net of Allowance of $1,509 and $1,582 as of September 30, 2016 and December 31, 2015, Respectively)		9,812			8,839
Other Intangible Assets		89			116
Other Assets		27,865			29,313
Total Assets	$	1,152,817		$	1,174,149
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing	$	138,941		$	133,886
Interest-Bearing		839,649			877,668
		978,590			1,011,554
Borrowed Money
Subordinated Debentures		24,229			24,229
Other Borrowed Money		46,000			40,000
		70,229			64,229
Other Liabilities		3,263			2,909
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued 14,360 Shares and 18,021 as of September 30, 2016 and December 31, 2015, Respectively		14,360			18,021
Common Stock, Par Value $1 a Share; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of September 30, 2016 and December 31, 2015		8,439			8,439
Paid-In Capital		29,145			29,145
Retained Earnings		49,582			44,286
Accumulated Other Comprehensive (Loss), Net of Tax Benefits		(791	)		(4,434	)
		100,735			95,457
Total Liabilities and Stockholders' Equity	$	1,152,817		$	1,174,149

The accompanying notes are an integral part of these statements.

5

PART I (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(UNAUDITED)

(DOLLARS IN THOUSANDS)

	Three Months Ended				Nine Months Ended
	September 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Interest Income
Loans, Including Fees	$	9,810	$	9,981	$	29,135	$	29,563
Federal Funds Sold		-		-		-		15
Deposits with Other Banks		18		17		79		58
Investment Securities
U.S. Government Agencies		1,266		1,060		3,978		3,108
State, County and Municipal		30		28		97		78
Dividends on Other Investments		32		31		97		91
		11,156		11,117		33,386		32,913
Interest Expense
Deposits		1,187		1,210		3,580		3,648
Borrowed Money		413		410		1,269		1,319
		1,600		1,620		4,849		4,967
Net Interest Income		9,556		9,497		28,537		27,946
Provision for Loan Losses		354		250		1,062		741
Net Interest Income After Provision for Loan Losses		9,202		9,247		27,475		27,205
Noninterest Income
Service Charges on Deposits		1,128		1,133		3,185		3,184
Other Service Charges, Commissions and Fees		686		661		2,104		1,963
Mortgage Fee Income		254		138		507		385
Securities Gains (Losses)		256		9		385		12
Other		313		292		980		1,259
		2,637		2,233		7,161		6,803
Noninterest Expenses
Salaries and Employee Benefits		4,726		4,395		13,825		13,270
Occupancy and Equipment		1,025		1,026		2,967		3,036
Other		2,903		2,914		8,451		8,635
		8,654		8,335		25,243		24,941
Income Before Income Taxes		3,185		3,145		9,393		9,067
Income Taxes		927		945		2,907		2,799
Net Income		2,258		2,200		6,486		6,268
Preferred Stock Dividends		378		594		1,189		1,854
Net Income Available to Common Stockholders	$	1,880	$	1,606	$	5,297	$	4,414
Net Income Per Share of Common Stock
Basic	$	0.22	$	0.19	$	0.63	$	0.52
Diluted	$	0.22	$	0.19	$	0.62	$	0.52
Cash Dividends Declared Per Share of Common Stock	$	-	$	-	$	-	$	-
Weighted Average Basic Shares Outstanding		8,439,258		8,439,258		8,439,258		8,439,258
Weighted Average Diluted Shares Outstanding		8,506,268		8,466,285		8,495,752		8,449,057

The accompanying notes are an integral part of these statements.

6

PART I (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(UNAUDITED)

(DOLLARS IN THOUSANDS)

	Three Months Ended						Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Net Income	$	2,258		$	2,200		$	6,486		$	6,268
Other Comprehensive Income:
Gains (Losses) on Securities Arising During the Year		(1,182	)		2,497			5,905			3,747
Tax Effect		402			(849	)		(2,008	)		(1,274	)
Realized Gains on Sale of AFS Securities		(256	)		(9	)		(385	)		(12	)
Tax Effect		87			3			131			4
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		(949	)		1,642			3,643			2,465
Comprehensive Income	$	1,309		$	3,842		$	10,129		$	8,733

The accompanying notes are an integral part of these statements.

7

PART I (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(UNAUDITED)

(DOLLARS IN THOUSANDS)

	Nine Months Ended
	September 30, 2016			September 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	6,486		$	6,268
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation		1,178			1,237
Provision for Loan Losses		1,062			741
Securities (Gains)		(385	)		(12	)
Amortization and Accretion		1,142			1,391
(Gain) on Sale of Other Real Estate and Repossessions		(17	)		(61	)
Provision for Losses on Other Real Estate		126			431
Increase in Cash Surrender Value of Life Insurance		(416	)		(132	)
Loss on Sale of Premises & Equipment		80			11
Other Prepaids, Deferrals and Accruals, Net		340			928
		9,596			10,802
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Investment Securities Available for Sale		(49,355	)		(63,715	)
Proceeds from Maturities, Calls, and Paydowns of Investment Securities:
Available for Sale		39,022			40,840
Held for Maturity		-			5
Proceeds from Sale of Investment Securities
Available for Sale		25,210			28,274
Interest-Bearing Deposits in Other Banks		24,743			5,210
Net Loans to Customers		(21,968	)		(25,631	)
Purchase of Premises and Equipment		(2,635	)		(776	)
Proceeds from Sale of Other Real Estate and Repossessions		2,981			5,404
Federal Home Loan Bank Stock		(279	)		100
Proceeds from Sale of Premises and Equipment		86			29
		17,805			(10,260	)
CASH FLOWS FROM FINANCING ACTIVITIES
Noninterest-Bearing Customer Deposits		5,055			(2,547	)
Interest-Bearing Customer Deposits		(38,019	)		(18,722	)
Dividends Paid for Preferred Stock		(1,230	)		(1,908	)
Redemption of Preferred Stock		(3,661	)		(4,833	)
Payments on Federal Home Loan Bank Advances		(4,000	)		(27,000	)
Proceeds from Federal Home Loan Bank Advances		10,000			27,000
		(31,855	)		(28,010	)
Net Decrease in Cash and Cash Equivalents		(4,454	)		(27,468	)
Cash and Cash Equivalents at Beginning of Period		22,257			44,605
Cash and Cash Equivalents at End of Period	$	17,803		$	17,137

The accompanying notes are an integral part of these statements.

8

PART I (Continued)

Item 1 (Continued

COLONY BANKCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Presentation

Colony Bankcorp, Inc. (the Company) is a bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Colony Bank, Fitzgerald, Georgia (the Bank). All significant intercompany accounts have been eliminated in consolidation. The accounting and reporting policies of the Company conform to generally accepted accounting principles and practices utilized in the commercial banking industry.

All dollars in notes to consolidated financial statements are rounded to the nearest thousand, except for per share amounts.

The consolidated financial statements in this report are unaudited, except for the December 31, 2015 consolidated balance sheet. All adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for fair presentation of the interim consolidated financial statements have been included and fairly and accurately present the financial position, results of operations and cash flows of the Company. The results of operations for the nine months ended September 30, 2016, are not necessarily indicative of the results which may be expected for the entire year.

Nature of Operations

The Bank 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. The Bank is headquartered in Fitzgerald, Georgia with banking offices in Albany, Ashburn, Broxton, Centerville, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, 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 have been reclassified to conform to statement presentations selected for 2016. Such reclassifications have not affected 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 September 30, 2016, approximately 85 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. 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.

9

PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

Concentrations of Credit Risk (Continued)

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 Colony depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment.

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 ratings are 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 collectability 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 collectability of principal. Loans are returned to an accrual status when factors indicating doubtful collectability on a timely basis no longer exist.

10

PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

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 non-accrual loan that has been modified in a TDR remains on non-accrual status for a period of 6 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 non-accrual 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. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms and, has performed according to the modified terms for at least six months, and there has not been any prior principal forgiveness on a cumulative basis.

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 inability to collect 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 collectability 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 are 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 lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices, (2) changes in international, national, regional, and local conditions, (3) changes in the nature and volume of the portfolio and terms of loans, (4) changes in the experience, depth, and ability of lending management, (5) changes in the volume and severity of past due loans and other similar conditions, (6) changes in the quality of the organization's loan review system, (7) changes in the value of underlying collateral for collateral dependent loans, (8) the existence and effect of any concentrations of credit and changes in the levels of such concentrations, and (9) the effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses.

Loans identified as losses by management, internal loan review and/or regulatory agencies 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

PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

Allowance for Loan Losses (Continued)

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

12

PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

Statement of Cash Flows

For reporting cash flows, cash and cash equivalents include cash on hand, noninterest-bearing amounts due from banks and federal funds sold. Cash flows from demand deposits, interest-bearing checking accounts, savings accounts, loans and certificates of deposit are reported net.

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.

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 statement of income.

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 other noninterest 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 $15,246 and $14,830 as of September 30, 2016 and December 31, 2015, respectively.

13

PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on securities available for sale, represent equity changes from economic events of the period other than transactions with owners and are not reported in the consolidated statements of operations but as a separate component of the equity section of the consolidated balance sheets. 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 when they are funded.

Changes in Accounting Principles and Effects of New Accounting Pronouncements

ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity is expected to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. ASU 2014-09, as deferred one year by ASU 2015-14, is effective for the Company in the first quarter of fiscal year 2018. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on the consolidated financial statements.

ASU 2016-1, “No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU  2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. ASU  2016-1 will be effective for the Company on January 1, 2018. The Company is currently evaluating the impact of the pending adoption of ASU 2016-1 on the consolidated financial statements.

ASU 2016-02, "Leases." This ASU requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to current accounting treatment. This ASU changes the guidance on sale-leaseback transactions, initial direct costs and lease execution costs, and, for lessors, modifies the classification criteria and the accounting for sales-type and direct financing leases. For public business entities, this ASU is effective for annual periods beginning after December 15, 2018, and interim periods therein. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, this ASU is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods therein. The Company is evaluating the impact of this ASU on its financial statements and disclosures.

14

PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

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

ASU 2016-13, “Financial Instruments – Credit Losses.” This ASU sets forth a “current expected credit loss” (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supported forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this ASU on its consolidated financial statements.

(2) Investment Securities

Investment securities as of September 30, 2016 and December 31, 2015 are summarized as follows:

September 30, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	282,681	$	816	$	(2,116	)	$	281,381
State, County & Municipal		4,607		101		-			4,708
	$	287,288	$	917	$	(2,116	)	$	286,089

December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	297,779	$	63	$	(6,792	)	$	291,050
State, County & Municipal		5,089		30		(20	)		5,099
	$	302,868	$	93	$	(6,812	)	$	296,149

15

PART I (Continued)

Item 1 (Continued)

(2) Investment Securities (Continued)

The amortized cost and fair value of investment securities as of September 30, 2016, 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
	Amortized Cost		Fair Value
Due In One Year or Less	$	346	$	348
Due After One Year Through Five Years		1,662		1,685
Due After Five Years Through Ten Years		1,109		1,139
Due After Ten Years		1,490		1,536
	$	4,607	$	4,708
Mortgage-Backed Securities		282,681		281,381
	$	287,288	$	286,089

Proceeds from the sale of investments available for sale during the first nine months of 2016 totaled $25,210 compared to $28,274 for the first nine months of 2015. The sale of investments available for sale during the first nine months of 2016 resulted in gross realized gains of $392 and losses of $7. The sale of investments available for sale during the first nine months of 2015 resulted in gross realized gains of $208 and losses of $196.

Investment securities having a carry value approximating $117,694 and $133,754 as of September 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at September 30, 2016 and December 31, 2015 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
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2016
U. S. Government Agencies
Mortgage-Backed	$	62,927	$	(301	)	$	110,587	$	(1,815	)	$	173,514	$	(2,116	)
	$	62,927	$	(301	)	$	110,587	$	(1,815	)	$	173,514	$	(2,116	)
December 31. 2015
U.S. Government Agencies
Mortgage-Backed	$	139,765	$	(1,270	)	$	139,720	$	(5,522	)	$	279,485	$	(6,792	)
State, County and Municipal		1,035		(20	)		-		-			1,035		(20	)
	$	140,800	$	(1,290	)	$	139,720	$	(5,522	)	$	280,520	$	(6,812	)

16

PART I (Continued)

Item 1 (Continued)

(2) Investment Securities (Continued)

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

At September 30, 2016, the debt securities with unrealized losses have depreciated 1.20 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.

(3) Loans

The following table presents the composition of loans segregated by class of loans, as of September 30, 2016 and December 31, 2015.

	September 30, 2016		December 31, 2015
Commercial and Agricultural
Commercial	$	45,773	$	47,782
Agricultural		26,547		19,193
Real Estate
Commercial Construction		33,724		40,107
Residential Construction		10,325		9,413
Commercial		349,392		346,262
Residential		195,045		197,002
Farmland		73,801		61,780
Consumer and Other
Consumer		20,378		20,605
Other		21,132		16,492
Total Loans	$	776,117	$	758,636

Commercial and industrial 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 (i) the risk grade assigned to commercial and consumer loans, (ii) the level of classified commercial loans, (iii) net charge-offs, (iv) nonperforming loans, and (v) the general economic conditions in the Company’s geographic markets.

17

PART I (Continued)

Item 1 (Continued)

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:

(3) Loans (Continued)

● 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 table presents the loan portfolio by credit quality indicator (risk grade) as of September 30, 2016 and December 31, 2015. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes. For the period ending September 30, 2016, the Company did not have any loans classified as “doubtful” or a “loss”.

September 30, 2016
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	43,042	$	1,867	$	864	$	45,773
Agricultural		25,990		184		373		26,547
Real Estate
Commercial Construction		32,191		268		1,265		33,724
Residential Construction		10,125		-		200		10,325
Commercial		325,699		7,685		16,008		349,392
Residential		176,480		7,012		11,553		195,045
Farmland		71,047		1,641		1,113		73,801
Consumer and Other
Consumer		19,703		264		411		20,378
Other		21,132		-		-		21,132
Total Loans	$	725,409	$	18,921	$	31,787	$	776,117

18

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

December 31, 2015
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	44,274	$	1,927	$	1,581	$	47,782
Agricultural		18,970		18		205		19,193
Real Estate
Commercial Construction		36,516		913		2,678		40,107
Residential Construction		9,413		-		-		9,413
Commercial		320,566		13,653		12,043		346,262
Residential		177,054		8,546		11,402		197,002
Farmland		56,798		930		4,052		61,780
Consumer and Other
Consumer		20,038		156		411		20,605
Other		16,467		-		25		16,492
Total Loans	$	700,096	$	26,143	$	32,397	$	758,636

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 or not such loans are considered past due.

19

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The following table represents an age analysis of past due loans and nonaccrual loans, segregated by class of loans, as of September 30, 2016 and December 31, 2015:

September 30, 2016
	Accruing Loans
			90 Days
	30-89 Days		or More		Total Accruing		Nonaccrual
	Past Due		Past Due		Loans Past Due		Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	262	$	-	$	262	$	646	$	44,865	$	45,773
Agricultural		67		-		67		281		26,199		26,547
Real Estate
Commercial Construction		109		-		109		200		33,415		33,724
Residential Construction		-		-		-		-		10,325		10,325
Commercial		261		-		261		8,179		340,952		349,392
Residential		3,069		-		3,069		3,520		188,456		195,045
Farmland		172		-		172		919		72,710		73,801
Consumer and Other
Consumer		235		1		236		241		19,901		20,378
Other		-		-		-		-		21,132		21,132
Total Loans	$	4,175	$	1	$	4,176	$	13,986	$	757,955	$	776,117

December 31, 2015
	Accruing Loans
			90 Days
	30-89 Days		or More		Total Accruing		Nonaccrual
	Past Due		Past Due		Loans Past Due		Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	491	$	-	$	491	$	577	$	46,714	$	47,782
Agricultural		71		-		71		178		18,944		19,193
Real Estate
Commercial Construction		90		-		90		1,643		38,374		40,107
Residential Construction		-		-		-		-		9,413		9,413
Commercial		6,031		-		6,031		7,565		332,666		346,262
Residential		3,683		-		3,683		3,164		190,155		197,002
Farmland		123		-		123		1,103		60,554		61,780
Consumer and Other
Consumer		470		8		478		178		19,949		20,605
Other		-		-		-		-		16,492		16,492
Total Loans	$	10,959	$	8	$	10,967	$	14,408	$	733,261	$	758,636

20

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The following table details impaired loan data as of September 30, 2016:

September 30, 2016
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	646	$	646	$	-	$	515	$	15		$	18
Agricultural		301		280		-		211		5			13
Commercial Construction		508		508		-		825		16			15
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		16,457		16,367		-		14,274		490			480
Residential Real Estate		5,321		4,995		-		4,704		56			178
Farmland		921		919		-		1,071		(4	)		1
Consumer		241		241		-		214		7			9
Other		-		-		-		-		-			-
		24,395		23,956		-		21,814		585			714
With An Allowance Recorded
Commercial		-		-		-		38		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		73		73		22		74		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		8,316		8,316		2,470		8,308		177			173
Residential Real Estate		858		851		435		936		4			6
Farmland		382		382		33		385		16			14
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		9,629		9,622		2,960		9,741		197			193
Total
Commercial		646		646		-		553		15			18
Agricultural		301		280		-		211		5			13
Commercial Construction		581		581		22		899		16			15
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		24,773		24,683		2,470		22,582		667			653
Residential Real Estate		6,179		5,846		435		5,640		60			184
Farmland		1,303		1,301		33		1,456		12			15
Consumer		241		241		-		214		7			9
Other		-		-		-		-		-			-
	$	34,024	$	33,578	$	2,960	$	31,555	$	782		$	907

21

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The following table details impaired loan data as of December 31, 2015:

December 31, 2015
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	454	$	454	$	-	$	535	$	17		$	21
Agricultural		196		178		-		163		(10	)		10
Commercial Construction		6,888		1,898		-		2,867		26			27
Commercial Real Estate		15,569		15,122		-		15,430		529			531
Residential Real Estate		5,429		4,576		-		4,715		176			159
Farmland		1,105		1,103		-		1,340		1			2
Consumer		180		178		-		191		14			15
Other		-		-		-		48		-			-
		29,821		23,509		-		25,289		753			765
With An Allowance Recorded
Commercial		123		123		95		100		2			3
Agricultural		-		-		-		-		-			-
Commercial Construction		77		76		25		92		-			-
Commercial Real Estate		8,969		8,956		1,608		6,673		214			209
Residential Real Estate		1,083		1,075		308		1,089		16			16
Farmland		388		388		37		391		21			21
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		10,640		10,618		2,073		8,345		253			249
Total
Commercial		577		577		95		635		19			24
Agricultural		196		178		-		163		(10	)		10
Commercial Construction		6,965		1,974		25		2,959		26			27
Commercial Real Estate		24,538		24,078		1,608		22,103		743			740
Residential Real Estate		6,512		5,651		308		5,804		192			175
Farmland		1,493		1,491		37		1,731		22			23
Consumer		180		178		-		191		14			15
Other		-		-		-		48		-			-
	$	40,461	$	34,127	$	2,073	$	33,634	$	1,006		$	1,014

22

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The following table details impaired loan data as of September 30, 2015:

September 30, 2015
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	580	$	573	$	-	$	562	$	16		$	19
Agricultural		174		156		-		158		(10	)		10
Commercial Construction		7,726		2,736		-		3,191		17			17
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		14,412		14,412		-		15,533		412			418
Residential Real Estate		5,359		4,400		-		4,761		165			148
Farmland		1,398		1,397		-		1,419		1			2
Consumer		195		187		-		195		8			11
Other		-		-		-		65		-			-
		29,844		23,861		-		25,884		609			625
With An Allowance Recorded
Commercial		91		91		91		92		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		78		78		14		97		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		6,941		6,282		243		5,912		132			123
Residential Real Estate		1,082		1,082		308		1,093		12			12
Farmland		390		390		57		392		16			16
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		8,582		7,923		713		7,586		160			151
Total
Commercial		671		664		91		654		16			19
Agricultural		174		156		-		158		(10	)		10
Commercial Construction		7,804		2,814		14		3,288		17			17
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		21,353		20,694		243		21,445		544			541
Residential Real Estate		6,441		5,482		308		5,854		177			160
Farmland		1,788		1,787		57		1,811		17			18
Consumer		195		187		-		195		8			11
Other		-		-		-		65		-			-
	$	38,426	$	31,784	$	713	$	33,470	$	769		$	776

23

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

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

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

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

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

As discussed in Note 1, Summary of Significant Accounting Policies, once a loan is identified as a TDR, it is accounted for as an impaired loan. The Company had no unfunded commitments to lend to a customer that has a troubled debt restructured loan as of September 30, 2016. The following tables present the number of loan contracts restructured during the three month and nine month period ended September 30, 2016 and 2015. It shows 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 twelve 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. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms and, has performed according to the modified terms for at least six months, and there has not been any prior principal forgiveness on a cumulative basis.

	Three Months Ended September 30, 2016						Nine Months Ended September 30, 2016
Troubled Debt Restructurings
	# of Contracts		Pre-Modification		Post-Modification		# of Contracts		Pre-Modification		Post-Modification
Residential Real Estate		-	$	-	$	-		1	$	91	$	91
Total Loans		-	$	-	$	-		1	$	91	$	91

	Three Months Ended September 30, 2015						Nine Months Ended September 30, 2015
Troubled Debt Restructurings
	# of Contracts		Pre-Modification		Post-Modification		# of Contracts		Pre-Modification		Post-Modification
Residential Real Estate		1	$	226	$	139		2	$	1,106	$	1,036
Total Loans	$	1	$	226	$	139		2	$	1,106	$	1,036

24

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The company did not have any TDRs that subsequently defaulted for the three months and nine months ended September 30, 2016.

(4) Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the nine month period ended September 30, 2016 and September 30, 2015. 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.

