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 JUNE 30, 2017                     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, SMALLER REPORTING COMPANY, OR AN EMERGING GROWTH COMPANY. SEE THE DEFINITIONS OF “LARGE ACCELERATED FILER,” “ACCELERATED FILER,” “SMALLER REPORTING COMPANY,” AND “EMERGING GROWTH COMPANY” IN RULE 12b-2 OF THE EXCHANGE ACT.

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

IF AN EMERGING GROWTH COMPANY, INDICATE BY CHECK MARK IF THE REGISTRANT HAS ELECTED NOT TO USE THE EXTENDED TRANSITION PERIOD FOR COMPLYING WITH ANY NEW OR REVISED FINANCIAL ACCOUNTING STANDARDS PROVIDED PURSUANT TO SECITON 13(A) OF THE EXCHANGE ACT.

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 AUGUST 2, 2017
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	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58
	Item 4.	Controls and Procedures	58
PART II – Other Information
	Item 6.	Exhibits	59
	Signatures		62

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.

3

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).

4

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 – JUNE 30, 2017 (UNAUDITED) AND DECEMBER 31, 2016 (AUDITED).
B.	CONSOLIDATED STATEMENTS OF INCOME – FOR THE THREE MONTHS ENDED JUNE 30, 2017 AND 2016 AND FOR THE SIX MONTHE ENDED JUNE 30, 2017 AND 2016 (UNAUDITED).
C.	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – FOR THE THREE MONTHS ENDED JUNE 30, 2017 AND 2016 AND FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016 (UNAUDITED).

D. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016 (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 SIX MONTH PERIOD ENDED JUNE 30, 2017 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED FOR THE FULL YEAR.

5

PART I (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2017 AND DECEMBER 31, 2016

(DOLLARS IN THOUSANDS)

	June 30, 2017			December 31, 2016
	(Unaudited)			(Audited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks	$	19,071		$	28,822
Interest-Bearing Deposits		10,988			46,345
Investment Securities
Available for Sale, at Fair Value		337,710			323,658
Federal Home Loan Bank Stock, at Cost		3,255			3,010
Loans		775,566			754,283
Allowance for Loan Losses		(8,043	)		(8,923	)
Unearned Interest and Fees		(454	)		(361	)
		767,069			744,999
Premises and Equipment		27,654			27,969
Other Real Estate (Net of Allowance of $1,350 and $1,878 as of June 30, 2017 and December 31, 2016, Respectively)		4,525			6,439
Other Intangible Assets		63			81
Other Assets		28,114			29,119
Total Assets	$	1,198,449		$	1,210,442
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing	$	162,928		$	159,059
Interest-Bearing		863,610			885,298
		1,026,538			1,044,357
Borrowed Money
Subordinated Debentures		24,229			24,229
Other Borrowed Money		56,000			46,000
		80,229			70,229
Other Liabilities		2,690			2,468
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued Shares of 0 and 9,360 as of June 30, 2017 and December 31, 2016, Respectively		-			9,360
Common Stock, Par Value $1 a Share; Authorized  20,000,000 Shares, Issued 8,439,258 Shares as of June 30, 2017 and December 31, 2016		8,439			8,439
Paid-In Capital		29,145			29,145
Retained Earnings		55,383			51,466
Accumulated Other Comprehensive (Loss), Net of Tax Benefits		(3,975	)		(5,022	)
		88,992			93,388
Total Liabilities and Stockholders' Equity	$	1,198,449		$	1,210,442

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 INCOME

THREE MONTHS ENDED JUNE 30, 2017 AND 2016

AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

(UNAUDITED)

(DOLLARS IN THOUSANDS)