September 30, 2016
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	855	$	(291	)	$	54	$	(127	)	$	491
Agricultural		203		(18	)		3		93			281
Real Estate
Commercial Construction		691		(25	)		813		(1,021	)		458
Residential Construction		20		-			-		2			22
Commercial		3,851		(992	)		197		2,231			5,287
Residential		1,990		(243	)		32		(114	)		1,665
Farmland		912		-			137		(187	)		862
Consumer and Other
Consumer		63		(180	)		44		176			103
Other		19		-			6		9			34
	$	8,604	$	(1,749	)	$	1,286	$	1,062		$	9,203

25

PART I (Continued)

Item 1 (Continued)

(4) Allowance for Loan Losses (Continued)

September 30, 2015
	Beginning									Ending
	Balance		Charge-Offs			Recoveries		Provision		Balance
Commercial and Agricultural
Commercial	$	497	$	(257	)	$	45	$	17	$	302
Agricultural		304		(5	)		3		4		306
Real Estate
Commercial Construction		1,223		(96	)		282		282		1,691
Residential Construction		138		-			-		-		138
Commercial		3,665		(275	)		138		296		3,824
Residential		2,425		(910	)		95		85		1,695
Farmland		104		(40	)		10		3		77
Consumer and Other
Consumer		67		(167	)		47		53		-
Other		379		(26	)		15		1		369
	$	8,802	$	(1,776	)	$	635	$	741	$	8,402

For the year ended December 31, 2015 the Company’s historical loss ratio within the ALLL calculation was based on a rolling 8 quarter historical loss period.  During the first quarter of 2016 Company management implemented a change to its allowance for loan loss methodology by expanding the historical loss period from a rolling 8 quarters to 16 quarters.  Management believes the longer historical loss period better reflects the current and expected loss behavior of the loan portfolio within the current credit cycle.  The transition to a rolling 16 quarter loss period will be complete in the first quarter of 2017.  As of September 30, 2016, this change in the historical loss period resulted in an increase to the allowance for loan losses of $986,000.

Management continually evaluates the allowance for loan losses methodology seeking to refine and enhance this process as appropriate, and it is likely that the methodology will continue to evolve over time.

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. At September 30, 2016, there were 160 impaired loans totaling $4.6 million below the $250,000 review threshold which 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 September 30, 2015, there were 156 impaired loans totaling $3.9 million which were below the $250,000 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.

Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on unimpaired 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 $12.45 million and $14.03 million as of September 30, 2016 and 2015, respectively. Specific allowance allocations were made for these loans totaling $742 thousand and $1.3 million as of September 30, 2016 and 2015, 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.

26

PART I (Continued)

Item 1 (Continued)

(4) Allowance for Loan Losses (Continued)

The following tables present breakdowns of the allowance for loan losses, segregated by impairment methodology for September 30, 2016 and 2015:

September 30, 2016
	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	-	$	491	$	491	$	8	$	45,765	$	45,773
Agricultural		-		281		281		-		26,547		26,547
Real Estate
Commercial Construction		22		436		458		380		33,344		33,724
Residential Construction		-		22		22		-		10,325		10,325
Commercial		2,470		2,817		5,287		24,363		325,029		349,392
Residential		435		1,230		1,665		3,200		191,845		195,045
Farmland		33		829		862		1,047		72,754		73,801
Consumer and Other
Consumer		-		103		103		-		20,378		20,378
Other		-		34		34		-		21,132		21,132
Total End of Period Balance	$	2,960	$	6,243	$	9,203	$	28,998	$	747,119	$	776,117

September 30, 2015
	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	91	$	211	$	302	$	91	$	48,668	$	48,759
Agricultural		-		306		306		8		27,365		27,373
Real Estate
Commercial Construction		14		1,677		1,691		2,694		40,895		43,589
Residential Construction		-		138		138		-		10,465		10,465
Commercial		243		3,581		3,824		20,049		327,654		347,703
Residential		308		1,387		1,695		3,380		192,420		195,800
Farmland		57		20		77		1,695		59,856		61,551
Consumer and Other
Consumer		-		-		-		-		20,958		20,958
Other		-		369		369		-		8,006		8,006
Total End of Period Balance	$	713	$	7,689	$	8,402	$	27,917	$	736,287	$	764,204

27

PART I (Continued)

Item 1 (Continued)

(5) Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at September 30, 2016 and December 31, 2015 was $9,812 and $8,839, 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 for the nine months ended September 30, 2016 and the year ended December 31, 2015.

	Nine Months Ended			Twelve Months Ended
	September 30, 2016			December 31, 2015
Balance, Beginning	$	8,839		$	10,402
Additions		3,953			7,536
Sales of OREO		(2,877	)		(8,055	)
Gains (Losses) on Sale		23			(591	)
Provision for Losses		(126	)		(453	)
Balance, Ending	$	9,812		$	8,839

At September 30, 2016, the Company held $922 thousand of residential real estate property as foreclosed property compared to $1.03 million as of December 31, 2015.  Also at September 30, 2016, $1.15 million of consumer mortgage loans collateralized by residential real estate property were in the process of foreclosure according to local requirements of the applicable jurisdictions. At December 31, 2015, only $159 thousand of consumer mortgage loans collateralized by residential real estate property were in the process of foreclosure according to local requirements of the applicable jurisdictions.

(6) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $392 and $272 as of September 30, 2016 and December 31, 2015.

Components of interest-bearing deposits as of September 30, 2016 and December 31, 2015 are as follows:

	Nine Months Ended		Twelve Months Ended
	September 30, 2016		December 31, 2015
Interest-Bearing Demand	$	395,614	$	412,960
Savings		69,060		64,976
Time, $100,000 and Over		188,185		202,801
Other Time		186,790		196,931
	$	839,649	$	877,668

At September 30, 2016 and December 31, 2015, the Company had brokered deposits of $43,232 and $25,577, respectively. All of these brokered deposits represent Certificate of Deposits 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 approximately $129,418 and $141,900 as of September 30, 2016 and December 31, 2015, respectively. The aggregate amount of certificates of deposit, each with a minimum deposit of $250,000 was $30,204 and $31,755 as of September 30, 2016 and December 31, 2015.

28

PART I (Continued)

Item 1 (Continued)

(6) Deposits (Continued)

As of September 30, 2016 and December 31, 2015, the scheduled maturities of certificates of deposits are as follows:

Maturity	September 30, 2016		December 31, 2015
One Year and Under	$	267,245	$	287,423
One to Three Years		83,978		88,019
Three Years and Over		23,752		24,290
	$	374,975	$	399,732

(7) Other Borrowed Money

Other borrowed money at September 30, 2016 and December 31, 2015 is summarized as follows:

	September 30, 2016		December 31, 2015
Federal Home Loan Bank Advances	$	46,000	$	40,000

Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2018 to 2026 and interest rates ranging from 0.98 percent to 3.51 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 September 30, 2016 the book value of those loans pledged is $106,506. At September 30, 2016 the Company had remaining credit availability from the FHLB of $240,282. 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 September 30, 2016 are as follows:

Year	Amount
2018	$	2,500
2019		5,000
2020		2,500
After 2020		36,000
	$	46,000

The Company also has available federal funds lines of credit with various financial institutions totaling $43,500, none of which were outstanding at September 30, 2016.

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 September 30, 2016, 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.

(8) Preferred Stock and Warrants

The Company had 14,360 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) issued and outstanding with private investors as of September 30, 2016. The Company redeemed 3,661 shares of Preferred Stock at $1,000 per share in August 2016. The Company redeemed 9,979 shares of Preferred Stock at $1,000 per share during 2015. 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.

29

PART I (Continued)

Item 1 (Continued)

(9) Subordinated Debentures (Trust Preferred Securities)

				3 Month	Added	Total		5 Year
Description	Date		Amount	Libor Rate	Points	Rate	Maturity	Call Option
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,640	0.85656	2.68	3.53656	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155	0.83769	1.50	2.33769	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279	0.83769	1.65	2.48769	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155	0.75650	1.40	2.15650	9/14/2037	9/14/2012

The Trust Preferred Securities are recorded as subordinated debentures on the consolidated balance sheets, but subject to certain limitations, qualify as Tier 1 Capital for regulatory capital purposes. The proceeds from the offerings were used to fund certain acquisitions, pay off holding company debt and inject capital into the bank subsidiary.

(10) 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. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but may include cash or cash equivalents, negotiable instruments, real estate, accounts receivable, inventory, oil, gas and mineral interests, property, plant, and equipment.

At September 30, 2016 and December 31, 2015 the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	September 30, 2016		December 31, 2015
Loan Commitments	$	74,910	$	67,889
Letters of Credit		1,466		1,588

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.

Other Contractual Obligations. In 2015, the Company committed to the construction of a new branch facility at an estimated cost of $1.2 million. Construction is expected to be completed in early 2017.

30

PART I (Continued)

Item 1 (Continued)

(11) 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 fair 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 as 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 – The fair value of subordinated debentures is estimated by discounting the future cash flows using the current rates at which similar advances would be obtained. Subordinate Debentures are classified as Level 2.

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.

31

PART I (Continued)

Item 1 (Continued)

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

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

The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2016 and December 31, 2015 are as follows:

	Fair Value Measurements at
	September 30, 2016
	Carrying		Estimated			Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	31,675	$	31,675	$	31,675	$	-	$	-
Investment Securities Available for Sale		286,089		286,089		-		285,493		596
Federal Home Loan Bank Stock		3,010		3,010		3,010		-		-
Loans, Net		766,532		767,161		-		760,499		6,662
Bank-Owned Life Insurance		15,246		15,246		15,246		-		-
Liabilities
Deposits		978,590		979,967		603,615		376,352		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		46,000		46,541		-		46,541		-

	Fair Value Measurements at
	December 31, 2015
	Carrying		Estimated			Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	60,872	$	60,872	$	60,872	$	-	$	-
Investment Securities Available for Sale		296,149		296,149		-		295,219		930
Federal Home Loan Bank Stock		2,731		2,731		2,731		-		-
Loans, Net		749,675		750,412		-		741,867		8,545
Bank-Owned Life Insurance		14,830		14,830		14,830		-		-
Liabilities
Deposits		1,011,554		1,013,111		611,822		401,289		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		40,000		40,421		-		40,421		-

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.

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PART I (Continued)

Item 1 (Continued)

(11) 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 measurements 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 September 30, 2016 and December 31, 2015, 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 September 30, 2016. Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

33

PART I (Continued)

Item 1 (Continued)

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

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
September 30, 2016	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	281,381	$	-	$	281,381	$	-
State, County and Municipal		4,708		-		4,112		596
	$	286,089	$	-	$	285,493	$	596
Nonrecurring
Impaired Loans	$	6,662	$	-	$	-	$	6,662
Other Real Estate	$	2,850	$	-	$	-	$	2,850

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
December 31, 2015	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	291,050	$	-	$	291,050	$	-
State, County and Municipal		5,099		-		4,169		930
	$	296,149	$	-	$	295,219	$	930
Nonrecurring
Impaired Loans	$	8,545	$	-	$	-	$	8,545
Other Real Estate	$	2,536	$	-	$	-	$	2,536

Liabilities

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

34

PART I (Continued)

Item 1 (Continued)

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

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at September 30, 2016 and December 31, 2015. This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

			Valuation	Unobservable	Range
	September 30, 2016		Techniques	Inputs	Weighted Avg
Real Estate
Commercial Construction		51	Sales Comparison	Adjustment for Differences	(5.00)%	-	99.00%
				Between the Comparable Sales		47.00%
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
Residential Real Estate		416	Sales Comparison	Adjustment for Differences	(22.00)%	-	0.00%
				Between the Comparable Sales		(11.00)%
				Management Adjustments for	0.00%	-	40.00%
				Age of Appraisals and/or Current		20.00%
				Market Conditions
Commercial Real Estate		5,846	Sales Comparison	Adjustment for Differences	(14.08)%	-	24.62%
				Between the Comparable Sales		5.27%
				Management Adjustments for	0.00%	-	100.00%
				Age of Appraisals and/or Current		50.00%
				Market Conditions
			Income Approach	Capitalization Rate		10.67%
Farmland		349	Sales Comparison	Adjustment for Differences	(27.00)%	-	15.00%
				Between the Comparable Sales		(6.00)%
				Management Adjustments for	10.00%	-	75.00%
				Age of Appraisals and/or Current		42.50%
				Market Conditions
Other Real Estate Owned		2,850	Sales Comparison	Adjustment for Differences	(50.80)%	-	142.90%
				Between the Comparable Sales		46.05%
				Management Adjustments for	0.62%	-	72.75%
				Age of Appraisals and/or Current		29.23%
				Market Conditions
			Income Approach	Discount Rate		12.50%

35

PART I (Continued)

Item 1 (Continued)

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

			Valuation	Unobservable	Range
	December 31, 2015		Techniques	Inputs	Weighted Avg
Commercial	$	28	Sales Comparison	Adjustment for Differences	(31.77)%	-	34.00%
				Between the Comparable Sales		1.12%
				Management Adjustment for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		11.00%
Real Estate
Commercial Construction		51	Sales Comparison	Adjustment for Differences	(5.00)%	-	99.00%
				Between the Comparable Sales		47.00%
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
Residential Real Estate		767	Sales Comparison	Adjustment for Differences	(22.00)%	-	10.80%
				Between the Comparable Sales		5.60%
				Management Adjustments for	0.00%	-	25.00%
				Age of Appraisals and/or Current		12.50%
				Market Conditions
Commercial Real Estate		7,348	Sales Comparison	Adjustment for differences	(31.77)%	-	34.00%
				Between the comparable Sales		1.12%
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		10.25%
Farmland		351	Sales Comparison	Adjustment for Differences	(27.00)%	-	15.00%
				Between the Comparable Sales		(6.00)%
				Management Adjustments for	10.00%	-	75.00%
				Age of Appraisals and/or Current		42.50%
				Market Conditions
Other Real Estate Owned		2,536	Sales Comparison	Adjustment for Differences	(50.80)%	-	142.90%
				Between the Comparable Sales		46.05%
				Management Adjustment for	15.53%	-	72.75%
				Age of Appraisals and/or Current		43.37%
				Market Conditions
			Income Approach	Discount Rate		12.50%

36

PART I (Continued)

Item 1 (Continued)

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

The table below 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 nine months ended September 30, 2016 and the twelve months ended December 31, 2015.

	Available for Sale Securities
	September 30, 2016			December 31, 2015
Balance, Beginning	$	930		$	948
Transfers out of Level 3		-			-
Maturities		(330	)		-
Loss on OTTI Impairment Included		-
in Noninterest Income		-			-
Unrealized Gains included in Other Comprehensive Income (Loss)		(4	)		(18	)
Balance, Ending	$	596		$	930

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. There were no transfers of securities between levels for the nine months ended September 30, 2016 and the twelve months ended December 31, 2015.

The following table presents quantitative information about recurring level 3 fair value measurements as of September 30, 2016.

			Valuation	Unobservable	Range
	Fair Value		Techniques	Inputs	Weighted Avg
State, County and Municipal	$	596	Discounted Cash Flow	Discount Rate		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.

(12) 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 common stockholders in the third quarter of 2009.

The Company is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets.  As of September 30, 2016, the interim final Basel III rules (Basel III) require the Company to also maintain minimum amounts and ratios of common equity Tier 1 capital to risk-weighted assets.  These amounts and ratios as defined in regulations are presented hereafter.  Management believes, as of September 30, 2016, 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 events or conditions since prior notification of capital adequacy from the regulators that have changed the institution’s category. 

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PART I (Continued)

Item 1 (Continued)

(12) Regulatory Capital Matters (Continued)

The Basel III rules also require the implementation of a new capital conservation buffer comprised of common equity Tier 1 capital.  The capital conservation buffer will be phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increase each subsequent year by 0.625% until reaching its final level of 2.5% on January 1, 2019.

The following table summarizes regulatory capital information as of September 30, 2016 and December 31, 2015 on a consolidated basis and for the subsidiary, as defined.  Regulatory capital ratios for September 30, 2016 and December 31, 2015 were calculated in accordance with the Basel III rules.

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2016
Total Capital to Risk-Weighted Assets
Consolidated	$	134,175		16.95	%	$	63,312		8.00	%		N/A		N/A
Colony Bank		130,022		16.45			63,223		8.00		$	79,029		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		124,972		15.79			47,484		6.00			N/A		N/A
Colony Bank		120,819		15.29			47,417		6.00			63,223		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated		87,112		11.01			35,613		4.50			N/A		N/A
Colony Bank		120,819		15.29			35,563		4.50			51,369		6.50
Tier I Capital to Average Assets
Consolidated		124,972		10.85			46,077		4.00			N/A		N/A
Colony Bank		120,819		10.51			46,002		4.00			57,502		5.00

38

PART I (Continued)

Item 1 (Continued)

(12) Regulatory Capital Matters (Continued)

		Actual				For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2015
Total Capital to Risk-Weighted Assets
Consolidated	$	131,948		16.60	%	$	63,602		8.00	%		N/A		N/A
Colony Bank		126,939		15.99			63,500		8.00		$	79,375		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		123,344		15.51			47,702		6.00			N/A		N/A
Colony Bank		118,335		14.91			47,625		6.00			63,500		8.00
Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		81,823		10.29			35,776		4.50			N/A		N/A
Colony Bank		118,335		14.91			35,719		4.50			51,594		6.50
Tier 1 Capital to Average Assets
Consolidated		123,344		10.69			46,149		4.00			N/A		N/A
Colony Bank		118,335		10.27			46,074		4.00			57,592		5.00

39

PART I (Continued)

Item 1 (Continued)

(13) Earnings Per Share

Basic earnings per share is computed by dividing net income 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 after preferred stock dividends. The following table presents earnings per share for the three month and nine month period ended September 30, 2016 and 2015:

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2016		2015		2016		2015
Numerator
Net Income Available to Common Stockholders	$	1,880	$	1,606	$	5,297	$	4,414
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439		8,439		8,439		8,439
Dilutive Effect of Potential Common Stock
Restricted Stock		-		-		-		-
Stock Warrants		67		27		57		10
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,506		8,466		8,496		8,449
Earnings Per Share - Basic	$	0.22	$	0.19	$	0.63	$	0.52
Earnings Per Share - Diluted	$	0.22	$	0.19	$	0.62	$	0.52

(14) Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) for unrealized gains and losses securities available for sale for the period ended September 30, 2016 and the year ended December 31, 2015 are as follows:

	September 30, 2016			December 31, 2015
Beginning Balance	$	(4,434	)	$	(4,845	)
Other Comprehensive Income Before Reclassification		3,897			403
Amounts Reclassified from Accumulated Other Comprehensive Income		(254	)		8
Net Current Period Other Comprehensive Income		3,643			411
Ending Balance	$	(791	)	$	(4,434	)

40

Part I (Continued)

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Future Outlook

In 2016, the Company is committed to improving earnings, reducing problem assets and redeeming TARP Preferred Stock. Given the improved condition of the Company we are also considering product and market expansion. During 2016, we have completed construction of a new banking facility in Tifton while beginning construction of a new facility in Savannah. The Company also completed the renovation of a new loan production office in Statesboro. The new Tifton location resulted in the closure of two leased offices in that market while two branch offices in Pitts and Chester were closed to improve operating efficiencies.

Major Trends/Significant Considerations

In an effort to enhance shareholder value, the Company has two initiatives underway to improve efficiencies. The first is a branch reconciliation project that involves closing four branches, while completing or beginning construction on three branches. The capital expenditure associated with this project should have minimal overall impact on the final performance of the Company over the course of the next twelve months and is expected to have no impact with respect to the Company’s liquidity and the cost of funds. Following the next twelve months, the reconciliation project is expected to have an accretive effect. The second initiative is to redeem TARP preferred stock of approximately $8.7 million during 2016. This will reduce dividend payments by $783 thousand on an annual basis. Currently, $3.6 million of preferred stock has been redeemed in 2016.

The following discussion sets forth management’s discussion and analysis of our consolidated financial condition as of September 30, 2016, and the consolidated results of operations for the nine months ended September 30, 2016. This discussion should be read in conjunction with the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2016. Readers should also carefully review all other disclosures we file from time to time with the SEC.

The Company

Colony Bankcorp, Inc. (the Company) is a bank holding company headquartered in Fitzgerald, Georgia that provides, through Colony Bank, its wholly owned subsidiary (collectively referred to as the Company), a broad array of products and services throughout 18 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.

Overview

The following discussion and analysis presents the more significant factors affecting the Company’s financial condition as of September 30, 2016 and December 31, 2015, and results of operations for each of the nine months in the periods ended September 30, 2016 and 2015. 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.

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 interest-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 interest-earning assets. Net income available to common shareholders totaled $1.88 million, or $0.22 diluted per common share, in the three months ended September 30, 2016 compared to net income available to common shareholders of $1.61 million, or $0.19 diluted per common share, in the three months ended September 30, 2015. Net income available to common shareholders totaled $5.30 million, or $0.62 diluted per common share, in the nine months ended September 30, 2016 compared to net income available to common shareholders of $4.41 million, or $0.52 diluted per common share, in the nine months ended September 30, 2015. The Company did not have any material changes in the third quarter of 2016.

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Part I (Continued)

Item 2

Results of Operations (Continued)

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

	Three Months Ended September 30												Nine Months Ended September 30
							$			%									$			%
	2016			2015			Variance			Variance			2016			2015			Variance			Variance
Taxable-equivalent net interest income	$	9,602		$	9,540		$	62			0.65	%	$	28,669		$	28,039		$	630			2.25	%
Taxable-equivalent adjustment		46			43			3			6.98			132			93			39			41.94
Net interest income		9,556			9,497			59			0.62			28,537			27,946			591			2.11
Provision for loan losses		354			250			104			41.60			1,062			741			321			43.32
Noninterest income		2,637			2,233			404			18.09			7,161			6,803			358			5.26
Noninterest expense		8,654			8,335			319			3.83			25,243			24,941			302			1.21
Income before income taxes	$	3,185		$	3,145		$	40			1.27		$	9,393		$	9,067		$	326			3.60
Income Taxes		927			945			(18	)		(1.90	)		2,907			2,799			108			3.86
Net income	$	2,258		$	2,200		$	58			2.64		$	6,486		$	6,268		$	218			3.48
Preferred stock dividends		378			594			(216	)		(36.36	)		1,189			1,854			(665	)		(35.87	)
Net income available to	$	1,880		$	1,606		$	274			17.06	%	$	5,297		$	4,414		$	883			20.00	%
common shareholders
Net income available to common shareholders:
Basic	$	0.22		$	0.19		$	0.03			15.79	%	$	0.63		$	0.52		$	0.11			21.15	%
Diluted	$	0.22		$	0.19		$	0.03			15.79	%	$	0.62		$	0.52		$	0.10			19.23	%
Return on average assets		0.65	%		0.57	%		0.08	%		14.04	%		0.61	%		0.51	%		0.10	%		19.61	%
Return on average total equity		7.35	%		6.28	%		1.07	%		17.04	%		7.03	%		5.77	%		1.26	%		21.84	%

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

Net Interest Income

Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is the Company’s largest source of revenue, representing 79.94 percent of total revenue for nine months ended September 30, 2016 and 80.42 percent for the same period a year ago.

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

42

Part I (Continued)

Item 2

Net Interest Income (Continued)

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 3.50 percent. The rate increased 25 basis points in fourth quarter of 2015 for the first time in several years. The federal funds rate moved similarly to the prime rate with interest rates currently at 0.50 percent. As expected, the federal funds rate and the prime rate has remained flat in 2016.

The following table presents the changes in taxable-equivalent net interest income and identifies the changes due to differences in the average volume of interest-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.

Rate/Volume Analysis

The rate/volume analysis presented hereafter illustrates the change from September 30, 2015 to September 30, 2016 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 September 30, 2015 to September 30, 2016
($ in thousands)	Volume			Rate			Total
Interest Income
Loans, Net-taxable	$	163		$	(553	)	$	(390	)
Investment Securities
Taxable		311			577			888
Tax-exempt		17			(15	)		2
Total Investment Securities		328			562			890
Interest-Bearing Deposits in other Banks		(20	)		41			21
Federal Funds Sold		(15	)		-			(15	)
Other Interest - Earning Assets		1			5			6
Total Interest Income		457			55			512
Interest Expense
Interest-Bearing Demand and Savings Deposits		98			38			136
Time Deposits		(199	)		(5	)		(204	)
Subordinated Debentures		-			67			67
Other Borrowed Money		30			(147	)		(117	)
Total Interest Expense		(71	)		(47	)		(118	)
Net Interest Income	$	528		$	102		$	630

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

43

Part I (Continued)

Item 2

Rate/Volume Analysis (Continued)

The Company maintains about 19 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 certificate of deposits that mature within one year. The net interest margin increased to 3.52 percent for the nine months ended September 30, 2016 compared to 3.48 percent for the same period a year ago. We anticipate the net interest margin remaining relatively flat for 2016.

Taxable-equivalent net interest income for the nine months ended September 30, 2016 increased by $630 thousand, or 2.25 percent compared to the same period a year ago. The average volume of earning assets during nine months ended September 30, 2016 increased $13.71 million compared to the same period a year ago. Growth in average earning assets during 2016 was primarily in loans and investments.

The average volume of loans increased $4.14 million for the nine months ended September 30, 2016 compared to the same period a year ago. The average yield on loans decreased 10 basis points for the nine months ended September 30, 2016 compared to the same period a year ago. The average volume of investment securities increased $27.81 million for the nine months ended September 30, 2016 compared to the same year ago period, while the average yield on investment securities increased 25 basis points for the same period comparison. The average volume of deposits increased $13.79 million for the nine months ended September 30, 2016 compared to the same period a year ago, with interest-bearing deposits increasing $4.25 million for the nine months ended September 30, 2016.

Accordingly, the ratio of average interest-bearing deposits to total average deposits was 86.12 percent for the nine months ended September 30, 2016 compared to 86.90 percent in the same period a year ago. This deposit mix, combined with a general decrease in market rates, had the effect of decreasing the average cost of total deposits by 2 basis points in nine months ended September 30, 2016 compared to the same period a year ago.

The Company’s net interest spread, which represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities, was 3.40 percent in nine months ended September 30, 2016 compared to 3.37 percent in the same period a year ago. 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.

44

Part I (Continued)

Item 2

Rate/Volume Analysis (Continued)

AVERAGE BALANCE SHEETS	Nine Months Ended								Nine Months Ended
	September 30, 2016								September 30, 2015
	Average			Income/		Yields/			Average			Income/		Yields/
($ in thousands)	Balances			Expense		Rates			Balances			Expense		Rates
Assets
Interest-Earning Assets
Loans, Net of Unearned Interest and fees Taxable (1)	$	758,377		$	29,242		5.14	%	$	754,235		$	29,632		5.24	%
Investment Securities
Taxable		303,100			4,027		1.77	%		275,790			3,139		1.52	%
Tax-Exempt (2)		2,503			73		3.89	%		2,008			71		4.71	%
Total Investment Securities		305,603			4,100		1.79	%		277,798			3,210		1.54	%
Interest-Bearing Deposits		19,867			79		0.53	%		30,044			58		0.26	%
Federal Funds Sold		-			-		-	%		8,096			15		0.25	%
Interest-Bearing Other Assets		2,802			97		4.62	%		2,762			91		4.39	%
Total Interest-Earning Assets	$	1,086,649		$	33,518		4.11	%	$	1,072,935		$	33,006		4.10	%
Non-interest-Earning Assets
Cash and Cash Equivalents		14,904								14,047
Allowance for Loan Losses		(9,418	)							(8,626	)
Other Assets		65,681								67,355
Total Noninterest-Earning Assets		71,167								72,776
Total Assets	$	1,157,816							$	1,145,711
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities
Interest-Bearing Deposits
Interest-Bearing Demand and Savings	$	463,115		$	1,241		0.36	%	$	425,649		$	1,105		0.35	%
Other Time		388,137			2,339		0.80	%		421,353			2,543		0.80	%
Total Interest-Bearing Deposits		851,252			3,580		0.56	%		847,002			3,648		0.57	%
Other Interest-Bearing Liabilities
Other Borrowed Money		41,285			829		2.68	%		40,000			946		3.15	%
Subordinated Debentures		24,229			440		2.42	%		24,229			373		2.05	%
Total Other Interest-Bearing Liabilities		65,514			1,269		2.58	%		64,229			1,319		2.74	%
Total Interest-Bearing Liabilities	$	916,766		$	4,849		0.71	%	$	911,231		$	4,967		0.73	%
Noninterest-Bearing Liabilities and Stockholders' Equity
Demand Deposits		137,230								127,692
Other Liabilities		3,389								4,877
Stockholders' Equity		100,431								101,911
Total Noninterest-Bearing Liabilities and Stockholders' Equity		241,050								234,480
Total Liabilities and Stockholders' Equity	$	1,157,816							$	1,145,711
Interest Rate Spread							3.40	%							3.37	%
Net Interest Income				$	28,669							$	28,039
Net Interest Margin							3.52	%							3.48	%

(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 $107 and $69 for nine month periods ended September 30, 2016 and 2015, respectively, are included in tax-exempt interest on loans.

(2)     Taxable-equivalent adjustments totaling $25 and $24 for nine month periods ended September 30, 2016 and 2015, 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.

45

Part I (Continued)

Item 2

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 $1.06 million in the nine months ended September 30, 2016 compared to $741 thousand in the same period a year ago. 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:

	Three Months Ended September 30										Nine Months Ended September 30
					$			%							$			%
	2016		2015		Variance			Variance			2016		2015		Variance			Variance
Service Charges on Deposit Accounts	$	1,128	$	1,133	$	(5	)	$	(0.44	)	$	3,185	$	3,184	$	1			0.03	%
Other Charges, Commissions and Fees		686		661		25			3.78			2,104		1,963		141			7.18
Mortgage Fee Income		254		138		116			84.06			507		385		122			31.69
Securities Gains (Losses)		256		9		247			2744.44			385		12		373			3108.33
Other		313		292		21			7.19			980		1,259		(279	)		(22.16	)
Total	$	2,637	$	2,233	$	404			18.09	%	$	7,161	$	6,803	$	358			5.26	%

Other Charges, Commissions and Fees. Debit card interchange fees and foreign fees increased $147 thousand in 2016 compared to the same period in 2015.

Mortgage Fee Income. The volume of mortgage loans has shown an increase in 2016 compared to the same period in 2015 which contributed to the increase in mortgage fee income.

Securities Gains (Losses). The increase is attributable to the gain on sale of securities compared to the prior year.

Other. The decrease in other noninterest income is attributed to having a tax credit of $66 thousand and life insurance benefits of $137 thousand in 2015 that did not occur in 2016.

Noninterest Expense

The components of noninterest expense were as follows:

	Three Months Ended September 30										Nine Months Ended September 30
					$			%							$			%
	2016		2015		Variance			Variance			2016		2015		Variance			Variance
Salaries and Employee Benefits	$	4,726	$	4,395	$	331			7.53	%	$	13,825	$	13,270	$	555			4.18	%
Occupancy and Equipment		1,025		1,026		(1	)		(0.10	)		2,967		3,036		(69	)		(2.27	)
Other		2,903		2,914		(11	)		(0.38	)		8,451		8,635		(184	)		(2.13	)
Total	$	8,654	$	8,335	$	319			3.83	%	$	25,243	$	24,941	$	302			1.21	%

Salaries and Employee Benefits. The increase in 2016 is primarily attributable to merit pay increases.

Occupancy and Equipment. The decrease in the nine months ended September 30, 2016 as compared to comparable periods is primarily attributable to a decrease in depreciation expense in 2016 and a decrease in leased equipment for information technology in 2016.

46

Part I (Continued)

Item 2

Noninterest Expense (Continued)

Other. The decrease in the third quarter of 2016 as compared to comparable periods is primarily attributable to foreclosed property costs which decreased by $404 thousand from $881 thousand in 2015 compared to $477 thousand in 2016. FDIC assessments decreased by $61 thousand in 2016. The decrease was offset by $153 increase in ATM expense, $51 thousand increase in software expense and $33 thousand increase in telephone expense.

Loans

The following table presents the composition of the Company’s loan portfolio as of September 30, 2016 and December 31, 2015:

	September 30, 2016			December 31, 2015			$ Variance			% Variance
Commercial and Agricultural
Commercial	$	45,773		$	47,782		$	(2,009	)		(4.20	)%
Agricultural		26,547			19,193			7,354			38.32
Real Estate
Commercial Construction		33,724			40,107			(6,383	)		(15.91	)
Residential Construction		10,325			9,413			912			9.69
Commercial		349,392			346,262			3,130			0.90
Residential		195,045			197,002			(1,957	)		(0.99	)
Farmland		73,801			61,780			12,021			19.46
Consumer and Other
Consumer		20,378			20,605			(227	)		(1.10	)
Other		21,132			16,492			4,640			28.13
Gross Loans		776,117			758,636			17,481			2.30
Unearned Interest and Fees		(382	)		(357	)		(25	)		(7.00	)
Allowance for Loan Losses		(9,203	)		(8,604	)		(599	)		(6.96	)
Net Loans	$	766,532		$	749,675		$	16,857			2.25	%

Loan Origination/Risk Management. In accordance with the Company’s decentralized banking model, loan decisions are made at the bank level. The Company utilizes both an Executive Loan Committee and a Director 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 criteria 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 similarly to how other loans are underwritten throughout the Company. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type and geographic location. In addition, the Company restricts total loans to $10 million per borrower, subject to exception and approval by the Director Loan Committee. 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 monthly 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 criteria 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.

47

Part I (Continued)

Item 2

Loans (Continued)

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 September 30, 2016 increased 7.98 percent to $72.3 million from December 31, 2015 at $67.0 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.

Real Estate.Commercial and residential construction loans decreased by $5.47 million, or 11.05 percent, at September 30, 2016 to $44.05 million from $49.52 million at December 31, 2015.  This decrease is due to the completion of construction and the new loan was transferred to the commercial real estate category or paid out. Farmland increased $12.0 million, or 19.46 percent, at September 30, 2016 to $73.80 million from $61.78 million at December 31, 2015.

Other.Other loans at September 30, 2016 increased 28.13 percent to $21.13 million from $16.49 million at December 31, 2015.

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 September 30, 2016, approximately 85 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. Though the real estate market remains somewhat sluggish, we have seen real estate values stabilize. The stabilization of rates has resulted in a decrease in the number of loans being classified as impaired over the past several years.

48

Part I (Continued)

Item 2

Nonperforming Assets and Potential Problem Loans

Nonperforming assets and accruing past due loans as of September 30, 2016, December 31, 2015 and September 30, 2015 were as follows:

	September 30, 2016			December 31, 2015			September 30, 2015
Loans Accounted for on Nonaccrual	$	13,986		$	14,408		$	13,559
Loans Accruing Past Due 90 Days or More		1			8			8
Other Real Estate Foreclosed		9,812			8,839			10,998
Total Nonperforming Assets	$	23,799		$	23,255		$	24,565
Nonperforming Assets by Segment Construction and Land Development	$	4,352		$	7,106		$	8,016
1-4 Family Residential		4,442			4,197			4,781
Nonfarm Residential		12,917			9,908			9,355
Farmland		919			1,103			1,397
Commercial and Consumer		1169			941			1,016
Total Nonperforming Assets	$	23,799		$	23,255		$	24,565
Nonperforming Assets as a Percentage of:
Total Loans and Foreclosed Assets		3.03	%		3.03	%		3.17	%
Total Assets		2.06	%		1.98	%		2.18	%
Nonperforming Loans as a Percentage of:
Total Loans		1.80	%		1.90	%		1.78	%
Supplemental Data:
Trouble Debt Restructured Loans In Compliance with Modified Terms	$	19,269		$	19,375		$	17,891
Trouble Debt Restructured Loans Past Due 30-89 Days		324			344			335
Accruing Past Due Loans:
30-89 Days Past Due	$	4,175		$	10,959		$	6,480
90 or More Days Past Due		1			8			8
Total Accruing Past Due Loans	$	4,176		$	10,967		$	6,488
Allowance for Loan Losses	$	9,203		$	8,604		$	8,402
ALLL as a Percentage of:
Total Loans		1.19	%		1.13	%		1.10	%
Nonperforming Loans		65.80	%		59.68	%		61.93	%

Nonperforming assets include nonaccrual loans, loans past due 90 days or more and foreclosed real estate. Nonperforming assets at September 30, 2016 increased 2.34 percent from December 31, 2015.

Generally, loans are placed on non-accrual status if principal or interest payments become 90 days past due and/or management deems the collectability 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 non-accrual status whether or not the loan is 90 days or more past due. For consumer loans, collectability 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.

49

Part I (Continued)

Item 2

Nonperforming Assets and Potential Problem Loans (Continued)

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

For the year ended December 31, 2015 the Company’s historical loss ratio within the ALLL calculation was based on a rolling 8 quarter historical loss period.  During the first quarter of 2016 Company management implemented a change to its allowance for loan loss methodology by expanding the historical loss period from a rolling 8 quarters to 16 quarters.  Management believes the longer historical loss period better reflects the current and expected loss behavior of the loan portfolio within the current credit cycle.  The transition to a rolling 16 quarter loss period will be complete in the first quarter of 2017.  As of September 30, 2016, this change in the historical loss period resulted in an increase to the allowance for loan losses of $986,000.

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 loans 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. Loans are segregated into fifteen separate groups based on call codes. Most of the Company’s charge-offs during the past two years have been real estate dependent loans. 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.

50

Part I (Continued)

Item 2

Allowance for Loan Losses (Continued)

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.

Deposits

The following table presents the average amount outstanding and the average rate paid on deposits by the Company for the nine month periods ended September 30, 2016 and September 30, 2015.

	September 30, 2016					September 30, 2015
	Average		Average			Average		Average
	Amount		Rate (1)			Amount		Rate (1)
Noninterest-Bearing Demand
Deposits	$	137,230				$	127,692
Interest-Bearing Demand and
Savings Deposits		463,115		0.36	%		425,649		0.35	%
Time Deposits		388,137		0.80	%		421,353		0.80	%
Total Deposits	$	988,482		0.48	%	$	974,694		0.50	%

(1) Average rate is an annualized rate.

Average deposits increased $13.79 million to $988.48 million at September 30, 2016 from $974.69 million at September 30, 2015. The increase included an increase of $9.54 million, or 7.47 percent in noninterest-bearing demand deposits while, at the same time, interest-bearing demand and savings deposits increased $37.47 million, or 8.80 percent and time deposits decreased $33.22 million, or 7.88 percent. The increase in deposits is attributable to public fund deposit customers having larger deposits due to tax collections. Accordingly the ratio of average noninterest-bearing deposits to total average deposits was 13.88 percent for nine months ended September 30, 2016 compared to 13.10 percent for nine months ended September 30, 2015. The general decrease in market rates, had the effect of decreasing the average cost of total deposits by 2 basis points in nine months ended September 30, 2016 compared to the same period a year ago.

Off-Balance-Sheet Arrangements, Commitments, Guarantees

In the ordinary course of business, the Company enters 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 and the contract or notional amounts of these instruments reflect the extent of involvement and exposure to credit loss that we have in these particular classes of financial instruments.

Commitments to extend credit are agreements to lend to a customer provided that the terms established in the contract are met. Commitments generally have fixed expiration dates and may require the payment of fees. Since some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers and similarly do not necessarily represent future cash obligations.

51

Part I (Continued)

Item 2

Off-Balance-Sheet Arrangements, Commitments, Guarantees (Continued)

As of September 30, 2016 and December 31, 2015, financial instruments with off-balance sheet risk were as follows:

	Contract Amount
	September 30, 2016		December 31, 2015
Loan Commitments	$	74,910	$	67,889
Letters of Credit		1,466		1,588

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. We evaluate each customer’s creditworthiness at a local bank level on a case-by-case basis. The amount of collateral obtained, if deemed necessary, upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies but may include cash or cash equivalents, negotiable instruments, real estate, accounts receivable, inventory, oil, gas and mineral interests, property, plant, and equipment.

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 September 30, 2016 are included in the table in Footnote 10 of the Consolidated Financial Statements.

Capital and Liquidity

At September 30, 2016, stockholders’ equity totaled $100.74 million compared to $95.46 million at December 31, 2015. In addition to net income of $6.49 million, other significant changes in stockholders’ equity during nine months ended September 30, 2016 included $1.19 million of preferred stock dividends declared and $3.66 million redemption of preferred stock. The accumulated other comprehensive income (loss) component of stockholders’ equity totaled $(791) thousand at September 30, 2016 compared to $(4.43) million at December 31, 2015. This fluctuation was mostly related to the after-tax effect of changes in the fair value of securities available for sale. 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 and trust preferred securities less goodwill. Tier 2 capital consists of tier 1 capital 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 September 30, 2016 was 15.79 percent and total Tier 1 and 2 risk-based capital was 16.95 percent. Both of these measures compare favorably with the regulatory minimum to be adequately capitalized of 6 percent for Tier 1 and 8 percent for total risk-based capital. The Company’s common equity Tier 1 ratio as of September 30, 2016 was 11.01, which exceeds the regulatory minimum of 4.50 percent. The Company’s Tier 1 leverage ratio as of September 30, 2016 was 10.85 percent, which exceeds the required ratio standard of 4 percent.

As of September 30, 2016, average capital was $100.43 million, representing 8.67 percent of average assets for the year. This compares to 8.90 percent for September 2015.

As of September 30, 2016, the Company has approximately $200 thousand material commitments for capital expenditures to construct a new branch. With an additional entry in the Savannah market and the recent new entry into the Statesboro office, we anticipate new loan and deposit opportunities. These new offices are expected to have a minimal impact in the first twelve months following their opening and are expected to be accretive thereafter.

The Company did not pay any common stock dividends in the third quarter of 2016 or 2015. The Company suspended common stock dividend payments beginning in the third quarter of 2009 for capital retention purposes.

The Company declared dividends of $1.19 million and $1.85 million on preferred stock on September 30, 2016 and 2015, respectively. Additional information is provided in the Notes to the Consolidated Financial Statements for Preferred Stock and Warrants.

52

Part I (Continued)

Item 2

Capital and Liquidity (Continued)

The Company, primarily through the actions of the 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 September 30, 2016, the available for sale bond portfolio totaled $286.09 million. At December 31, 2015, the available for sale bond portfolio totaled $296.15 million. Only marketable investment grade bonds are purchased. Although a good portion of the banks’ bond portfolios are encumbered as pledges to secure various public funds deposits, repurchase agreements, and for other purposes, management can restructure and free up investment securities for a sale if required to meet liquidity needs.

Management continually monitors the relationship of loans to deposits as it primarily determines the Company’s liquidity posture. The Company had ratios of loans to deposits of 79.3 percent as of September 30, 2016 and 75.0 percent at December 31, 2015. 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 September 30, 2016 and December 31, 2015 were 75.8 percent and 72.1 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 September 30, 2016 and December 31, 2015, the Company had $188 million and $203 million in certificates of deposit of $100,000 or more. These larger deposits represented 19.2 percent and 20.1 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.

The Company supplemented deposit sources with brokered deposits. As of September 30, 2016, the Company had $43.2 million, or 4.42 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. These deposits obtained from listing services are often referred to as wholesale or internet CDs. As of September 30, 2016, the Company had $21.04 million, or 2.15 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, the Company and the Bank 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, federal funds sold and securities purchased under resale agreements.

53

Part I (Continued)

Item 2

Capital and Liquidity (Continued)

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 and three correspondent banks.

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

Return on Assets and Stockholders’ Equity

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

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2016			2015			2016			2015
Return on Average Assets (1)		0.65	%		0.57	%		0.61	%		0.51	%
Return on Average Total Equity (1)		7.35	%		6.28	%		7.03	%		5.77	%
Average Total Equity to Average Assets		8.89	%		9.01	%		8.67	%		8.90	%

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

54

Part I (Continued)

Item 3

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, Colony Bank is not required to report this information.

ITEM 4 – CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”) (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. In addition, no change in the Company’s internal control over financial reporting occurred during the quarter ended September 30, 2016 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

55

Part II

Item 6

ITEM 6 – EXHIBITS

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 Article 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.

3.5 Amendment to the Company’s Bylaws

-filed as Exhibit 99.1 to the Registrant’s 8-K (File No.000-12436) , filed with the Commission on May 29, 2015 and incorporated herein by reference.

4.1 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.

4.2 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(c) the Registrant’s Annual Report on Form 10-K (File No. 000-12436), filed with the Commission on March 30, 2001 and incorporated herein by reference.

56

Part II

Item 6

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 Shareholders 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 Tracts, 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 Al D. Ross

- 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 Form of Waiver, Executed by Terry L. Hester

- 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.

10.9 Form of Waiver, Executed by Henry F. Brown, Jr.

- 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.

10.10 Form of Waiver, Executed by Walter F. Patten

- 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.

10.11 Form of Waiver, Executed by 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.

10.12 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.

99.1 Retention Agreement

-filed as Exhibit 99.1 to the Registrant’s 10-Q for the period ended March 31, 2015 (File No. 000-12436), filed with the Commission on May 4, 2015 and incorporated herein by reference.

99.2 Retention Agreement

-filed as Exhibit 99.2 to the Registrant’s 10-Q for the period ended June 30, 2016 (File No. 000-12436), filed with the Commission on May 31, 2016 and incorporated herein by reference.