	Three Months Ended				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Interest Income
Loans, Including Fees	$	9,733	$	9,693	$	19,130	$	19,325
Deposits with Other Banks		34		23		114		61
Investment Securities
U.S. Government Agencies		1,685		1,359		3,248		2,712
State, County and Municipal		30		33		60		67
Corporate Debt		21		-		36		-
Dividends on Other Investments		35		33		71		65
		11,538		11,141		22,659		22,230
Interest Expense
Deposits		1,177		1,189		2,368		2,393
Federal Funds Purchased		3		-		3		-
Borrowed Money		542		427		1,010		856
		1,722		1,616		3,381		3,249
Net Interest Income		9,816		9,525		19,278		18,981
Provision for Loan Losses		-		354		335		708
Net Interest Income After Provision for Loan Losses		9,816		9,171		18,943		18,273
Noninterest Income
Service Charges on Deposits		1,091		1,055		2,146		2,057
Other Service Charges, Commissions and Fees		772		714		1,559		1,418
Mortgage Fee Income		202		153		388		253
Securities Gains (Losses)		-		127		-		129
Other		329		303		701		667
		2,394		2,352		4,794		4,524
Noninterest Expenses
Salaries and Employee Benefits		4,880		4,625		9,665		9,099
Occupancy and Equipment		991		978		1,951		1,942
Other		2,749		2,751		5,412		5,548
		8,620		8,354		17,028		16,589
Income Before Income Taxes		3,590		3,169		6,709		6,208
Income Taxes		1,157		1,002		2,159		1,980
Net Income		2,433		2,167		4,550		4,228
Preferred Stock Dividends		-		406		211		811
Net Income Available to Common Stockholders	$	2,433	$	1,761	$	4,339	$	3,417
Net Income Per Share of Common Stock
Basic	$	0.29	$	0.21	$	0.51	$	0.40
Diluted	$	0.28	$	0.21	$	0.50	$	0.40
Cash Dividends Declared Per Share of Common Stock	$	0.025	$	-	$	0.050	$	-
Weighted Average Basic Shares Outstanding		8,439,258		8,439,258		8,439,258		8,439,258
Weighted Average Diluted Shares Outstanding		8,630,207		8,497,618		8,632,465		8,490,540

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 COMPREHENSIVE INCOME

THREE MONTHS ENDED JUNE 30, 2017 AND 2016

SIX MONTHS ENDED JUNE 30, 2017 AND 2016

(UNAUDITED)

(DOLLARS IN THOUSANDS)

	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Net Income	$	2,433		$	2,167		$	4,550		$	4,228
Other Comprehensive Income:
Gains (Losses) on Securities Arising During the Year		1,377			1,886			1,586			7,087
Tax Effect		(468	)		(641	)		(539	)		(2,410	)
Realized Gains on Sale of AFS Securities		-			(127	)		-			(129	)
Tax Effect		-			43			-			44
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		909			1,161			1,047			4,592
Comprehensive Income	$	3,342		$	3,328		$	5,597		$	8,820

The accompanying notes are an integral part of these statements.

8

PART I (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2017 AND 2016

(UNAUDITED)

(DOLLARS IN THOUSANDS)

	Six Months Ended
	June 30, 2017			June 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	4,550		$	4,228
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation		823			771
Provision for Loan Losses		335			708
Securities (Gains)		-			(129	)
Amortization and Accretion		750			750
(Gain) on Sale of Other Real Estate and Repossessions		(93	)		(31	)
Provision for Losses on Other Real Estate		206			78
Increase in Cash Surrender Value of Life Insurance		(305	)		(313	)
(Gain) Loss on Sale of Premises & Equipment		(15	)		77
Other Prepaids, Deferrals and Accruals, Net		1,080			498
		7,331			6,637
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Investment Securities Available for Sale		(41,269	)		(46,069	)
Proceeds from Maturities, Calls, and Paydowns of Investment Securities:
Available for Sale		28,074			24,656
Proceeds from Sale of Investment Securities
Available for Sale		-			16,010
Interest-Bearing Deposits in Other Banks		35,357			37,151
Net Loans to Customers		(22,848	)		(8,724	)
Purchase of Premises and Equipment		(531	)		(1,795	)
Proceeds from Sale of Other Real Estate and Repossessions		2,259			1,873
Federal Home Loan Bank Stock		(245	)		(24	)
Proceeds from Sale of Premises and Equipment		38			14
		835			23,092
CASH FLOWS FROM FINANCING ACTIVITIES
Noninterest-Bearing Customer Deposits		3,869			776
Interest-Bearing Customer Deposits		(21,688	)		(35,763	)
Dividends Paid for Preferred Stock		(316	)		(811	)
Dividends Paid for Common Stock		(422	)		-
Redemption of Preferred Stock		(9,360	)		-
Payments on Other Borrowed Money		(16	)		-
Proceeds from Federal Home Loan Bank Advances		5,000			-
Proceeds from Other Borrowed Money		5,016			-
		(17,917	)		(35,798	)
Net Decrease in Cash and Cash Equivalents		(9,751	)		(6,069	)
Cash and Cash Equivalents at Beginning of Period		28,822			22,257
Cash and Cash Equivalents at End of Period	$	19,071		$	16,188

The accompanying notes are an integral part of these statements.

9

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, 2016 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 six months ended June 30, 2017 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, Statesboro, 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 2017. 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. At June 30, 2017, approximately 87 percent of the Company’s loan portfolio was concentrated in loans secured by real estate. A substantial portion of borrowers’ ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector. Collateral real estate values that secure land development, construction and speculative real estate loans in the Company’s larger Metropolitan Statistical Area (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.

10

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

At times, the Company may have cash and cash equivalents at financial institutions in excess of federal deposit insurance limits. The Company places its cash and cash equivalents with high credit quality financial institutions whose credit 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.

11

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.

12

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.

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 $15,724 and $15,419 as of June 30, 2017 and December 31, 2016, respectively.

14

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 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU  2016-01, 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 2016-01 will be effective for the Company on January 1, 2018. The Company is currently evaluating the impact of the pending adoption of ASU 2016-01 on the consolidated financial statements.

ASU 2016-02, Leases (Topic 842). 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 2016-13, Financial Instruments – Credit Losses (Topic 326). 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.

15

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 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. ASU 2016-15 will be effective for us on January 1, 2018 and is not expected to have a significant impact on our financial statements.

ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash.  ASU 2016-18 requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this guidance will only affect the Consolidated Statements of Cash Flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and is not expected to have a significant impact on the Company's consolidated financial statements.

ASU 2017-08,Premium Amortization on Purchased Callable Debt Securities.This ASU shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. Today, entities generally amortize the premium over the contractual life of the security. The new guidance does not change the accounting for purchased callable debt securities held at a discount; the discount continues to be amortized to maturity. ASU No. 2017-08 is effective for interim and annual reporting periods beginning after December 15, 2018; early adoption is permitted. The guidance calls for a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently evaluating the provisions of ASU No. 2017-08 to determine the potential impact the new standard will have on the Company’s Consolidated Financial Statements. 

(2) Investment Securities

Investment securities as of June 30, 2017 and December 31, 2016 are summarized as follows:

June 30, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	336,786	$	204	$	(6,248	)	$	330,742
State, County & Municipal		4,891		40		(27	)		4,904
Corporate Bonds		2,056		8		-			2,064
	$	343,733	$	252	$	(6,275	)	$	337,710

December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	326,694	$	76	$	(7,673	)	$	319,097
State, County & Municipal		4,573		18		(30	)		4,561
	$	331,267	$	94	$	(7,703	)	$	323,658

16

PART I (Continued)

Item 1 (Continued)

(2) Investment Securities (Continued)

The amortized cost and fair value of investment securities as of June 30, 2017, 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	$	665	$	667
Due After One Year Through Five Years		4,535		4,524
Due After Five Years Through Ten Years		1,053		1,077
Due After Ten Years		694		700
	$	6,947	$	6,968
Mortgage-Backed Securities		336,786		330,742
	$	343,733	$	337,710

The Bank did not sell any investments during the first six months of 2017. Therefore the Bank did not have any proceeds, gains or losses during the first six months of 2017. Proceeds from the sale of investments available for sale totaled $16,010 for the first six months of 2016. The sale of investments available for sale during the first six months of 2016 resulted in gross realized gains of $135 and losses of $6.