57

Part II

Item 6

31.1 Certificate of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

31.2 Certificate of Chief Financial Officer Pursuant to Section 302 of Sarbanes – Oxley Act of 2002

32.1 Certification of 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.DEF XBRL Definition Linkbase Document

101.LAB XBRL Label Linkbase Document

101.PRE XBRL Presentation Linkbase Document

58

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Colony Bankcorp, Inc.
	/s/ Edward P. Loomis, Jr.
Date:     November 1, 2016	Edward P. Loomis, Jr.
	President/Director/Chief Executive Officer

	/s/ Terry L. Hester
Date:     November 1, 2016	Terry L. Hester
	Executive Vice-President/Director/Chief Financial Officer

59

EX-31.1

EXHIBIT 31.1

CERTIFICATION

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

1. I have reviewed this Form 10-Q 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 officer 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 subsidiaries, 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 officer 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 the 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 information; 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.

November 1, 2016

/s/ Edward P. Loomis, Jr.

Edward P. Loomis, Jr.

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Terry L. Hester certify that:

1. I have reviewed this Form 10-Q 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 officer 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 subsidiaries, 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 officer 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 the 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 information; 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.

November 1, 2016

/s/ Terry L. Hester

Terry L. Hester

Executive Vice-President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

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-Q of Colony Bankcorp, Inc. (the Company) for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the Report), Edward P. Loomis, Jr., President and Chief Executive Officer of the Company, and Terry L. Hester, Executive Vice President and Chief Financial 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 his knowledge 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.

November 1, 2016

/s/ Edward P. Loomis, Jr.

Edward P. Loomis, Jr.

President and Chief Executive Officer

November 1, 2016

/s/ Terry L. Hester

Terry L. Hester

Executive Vice-President and Chief Financial Officer

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

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Document Information [Line Items]
Entity Registrant Name	Colony Bankcorp Inc
Entity Central Index Key	0000711669
Trading Symbol	cban
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		8,439,258
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Cash and Cash Equivalents
Cash and Due from Banks	$ 17,803	$ 22,257
Interest-Bearing Deposits	13,872	38,615
Investment Securities
Available for Sale, at Fair Value	286,089	296,149
Federal Home Loan Bank Stock, at Cost	3,010	2,731
Loans	776,117	758,636
Allowance for Loan Losses	(9,203)	(8,604)
Unearned Interest and Fees	(382)	(357)
	766,532	749,675
Premises and Equipment	27,745	26,454
Other Real Estate (Net of Allowance of $1,509 and $1,582 as of September 30, 2016 and December 31, 2015, Respectively)	9,812	8,839
Other Intangible Assets	89	116
Other Assets	27,865	29,313
Total Assets	1,152,817	1,174,149
Deposits
Noninterest-Bearing	138,941	133,886
Interest-Bearing	839,649	877,668
	978,590	1,011,554
Borrowed Money
Subordinated Debentures	24,229	24,229
Federal Home Loan Bank Advances	46,000	40,000
	70,229	64,229
Other Liabilities	3,263	2,909
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued 14,360 Shares and 18,021 as of September 30, 2016 and December 31, 2015, Respectively	14,360	18,021
Common Stock, Par Value $1 a Share; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of September 30, 2016 and December 31, 2015	8,439	8,439
Paid-In Capital	29,145	29,145
Retained Earnings	49,582	44,286
Accumulated Other Comprehensive (Loss), Net of Tax Benefits	(791)	(4,434)
	100,735	95,457
Total Liabilities and Stockholders' Equity	$ 1,152,817	$ 1,174,149

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Other Real Estate, Allowance	$ 1,509	$ 1,582
Preferred Stock, Stated Value (in dollars per share)	$ 1,000	$ 1,000
Preferred Stock, Shares Authorized (in shares)	10,000,000	10,000,000
Preferred Stock, Shares Issued (in shares)	14,360	18,021
Common Stock, Par Value (in dollars per share)	$ 1	$ 1
Common Stock, Shares Authorized (in shares)	20,000,000	20,000,000
Common Stock, Shares Issued (in shares)	8,439,258	8,439,258

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Interest Income
Loans, Including Fees	$ 9,810	$ 9,981	$ 29,135	$ 29,563
Federal Funds Sold				15
Deposits with Other Banks	18	17	79	58
U.S. Government Agencies	1,266	1,060	3,978	3,108
State, County and Municipal	30	28	97	78
Dividends on Other Investments	32	31	97	91
	11,156	11,117	33,386	32,913
Interest Expense
Deposits	1,187	1,210	3,580	3,648
Borrowed Money	413	410	1,269	1,319
	1,600	1,620	4,849	4,967
Net Interest Income	9,556	9,497	28,537	27,946
Provision for Loan Losses	354	250	1,062	741
Net Interest Income After Provision for Loan Losses	9,202	9,247	27,475	27,205
Noninterest Income
Service Charges on Deposits	1,128	1,133	3,185	3,184
Other Service Charges, Commissions and Fees	686	661	2,104	1,963
Mortgage Fee Income	254	138	507	385
Securities Gains (Losses)	256	9	385	12
Other	313	292	980	1,259
	2,637	2,233	7,161	6,803
Noninterest Expenses
Salaries and Employee Benefits	4,726	4,395	13,825	13,270
Occupancy and Equipment	1,025	1,026	2,967	3,036
Other	2,903	2,914	8,451	8,635
	8,654	8,335	25,243	24,941
Income Before Income Taxes	3,185	3,145	9,393	9,067
Income Taxes	927	945	2,907	2,799
Net Income	2,258	2,200	6,486	6,268
Preferred Stock Dividends	378	594	1,189	1,854
Net Income Available to Common Stockholders	$ 1,880	$ 1,606	$ 5,297	$ 4,414
Net Income Per Share of Common Stock
Basic (in dollars per share)	$ 0.22	$ 0.19	$ 0.63	$ 0.52
Diluted (in dollars per share)	0.22	0.19	0.62	0.52
Cash Dividends Declared Per Share of Common Stock (in dollars per share)
Weighted Average Basic Shares Outstanding (in shares)	8,439,258	8,439,258	8,439,258	8,439,258
Weighted Average Diluted Shares Outstanding (in shares)	8,506,268	8,466,285	8,495,752	8,449,057

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net Income	$ 2,258	$ 2,200	$ 6,486	$ 6,268
Other Comprehensive Income:
Gains (Losses) on Securities Arising During the Year	(1,182)	2,497	5,905	3,747
Tax Effect	402	(849)	(2,008)	(1,274)
Realized Gains on Sale of AFS Securities	(256)	(9)	(385)	(12)
Tax Effect	87	3	131	4
Net Current Period Other Comprehensive Income	(949)	1,642	3,643	2,465
Comprehensive Income	$ 1,309	$ 3,842	$ 10,129	$ 8,733

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 6,486	$ 6,268
Adjustments to Reconcile Net Income to Net Cash
Depreciation	1,178	1,237
Provision for Loan Losses	1,062	741
Securities (Gains)	(385)	(12)
Amortization and Accretion	1,142	1,391
(Gain) on Sale of Other Real Estate and Repossessions	(17)	(61)
Provision for Losses on Other Real Estate	126	431
Increase in Cash Surrender Value of Life Insurance	(416)	(132)
Loss on Sale of Premises & Equipment	80	11
Other Prepaids, Deferrals and Accruals, Net	340	928
	9,596	10,802
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Investment Securities Available for Sale	(49,355)	(63,715)
Proceeds from Maturities, Calls, and Paydowns of Investment Securities: Available for Sale	39,022	40,840
Proceeds from Maturities, Calls, and Paydowns of Investment Securities: Held for Maturity		5
Proceeds from Sale of Investment Securities Available for Sale	25,210	28,274
Interest-Bearing Deposits in Other Banks	24,743	5,210
Net Loans to Customers	(21,968)	(25,631)
Purchase of Premises and Equipment	(2,635)	(776)
Proceeds from Sale of Other Real Estate and Repossessions	2,981	5,404
Federal Home Loan Bank Stock	(279)	100
Proceeds from Sale of Premises and Equipment	86	29
	17,805	(10,260)
CASH FLOWS FROM FINANCING ACTIVITIES
Noninterest-Bearing Customer Deposits	5,055	(2,547)
Interest-Bearing Customer Deposits	(38,019)	(18,722)
Dividends Paid for Preferred Stock	(1,230)	(1,908)
Redemption of Preferred Stock	(3,661)	(4,833)
Payments on Federal Home Loan Bank Advances	(4,000)	(27,000)
Proceeds from Federal Home Loan Bank Advances	10,000	27,000
	(31,855)	(28,010)
Net Decrease in Cash and Cash Equivalents	(4,454)	(27,468)
Cash and Cash Equivalents at Beginning of Period	22,257	44,605
Cash and Cash Equivalents at End of Period	$ 17,803	$ 17,137

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Note 1 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(1

)

Summary of Significant Accounting Policies

Presentation

Colony Bankcorp, Inc. (the Company) is a bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Colony Bank, Fitzgerald, Georgia (the Bank). All significant intercompany accounts have been eliminated in consolidation. The accounting and reporting policies of the Company conform to generally accepted accounting principles and practices utilized in the commercial banking industry.

All dollars in notes to consolidated financial statements are rounded to the nearest thousand, except for per share amounts.

The consolidated financial statements in this report are unaudited, except for the December 31, 2015 consolidated balance sheet. All adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for fair presentation of the interim consolidated financial statements have been included and fairly and accurately present the financial position, results of operations and cash flows of the Company. The results of operations for the nine months ended September 30, 2016, are not necessarily indicative of the results which may be expected for the entire year.

Nature of Operations

The Bank 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. The Bank is headquartered in Fitzgerald, Georgia with banking offices in Albany, Ashburn, Broxton, Centerville, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, 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 have been reclassified to conform to statement presentations selected for 2016. Such reclassifications have not affected 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 September 30, 2016, approximately 85 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. 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 Colony depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment.

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 ratings are 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) isrequired 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 collectability 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 collectability of principal. Loans are returned to an accrual status when factors indicating doubtful collectability 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 non-accrual loan that has been modified in a TDR remains on non-accrual status for a period of 6 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 non-accrual 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. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms and, has performed according to the modified terms for at least six months, and there has not been any prior principal forgiveness on a cumulative basis.

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 inability to collect 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 collectability 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 are 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 lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices, (2) changes in international, national, regional, and local conditions, (3) changes in the nature and volume of the portfolio and terms of loans, (4) changes in the experience, depth, and ability of lending management, (5) changes in the volume and severity of past due loans and other similar conditions, (6) changes in the quality of the organization's loan review system, (7) changes in the value of underlying collateral for collateral dependent loans, (8) the existence and effect of any concentrations of credit and changes in the levels of such concentrations, and (9) the effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses.

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

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

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

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.

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 statement of income.

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 other noninterest 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 $15,246 and $14,830 as of September 30, 2016 and December 31, 2015, 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 and are not reported in the consolidated statements of operations but as a separate component of the equity section of the consolidated balance sheets. 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 when they are funded.

Changes in Accounting Principles and Effects of New Accounting Pronouncements

ASU 2014-09,

 Revenue from Contracts with Customers (Topic 606).

 The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity is expected to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. ASU 2014-09, as deferred one year by ASU 2015-14, is effective for the Company in the first quarter of fiscal year 2018. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on the consolidated financial statements.

ASU 2016-1, 

“No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.

 ASU  2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. ASU  2016-1 will be effective for the Company on January 1, 2018. The Company is currently evaluating the impact of the pending adoption of ASU 2016-1 on the consolidated financial statements.

ASU 2016-02,

"Lease

s

."

This ASU requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to current accounting treatment. This ASU changes the guidance on sale-leaseback transactions, initial direct costs and lease execution costs, and, for lessors, modifies the classification criteria and the accounting for sales-type and direct financing leases. For public business entities, this ASU is effective for annual periods beginning after December 15, 2018, and interim periods therein. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2016-09,

"Improvements to Employee Share-Based Payment Accounting."

This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, this ASU is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods therein. The Company is evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2016-13,

“Financial Instruments – Credit Losses.

”

This ASU sets forth a “current expected credit loss” (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supported forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this ASU on its consolidated financial statements.

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Note 2 - Investment Securities

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

(2) Investment Securities

Investment securities as of September 30, 2016 and December 31, 2015 are summarized as follows:

September 30, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	282,681	$	816	$	(2,116	)	$	281,381
State, County & Municipal		4,607		101		-			4,708
	$	287,288	$	917	$	(2,116	)	$	286,089

December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	297,779	$	63	$	(6,792	)	$	291,050
State, County & Municipal		5,089		30		(20	)		5,099
	$	302,868	$	93	$	(6,812	)	$	296,149

The amortized cost and fair value of investment securities as of September 30, 2016, 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
	Amortized Cost		Fair Value
Due In One Year or Less	$	346	$	348
Due After One Year Through Five Years		1,662		1,685
Due After Five Years Through Ten Years		1,109		1,139
Due After Ten Years		1,490		1,536
	$	4,607	$	4,708
Mortgage-Backed Securities		282,681		281,381
	$	287,288	$	286,089

Proceeds from the sale of investments available for sale during the first nine months of 2016 totaled $25,210 compared to $28,274 for the first nine months of 2015. The sale of investments available for sale during the first nine months of 2016 resulted in gross realized gains of $392 and losses of $7. The sale of investments available for sale during the first nine months of 2015 resulted in gross realized gains of $208 and losses of $196.

Investment securities having a carry value approximating $117,694 and $133,754 as of September 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at September 30, 2016 and December 31, 2015 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
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2016
U. S. Government Agencies
Mortgage-Backed	$	62,927	$	(301	)	$	110,587	$	(1,815	)	$	173,514	$	(2,116	)
	$	62,927	$	(301	)	$	110,587	$	(1,815	)	$	173,514	$	(2,116	)
December 31. 2015
U.S. Government Agencies
Mortgage-Backed	$	139,765	$	(1,270	)	$	139,720	$	(5,522	)	$	279,485	$	(6,792	)
State, County and Municipal		1,035		(20	)		-		-			1,035		(20	)
	$	140,800	$	(1,290	)	$	139,720	$	(5,522	)	$	280,520	$	(6,812	)

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 September 30, 2016, the debt securities with unrealized losses have depreciated 1.20 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.

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Note 3 - Loans

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(3)

Loans

The following table presents the composition of loans segregated by class of loans, as of September 30, 2016 and December 31, 2015.

	September 30, 2016		December 31, 2015
Commercial and Agricultural
Commercial	$	45,773	$	47,782
Agricultural		26,547		19,193
Real Estate
Commercial Construction		33,724		40,107
Residential Construction		10,325		9,413
Commercial		349,392		346,262
Residential		195,045		197,002
Farmland		73,801		61,780
Consumer and Other
Consumer		20,378		20,605
Other		21,132		16,492
Total Loans	$	776,117	$	758,636

Commercial and industrial 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 (i) the risk grade assigned to commercial and consumer loans, (ii) the level of classified commercial loans, (iii) net charge-offs, (iv) nonperforming loans, and (v) 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 table presents the loan portfolio by credit quality indicator (risk grade) as of September 30, 2016 and December 31, 2015. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes. For the period ending September 30, 2016, the Company did not have any loans classified as “doubtful” or a “loss”.

September 30, 2016
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	43,042	$	1,867	$	864	$	45,773
Agricultural		25,990		184		373		26,547
Real Estate
Commercial Construction		32,191		268		1,265		33,724
Residential Construction		10,125		-		200		10,325
Commercial		325,699		7,685		16,008		349,392
Residential		176,480		7,012		11,553		195,045
Farmland		71,047		1,641		1,113		73,801
Consumer and Other
Consumer		19,703		264		411		20,378
Other		21,132		-		-		21,132
Total Loans	$	725,409	$	18,921	$	31,787	$	776,117

December 31, 2015
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	44,274	$	1,927	$	1,581	$	47,782
Agricultural		18,970		18		205		19,193
Real Estate
Commercial Construction		36,516		913		2,678		40,107
Residential Construction		9,413		-		-		9,413
Commercial		320,566		13,653		12,043		346,262
Residential		177,054		8,546		11,402		197,002
Farmland		56,798		930		4,052		61,780
Consumer and Other
Consumer		20,038		156		411		20,605
Other		16,467		-		25		16,492
Total Loans	$	700,096	$	26,143	$	32,397	$	758,636

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 or not 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 September 30, 2016 and December 31, 2015:

September 30, 2016
	Accruing Loans
			90 Days
	30-89 Days		or More		Total Accruing		Nonaccrual
	Past Due		Past Due		Loans Past Due		Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	262	$	-	$	262	$	646	$	44,865	$	45,773
Agricultural		67		-		67		281		26,199		26,547
Real Estate
Commercial Construction		109		-		109		200		33,415		33,724
Residential Construction		-		-		-		-		10,325		10,325
Commercial		261		-		261		8,179		340,952		349,392
Residential		3,069		-		3,069		3,520		188,456		195,045
Farmland		172		-		172		919		72,710		73,801
Consumer and Other
Consumer		235		1		236		241		19,901		20,378
Other		-		-		-		-		21,132		21,132
Total Loans	$	4,175	$	1	$	4,176	$	13,986	$	757,955	$	776,117

December 31, 2015
	Accruing Loans
			90 Days
	30-89 Days		or More		Total Accruing		Nonaccrual
	Past Due		Past Due		Loans Past Due		Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	491	$	-	$	491	$	577	$	46,714	$	47,782
Agricultural		71		-		71		178		18,944		19,193
Real Estate
Commercial Construction		90		-		90		1,643		38,374		40,107
Residential Construction		-		-		-		-		9,413		9,413
Commercial		6,031		-		6,031		7,565		332,666		346,262
Residential		3,683		-		3,683		3,164		190,155		197,002
Farmland		123		-		123		1,103		60,554		61,780
Consumer and Other
Consumer		470		8		478		178		19,949		20,605
Other		-		-		-		-		16,492		16,492
Total Loans	$	10,959	$	8	$	10,967	$	14,408	$	733,261	$	758,636

The following table details impaired loan data as of September 30, 2016:

September 30, 2016
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	646	$	646	$	-	$	515	$	15		$	18
Agricultural		301		280		-		211		5			13
Commercial Construction		508		508		-		825		16			15
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		16,457		16,367		-		14,274		490			480
Residential Real Estate		5,321		4,995		-		4,704		56			178
Farmland		921		919		-		1,071		(4	)		1
Consumer		241		241		-		214		7			9
Other		-		-		-		-		-			-
		24,395		23,956		-		21,814		585			714
With An Allowance Recorded
Commercial		-		-		-		38		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		73		73		22		74		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		8,316		8,316		2,470		8,308		177			173
Residential Real Estate		858		851		435		936		4			6
Farmland		382		382		33		385		16			14
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		9,629		9,622		2,960		9,741		197			193
Total
Commercial		646		646		-		553		15			18
Agricultural		301		280		-		211		5			13
Commercial Construction		581		581		22		899		16			15
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		24,773		24,683		2,470		22,582		667			653
Residential Real Estate		6,179		5,846		435		5,640		60			184
Farmland		1,303		1,301		33		1,456		12			15
Consumer		241		241		-		214		7			9
Other		-		-		-		-		-			-
	$	34,024	$	33,578	$	2,960	$	31,555	$	782		$	907

The following table details impaired loan data as of December 31, 2015:

December 31, 2015
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	454	$	454	$	-	$	535	$	17		$	21
Agricultural		196		178		-		163		(10	)		10
Commercial Construction		6,888		1,898		-		2,867		26			27
Commercial Real Estate		15,569		15,122		-		15,430		529			531
Residential Real Estate		5,429		4,576		-		4,715		176			159
Farmland		1,105		1,103		-		1,340		1			2
Consumer		180		178		-		191		14			15
Other		-		-		-		48		-			-
		29,821		23,509		-		25,289		753			765
With An Allowance Recorded
Commercial		123		123		95		100		2			3
Agricultural		-		-		-		-		-			-
Commercial Construction		77		76		25		92		-			-
Commercial Real Estate		8,969		8,956		1,608		6,673		214			209
Residential Real Estate		1,083		1,075		308		1,089		16			16
Farmland		388		388		37		391		21			21
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		10,640		10,618		2,073		8,345		253			249
Total
Commercial		577		577		95		635		19			24
Agricultural		196		178		-		163		(10	)		10
Commercial Construction		6,965		1,974		25		2,959		26			27
Commercial Real Estate		24,538		24,078		1,608		22,103		743			740
Residential Real Estate		6,512		5,651		308		5,804		192			175
Farmland		1,493		1,491		37		1,731		22			23
Consumer		180		178		-		191		14			15
Other		-		-		-		48		-			-
	$	40,461	$	34,127	$	2,073	$	33,634	$	1,006		$	1,014

The following table details impaired loan data as of September 30, 2015:

September 30, 2015
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	580	$	573	$	-	$	562	$	16		$	19
Agricultural		174		156		-		158		(10	)		10
Commercial Construction		7,726		2,736		-		3,191		17			17
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		14,412		14,412		-		15,533		412			418
Residential Real Estate		5,359		4,400		-		4,761		165			148
Farmland		1,398		1,397		-		1,419		1			2
Consumer		195		187		-		195		8			11
Other		-		-		-		65		-			-
		29,844		23,861		-		25,884		609			625
With An Allowance Recorded
Commercial		91		91		91		92		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		78		78		14		97		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		6,941		6,282		243		5,912		132			123
Residential Real Estate		1,082		1,082		308		1,093		12			12
Farmland		390		390		57		392		16			16
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		8,582		7,923		713		7,586		160			151
Total
Commercial		671		664		91		654		16			19
Agricultural		174		156		-		158		(10	)		10
Commercial Construction		7,804		2,814		14		3,288		17			17
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		21,353		20,694		243		21,445		544			541
Residential Real Estate		6,441		5,482		308		5,854		177			160
Farmland		1,788		1,787		57		1,811		17			18
Consumer		195		187		-		195		8			11
Other		-		-		-		65		-			-
	$	38,426	$	31,784	$	713	$	33,470	$	769		$	776

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 September 30, 2016. The following tables present the number of loan contracts restructured during the three month and nine month period ended September 30, 2016 and 2015. It shows 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 twelve 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. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms and, has performed according to the modified terms for at least six months, and there has not been any prior principal forgiveness on a cumulative basis.