Investment securities having a carrying value approximating $147,765 and $144,854 as of June 30, 2017 and December 31, 2016, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at June 30, 2017 and December 31, 2016 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
June 30, 2017
U. S. Government Agencies Mortgage-Backed	$	170,412	$	(2,499	)	$	108,285	$	(3,749	)	$	278,697	$	(6,248	)
State, County and Municipal		1,776		(27	)		-		-			1,776		(27	)
	$	172,188	$	(2,526	)	$	108,285	$	(3,749	)	$	280,473	$	(6,275	)
December 31. 2016
U.S. Government Agencies Mortgage-Backed	$	174,201	$	(3,460	)	$	107,482	$	(4,213	)	$	281,683	$	(7,673	)
State, County and Municipal		3,488		(30	)		-		-			3,488		(30	)
	$	177,689	$	(3,490	)	$	107,482	$	(4,213	)	$	285,171	$	(7,703	)

17

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 June 30, 2017, 108 securities have unrealized losses which have depreciated 2.19 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 June 30, 2017 and December 31, 2016.

	June 30, 2017		December 31, 2016
Commercial and Agricultural
Commercial	$	44,883	$	47,025
Agricultural		21,810		17,080
Real Estate
Commercial Construction		35,151		30,358
Residential Construction		9,230		11,830
Commercial		355,801		349,090
Residential		200,572		195,580
Farmland		70,194		66,877
Consumer and Other
Consumer		19,134		19,695
Other		18,791		16,748
Total Loans	$	775,566	$	754,283

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.

18

PART I (Continued)

Item 1 (Continued)

(3) Loans (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:

● 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 June 30, 2017 and December 31, 2016. 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 June 30, 2017, the Company did not have any loans classified as “doubtful” or a “loss”.

June 30, 2017
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	42,156	$	1,864	$	863	$	44,883
Agricultural		21,110		163		537		21,810
Real Estate
Commercial Construction		31,324		1,211		2,616		35,151
Residential Construction		9,031		-		199		9,230
Commercial		341,986		4,158		9,657		355,801
Residential		185,981		3,636		10,955		200,572
Farmland		68,144		1,102		948		70,194
Consumer and Other
Consumer		18,649		114		371		19,134
Other		18,791		-		-		18,791
Total Loans	$	737,172	$	12,248	$	26,146	$	775,566

19

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

December 31, 2016
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	44,250	$	1,862	$	913	$	47,025
Agricultural		16,586		192		302		17,080
Real Estate
Commercial Construction		28,425		1,349		584		30,358
Residential Construction		11,630		-		200		11,830
Commercial		327,561		9,403		12,126		349,090
Residential		178,618		5,659		11,303		195,580
Farmland		65,075		839		963		66,877
Consumer and Other
Consumer		19,072		226		397		19,695
Other		16,748		-		-		16,748
Total Loans	$	707,965	$	19,530	$	26,788	$	754,283

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.

20

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 June 30, 2017 and December 31, 2016:

June 30, 2017
	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	$	615	$	-	$	615	$	608	$	43,660	$	44,883
Agricultural		202		-		202		348		21,260		21,810
Real Estate
Commercial Construction		792		-		792		102		34,257		35,151
Residential Construction		-		-		-		199		9,031		9,230
Commercial		1,233		-		1,233		3,079		351,489		355,801
Residential		2,984		-		2,984		3,013		194,575		200,572
Farmland		187		-		187		678		69,329		70,194
Consumer and Other
Consumer		205		-		205		149		18,780		19,134
Other		-		-		-		-		18,791		18,791
Total Loans	$	6,218	$	-	$	6,218	$	8,176	$	761,172	$	775,566