	Three Months Ended September 30, 2016						Nine Months Ended September 30, 2016
Troubled Debt Restructurings
	# of Contracts		Pre-Modification		Post-Modification		# of Contracts		Pre-Modification		Post-Modification
Residential Real Estate		-	$	-	$	-		1	$	91	$	91
Total Loans		-	$	-	$	-		1	$	91	$	91

	Three Months Ended September 30, 2015						Nine Months Ended September 30, 2015
Troubled Debt Restructurings
	# of Contracts		Pre-Modification		Post-Modification		# of Contracts		Pre-Modification		Post-Modification
Residential Real Estate		1	$	226	$	139		2	$	1,106	$	1,036
Total Loans	$	1	$	226	$	139		2	$	1,106	$	1,036

The company did not have any TDRs that subsequently defaulted for the three months and nine months ended September 30, 2016.

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Note 4 - Allowance for Loan Losses

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Allowance for Credit Losses [Text Block]

(

4

) Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the nine month period ended September 30, 2016 and September 30, 2015. 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.

September 30, 2016
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	855	$	(291	)	$	54	$	(127	)	$	491
Agricultural		203		(18	)		3		93			281
Real Estate
Commercial Construction		691		(25	)		813		(1,021	)		458
Residential Construction		20		-			-		2			22
Commercial		3,851		(992	)		197		2,231			5,287
Residential		1,990		(243	)		32		(114	)		1,665
Farmland		912		-			137		(187	)		862
Consumer and Other
Consumer		63		(180	)		44		176			103
Other		19		-			6		9			34
	$	8,604	$	(1,749	)	$	1,286	$	1,062		$	9,203

September 30, 2015
	Beginning									Ending
	Balance		Charge-Offs			Recoveries		Provision		Balance
Commercial and Agricultural
Commercial	$	497	$	(257	)	$	45	$	17	$	302
Agricultural		304		(5	)		3		4		306
Real Estate
Commercial Construction		1,223		(96	)		282		282		1,691
Residential Construction		138		-			-		-		138
Commercial		3,665		(275	)		138		296		3,824
Residential		2,425		(910	)		95		85		1,695
Farmland		104		(40	)		10		3		77
Consumer and Other
Consumer		67		(167	)		47		53		-
Other		379		(26	)		15		1		369
	$	8,802	$	(1,776	)	$	635	$	741	$	8,402

For the year ended December 31, 2015 the Company’s historical loss ratio within the ALLL calculation was based on a rolling 8 quarter historical loss period.  During the first quarter of 2016 Company management implemented a change to its allowance for loan loss methodology by expanding the historical loss period from a rolling 8 quarters to 16 quarters.  Management believes the longer historical loss period better reflects the current and expected loss behavior of the loan portfolio within the current credit cycle.  The transition to a rolling 16 quarter loss period will be complete in the first quarter of 2017.  As of September 30, 2016, this change in the historical loss period resulted in an increase to the allowance for loan losses of $986,000.

Management continually evaluates the allowance for loan losses methodology seeking to refine and enhance this process as appropriate, and it is likely that the methodology will continue to evolve over time.

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. At September 30, 2016, there were 160 impaired loans totaling $4.6 million below the $250,000 review threshold which 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 September 30, 2015, there were 156 impaired loans totaling $3.9 million which were below the $250,000 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.

Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on unimpaired 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 $12.45 million and $14.03 million as of September 30, 2016 and 2015, respectively. Specific allowance allocations were made for these loans totaling $742 thousand and $1.3 million as of September 30, 2016 and 2015, 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.

The following tables present breakdowns of the allowance for loan losses, segregated by impairment methodology for September 30, 2016 and 2015:

September 30, 2016
	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	-	$	491	$	491	$	8	$	45,765	$	45,773
Agricultural		-		281		281		-		26,547		26,547
Real Estate
Commercial Construction		22		436		458		380		33,344		33,724
Residential Construction		-		22		22		-		10,325		10,325
Commercial		2,470		2,817		5,287		24,363		325,029		349,392
Residential		435		1,230		1,665		3,200		191,845		195,045
Farmland		33		829		862		1,047		72,754		73,801
Consumer and Other
Consumer		-		103		103		-		20,378		20,378
Other		-		34		34		-		21,132		21,132
Total End of Period Balance	$	2,960	$	6,243	$	9,203	$	28,998	$	747,119	$	776,117

September 30, 2015
	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	91	$	211	$	302	$	91	$	48,668	$	48,759
Agricultural		-		306		306		8		27,365		27,373
Real Estate
Commercial Construction		14		1,677		1,691		2,694		40,895		43,589
Residential Construction		-		138		138		-		10,465		10,465
Commercial		243		3,581		3,824		20,049		327,654		347,703
Residential		308		1,387		1,695		3,380		192,420		195,800
Farmland		57		20		77		1,695		59,856		61,551
Consumer and Other
Consumer		-		-		-		-		20,958		20,958
Other		-		369		369		-		8,006		8,006
Total End of Period Balance	$	713	$	7,689	$	8,402	$	27,917	$	736,287	$	764,204

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Note 5 - Other Real Estate Owned

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Real Estate Owned [Text Block]

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)

Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at September 30, 2016 and December 31, 2015 was $9,812 and $8,839, 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 for the nine months ended September 30, 2016 and the year ended December 31, 2015.

	Nine Months Ended			Twelve Months Ended
	September 30, 2016			December 31, 2015
Balance, Beginning	$	8,839		$	10,402
Additions		3,953			7,536
Sales of OREO		(2,877	)		(8,055	)
Gains (Losses) on Sale		23			(591	)
Provision for Losses		(126	)		(453	)
Balance, Ending	$	9,812		$	8,839

At September 30, 2016, the Company held $922 thousand of residential real estate property as foreclosed property compared to $1.03 million as of December 31, 2015.  Also at September 30, 2016, $1.15 million of consumer mortgage loans collateralized by residential real estate property were in the process of foreclosure according to local requirements of the applicable jurisdictions. At December 31, 2015, only $159 thousand of consumer mortgage loans collateralized by residential real estate property were in the process of foreclosure according to local requirements of the applicable jurisdictions.

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Note 6 - Deposits

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

(6

) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $392 and $272 as of September 30, 2016 and December 31, 2015.

Components of interest-bearing deposits as of September 30, 2016 and December 31, 2015 are as follows:

	Nine Months Ended		Twelve Months Ended
	September 30, 2016		December 31, 2015
Interest-Bearing Demand	$	395,614	$	412,960
Savings		69,060		64,976
Time, $100,000 and Over		188,185		202,801
Other Time		186,790		196,931
	$	839,649	$	877,668

At September 30, 2016 and December 31, 2015, the Company had brokered deposits of $43,232 and $25,577, respectively. All of these brokered deposits represent Certificate of Deposits 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 approximately $129,418 and $141,900 as of September 30, 2016 and December 31, 2015, respectively. The aggregate amount of certificates of deposit, each with a minimum deposit of $250,000 was $30,204 and $31,755 as of September 30, 2016 and December 31, 2015.

 

As of September 30, 2016 and December 31, 2015, the scheduled maturities of certificates of deposits are as follows:

Maturity	September 30, 2016		December 31, 2015
One Year and Under	$	267,245	$	287,423
One to Three Years		83,978		88,019
Three Years and Over		23,752		24,290
	$	374,975	$	399,732

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Note 7 - Other Borrowed Money

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

(

7

) Other Borrowed Money

Other borrowed money at September 30, 2016 and December 31, 2015 is summarized as follows:

	September 30, 2016		December 31, 2015
Federal Home Loan Bank Advances	$	46,000	$	40,000

Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2018 to 2026 and interest rates ranging from 0.98 percent to 3.51 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 September 30, 2016 the book value of those loans pledged is $106,506. At September 30, 2016 the Company had remaining credit availability from the FHLB of $240,282. 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 September 30, 2016 are as follows:

Year	Amount
2018	$	2,500
2019		5,000
2020		2,500
After 2020		36,000
	$	46,000

The Company also has available federal funds lines of credit with various financial institutions totaling $43,500, none of which were outstanding at September 30, 2016.

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 September 30, 2016, 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.

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Note 8 - Preferred Stock and Warrants

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Preferred Stock And Warrants [Text Block]

(

8

) Preferred Stock and Warrants

The Company had 14,360 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) issued and outstanding with private investors as of September 30, 2016. The Company redeemed 3,661 shares of Preferred Stock at $1,000 per share in August 2016. The Company redeemed 9,979 shares of Preferred Stock at $1,000 per share during 2015. 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.

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Note 9 - Subordinated Debentures (Trust Preferred Securities)

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Subordinated Borrowings Disclosure [Text Block]

(

9

) Subordinated Debentures (Trust Preferred Securities)

				3 Month	Added	Total		5 Year
Description	Date		Amount	Libor Rate	Points	Rate	Maturity	Call Option
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,640	0.85656	2.68	3.53656	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155	0.83769	1.50	2.33769	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279	0.83769	1.65	2.48769	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155	0.75650	1.40	2.15650	9/14/2037	9/14/2012

The Trust Preferred Securities are recorded as subordinated debentures on the consolidated balance sheets, but subject to certain limitations, qualify as Tier 1 Capital for regulatory capital purposes. The proceeds from the offerings were used to fund certain acquisitions, pay off holding company debt and inject capital into the bank subsidiary.

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Note 10 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(1

0

) 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. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies, but may include cash or cash equivalents, negotiable instruments, real estate, accounts receivable, inventory, oil, gas and mineral interests, property, plant, and equipment.

At September 30, 2016 and December 31, 2015 the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	September 30, 2016		December 31, 2015
Loan Commitments	$	74,910	$	67,889
Letters of Credit		1,466		1,588

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.

Le

gal

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.

Other Contractual Obligations.

In 2015, the Company committed to the construction of a new branch facility at an estimated cost of $1.2 million. Construction is expected to be completed in early 2017.

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(11

) 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 fair 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 as 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

– The fair value of subordinated debentures is estimated by discounting the future cash flows using the current rates at which similar advances would be obtained. Subordinate Debentures are classified as Level 2.

Other Borrowed Money

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

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

The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2016 and December 31, 2015 are as follows:

	Fair Value Measurements at
	September 30, 2016
	Carrying		Estimated			Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	31,675	$	31,675	$	31,675	$	-	$	-
Investment Securities Available for Sale		286,089		286,089		-		285,493		596
Federal Home Loan Bank Stock		3,010		3,010		3,010		-		-
Loans, Net		766,532		767,161		-		760,499		6,662
Bank-Owned Life Insurance		15,246		15,246		15,246		-		-
Liabilities
Deposits		978,590		979,967		603,615		376,352		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		46,000		46,541		-		46,541		-

	Fair Value Measurements at
	December 31, 2015
	Carrying		Estimated			Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	60,872	$	60,872	$	60,872	$	-	$	-
Investment Securities Available for Sale		296,149		296,149		-		295,219		930
Federal Home Loan Bank Stock		2,731		2,731		2,731		-		-
Loans, Net		749,675		750,412		-		741,867		8,545
Bank-Owned Life Insurance		14,830		14,830		14,830		-		-
Liabilities
Deposits		1,011,554		1,013,111		611,822		401,289		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		40,000		40,421		-		40,421		-

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 measurements 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 September 30, 2016 and December 31, 2015, 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 September 30, 2016. 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
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
September 30, 2016	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	281,381	$	-	$	281,381	$	-
State, County and Municipal		4,708		-		4,112		596
	$	286,089	$	-	$	285,493	$	596
Nonrecurring
Impaired Loans	$	6,662	$	-	$	-	$	6,662
Other Real Estate	$	2,850	$	-	$	-	$	2,850

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
December 31, 2015	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	291,050	$	-	$	291,050	$	-
State, County and Municipal		5,099		-		4,169		930
	$	296,149	$	-	$	295,219	$	930
Nonrecurring
Impaired Loans	$	8,545	$	-	$	-	$	8,545
Other Real Estate	$	2,536	$	-	$	-	$	2,536

Liabilities

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

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at September 30, 2016 and December 31, 2015. This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

			Valuation	Unobservable	Range
	September 30, 2016		Techniques	Inputs	Weighted Avg
Real Estate
Commercial Construction		51	Sales Comparison	Adjustment for Differences	(5.00 )%	-	99.00%
				Between the Comparable Sales		47.00 %
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00 %
				Market Conditions
Residential Real Estate		416	Sales Comparison	Adjustment for Differences	(22.00 )%	-	0.00%
				Between the Comparable Sales		(11.00 )%
				Management Adjustments for	0.00%	-	40.00%
				Age of Appraisals and/or Current		20.00%
				Market Conditions
Commercial Real Estate		5,846	Sales Comparison	Adjustment for Differences	(14.08 )%	-	24.62%
				Between the Comparable Sales		5.27%
				Management Adjustments for	0.00%	-	100.00%
				Age of Appraisals and/or Current		50.00%
				Market Conditions
			Income Approach	Capitalization Rate		10.67 %
Farmland		349	Sales Comparison	Adjustment for Differences	(27.00 )%	-	15.00%
				Between the Comparable Sales		(6.00 )%
				Management Adjustments for	10.00%	-	75.00%
				Age of Appraisals and/or Current		42.50%
				Market Conditions
Other Real Estate Owned		2,850	Sales Comparison	Adjustment for Differences	(50.80 )%	-	142.90%
				Between the Comparable Sales		46.05%
				Management Adjustments for	0.62%	-	72.75%
				Age of Appraisals and/or Current		29.23%
				Market Conditions
			Income Approach	Discount Rate		12.50%

			Valuation	Unobservable	Range
	December 31, 2015		Techniques	Inputs	Weighted Avg
Commercial	$	28	Sales Comparison	Adjustment for Differences	(31.77)%	-	34.00%
				Between the Comparable Sales		1.12%
				Management Adjustment for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		11.00%
Real Estate
Commercial Construction		51	Sales Comparison	Adjustment for Differences	(5.00)%	-	99.00%
				Between the Comparable Sales		47.00%
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
Residential Real Estate		767	Sales Comparison	Adjustment for Differences	(22.00)%	-	10.80%
				Between the Comparable Sales		5.60%
				Management Adjustments for	0.00%	-	25.00%
				Age of Appraisals and/or Current		12.50%
				Market Conditions
Commercial Real Estate		7,348	Sales Comparison	Adjustment for differences	(31.77)%	-	34.00%
				Between the comparable Sales		1.12%
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		10.25%
Farmland		351	Sales Comparison	Adjustment for Differences	(27.00)%	-	15.00%
				Between the Comparable Sales		(6.00)%
				Management Adjustments for	10.00%	-	75.00%
				Age of Appraisals and/or Current		42.50%
				Market Conditions
Other Real Estate Owned		2,536	Sales Comparison	Adjustment for Differences	(50.80)%	-	142.90%
				Between the Comparable Sales		46.05%
				Management Adjustment for	15.53%	-	72.75%
				Age of Appraisals and/or Current		43.37%
				Market Conditions
			Income Approach	Discount Rate		12.50%

The table below 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 nine months ended September 30, 2016 and the twelve months ended December 31, 2015.

	Available for Sale Securities
	September 30, 2016			December 31, 2015
Balance, Beginning	$	930		$	948
Transfers out of Level 3		-			-
Maturities		(330	)		-
Loss on OTTI Impairment Included		-
in Noninterest Income		-			-
Unrealized Gains included in Other Comprehensive Income (Loss)		(4	)		(18	)
Balance, Ending	$	596		$	930

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. There were no transfers of securities between levels for the nine months ended September 30, 2016 and the twelve months ended December 31, 2015.

The following table presents quantitative information about recurring level 3 fair value measurements as of September 30, 2016.

			Valuation	Unobservable	Range
	Fair Value		Techniques	Inputs	Weighted Avg
State, County and Municipal	$	596	Discounted Cash Flow	Discount Rate		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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Note 12 - Regulatory Capital Matters

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

(

12

) 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 common stockholders in the third quarter of 2009.

The Company is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets.  As of September 30, 2016, the interim final Basel III rules (Basel III) require the Company to also maintain minimum amounts and ratios of common equity Tier 1 capital to risk-weighted assets.  These amounts and ratios as defined in regulations are presented hereafter.  Management believes, as of September 30, 2016, 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 events or conditions since prior notification of capital adequacy from the regulators that have changed the institution’s category. 

The Basel III rules also require the implementation of a new capital conservation buffer comprised of common equity Tier 1 capital.  The capital conservation buffer will be phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increase each subsequent year by 0.625% until reaching its final level of 2.5% on January 1, 2019.

The following table summarizes regulatory capital information as of September 30, 2016 and December 31, 2015 on a consolidated basis and for the subsidiary, as defined.  Regulatory capital ratios for September 30, 2016 and December 31, 2015 were calculated in accordance with the Basel III rules.

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30 , 2016
Total Capital to Risk-Weighted Assets
Consolidated	$	134,175		16.95	%	$	63,312		8.00	%		N/A		N/A
Colony Bank		130,022		16.45			63,223		8.00		$	79,029		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		124,972		15.79			47,484		6.00			N/A		N/A
Colony Bank		120,819		15.29			47,417		6.00			63,223		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated		87,112		11.01			35,613		4.50			N/A		N/A
Colony Bank		120,819		15.29			35,563		4.50			51,369		6.50
Tier I Capital to Average Assets
Consolidated		124,972		10.85			46,077		4.00			N/A		N/A
Colony Bank		120,819		10.51			46,002		4.00			57,502		5.00

		Actual				For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2015
Total Capital to Risk-Weighted Assets
Consolidated	$	131,948		16.60	%	$	63,602		8.00	%		N/A		N/A
Colony Bank		126,939		15.99			63,500		8.00		$	79,375		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		123,344		15.51			47,702		6.00			N/A		N/A
Colony Bank		118,335		14.91			47,625		6.00			63,500		8.00
Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		81,823		10.29			35,776		4.50			N/A		N/A
Colony Bank		118,335		14.91			35,719		4.50			51,594		6.50
Tier 1 Capital to Average Assets
Consolidated		123,344		10.69			46,149		4.00			N/A		N/A
Colony Bank		118,335		10.27			46,074		4.00			57,592		5.00

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Note 13 - Earnings Per Share

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

(13

) Earnings Per Share

Basic earnings per share is computed by dividing net income 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 after preferred stock dividends. The following table presents earnings per share for the three month and nine month period ended September 30, 2016 and 2015:

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2016		2015		2016		2015
Numerator
Net Income Available to Common Stockholders	$	1,880	$	1,606	$	5,297	$	4,414
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439		8,439		8,439		8,439
Dilutive Effect of Potential Common Stock
Restricted Stock		-		-		-		-
Stock Warrants		67		27		57		10
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,506		8,466		8,496		8,449
Earnings Per Share - Basic	$	0.22	$	0.19	$	0.63	$	0.52
Earnings Per Share - Diluted	$	0.22	$	0.19	$	0.62	$	0.52

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Note 14 - Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

(14

)

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) for unrealized gains and losses securities available for sale for the period ended September 30, 2016 and the year ended December 31, 2015 are as follows:

	September 30, 2016			December 31, 2015
Beginning Balance	$	(4,434	)	$	(4,845	)
Other Comprehensive Income Before Reclassification		3,897			403
Amounts Reclassified from Accumulated Other Comprehensive Income		(254	)		8
Net Current Period Other Comprehensive Income		3,643			411
Ending Balance	$	(791	)	$	(4,434	)

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Presentation

Colony Bankcorp, Inc. (the Company) is a bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Colony Bank, Fitzgerald, Georgia (the Bank). All significant intercompany accounts have been eliminated in consolidation. The accounting and reporting policies of the Company conform to generally accepted accounting principles and practices utilized in the commercial banking industry.

All dollars in notes to consolidated financial statements are rounded to the nearest thousand, except for per share amounts.

The consolidated financial statements in this report are unaudited, except for the December 31, 2015 consolidated balance sheet. All adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for fair presentation of the interim consolidated financial statements have been included and fairly and accurately present the financial position, results of operations and cash flows of the Company. The results of operations for the nine months ended September 30, 2016, are not necessarily indicative of the results which may be expected for the entire year.

Nature of Operations

The Bank 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. The Bank is headquartered in Fitzgerald, Georgia with banking offices in Albany, Ashburn, Broxton, Centerville, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, 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, Policy [Policy Text Block]

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.

Reclassification, Policy [Policy Text Block]

Reclassifications

In certain instances, amounts reported in prior years’ consolidated financial statements have been reclassified to conform to statement presentations selected for 2016. Such reclassifications have not affected previously reported stockholders’ equity or net income.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

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 September 30, 2016, approximately 85 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. 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 Colony depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment.

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 ratings are monitored by management to minimize credit risk.

Investment, Policy [Policy Text Block]

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).

Investment in Federal Home Bank Stock [Policy Text Block]

Federal Home Loan Bank Stock

Investment in stock of a Federal Home Loan Bank (FHLB) isrequired 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.

Policy Loans Receivable, Policy [Policy Text Block]

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 collectability 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 collectability of principal. Loans are returned to an accrual status when factors indicating doubtful collectability on a timely basis no longer exist.

Loans and Leases Receivable, Troubled Debt Restructuring Policy [Policy Text Block]

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 non-accrual loan that has been modified in a TDR remains on non-accrual status for a period of 6 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 non-accrual 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. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms and, has performed according to the modified terms for at least six months, and there has not been any prior principal forgiveness on a cumulative basis.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

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 inability to collect 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 collectability 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 are 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 lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices, (2) changes in international, national, regional, and local conditions, (3) changes in the nature and volume of the portfolio and terms of loans, (4) changes in the experience, depth, and ability of lending management, (5) changes in the volume and severity of past due loans and other similar conditions, (6) changes in the quality of the organization's loan review system, (7) changes in the value of underlying collateral for collateral dependent loans, (8) the existence and effect of any concentrations of credit and changes in the levels of such concentrations, and (9) the effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses.

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

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

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

Property, Plant and Equipment, Policy [Policy Text Block]

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, Finite-Lived, Policy [Policy Text Block]

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 a 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 and Servicing of Financial Assets, Transfers of Financial Assets, Policy [Policy Text Block]

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.

Cash and Cash Equivalents, Policy [Policy Text Block]

Statement of Cash Flows

For reporting cash flows, cash and cash equivalents include cash on hand, noninterest-bearing amounts due from banks and federal funds sold. Cash flows from demand deposits, interest-bearing checking accounts, savings accounts, loans and certificates of deposit are reported net.

Advertising Costs, Policy [Policy Text Block]

Advertising Costs

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

Income Tax, Policy [Policy Text Block]

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.