December 31, 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	$	420	$	-	$	420	$	635	$	45,970	$	47,025
Agricultural		33		-		33		209		16,838		17,080
Real Estate
Commercial Construction		54		-		54		190		30,114		30,358
Residential Construction		-		-		-		-		11,830		11,830
Commercial		492		-		492		6,360		342,238		349,090
Residential		3,179		-		3,179		3,944		188,457		195,580
Farmland		95		-		95		800		65,982		66,877
Consumer and Other
Consumer		196		-		196		212		19,287		19,695
Other		-		-		-		-		16,748		16,748
Total Loans	$	4,469	$	-	$	4,469	$	12,350	$	737,464	$	754,283

21

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The following table details impaired loan data as of June 30, 2017:

June 30, 2017
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	608	$	608	$	-	$	639	$	11		$	15
Agricultural		370		349		-		254		11			13
Commercial Construction		102		102		-		159		1			1
Residential Construction		199		199				66		5			5
Commercial Real Estate		10,454		10,454		-		13,543		226			222
Residential Real Estate		5,667		4,871		-		4,511		98			115
Farmland		679		678		-		759		56			56
Consumer		149		149		-		188		3			3
Other		-		-		-		-		-			-
		18,228		17,410		-		20,119		411			430
With An Allowance Recorded
Commercial		-		-		-		-		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		71		71		4		72		2			2
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		7,169		7,169		1,517		6,714		135			134
Residential Real Estate		49		41		20		755		(2	)		2
Farmland		376		376		26		378		11			11
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		7,665		7,657		1,567		7,919		146			149
Total
Commercial		608		608		-		639		11			15
Agricultural		370		349		-		254		11			13
Commercial Construction		173		173		4		231		3			3
Residential Construction		199		199		-		66		5			5
Commercial Real Estate		17,623		17,623		1,517		20,257		361			356
Residential Real Estate		5,716		4,912		20		5,266		96			117
Farmland		1,055		1,054		26		1,137		67			67
Consumer		149		149		-		188		3			3
Other		-		-		-		-		-			-
	$	25,893	$	25,067	$	1,567	$	28,038	$	557		$	579

22

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The following table details impaired loan data as of December 31, 2016:

December 31, 2016
	Unpaid
	Contractual						Average		Interest		Interest
	Principal		Impaired		Related		Recorded		Income		Income
	Balance		Balance		Allowance		Investment		Recognized		Collected
With No Related Allowance Recorded
Commercial	$	635	$	635	$	-	$	539	$	24	$	27
Agricultural		229		209		-		210		9		12
Commercial Construction		191		191		-		698		7		7
Commercial Real Estate		14,358		14,276		-		14,275		567		560
Residential Real Estate		4,261		3,952		-		4,553		73		191
Farmland		921		799		-		1,016		22		26
Consumer		212		212		-		213		10		12
		20,807		20,274		-		21,504		712		835
With An Allowance Recorded
Commercial		-		-		-		30		-		-
Agricultural		-		-		-		-		-		-
Commercial Construction		72		72		21		74		1		2
Commercial Real Estate		8,557		8,467		3,022		8,340		239		236
Residential Real Estate		1,476		1,468		363		1,043		28		32
Farmland		380		380		29		384		21		21
Consumer		-		-		-		-		-		-
		10,485		10,387		3,435		9,871		289		291
Total
Commercial		635		635		-		569		24		27
Agricultural		229		209		-		210		9		12
Commercial Construction		263		263		21		772		8		9
Commercial Real Estate		22,915		22,743		3,022		22,615		806		796
Residential Real Estate		5,737		5,420		363		5,596		101		223
Farmland		1,301		1,179		29		1,400		43		47
Consumer		212		212		-		213		10		12
	$	31,292	$	30,661	$	3,435	$	31,375	$	1,001	$	1,126

23

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

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

June 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	$	460	$	460	$	-	$	472	$	4		$	5
Agricultural		213		192		-		188		9			13
Commercial Construction		453		428		-		930		8			7
Residential Construction		-		-				-		-			-
Commercial Real Estate		16,383		15,615		-		13,577		271			270
Residential Real Estate		5,227		4,956		-		4,606		(7	)		119
Farmland		935		933		-		1,121		(3	)		1
Consumer		248		240				205		4			6
Other		-		-		-		-		-			-
		23,919		22,824		-		21,099		286			421
With An Allowance Recorded
Commercial		-		-		-		50		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		74		74		22		75		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		8,709		8,695		2,886		8,305		127			124
Residential Real Estate		864		856		440		965		3			3
Farmland		384		384		33		386		10			11
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		10,031		10,009		3,381		9,781		140			138
Total
Commercial		460		460		-		522		4			5
Agricultural		213		192		-		188		9			13
Commercial Construction		527		502		22		1,005		8			7
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		25,092		24,310		2,886		21,882		398			394
Residential Real Estate		6,091		5,812		440		5,571		(4	)		122
Farmland		1,319		1,317		33		1,507		7			12
Consumer		248		240		-		205		4			6
Other		-		-		-		-		-			-
	$	33,950	$	32,833	$	3,381	$	30,880	$	426		$	559

24

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

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 June 30, 2017. The following tables present the number of loan contracts restructured during the three month and six month period ended June 30, 2017 and 2016. 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 June 30, 2017

Six Months Ended June 30, 2017

Troubled Debt Restructurings

# of Contracts

Pre-Modification

Post-Modification

# of Contracts

Pre-Modification

Post-Modification

Residential Real Estate

-

$

-

$

-

-

$

-

$

-

Total Loans

-

$

-

$

-

-

$

-

$

-

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

25

PART I (Continued)

Item 1 (Continued)

(3) Loans (Continued)

The company did not have any TDRs that subsequently defaulted for the three months and six months ended June 30, 2017.

(4) Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the six month period ended June 30, 2017 and June 30, 2016. 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.

June 30, 2017
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	456	$	(124	)	$	100	$	(7	)	$	425
Agricultural		168		(4	)		2		72			238
Real Estate
Commercial Construction		323		(49	)		162		334			770
Residential Construction		13		-			-		(2	)		11
Commercial		5,751		(966	)		302		(424	)		4,663
Residential		1,396		(605	)		33		148			972
Farmland		722		-			-		137			859
Consumer and Other
Consumer		80		(117	)		51		70			84
Other		14		-			-		7			21
	$	8,923	$	(1,865	)	$	650	$	335		$	8,043

26

PART I (Continued)

Item 1 (Continued)

(4) Allowance for Loan Losses (Continued)

June 30, 2016
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	855	$	(225	)	$	25	$	(100	)	$	555
Agricultural		203		(18	)		2		64			251
Real Estate
Commercial Construction		691		(25	)		804		(1,032	)		438
Residential Construction		20		-			-		(2	)		18
Commercial		3,851		(569	)		180		2,136			5,598
Residential		1,990		(159	)		23		(242	)		1,612
Farmland		912		-			125		(241	)		796
Consumer and Other
Consumer		63		(111	)		21		123			96
Other		19		-			5		2			26
	$	8,604	$	(1,107	)	$	1,185	$	708		$	9,390

During the first quarter of 2017 Company management completed the transition to 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.  As of June 30, 2017, this change in the historical loss period resulted in an increase to the allowance for loan losses of $431,600.

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 June 30, 2017, there were 153 impaired loans totaling $4.3 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 June 30, 2016, there were 165 impaired loans totaling $3.8 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 $13.04 million and $12.64 million as of June 30, 2017 and 2016, respectively. Specific allowance allocations were made for these loans totaling $1.19 million and $791 thousand as of June 30, 2017 and 2016, 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.

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 June 30, 2017 and 2016:

June 30, 2017
	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	$	-	$	425	$	425	$	33	$	44,850	$	44,883
Agricultural		-		238		238		5		21,805		21,810
Real Estate
Commercial Construction		4		766		770		72		35,079		35,151
Residential Construction		-		11		11		-		9,230		9,230
Commercial		1,517		3,146		4,663		17,292		338,509		355,801
Residential		20		952		972		2,336		198,236		200,572
Farmland		26		833		859		1,040		69,154		70,194
Consumer and Other
Consumer		-		84		84		-		19,134		19,134
Other		-		21		21		-		18,791		18,791
Total End of Period Balance	$	1,567	$	6,476	$	8,043	$	20,778	$	754,788	$	775,566