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 statement of income.

Real Estate Owned, Valuation Allowance, Policy [Policy Text Block]

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 other noninterest expense.

Bank Owned Life Insurance [Policy Text Block]

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 $15,246 and $14,830 as of September 30, 2016 and December 31, 2015, respectively.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on securities available for sale, represent equity changes from economic events of the period other than transactions with owners and are not reported in the consolidated statements of operations but as a separate component of the equity section of the consolidated balance sheets. 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 Exposure, Policy [Policy Text Block]

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 when they are funded.

New Accounting Pronouncements, Policy [Policy Text Block]

Changes in Accounting Principles and Effects of New Accounting Pronouncements

ASU 2014-09,

 Revenue from Contracts with Customers (Topic 606).

 The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity is expected to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. ASU 2014-09, as deferred one year by ASU 2015-14, is effective for the Company in the first quarter of fiscal year 2018. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on the consolidated financial statements.

ASU 2016-1, 

“No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.

 ASU  2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. ASU  2016-1 will be effective for the Company on January 1, 2018. The Company is currently evaluating the impact of the pending adoption of ASU 2016-1 on the consolidated financial statements.

ASU 2016-02,

"Lease

s

."

This ASU requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to current accounting treatment. This ASU changes the guidance on sale-leaseback transactions, initial direct costs and lease execution costs, and, for lessors, modifies the classification criteria and the accounting for sales-type and direct financing leases. For public business entities, this ASU is effective for annual periods beginning after December 15, 2018, and interim periods therein. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2016-09,

"Improvements to Employee Share-Based Payment Accounting."

This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, this ASU is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods therein. The Company is evaluating the impact of this ASU on its financial statements and disclosures.

ASU 2016-13,

“Financial Instruments – Credit Losses.

”

This ASU sets forth a “current expected credit loss” (CECL) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supported forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this ASU on its consolidated financial statements.

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Note 1 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

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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Note 2 - Investment Securities (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Marketable Securities [Table Text Block]

September 30, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	282,681	$	816	$	(2,116	)	$	281,381
State, County & Municipal		4,607		101		-			4,708
	$	287,288	$	917	$	(2,116	)	$	286,089

December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	297,779	$	63	$	(6,792	)	$	291,050
State, County & Municipal		5,089		30		(20	)		5,099
	$	302,868	$	93	$	(6,812	)	$	296,149

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities
	Available for Sale
	Amortized Cost		Fair Value
Due In One Year or Less	$	346	$	348
Due After One Year Through Five Years		1,662		1,685
Due After Five Years Through Ten Years		1,109		1,139
Due After Ten Years		1,490		1,536
	$	4,607	$	4,708
Mortgage-Backed Securities		282,681		281,381
	$	287,288	$	286,089

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less Than 12 Months					12 Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
September 30, 2016
U. S. Government Agencies
Mortgage-Backed	$	62,927	$	(301	)	$	110,587	$	(1,815	)	$	173,514	$	(2,116	)
	$	62,927	$	(301	)	$	110,587	$	(1,815	)	$	173,514	$	(2,116	)
December 31. 2015
U.S. Government Agencies
Mortgage-Backed	$	139,765	$	(1,270	)	$	139,720	$	(5,522	)	$	279,485	$	(6,792	)
State, County and Municipal		1,035		(20	)		-		-			1,035		(20	)
	$	140,800	$	(1,290	)	$	139,720	$	(5,522	)	$	280,520	$	(6,812	)

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Note 3 - Loans (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	September 30, 2016		December 31, 2015
Commercial and Agricultural
Commercial	$	45,773	$	47,782
Agricultural		26,547		19,193
Real Estate
Commercial Construction		33,724		40,107
Residential Construction		10,325		9,413
Commercial		349,392		346,262
Residential		195,045		197,002
Farmland		73,801		61,780
Consumer and Other
Consumer		20,378		20,605
Other		21,132		16,492
Total Loans	$	776,117	$	758,636

Financing Receivable Credit Quality Indicators [Table Text Block]

September 30, 2016
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	43,042	$	1,867	$	864	$	45,773
Agricultural		25,990		184		373		26,547
Real Estate
Commercial Construction		32,191		268		1,265		33,724
Residential Construction		10,125		-		200		10,325
Commercial		325,699		7,685		16,008		349,392
Residential		176,480		7,012		11,553		195,045
Farmland		71,047		1,641		1,113		73,801
Consumer and Other
Consumer		19,703		264		411		20,378
Other		21,132		-		-		21,132
Total Loans	$	725,409	$	18,921	$	31,787	$	776,117

December 31, 2015
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	44,274	$	1,927	$	1,581	$	47,782
Agricultural		18,970		18		205		19,193
Real Estate
Commercial Construction		36,516		913		2,678		40,107
Residential Construction		9,413		-		-		9,413
Commercial		320,566		13,653		12,043		346,262
Residential		177,054		8,546		11,402		197,002
Farmland		56,798		930		4,052		61,780
Consumer and Other
Consumer		20,038		156		411		20,605
Other		16,467		-		25		16,492
Total Loans	$	700,096	$	26,143	$	32,397	$	758,636

Past Due Financing Receivables [Table Text Block]

September 30, 2016
	Accruing Loans
			90 Days
	30-89 Days		or More		Total Accruing		Nonaccrual
	Past Due		Past Due		Loans Past Due		Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	262	$	-	$	262	$	646	$	44,865	$	45,773
Agricultural		67		-		67		281		26,199		26,547
Real Estate
Commercial Construction		109		-		109		200		33,415		33,724
Residential Construction		-		-		-		-		10,325		10,325
Commercial		261		-		261		8,179		340,952		349,392
Residential		3,069		-		3,069		3,520		188,456		195,045
Farmland		172		-		172		919		72,710		73,801
Consumer and Other
Consumer		235		1		236		241		19,901		20,378
Other		-		-		-		-		21,132		21,132
Total Loans	$	4,175	$	1	$	4,176	$	13,986	$	757,955	$	776,117

December 31, 2015
	Accruing Loans
			90 Days
	30-89 Days		or More		Total Accruing		Nonaccrual
	Past Due		Past Due		Loans Past Due		Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	491	$	-	$	491	$	577	$	46,714	$	47,782
Agricultural		71		-		71		178		18,944		19,193
Real Estate
Commercial Construction		90		-		90		1,643		38,374		40,107
Residential Construction		-		-		-		-		9,413		9,413
Commercial		6,031		-		6,031		7,565		332,666		346,262
Residential		3,683		-		3,683		3,164		190,155		197,002
Farmland		123		-		123		1,103		60,554		61,780
Consumer and Other
Consumer		470		8		478		178		19,949		20,605
Other		-		-		-		-		16,492		16,492
Total Loans	$	10,959	$	8	$	10,967	$	14,408	$	733,261	$	758,636

Impaired Financing Receivables [Table Text Block]

September 30, 2016
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	646	$	646	$	-	$	515	$	15		$	18
Agricultural		301		280		-		211		5			13
Commercial Construction		508		508		-		825		16			15
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		16,457		16,367		-		14,274		490			480
Residential Real Estate		5,321		4,995		-		4,704		56			178
Farmland		921		919		-		1,071		(4	)		1
Consumer		241		241		-		214		7			9
Other		-		-		-		-		-			-
		24,395		23,956		-		21,814		585			714
With An Allowance Recorded
Commercial		-		-		-		38		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		73		73		22		74		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		8,316		8,316		2,470		8,308		177			173
Residential Real Estate		858		851		435		936		4			6
Farmland		382		382		33		385		16			14
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		9,629		9,622		2,960		9,741		197			193
Total
Commercial		646		646		-		553		15			18
Agricultural		301		280		-		211		5			13
Commercial Construction		581		581		22		899		16			15
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		24,773		24,683		2,470		22,582		667			653
Residential Real Estate		6,179		5,846		435		5,640		60			184
Farmland		1,303		1,301		33		1,456		12			15
Consumer		241		241		-		214		7			9
Other		-		-		-		-		-			-
	$	34,024	$	33,578	$	2,960	$	31,555	$	782		$	907

December 31, 2015
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	454	$	454	$	-	$	535	$	17		$	21
Agricultural		196		178		-		163		(10	)		10
Commercial Construction		6,888		1,898		-		2,867		26			27
Commercial Real Estate		15,569		15,122		-		15,430		529			531
Residential Real Estate		5,429		4,576		-		4,715		176			159
Farmland		1,105		1,103		-		1,340		1			2
Consumer		180		178		-		191		14			15
Other		-		-		-		48		-			-
		29,821		23,509		-		25,289		753			765
With An Allowance Recorded
Commercial		123		123		95		100		2			3
Agricultural		-		-		-		-		-			-
Commercial Construction		77		76		25		92		-			-
Commercial Real Estate		8,969		8,956		1,608		6,673		214			209
Residential Real Estate		1,083		1,075		308		1,089		16			16
Farmland		388		388		37		391		21			21
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		10,640		10,618		2,073		8,345		253			249
Total
Commercial		577		577		95		635		19			24
Agricultural		196		178		-		163		(10	)		10
Commercial Construction		6,965		1,974		25		2,959		26			27
Commercial Real Estate		24,538		24,078		1,608		22,103		743			740
Residential Real Estate		6,512		5,651		308		5,804		192			175
Farmland		1,493		1,491		37		1,731		22			23
Consumer		180		178		-		191		14			15
Other		-		-		-		48		-			-
	$	40,461	$	34,127	$	2,073	$	33,634	$	1,006		$	1,014

September 30, 2015
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	580	$	573	$	-	$	562	$	16		$	19
Agricultural		174		156		-		158		(10	)		10
Commercial Construction		7,726		2,736		-		3,191		17			17
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		14,412		14,412		-		15,533		412			418
Residential Real Estate		5,359		4,400		-		4,761		165			148
Farmland		1,398		1,397		-		1,419		1			2
Consumer		195		187		-		195		8			11
Other		-		-		-		65		-			-
		29,844		23,861		-		25,884		609			625
With An Allowance Recorded
Commercial		91		91		91		92		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		78		78		14		97		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		6,941		6,282		243		5,912		132			123
Residential Real Estate		1,082		1,082		308		1,093		12			12
Farmland		390		390		57		392		16			16
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		8,582		7,923		713		7,586		160			151
Total
Commercial		671		664		91		654		16			19
Agricultural		174		156		-		158		(10	)		10
Commercial Construction		7,804		2,814		14		3,288		17			17
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		21,353		20,694		243		21,445		544			541
Residential Real Estate		6,441		5,482		308		5,854		177			160
Farmland		1,788		1,787		57		1,811		17			18
Consumer		195		187		-		195		8			11
Other		-		-		-		65		-			-
	$	38,426	$	31,784	$	713	$	33,470	$	769		$	776

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Three Months Ended September 30, 2016						Nine Months Ended September 30, 2016
Troubled Debt Restructurings
	# of Contracts		Pre-Modification		Post-Modification		# of Contracts		Pre-Modification		Post-Modification
Residential Real Estate		-	$	-	$	-		1	$	91	$	91
Total Loans		-	$	-	$	-		1	$	91	$	91

	Three Months Ended September 30, 2015						Nine Months Ended September 30, 2015
Troubled Debt Restructurings
	# of Contracts		Pre-Modification		Post-Modification		# of Contracts		Pre-Modification		Post-Modification
Residential Real Estate		1	$	226	$	139		2	$	1,106	$	1,036
Total Loans	$	1	$	226	$	139		2	$	1,106	$	1,036

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Note 4 - Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Allowance for Credit Losses on Financing Receivables [Table Text Block]

September 30, 2016
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	855	$	(291	)	$	54	$	(127	)	$	491
Agricultural		203		(18	)		3		93			281
Real Estate
Commercial Construction		691		(25	)		813		(1,021	)		458
Residential Construction		20		-			-		2			22
Commercial		3,851		(992	)		197		2,231			5,287
Residential		1,990		(243	)		32		(114	)		1,665
Farmland		912		-			137		(187	)		862
Consumer and Other
Consumer		63		(180	)		44		176			103
Other		19		-			6		9			34
	$	8,604	$	(1,749	)	$	1,286	$	1,062		$	9,203

September 30, 2015
	Beginning									Ending
	Balance		Charge-Offs			Recoveries		Provision		Balance
Commercial and Agricultural
Commercial	$	497	$	(257	)	$	45	$	17	$	302
Agricultural		304		(5	)		3		4		306
Real Estate
Commercial Construction		1,223		(96	)		282		282		1,691
Residential Construction		138		-			-		-		138
Commercial		3,665		(275	)		138		296		3,824
Residential		2,425		(910	)		95		85		1,695
Farmland		104		(40	)		10		3		77
Consumer and Other
Consumer		67		(167	)		47		53		-
Other		379		(26	)		15		1		369
	$	8,802	$	(1,776	)	$	635	$	741	$	8,402

Schedule of Allowance for Loan Losses by Portfolio Segment [Table Text Block]

September 30, 2016
	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	-	$	491	$	491	$	8	$	45,765	$	45,773
Agricultural		-		281		281		-		26,547		26,547
Real Estate
Commercial Construction		22		436		458		380		33,344		33,724
Residential Construction		-		22		22		-		10,325		10,325
Commercial		2,470		2,817		5,287		24,363		325,029		349,392
Residential		435		1,230		1,665		3,200		191,845		195,045
Farmland		33		829		862		1,047		72,754		73,801
Consumer and Other
Consumer		-		103		103		-		20,378		20,378
Other		-		34		34		-		21,132		21,132
Total End of Period Balance	$	2,960	$	6,243	$	9,203	$	28,998	$	747,119	$	776,117

September 30, 2015
	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	91	$	211	$	302	$	91	$	48,668	$	48,759
Agricultural		-		306		306		8		27,365		27,373
Real Estate
Commercial Construction		14		1,677		1,691		2,694		40,895		43,589
Residential Construction		-		138		138		-		10,465		10,465
Commercial		243		3,581		3,824		20,049		327,654		347,703
Residential		308		1,387		1,695		3,380		192,420		195,800
Farmland		57		20		77		1,695		59,856		61,551
Consumer and Other
Consumer		-		-		-		-		20,958		20,958
Other		-		369		369		-		8,006		8,006
Total End of Period Balance	$	713	$	7,689	$	8,402	$	27,917	$	736,287	$	764,204

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Note 5 - Other Real Estate Owned (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Other Real Estate, Roll Forward [Table Text Block]

	Nine Months Ended			Twelve Months Ended
	September 30, 2016			December 31, 2015
Balance, Beginning	$	8,839		$	10,402
Additions		3,953			7,536
Sales of OREO		(2,877	)		(8,055	)
Gains (Losses) on Sale		23			(591	)
Provision for Losses		(126	)		(453	)
Balance, Ending	$	9,812		$	8,839

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Note 6 - Deposits (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Components Of Interest Bearing Deposits [Table Text Block]

	Nine Months Ended		Twelve Months Ended
	September 30, 2016		December 31, 2015
Interest-Bearing Demand	$	395,614	$	412,960
Savings		69,060		64,976
Time, $100,000 and Over		188,185		202,801
Other Time		186,790		196,931
	$	839,649	$	877,668

Scheduled Maturities Of Certificates Of Deposits [Table Text Block]

Maturity	September 30, 2016		December 31, 2015
One Year and Under	$	267,245	$	287,423
One to Three Years		83,978		88,019
Three Years and Over		23,752		24,290
	$	374,975	$	399,732

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Note 7 - Other Borrowed Money (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	September 30, 2016		December 31, 2015
Federal Home Loan Bank Advances	$	46,000	$	40,000

Schedule of Maturities of Long-term Debt [Table Text Block]

Year	Amount
2018	$	2,500
2019		5,000
2020		2,500
After 2020		36,000
	$	46,000

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Note 9 - Subordinated Debentures (Trust Preferred Securities) (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Subordinated Borrowing [Table Text Block]

				3 Month	Added	Total		5 Year
Description	Date		Amount	Libor Rate	Points	Rate	Maturity	Call Option
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,640	0.85656	2.68	3.53656	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155	0.83769	1.50	2.33769	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279	0.83769	1.65	2.48769	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155	0.75650	1.40	2.15650	9/14/2037	9/14/2012

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Note 10 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Summary Of Financial Instrument Outstanding [Table Text Block]

	Contract Amount
	September 30, 2016		December 31, 2015
Loan Commitments	$	74,910	$	67,889
Letters of Credit		1,466		1,588

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value, Inputs, Level 3 [Member]

Notes Tables

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

			Valuation	Unobservable	Range
	Fair Value		Techniques	Inputs	Weighted Avg
State, County and Municipal	$	596	Discounted Cash Flow	Discount Rate		N/A*

Fair Value, by Balance Sheet Grouping [Table Text Block]

	Fair Value Measurements at
	September 30, 2016
	Carrying		Estimated			Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	31,675	$	31,675	$	31,675	$	-	$	-
Investment Securities Available for Sale		286,089		286,089		-		285,493		596
Federal Home Loan Bank Stock		3,010		3,010		3,010		-		-
Loans, Net		766,532		767,161		-		760,499		6,662
Bank-Owned Life Insurance		15,246		15,246		15,246		-		-
Liabilities
Deposits		978,590		979,967		603,615		376,352		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		46,000		46,541		-		46,541		-

	Fair Value Measurements at
	December 31, 2015
	Carrying		Estimated			Level		Level		Level
	Value		Fair Value			1		2		3
Assets
Cash and Short-Term Investments	$	60,872	$	60,872	$	60,872	$	-	$	-
Investment Securities Available for Sale		296,149		296,149		-		295,219		930
Federal Home Loan Bank Stock		2,731		2,731		2,731		-		-
Loans, Net		749,675		750,412		-		741,867		8,545
Bank-Owned Life Insurance		14,830		14,830		14,830		-		-
Liabilities
Deposits		1,011,554		1,013,111		611,822		401,289		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		40,000		40,421		-		40,421		-

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
September 30, 2016	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	281,381	$	-	$	281,381	$	-
State, County and Municipal		4,708		-		4,112		596
	$	286,089	$	-	$	285,493	$	596
Nonrecurring
Impaired Loans	$	6,662	$	-	$	-	$	6,662
Other Real Estate	$	2,850	$	-	$	-	$	2,850

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Total Fair		Identical Assets		Observable		Inputs
December 31, 2015	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	291,050	$	-	$	291,050	$	-
State, County and Municipal		5,099		-		4,169		930
	$	296,149	$	-	$	295,219	$	930
Nonrecurring
Impaired Loans	$	8,545	$	-	$	-	$	8,545
Other Real Estate	$	2,536	$	-	$	-	$	2,536

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

			Valuation	Unobservable	Range
	September 30, 2016		Techniques	Inputs	Weighted Avg
Real Estate
Commercial Construction		51	Sales Comparison	Adjustment for Differences	(5.00 )%	-	99.00%
				Between the Comparable Sales		47.00 %
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00 %
				Market Conditions
Residential Real Estate		416	Sales Comparison	Adjustment for Differences	(22.00 )%	-	0.00%
				Between the Comparable Sales		(11.00 )%
				Management Adjustments for	0.00%	-	40.00%
				Age of Appraisals and/or Current		20.00%
				Market Conditions
Commercial Real Estate		5,846	Sales Comparison	Adjustment for Differences	(14.08 )%	-	24.62%
				Between the Comparable Sales		5.27%
				Management Adjustments for	0.00%	-	100.00%
				Age of Appraisals and/or Current		50.00%
				Market Conditions
			Income Approach	Capitalization Rate		10.67 %
Farmland		349	Sales Comparison	Adjustment for Differences	(27.00 )%	-	15.00%
				Between the Comparable Sales		(6.00 )%
				Management Adjustments for	10.00%	-	75.00%
				Age of Appraisals and/or Current		42.50%
				Market Conditions
Other Real Estate Owned		2,850	Sales Comparison	Adjustment for Differences	(50.80 )%	-	142.90%
				Between the Comparable Sales		46.05%
				Management Adjustments for	0.62%	-	72.75%
				Age of Appraisals and/or Current		29.23%
				Market Conditions
			Income Approach	Discount Rate		12.50%

			Valuation	Unobservable	Range
	December 31, 2015		Techniques	Inputs	Weighted Avg
Commercial	$	28	Sales Comparison	Adjustment for Differences	(31.77)%	-	34.00%
				Between the Comparable Sales		1.12%
				Management Adjustment for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		11.00%
Real Estate
Commercial Construction		51	Sales Comparison	Adjustment for Differences	(5.00)%	-	99.00%
				Between the Comparable Sales		47.00%
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
Residential Real Estate		767	Sales Comparison	Adjustment for Differences	(22.00)%	-	10.80%
				Between the Comparable Sales		5.60%
				Management Adjustments for	0.00%	-	25.00%
				Age of Appraisals and/or Current		12.50%
				Market Conditions
Commercial Real Estate		7,348	Sales Comparison	Adjustment for differences	(31.77)%	-	34.00%
				Between the comparable Sales		1.12%
				Management Adjustments for	0.00%	-	10.00%
				Age of Appraisals and/or Current		5.00%
				Market Conditions
			Income Approach	Capitalization Rate		10.25%
Farmland		351	Sales Comparison	Adjustment for Differences	(27.00)%	-	15.00%
				Between the Comparable Sales		(6.00)%
				Management Adjustments for	10.00%	-	75.00%
				Age of Appraisals and/or Current		42.50%
				Market Conditions
Other Real Estate Owned		2,536	Sales Comparison	Adjustment for Differences	(50.80)%	-	142.90%
				Between the Comparable Sales		46.05%
				Management Adjustment for	15.53%	-	72.75%
				Age of Appraisals and/or Current		43.37%
				Market Conditions
			Income Approach	Discount Rate		12.50%

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Available for Sale Securities
	September 30, 2016			December 31, 2015
Balance, Beginning	$	930		$	948
Transfers out of Level 3		-			-
Maturities		(330	)		-
Loss on OTTI Impairment Included		-
in Noninterest Income		-			-
Unrealized Gains included in Other Comprehensive Income (Loss)		(4	)		(18	)
Balance, Ending	$	596		$	930

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Note 12 - Regulatory Capital Matters (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30 , 2016
Total Capital to Risk-Weighted Assets
Consolidated	$	134,175		16.95	%	$	63,312		8.00	%		N/A		N/A
Colony Bank		130,022		16.45			63,223		8.00		$	79,029		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		124,972		15.79			47,484		6.00			N/A		N/A
Colony Bank		120,819		15.29			47,417		6.00			63,223		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated		87,112		11.01			35,613		4.50			N/A		N/A
Colony Bank		120,819		15.29			35,563		4.50			51,369		6.50
Tier I Capital to Average Assets
Consolidated		124,972		10.85			46,077		4.00			N/A		N/A
Colony Bank		120,819		10.51			46,002		4.00			57,502		5.00

		Actual				For Capital Adequacy Purposes						To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2015
Total Capital to Risk-Weighted Assets
Consolidated	$	131,948		16.60	%	$	63,602		8.00	%		N/A		N/A
Colony Bank		126,939		15.99			63,500		8.00		$	79,375		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		123,344		15.51			47,702		6.00			N/A		N/A
Colony Bank		118,335		14.91			47,625		6.00			63,500		8.00
Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		81,823		10.29			35,776		4.50			N/A		N/A
Colony Bank		118,335		14.91			35,719		4.50			51,594		6.50
Tier 1 Capital to Average Assets
Consolidated		123,344		10.69			46,149		4.00			N/A		N/A
Colony Bank		118,335		10.27			46,074		4.00			57,592		5.00

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Note 13 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2016		2015		2016		2015
Numerator
Net Income Available to Common Stockholders	$	1,880	$	1,606	$	5,297	$	4,414
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439		8,439		8,439		8,439
Dilutive Effect of Potential Common Stock
Restricted Stock		-		-		-		-
Stock Warrants		67		27		57		10
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,506		8,466		8,496		8,449
Earnings Per Share - Basic	$	0.22	$	0.19	$	0.63	$	0.52
Earnings Per Share - Diluted	$	0.22	$	0.19	$	0.62	$	0.52

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Note 14 - Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	September 30, 2016			December 31, 2015
Beginning Balance	$	(4,434	)	$	(4,845	)
Other Comprehensive Income Before Reclassification		3,897			403
Amounts Reclassified from Accumulated Other Comprehensive Income		(254	)		8
Net Current Period Other Comprehensive Income		3,643			411
Ending Balance	$	(791	)	$	(4,434	)

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Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Other Assets [Member]
Cash Surrender Value of Life Insurance	$ 15,246	$ 14,830
Percentage of Loan Portfolio Concentrated in Loans Secured by Real Estate.	85.00%
Discounted Percentage to Account for Selling and Marketing Costs	10.00%
Probability of Uncertain Tax Positions of Being Realized upon Settlement, Minimum	50.00%

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Note 1 - Summary of Significant Accounting Policies - Estimated Useful Lives and Methods of Depreciation (Details)	3 Months Ended
	Sep. 30, 2016
Banking Premises [Member] | Minimum [Member]
Property, plant and equipment, useful life	15 years
Banking Premises [Member] | Maximum [Member]
Property, plant and equipment, useful life	40 years
Banking Premises [Member]
Property, plant and equipment, depreciation method	Straight-Line and Accelerated
Furniture and Equipment [Member] | Minimum [Member]
Property, plant and equipment, useful life	5 years
Furniture and Equipment [Member] | Maximum [Member]
Property, plant and equipment, useful life	10 years
Furniture and Equipment [Member]
Property, plant and equipment, depreciation method	Straight-Line and Accelerated

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Note 2 - Investment Securities (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Proceeds from Sale of Available-for-sale Securities	$ 25,210	$ 28,274
Available-for-sale Securities, Gross Realized Gains	392	208
Available-for-sale Securities, Gross Realized Losses	7	$ 196
Held-to-maturity Securities Pledged as Collateral	$ 117,694		$ 133,754
Depreciated Debt Securities with Unrealized Losses	1.20%

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Note 2 - Investment Securities - Schedule of Investment Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
US Government Agencies Debt Securities [Member]
Available for sale securities, amortized cost	$ 282,681	$ 297,779
Available for sale securities, gross unrealized gains	816	63
Available for sale securities, gross unrealized losses	(2,116)	(6,792)
Available for Sale, at Fair Value	281,381	291,050
US States and Political Subdivisions Debt Securities [Member]
Available for sale securities, amortized cost	4,607	5,089
Available for sale securities, gross unrealized gains	101	30
Available for sale securities, gross unrealized losses		(20)
Available for Sale, at Fair Value	4,708	5,099
Available for sale securities, amortized cost	287,288	302,868
Available for sale securities, gross unrealized gains	917	93
Available for sale securities, gross unrealized losses	(2,116)	(6,812)
Available for Sale, at Fair Value	$ 286,089	$ 296,149

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Note 2 - Investment Securities - Amortized Cost and Fair Value of Investment Securities by Contractual Maturity (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Due In One Year or Less,available for sale, amortized cost	$ 346
Due In One Year or Less, available for sale, fair value	348
Due After One Year Through Five Years,available for sale, amortized cost	1,662
Due After One Year Through Five Years, available for sale, fair value	1,685
Due After Five Years Through Ten Years,available for sale, amortized cost	1,109
Due After Five Years Through Ten Years, available for sale, fair value	1,139
Due After Ten Years,available for sale, amortized cost	1,490
Due After Ten Years, available for sale, fair value	1,536
	4,607
	4,708
Mortgage-Backed Securities,available for sale, amortized cost	282,681
Mortgage-Backed Securities, available for sale, fair value	281,381
	287,288
	$ 286,089

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Note 2 - Investment Securities - Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
US Government Agencies Debt Securities [Member]
Continuous unrealized loss, less than 12 months, fair value	$ 62,927	$ 139,765
Continuous unrealized loss, less than 12 months, gross unrealized losses	(301)	(1,270)
Continuous unrealized loss, greater than 12 months, fair value	110,587	139,720
Continuous unrealized loss, greater than 12 months, gross unrealized losses	(1,815)	(5,522)
Continuous unrealized loss, fair value	173,514	279,485
Continuous unrealized loss, gross unrealized losses	(2,116)	(6,792)
US States and Political Subdivisions Debt Securities [Member]
Continuous unrealized loss, less than 12 months, fair value		1,035
Continuous unrealized loss, less than 12 months, gross unrealized losses		(20)
Continuous unrealized loss, greater than 12 months, fair value
Continuous unrealized loss, greater than 12 months, gross unrealized losses
Continuous unrealized loss, fair value		1,035
Continuous unrealized loss, gross unrealized losses		(20)
Continuous unrealized loss, less than 12 months, fair value	62,927	140,800
Continuous unrealized loss, less than 12 months, gross unrealized losses	(301)	(1,290)
Continuous unrealized loss, greater than 12 months, fair value	110,587	139,720
Continuous unrealized loss, greater than 12 months, gross unrealized losses	(1,815)	(5,522)
Continuous unrealized loss, fair value	173,514	280,520
Continuous unrealized loss, gross unrealized losses	$ (2,116)	$ (6,812)

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Note 3 - Loans (Details Textual)	3 Months Ended	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)
Loans and Leases Receivable, Impaired, Commitment to Lend	$ 0	$ 0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0

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Note 3 - Loans - Segregated by Class of Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Loans	$ 45,773	$ 47,782	$ 48,759
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Loans	26,547	19,193	27,373
Real Estate Portfolio Segment [Member] | Commercial [Member]
Loans	349,392	346,262	347,703
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Loans	33,724	40,107	43,589
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Loans	10,325	9,413	10,465
Real Estate Portfolio Segment [Member] | Residential [Member]
Loans	195,045	197,002	195,800
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans	73,801	61,780	61,551
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Loans	20,378	20,605	20,958
Consumer and Other Portfolio Segment [Member] | Other [Member]
Loans	21,132	16,492	8,006
Loans	$ 776,117	$ 758,636	$ 764,204

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Note 3 - Loans - Loan Portfolio by Credit Quality Indicator (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Pass [Member]
Loans	$ 43,042,000	$ 44,274,000
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Special Mention [Member]
Loans	1,867,000	1,927,000
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Substandard [Member]
Loans	864,000	1,581,000
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Loans	45,773,000	47,782,000	$ 48,759,000
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Pass [Member]
Loans	25,990,000	18,970,000
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Special Mention [Member]
Loans	184,000	18,000
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Substandard [Member]
Loans	373,000	205,000
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Loans	26,547,000	19,193,000	27,373,000
Real Estate Portfolio Segment [Member] | Commercial [Member] | Pass [Member]
Loans	325,699,000	320,566,000
Real Estate Portfolio Segment [Member] | Commercial [Member] | Special Mention [Member]
Loans	7,685,000	13,653,000
Real Estate Portfolio Segment [Member] | Commercial [Member] | Substandard [Member]
Loans	16,008,000	12,043,000
Real Estate Portfolio Segment [Member] | Commercial [Member]
Loans	349,392,000	346,262,000	347,703,000
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Pass [Member]
Loans	32,191,000	36,516,000
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Special Mention [Member]
Loans	268,000	913,000
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Substandard [Member]
Loans	1,265,000	2,678,000
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Loans	33,724,000	40,107,000	43,589,000
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Pass [Member]
Loans	10,125,000	9,413,000
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Special Mention [Member]
Loans	0	0
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Substandard [Member]
Loans	200,000	0
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Loans	10,325,000	9,413,000	10,465,000
Real Estate Portfolio Segment [Member] | Residential [Member] | Pass [Member]
Loans	176,480,000	177,054,000
Real Estate Portfolio Segment [Member] | Residential [Member] | Special Mention [Member]
Loans	7,012,000	8,546,000
Real Estate Portfolio Segment [Member] | Residential [Member] | Substandard [Member]
Loans	11,553,000	11,402,000
Real Estate Portfolio Segment [Member] | Residential [Member]
Loans	195,045,000	197,002,000	195,800,000
Real Estate Portfolio Segment [Member] | Farmland [Member] | Pass [Member]
Loans	71,047,000	56,798,000
Real Estate Portfolio Segment [Member] | Farmland [Member] | Special Mention [Member]
Loans	1,641,000	930,000
Real Estate Portfolio Segment [Member] | Farmland [Member] | Substandard [Member]
Loans	1,113,000	4,052,000
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans	73,801,000	61,780,000	61,551,000
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Pass [Member]
Loans	19,703,000	20,038,000
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Special Mention [Member]
Loans	264,000	156,000
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Substandard [Member]
Loans	411,000	411,000
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Loans	20,378,000	20,605,000	20,958,000
Consumer and Other Portfolio Segment [Member] | Other [Member] | Pass [Member]
Loans	21,132,000	16,467,000
Consumer and Other Portfolio Segment [Member] | Other [Member] | Special Mention [Member]
Loans	0	0
Consumer and Other Portfolio Segment [Member] | Other [Member] | Substandard [Member]
Loans		25,000
Consumer and Other Portfolio Segment [Member] | Other [Member]
Loans	21,132,000	16,492,000	8,006,000
Pass [Member]
Loans	725,409,000	700,096,000
Special Mention [Member]
Loans	18,921,000	26,143,000
Substandard [Member]
Loans	31,787,000	32,397,000
Loans	$ 776,117,000	$ 758,636,000	$ 764,204,000

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Note 3 - Loans - Age Analysis of Past Due Loans and Nonaccrual Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	$ 262	$ 491
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Accruing loans past due	262	491
Nonaccrual loans	646	577
Current loans	44,865	46,714
Loans	45,773	47,782	$ 48,759
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	67	71
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Accruing loans past due	67	71
Nonaccrual loans	281	178
Current loans	26,199	18,944
Loans	26,547	19,193	27,373
Real Estate Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	261	6,031
Real Estate Portfolio Segment [Member] | Commercial [Member]
Accruing loans past due	261	6,031
Nonaccrual loans	8,179	7,565
Current loans	340,952	332,666
Loans	349,392	346,262	347,703
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	109	90
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Accruing loans past due	109	90
Nonaccrual loans	200	1,643
Current loans	33,415	38,374
Loans	33,724	40,107	43,589
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Current loans	10,325	9,413
Loans	10,325	9,413	10,465
Real Estate Portfolio Segment [Member] | Residential [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	3,069	3,683
Real Estate Portfolio Segment [Member] | Residential [Member]
Accruing loans past due	3,069	3,683
Nonaccrual loans	3,520	3,164
Current loans	188,456	190,155
Loans	195,045	197,002	195,800
Real Estate Portfolio Segment [Member] | Farmland [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	172	123
Real Estate Portfolio Segment [Member] | Farmland [Member]
Accruing loans past due	172	123
Nonaccrual loans	919	1,103
Current loans	72,710	60,554
Loans	73,801	61,780	61,551
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	235	470
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due	1	8
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Accruing loans past due	236	478
Nonaccrual loans	241	178
Current loans	19,901	19,949
Loans	20,378	20,605	20,958
Consumer and Other Portfolio Segment [Member] | Other [Member]
Current loans	21,132	16,492
Loans	21,132	16,492	8,006
Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	4,175	10,959
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due	1	8
Accruing loans past due	4,176	10,967
Nonaccrual loans	13,986	14,408
Current loans	757,955	733,261
Loans	$ 776,117	$ 758,636	$ 764,204

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Note 3 - Loans - Impaired Loan Data (Details) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Unpaid contractual principal balance with no related allowance	$ 646,000	$ 580,000	$ 454,000
Impaired balance with no related allowance	646,000	573,000	454,000
Average recorded investment with no related allowance	515,000	562,000	535,000
Interest income recognized with no related allowance	15,000	16,000	17,000
Interest income collected with no related allowance	18,000	19,000	21,000
Unpaid contractual principal balance with an allowance		91,000	123,000
Impaired balance with an allowance	0	91,000	123,000
Related allowance	0	91,000	95,000
Average recorded investment with an allowance	38,000	92,000	100,000
Interest income recognized with an allowance	0	0	2,000
Interest income collected with an allowance	0	0	3,000
Unpaid contractual principal balance	646,000	671,000	577,000
Impaired balance	646,000	664,000	577,000
Average recorded investment	553,000	654,000	635,000
Interest income recognized	15,000	16,000	19,000
Interest income collected	18,000	19,000	24,000
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Unpaid contractual principal balance with no related allowance	301,000	174,000	196,000
Impaired balance with no related allowance	280,000	156,000	178,000
Average recorded investment with no related allowance	211,000	158,000	163,000
Interest income recognized with no related allowance	5,000	(10,000)	(10,000)
Interest income collected with no related allowance	13,000	10,000	10,000
Unpaid contractual principal balance with an allowance		0	0
Impaired balance with an allowance	0	0	0
Related allowance	0	0	0
Average recorded investment with an allowance	0	0	0
Interest income recognized with an allowance	0	0	0
Interest income collected with an allowance	0	0	0
Unpaid contractual principal balance	301,000	174,000	196,000
Impaired balance	280,000	156,000	178,000
Average recorded investment	211,000	158,000	163,000
Interest income recognized	5,000	(10,000)	(10,000)
Interest income collected	13,000	10,000	10,000
Real Estate Portfolio Segment [Member] | Commercial [Member]
Unpaid contractual principal balance with no related allowance	16,457,000	14,412,000	15,569,000
Impaired balance with no related allowance	16,367,000	14,412,000	15,122,000
Average recorded investment with no related allowance	14,274,000	15,533,000	15,430,000
Interest income recognized with no related allowance	490,000	412,000	529,000
Interest income collected with no related allowance	480,000	418,000	531,000
Unpaid contractual principal balance with an allowance	8,316,000	6,941,000	8,969,000
Impaired balance with an allowance	8,316,000	6,282,000	8,956,000
Related allowance	2,470,000	243,000	1,608,000
Average recorded investment with an allowance	8,308,000	5,912,000	6,673,000
Interest income recognized with an allowance	177,000	132,000	214,000
Interest income collected with an allowance	173,000	123,000	209,000
Unpaid contractual principal balance	24,773,000	21,353,000	24,538,000
Impaired balance	24,683,000	20,694,000	24,078,000
Average recorded investment	22,582,000	21,445,000	22,103,000
Interest income recognized	667,000	544,000	743,000
Interest income collected	653,000	541,000	740,000
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Unpaid contractual principal balance with no related allowance	508,000	7,726,000	6,888,000
Impaired balance with no related allowance	508,000	2,736,000	1,898,000
Average recorded investment with no related allowance	825,000	3,191,000	2,867,000
Interest income recognized with no related allowance	16,000	17,000	26,000
Interest income collected with no related allowance	15,000	17,000	27,000
Unpaid contractual principal balance with an allowance	73,000	78,000	77,000
Impaired balance with an allowance	73,000	78,000	76,000
Related allowance	22,000	14,000	25,000
Average recorded investment with an allowance	74,000	97,000	92,000
Interest income recognized with an allowance	0	0	0
Interest income collected with an allowance	0	0	0
Unpaid contractual principal balance	581,000	7,804,000	6,965,000
Impaired balance	581,000	2,814,000	1,974,000
Average recorded investment	899,000	3,288,000	2,959,000
Interest income recognized	16,000	17,000	26,000
Interest income collected	15,000	17,000	27,000
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Unpaid contractual principal balance with no related allowance	0	0
Impaired balance with no related allowance	0	0
Average recorded investment with no related allowance	0	0
Interest income recognized with no related allowance	0	0
Interest income collected with no related allowance	0	0
Unpaid contractual principal balance with an allowance	0	0
Impaired balance with an allowance	0	0
Related allowance	0	0
Average recorded investment with an allowance	0	0
Interest income recognized with an allowance	0	0
Interest income collected with an allowance	0	0
Unpaid contractual principal balance	0	0
Impaired balance	0	0
Average recorded investment	0	0
Interest income recognized	0	0
Interest income collected	0	0
Real Estate Portfolio Segment [Member] | Residential [Member]
Unpaid contractual principal balance with no related allowance	5,321,000	5,359,000	5,429,000
Impaired balance with no related allowance	4,995,000	4,400,000	4,576,000
Average recorded investment with no related allowance	4,704,000	4,761,000	4,715,000
Interest income recognized with no related allowance	56,000	165,000	176,000
Interest income collected with no related allowance	178,000	148,000	159,000
Unpaid contractual principal balance with an allowance	858,000	1,082,000	1,083,000
Impaired balance with an allowance	851,000	1,082,000	1,075,000
Related allowance	435,000	308,000	308,000
Average recorded investment with an allowance	936,000	1,093,000	1,089,000
Interest income recognized with an allowance	4,000	12,000	16,000
Interest income collected with an allowance	6,000	12,000	16,000
Unpaid contractual principal balance	6,179,000	6,441,000	6,512,000
Impaired balance	5,846,000	5,482,000	5,651,000
Average recorded investment	5,640,000	5,854,000	5,804,000
Interest income recognized	60,000	177,000	192,000
Interest income collected	184,000	160,000	175,000
Real Estate Portfolio Segment [Member] | Farmland [Member]
Unpaid contractual principal balance with no related allowance	921,000	1,398,000	1,105,000
Impaired balance with no related allowance	919,000	1,397,000	1,103,000
Average recorded investment with no related allowance	1,071,000	1,419,000	1,340,000
Interest income recognized with no related allowance	(4,000)	1,000	1,000
Interest income collected with no related allowance	1,000	2,000	2,000
Unpaid contractual principal balance with an allowance	382,000	390,000	388,000
Impaired balance with an allowance	382,000	390,000	388,000
Related allowance	33,000	57,000	37,000
Average recorded investment with an allowance	385,000	392,000	391,000
Interest income recognized with an allowance	16,000	16,000	21,000
Interest income collected with an allowance	14,000	16,000	21,000
Unpaid contractual principal balance	1,303,000	1,788,000	1,493,000
Impaired balance	1,301,000	1,787,000	1,491,000
Average recorded investment	1,456,000	1,811,000	1,731,000
Interest income recognized	12,000	17,000	22,000
Interest income collected	15,000	18,000	23,000
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Unpaid contractual principal balance with no related allowance	241,000	195,000	180,000
Impaired balance with no related allowance	241,000	187,000	178,000
Average recorded investment with no related allowance	214,000	195,000	191,000
Interest income recognized with no related allowance	7,000	8,000	14,000
Interest income collected with no related allowance	9,000	11,000	15,000
Unpaid contractual principal balance with an allowance	0	0	0
Impaired balance with an allowance	0	0	0
Related allowance	0	0	0
Average recorded investment with an allowance	0	0	0
Interest income recognized with an allowance	0	0	0
Interest income collected with an allowance	0	0	0
Unpaid contractual principal balance	241,000	195,000	180,000
Impaired balance	241,000	187,000	178,000
Average recorded investment	214,000	195,000	191,000
Interest income recognized	7,000	8,000	14,000
Interest income collected	9,000	11,000	15,000
Consumer and Other Portfolio Segment [Member] | Other [Member]
Unpaid contractual principal balance with no related allowance	0	0	0
Impaired balance with no related allowance	0	0	0
Average recorded investment with no related allowance	0	65,000	48,000
Interest income recognized with no related allowance	0	0	0
Interest income collected with no related allowance	0	0	0
Unpaid contractual principal balance with an allowance	0	0	0
Impaired balance with an allowance	0	0	0
Related allowance	0	0	0
Average recorded investment with an allowance	0	0	0
Interest income recognized with an allowance	0	0	0
Interest income collected with an allowance	0	0	0
Unpaid contractual principal balance	0	0	0
Impaired balance	0	0	0
Average recorded investment	0	65,000	48,000
Interest income recognized	0	0	0
Interest income collected	0	0	0
Unpaid contractual principal balance with no related allowance	24,395,000	29,844,000	29,821,000
Impaired balance with no related allowance	23,956,000	23,861,000	23,509,000
Average recorded investment with no related allowance	21,814	25,884,000	25,289,000
Interest income recognized with no related allowance	585,000	609,000	753,000
Interest income collected with no related allowance	714,000	625,000	765,000
Unpaid contractual principal balance with an allowance	9,629,000	8,582,000	10,640,000
Impaired balance with an allowance	9,622,000	7,923,000	10,618,000
Related allowance	2,960,000	713,000	2,073,000
Average recorded investment with an allowance	9,741,000	7,586,000	8,345,000
Interest income recognized with an allowance	197,000	160,000	253,000
Interest income collected with an allowance	193,000	151,000	249,000
Unpaid contractual principal balance	34,024,000	38,426,000	40,461,000
Impaired balance	33,578,000	31,784,000	34,127,000
Average recorded investment	31,555,000	33,470,000	33,634,000
Interest income recognized	782,000	769,000	1,006,000
Interest income collected	$ 907,000	$ 776,000	$ 1,014,000