June 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	$	-	$	555	$	555	$	9	$	47,925	$	47,934
Agricultural		-		251		251		-		24,307		24,307
Real Estate
Commercial Construction		22		416		438		384		31,908		32,292
Residential Construction		-		18		18		-		9,141		9,141
Commercial		2,886		2,712		5,598		17,463		327,718		345,181
Residential		440		1,172		1,612		3,609		192,531		196,140
Farmland		33		763		796		1,048		69,089		70,137
Consumer and Other
Consumer		-		96		96		-		19,936		19,936
Other		-		26		26		-		19,141		19,141
Total End of Period Balance	$	3,381	$	6,009	$	9,390	$	22,513	$	741,696	$	764,209

28

PART I (Continued)

Item 1 (Continued)

(5) Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at June 30, 2017 and December 31, 2016 was $4,525 and $6,439, 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 six months ended June 30, 2017 and the year ended December 31, 2016.

	Six Months Ended			Twelve Months Ended
	June 30, 2017			December 31, 2016
Balance, Beginning	$	6,439		$	8,839
Additions		432			5,664
Sales of OREO		(2,236	)		(7,416	)
Gains (Losses) on Sale		96			(146	)
Provision for Losses		(206	)		(502	)
Balance, Ending	$	4,525		$	6,439

At June 30, 2017, the Company held $423 thousand of residential real estate property as foreclosed property compared to $431 thousand as of December 31, 2016.  Also at June 30, 2017, $317 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. At December 31, 2016, only $204 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 $457 and $414 as of June 30, 2017 and December 31, 2016.

Components of interest-bearing deposits as of June 30, 2017 and December 31, 2016 are as follows:

	Six Months Ended		Twelve Months Ended
	June 30, 2017		December 31, 2016
Interest-Bearing Demand	$	432,635	$	448,004
Savings		76,294		70,066
Time, $250,000 and Over		26,347		32,168
Other Time		328,334		335,060
	$	863,610	$	885,298

At June 30, 2017 and December 31, 2016, the Company had brokered deposits of $49,052 and $49,303, 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 $250,000 was approximately $21,359 and $25,446 as of June 30, 2017 and December 31, 2016, respectively. The aggregate amount of certificates of deposit, each with a minimum deposit of $250,000 was $26,347 and $32,168 as of June 30, 2017 and December 31, 2016.

29

PART I (Continued)

Item 1 (Continued)

(6) Deposits (Continued)

As of June 30, 2017 and December 31, 2016, the scheduled maturities of certificates of deposits are as follows:

Maturity	June 30, 2017		December 31, 2016
One Year and Under	$	258,785	$	256,886
One to Three Years		73,550		85,794
Three Years and Over		22,346		24,548
	$	354,681	$	367,228

(7) Other Borrowed Money

Other borrowed money at June 30, 2017 and December 31, 2016 is summarized as follows:

	June 30, 2017		December 31, 2016
Federal Home Loan Bank Advances	$	51,000	$	46,000
Other Borrowings		5,000		-
	$	56,000	$	46,000

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 June 30, 2017 the book value of those loans pledged is $118,022. At June 30, 2017 the Company had remaining credit availability from the FHLB of $250,736. The Company may be required to pledge additional qualifying collateral in order to utilize the full amount of the remaining credit line.

The Company borrowed $5,000 during the first quarter of 2017 as a short term loan to be paid off within one year with an interest rate of prime plus 0.75 percent, currently 5.00 percent.

The aggregate stated maturities of other borrowed money at June 30, 2017 are as follows:

Year	Amount
2018	$	12,500
2019		5,000
2020		2,500
After 2020	$	36,000
		56,000

The Company also has available federal funds lines of credit with various financial institutions totaling $43,500, none of which were outstanding at June 30, 2017.