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Note 3 - Loans - Modified in a Troubled Debt Restructuring (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)
Real Estate Portfolio Segment [Member] | Residential [Member]
Number of contracts		1	1	2
Pre-modification		$ 226	$ 91	$ 1,106
Post-modification		$ 139	$ 91	$ 1,036
Number of contracts		1	1	2
Pre-modification		$ 226	$ 91	$ 1,106
Post-modification		$ 139	$ 91	$ 1,036

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Note 4 - Allowance for Loan Losses (Details Textual)	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2016	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Loans Not Classified as Impaired [Member] | Substandard [Member]
Loans and Leases Receivable, Gross		$ 12,450,000		$ 14,030,000
Loans and Leases Receivable, Allowance		742,000		$ 1,300,000
Substandard [Member]
Loans and Leases Receivable, Gross		31,787,000	$ 32,397,000
Allowance for Loan Losses, Loss History Period, Number of Quarters	16		8
Financing Receivable, Allowance for Credit Losses, Effect of Change in Method		(986,000)
Loan Balance For Reviewing High Risk Loans Minimum		$ 250,000
Impaired Financing Receivable, Number of Loans Below Review Threshold		160		156
Impaired Financing Receivable Recorded Investment Below Review Threshold		$ 4,600,000		$ 3,900,000
Loans and Leases Receivable, Gross		776,117,000	$ 758,636,000	764,204,000
Loans and Leases Receivable, Allowance		$ 9,203,000	$ 8,604,000	$ 8,402,000	$ 8,802,000

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Note 4 - Allowance for Loan Losses - Segregated by Class of Loan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Commercial [Member] | Commercial and Agricultural Portfolio Segment [Member]
Allowance for loan losses, beginning balance			$ 855	$ 497
Allowance for loan losses, charge-offs			(291)	(257)
Allowance for loan losses, recoveries			54	45
Provision for Loan Losses			(127)	17
Allowance for loan losses, ending balance	$ 491	$ 302	491	302
Commercial [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance			3,851	3,665
Allowance for loan losses, charge-offs			(992)	(275)
Allowance for loan losses, recoveries			197	138
Provision for Loan Losses			2,231	296
Allowance for loan losses, ending balance	5,287	3,824	5,287	3,824
Agricultural [Member] | Commercial and Agricultural Portfolio Segment [Member]
Allowance for loan losses, beginning balance			203	304
Allowance for loan losses, charge-offs			(18)	(5)
Allowance for loan losses, recoveries			3	3
Provision for Loan Losses			93	4
Allowance for loan losses, ending balance	281	306	281	306
Commercial Construction [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance			691	1,223
Allowance for loan losses, charge-offs			(25)	(96)
Allowance for loan losses, recoveries			813	282
Provision for Loan Losses			(1,021)	282
Allowance for loan losses, ending balance	458	1,691	458	1,691
Residential Construction [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance			20	138
Allowance for loan losses, charge-offs
Allowance for loan losses, recoveries
Provision for Loan Losses			2
Allowance for loan losses, ending balance	22	138	22	138
Residential [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance			1,990	2,425
Allowance for loan losses, charge-offs			(243)	(910)
Allowance for loan losses, recoveries			32	95
Provision for Loan Losses			(114)	85
Allowance for loan losses, ending balance	1,665	1,695	1,665	1,695
Farmland [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance			912	104
Allowance for loan losses, charge-offs				(40)
Allowance for loan losses, recoveries			137	10
Provision for Loan Losses			(187)	3
Allowance for loan losses, ending balance	862	77	862	77
Consumer [Member] | Consumer and Other Portfolio Segment [Member]
Allowance for loan losses, beginning balance			63	67
Allowance for loan losses, charge-offs			(180)	(167)
Allowance for loan losses, recoveries			44	47
Provision for Loan Losses			176	53
Allowance for loan losses, ending balance	103		103
Other [Member] | Consumer and Other Portfolio Segment [Member]
Allowance for loan losses, beginning balance			19	379
Allowance for loan losses, charge-offs				(26)
Allowance for loan losses, recoveries			6	15
Provision for Loan Losses			9	1
Allowance for loan losses, ending balance	34	369	34	369
Allowance for loan losses, beginning balance			8,604	8,802
Allowance for loan losses, charge-offs			(1,749)	(1,776)
Allowance for loan losses, recoveries			1,286	635
Provision for Loan Losses	354	250	1,062	741
Allowance for loan losses, ending balance	$ 9,203	$ 8,402	$ 9,203	$ 8,402

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Note 4 - Allowance for Loan Losses - Segregated by Impairment Methodology (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Commercial [Member] | Commercial and Agricultural Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment			$ 91
Ending allowance balance, collectively evaluated for impairment	491		211
Allowance for loan losses, ending balance	491	$ 855	302	$ 497
Ending loan balance, individually evaluated for impairment	8		91
Ending loan balance, collectively evaluated for impairment	45,765		48,668
Loans	45,773	47,782	48,759
Commercial [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	2,470		243
Ending allowance balance, collectively evaluated for impairment	2,817		3,581
Allowance for loan losses, ending balance	5,287	3,851	3,824	3,665
Ending loan balance, individually evaluated for impairment	24,363		20,049
Ending loan balance, collectively evaluated for impairment	325,029		327,654
Loans	349,392	346,262	347,703
Agricultural [Member] | Commercial and Agricultural Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment	281		306
Allowance for loan losses, ending balance	281	203	306	304
Ending loan balance, individually evaluated for impairment			8
Ending loan balance, collectively evaluated for impairment	26,547		27,365
Loans	26,547	19,193	27,373
Commercial Construction [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	22		14
Ending allowance balance, collectively evaluated for impairment	436		1,677
Allowance for loan losses, ending balance	458	691	1,691	1,223
Ending loan balance, individually evaluated for impairment	380		2,694
Ending loan balance, collectively evaluated for impairment	33,344		40,895
Loans	33,724	40,107	43,589
Residential Construction [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment	22		138
Allowance for loan losses, ending balance	22	20	138	138
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	10,325		10,465
Loans	10,325	9,413	10,465
Residential [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	435		308
Ending allowance balance, collectively evaluated for impairment	1,230		1,387
Allowance for loan losses, ending balance	1,665	1,990	1,695	2,425
Ending loan balance, individually evaluated for impairment	3,200		3,380
Ending loan balance, collectively evaluated for impairment	191,845		192,420
Loans	195,045	197,002	195,800
Farmland [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	33		57
Ending allowance balance, collectively evaluated for impairment	829		20
Allowance for loan losses, ending balance	862	912	77	104
Ending loan balance, individually evaluated for impairment	1,047		1,695
Ending loan balance, collectively evaluated for impairment	72,754		59,856
Loans	73,801	61,780	61,551
Consumer [Member] | Consumer and Other Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment	103
Allowance for loan losses, ending balance	103	63		67
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	20,378		20,958
Loans	20,378	20,605	20,958
Other [Member] | Consumer and Other Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment	34		369
Allowance for loan losses, ending balance	34	19	369	379
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	21,132		8,006
Loans	21,132	16,492	8,006
Ending allowance balance, individually evaluated for impairment	2,960		713
Ending allowance balance, collectively evaluated for impairment	6,243		7,689
Allowance for loan losses, ending balance	9,203	8,604	8,402	$ 8,802
Ending loan balance, individually evaluated for impairment	28,998		27,917
Ending loan balance, collectively evaluated for impairment	747,119		736,287
Loans	$ 776,117	$ 758,636	$ 764,204

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Note 5 - Other Real Estate Owned (Details Textual) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Other Real Estate	$ 9,812	$ 8,839	$ 10,402
Other Real Estate, Foreclosed Assets, and Repossessed Assets	922	1,030
Mortgage Loans in Process of Foreclosure, Amount	$ 1,150	$ 159

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Note 5 - Other Real Estate Owned - Change in OREO (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Balance	$ 8,839	$ 10,402
Additions	3,953	7,536
Sales of OREO	(2,877)	(8,055)
Gains (Losses) on Sale	23	(591)
Provision for Losses	(126)	(453)
Balance	$ 9,812	$ 8,839

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Note 6 - Deposits (Details Textual) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Deposit Liabilities Reclassified as Loans Receivable	$ 392	$ 272
Interest-bearing Domestic Deposit, Brokered	43,232	25,577
Time Deposits, $100,000 or More	129,418	141,900
Time Deposits $250,000 or More	$ 30,204	$ 31,755

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Note 6 - Deposits - Components of Interest-bearing Deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Interest-Bearing Demand	$ 395,614	$ 412,960
Savings	69,060	64,976
Time, $100,000 and Over	188,185	202,801
Other Time	186,790	196,931
	$ 839,649	$ 877,668

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Note 6 - Deposits - Maturities of Certificates of Deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
One Year and Under	$ 267,245	$ 287,423
One to Three Years	83,978	88,019
Three Years and Over	23,752	24,290
	$ 374,975	$ 399,732

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Note 7 - Other Borrowed Money (Details Textual)	Sep. 30, 2016 USD ($)
Federal Reserve Bank Advances [Member]
Short-term Debt	$ 0
Minimum [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate at Period End	0.98%
Maximum [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Interest Rate at Period End	3.51%
Long-term Line of Credit	$ 0
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Due Date, Earliest	2018
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Due Date, Last	2026
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	$ 106,506,000
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	240,282,000
Line of Credit Facility, Current Borrowing Capacity	$ 43,500,000

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Note 7 - Other Borrowed Money - Summary of Other Borrowed Money (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Federal Home Loan Bank Advances	$ 46	$ 40

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Note 7 - Other Borrowed Money - Aggregate Stated Maturities (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
2018	$ 2.5
2019	5.0
2020	2.5
After 2020	36.0
	$ 46.0	$ 40.0

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Note 8 - Preferred Stock and Warrants (Details Textual) - $ / shares	1 Months Ended	12 Months Ended
	Aug. 31, 2016	Dec. 31, 2015	Sep. 30, 2016
Series A Preferred Stock [Member]
Preferred Stock, Shares Issued			14,360
Stock Redeemed or Called During Period, Shares	3,661	9,979
Preferred Stock, Redemption Price Per Share	$ 1,000	$ 1,000
Preferred Stock, Shares Issued		18,021	14,360
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			500,000
Preferred Stock, Liquidation Preference Per Share			$ 1,000
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 8.40

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Note 9 - Subordinated Debentures (Trusted Preferred Securities) - Schedule of Subordinated Debentures (Details) - Trust Preferred Securities Subject to Mandatory Redemption [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Colony Bankcorp Statutory Trust III [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	0.85656%
Added points	2.68%
Colony Bankcorp Statutory Trust III [Member]
Issuance date	Jun. 17, 2004
Debt amount	$ 4,640
Total interest rate	3.53656%
Maturity date	Jun. 14, 2034
5 year call option	Jun. 17, 2009
Colony Bankcorp Capital Trust I [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	0.83769%
Added points	1.50%
Colony Bankcorp Capital Trust I [Member]
Issuance date	Apr. 13, 2006
Debt amount	$ 5,155
Total interest rate	2.33769%
Maturity date	Apr. 13, 2036
5 year call option	Apr. 13, 2011
Colony Bankcorp Capital Trust II [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	0.83769%
Added points	1.65%
Colony Bankcorp Capital Trust II [Member]
Issuance date	Mar. 12, 2007
Debt amount	$ 9,279
Total interest rate	2.48769%
Maturity date	Mar. 12, 2037
5 year call option	Mar. 12, 2012
Colony Bankcorp Capital Trust III [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	0.7565%
Added points	1.40%
Colony Bankcorp Capital Trust III [Member]
Issuance date	Sep. 14, 2007
Debt amount	$ 5,155
Total interest rate	2.1565%
Maturity date	Sep. 14, 2037
5 year call option	Sep. 14, 2012

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Note 10 - Commitments and Contingencies (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Construction [Member]
Other Commitment		$ 1.2
Expiration Period Of Letter Of Credit Issued	1 year

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Note 10 - Commitments and Contingencies - Financial Instruments Outstanding Whose Contract Amount Represents Credit Risk (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Loan Origination Commitments [Member]
Loan Commitments	$ 74,910	$ 67,889
Letters of Credit	$ 1,466	$ 1,588

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements (Details Textual)	Sep. 30, 2016
Discounted Rate To Account For Selling And Marketing Costs	10.00%

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Reported Value Measurement [Member]
Cash and Short-Term Investments	$ 31,675	$ 60,872
Available for Sale, at Fair Value	286,089	296,149
Federal Home Loan Bank Stock	3,010	2,731
Loans, Net	766,532	749,675
Bank-Owned Life Insurance	15,246	14,830
Deposits	978,590	1,011,554
Subordinated Debentures	24,229	24,229
Other Borrowed Money	46,000	40,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and Short-Term Investments	31,675	60,872
Federal Home Loan Bank Stock	3,010	2,731
Bank-Owned Life Insurance	15,246	14,830
Deposits	603,615	611,822
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Available for Sale, at Fair Value	285,493	295,219
Loans, Net	760,499	741,867
Deposits	376,352	401,289
Subordinated Debentures	24,229	24,229
Other Borrowed Money	46,541	40,421
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Available for Sale, at Fair Value	596	930
Federal Home Loan Bank Stock
Loans, Net	6,662	8,545
Estimate of Fair Value Measurement [Member]
Cash and Short-Term Investments	31,675	60,872
Available for Sale, at Fair Value	286,089	296,149
Federal Home Loan Bank Stock	3,010	2,731
Loans, Net	767,161	750,412
Bank-Owned Life Insurance	15,246	14,830
Deposits	979,967	1,013,111
Subordinated Debentures	24,229	24,229
Other Borrowed Money	46,541	40,421
Available for Sale, at Fair Value	$ 286,089	$ 296,149

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
US Government Agencies Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value, recurring	$ 281,381	$ 291,050
US Government Agencies Debt Securities [Member] | Available-for-sale Securities [Member]
Assets, fair value, recurring	281,381	291,050
US States and Political Subdivisions Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value, recurring	4,112	4,169
US States and Political Subdivisions Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value, recurring	596	930
US States and Political Subdivisions Debt Securities [Member] | Available-for-sale Securities [Member]
Assets, fair value, recurring	4,708	5,099
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value, recurring	285,493	295,219
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value, recurring	596	930
Available-for-sale Securities [Member]
Assets, fair value, recurring	286,089	296,149
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member]
Assets, fair value, nonrecurring	6,662	8,545
Fair Value, Inputs, Level 3 [Member] | Other Real Estate [Member]
Assets, fair value, nonrecurring	2,850	2,536
Impaired Loans [Member]
Assets, fair value, nonrecurring	6,662	8,545
Other Real Estate [Member]
Assets, fair value, nonrecurring	$ 2,850	$ 2,536

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements - Quantitative Information for Financial Instruments Measured at Fair Value (Details) - Fair Value, Inputs, Level 3 [Member] - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Minimum [Member]
Fair value inputs, comparability adjustments		(31.77%)
Fair value inputs, management adjustments		0.00%
Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Maximum [Member]
Fair value inputs, comparability adjustments		34.00%
Fair value inputs, management adjustments		10.00%
Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments		1.12%
Fair value inputs, management adjustments		5.00%
Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member]
Assets measured at fair value		$ 28
Commercial Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, cap rate		11.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(5.00%)	(5.00%)
Fair value inputs, management adjustments	0.00%	0.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	99.00%	99.00%
Fair value inputs, management adjustments	10.00%	10.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	47.00%	47.00%
Fair value inputs, management adjustments	5.00%	5.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member]
Assets measured at fair value	$ 51	$ 51
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(22.00%)	(22.00%)
Fair value inputs, management adjustments	0.00%	0.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	0.00%	10.80%
Fair value inputs, management adjustments	40.00%	25.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	(11.00%)	5.60%
Fair value inputs, management adjustments	20.00%	12.50%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member]
Assets measured at fair value	$ 416	$ 767
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(14.08%)	(31.77%)
Fair value inputs, management adjustments	0.00%	0.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	24.62%	34.00%
Fair value inputs, management adjustments	100.00%	10.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	5.27%	1.12%
Fair value inputs, management adjustments	50.00%	5.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member]
Assets measured at fair value	$ 5,846	$ 7,348
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(27.00%)	(27.00%)
Fair value inputs, management adjustments	10.00%	10.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	15.00%	15.00%
Fair value inputs, management adjustments	75.00%	75.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	(6.00%)	(6.00%)
Fair value inputs, management adjustments	42.50%	42.50%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member]
Assets measured at fair value	$ 349	$ 351
Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Commercial [Member] | Weighted Average [Member]
Fair value inputs, cap rate	10.67%	10.25%
Consumer and Other Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(50.80%)	(50.80%)
Fair value inputs, management adjustments	0.62%	15.53%
Consumer and Other Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	142.90%	142.90%
Fair value inputs, management adjustments	72.75%	72.75%
Consumer and Other Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	46.05%	46.05%
Fair value inputs, management adjustments	29.23%	43.37%
Consumer and Other Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Assets measured at fair value	$ 2,850	$ 2,536
Consumer and Other Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Fair value inputs, discount rate	12.50%	12.50%

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements - Fair Value Measurement Using Significant Unobservable Inputs (Details) - Available-for-sale Securities [Member] - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Balance, available for sale securities	$ 930	$ 948
Maturities	(330)
Unrealized Gains included in Other Comprehensive Income (Loss)	(4)	(18)
Balance, available for sale securities	$ 596	$ 930

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Note 11 - Fair Value of Financial Instruments and Fair Value Measurements - Quantitative Information About Recurring Level 3 Fair Value Measurement (Details) - US States and Political Subdivisions Debt Securities [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Fair Value	$ 596
Range Weighted Average		[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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Note 12 - Regulatory Capital Matters (Details Textual)	Sep. 30, 2016
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets Rule 1	0.625%
Increase in Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	0.625%
Tier 1 Capital Conservation Buffer of Risk Weighted Assets	2.50%

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Note 12 - Regulatory Capital Matters - Summary of Regulatory Capital Information (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Colony Bank [Member]
Capital	$ 130,022	$ 126,939
Capital to Risk-Weighted Assets	16.45%	15.99%
Capital Required for Capital Adequacy	$ 63,223	$ 63,500
Capital Required for Capital Adequacy to Risk-Weighted Assets	8.00%	8.00%
Capital Required to be Well Capitalized	$ 79,029	$ 79,375
Capital Requited to be Well Capitalized to Risk-Weighted Assets	10.00%	10.00%
Tier I Risk Based Capital	$ 120,819	$ 118,335
Tier I Risk Based Capital to Risk-Weighted Assets	15.29%	14.91%
Tier I Risk Based Capital Required for Capital Adequacy	$ 47,417	$ 47,625
Tier I Risk Based Capital Required for Capital Adequacy to Risk-Weighted Assets	6.00%	6.00%
Tier I Risk Based Capital Required to be Well Capitalized	$ 63,223	$ 63,500
Tier I Risk Based Capital Required to be Well Capitalized to Risk-Weighted Assets	8.00%	8.00%
Common Equity Tier I Risk Based Capital	$ 120,819	$ 118,335
Common Equity Tier I Risk Based Capital to Risk-Weighted Assets	15.29%	14.91%
Common Equity Tier I Risk Based Capital Required for Capital Adequacy	$ 35,563	$ 35,719
Common Equity Tier I Risk Based Capital Required for Capital Adequacy to Risk-Weighted Assets	4.50%	4.50%
Common Equity Tier I Risk Based Capital Required to Be Well Capitalized	$ 51,369	$ 51,594
Common Equity Tier I Risk Based Capital Required to Be Well Capitalized to Risk-Weighted Assets	6.50%	6.50%
Tier I Leverage Capital	$ 120,819	$ 118,335
Tier I Leverage Capital to Average Assets	10.51%	10.27%
Tier I Leverage Capital Required for Capital Adequacy	$ 46,002	$ 46,074
Tier I Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Tier I Leverage Capital Required to Be Well Capitalized	$ 57,502	$ 57,592
Tier I Leverage Capital Required to Be Well Capitalized to Average Assets	5.00%	5.00%
Capital	$ 134,175	$ 131,948
Capital to Risk-Weighted Assets	16.95%	16.60%
Capital Required for Capital Adequacy	$ 63,312	$ 63,602
Capital Required for Capital Adequacy to Risk-Weighted Assets	8.00%	8.00%
Tier I Risk Based Capital	$ 124,972	$ 123,344
Tier I Risk Based Capital to Risk-Weighted Assets	15.79%	15.51%
Tier I Risk Based Capital Required for Capital Adequacy	$ 47,484	$ 47,702
Tier I Risk Based Capital Required for Capital Adequacy to Risk-Weighted Assets	6.00%	6.00%
Common Equity Tier I Risk Based Capital	$ 87,112	$ 81,823
Common Equity Tier I Risk Based Capital to Risk-Weighted Assets	11.01%	10.29%
Common Equity Tier I Risk Based Capital Required for Capital Adequacy	$ 35,613	$ 35,776
Common Equity Tier I Risk Based Capital Required for Capital Adequacy to Risk-Weighted Assets	4.50%	4.50%
Tier I Leverage Capital	$ 124,972	$ 123,344
Tier I Leverage Capital to Average Assets	10.85%	10.69%
Tier I Leverage Capital Required for Capital Adequacy	$ 46,077	$ 46,149
Tier I Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%

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Note 13 - Earnings Per Share - Summary of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Restricted Stock [Member]
Restricted Stock (in shares)
Warrant [Member]
Restricted Stock (in shares)	67,000	27,000	57,000	10,000
Net Income Available to Common Stockholders	$ 1,880	$ 1,606	$ 5,297	$ 4,414
Weighted Average Basic Shares Outstanding (in shares)	8,439,258	8,439,258	8,439,258	8,439,258
Weighted Average Diluted Shares Outstanding (in shares)	8,506,268	8,466,285	8,495,752	8,449,057
Basic (in dollars per share)	$ 0.22	$ 0.19	$ 0.63	$ 0.52
Diluted (in dollars per share)	$ 0.22	$ 0.19	$ 0.62	$ 0.52

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Note 14 - Accumulated Other Comprehensive Income (Loss) - Changes for Unrealized Gains and Losses Securities Available for Sale (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Beginning Balance			$ (4,434)	$ (4,845)	$ (4,845)
Other Comprehensive Income Before Reclassification			3,897		403
Amounts Reclassified from Accumulated Other Comprehensive Income			(254)		8
Net Current Period Other Comprehensive Income	$ (949)	$ 1,642	3,643	$ 2,465	411
Ending Balance	$ (791)		$ (791)		$ (4,434)