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 June 30, 2017, 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 redeemed 9,360 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) outstanding with private investors on March 31, 2017. As a result, there is no outstanding Preferred Stock as of June 30, 2017. The Company redeemed 8,661 shares of Preferred Stock at $1,000 per share in 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 in 2013.

30

PART I (Continued)

Item 1 (Continued)

(8) Preferred Stock and Warrants (Continued)

The Preferred Stock qualified as Tier 1 capital and was nonvoting, other than class voting rights on certain matters that could adversely affect the Preferred Stock. The Preferred Stock was redeemable by the Company at the liquidation preference of $1,000 per share, plus any accrued and unpaid dividends. The Warrant could 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 was exercised.

(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		1.26744		2.68		3.94744	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155		1.29639		1.50		2.79639	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279		1.29639		1.65		2.94639	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155		1.16956		1.40		2.56956	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.

The Trust Preferred Securities pay interest quarterly.

(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 June 30, 2017 and December 31, 2016 the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	June 30, 2017		December 31, 2016
Loan Commitments	$	96,380	$	71,359
Letters of Credit		1,445		1,551

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.

31

PART I (Continued)

Item 1 (Continued)

(10) Commitments and Contingencies (Continued)

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 the Company and the Bank. The aggregate liabilities, if any, arising from such proceedings would not, in the opinion of management, have a material adverse effect on the Company’s consolidated financial position.

(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 that value. The assumptions used in the estimation of the fair value of the Company and the Bank’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.

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

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

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.

32

PART I (Continued)

Item 1 (Continued)

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

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 June 30, 2017 and December 31, 2016 are as follows:

	Fair Value Measurements at
	June 30, 2017
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value		1		2		3
Assets
Cash and Short-Term Investments	$	30,059	$	30,059	$	30,059	$	-	$	-
Investment Securities Available for Sale		337,710		337,710		-		337,134		576
Federal Home Loan Bank Stock		3,255		3,255		3,255		-		-
Loans, Net		767,069		767,523		-		761,433		6,090
Bank-Owned Life Insurance		15,724		15,724		15,724		-		-
Liabilities
Deposits		1,026,538		1,026,846		671,857		354,989		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		56,000		56,251		-		56,251		-

	Fair Value Measurements at
	December 31, 2016
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value		1		2		3
Assets
Cash and Short-Term Investments	$	75,167	$	75,167	$	75,167	$	-	$	-
Investment Securities Available for Sale		323,658		323,658		-		323,082		576
Federal Home Loan Bank Stock		3,010		3,010		3,010		-		-
Loans, Net		744,999		745,240		-		738,288		6,952
Bank-Owned Life Insurance		15,419		15,419		15,419		-		-
Liabilities
Deposits		1,044,357		1,045,726		677,129		368,597		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		46,000		46,232		-		46,232		-

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.

33

PART I (Continued)

Item 1 (Continued)

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

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.

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 June 30, 2017 and December 31, 2016, 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 June 30, 2017. Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

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
June 30, 2017	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	330,742	$	-	$	330,742	$	-
State, County and Municipal		4,904		-		4,328		576
Corporate Bonds		2,064				2,064		-
	$	337,710	$	-	$	337,134	$	576
Nonrecurring
Impaired Loans	$	6,090	$	-	$	-	$	6,090
Other Real Estate	$	1,857	$	-	$	-	$	1,857

			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, 2016	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	319,097	$	-	$	319,097	$	-
State, County and Municipal		4,561		-		3,985		576
	$	323,658	$	-	$	323,082	$	576
Nonrecurring
Impaired Loans	$	6,952	$	-	$	-	$	6,952
Other Real Estate	$	2,505	$	-	$	-	$	2,505

Liabilities

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

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 June 30, 2017 and December 31, 2016. This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

			Valuation	Unobservable	Range
	June 30, 2017		Techniques	Inputs	Weighted Avg
Real Estate
Commercial Construction	$	67	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		21	Sales Comparison	Adjustment for Differences		(22.00)%	-	(6.00)%
				Between the Comparable Sales			(14.00)%
				Management Adjustments for		10.00%	-	25.00%
				Age of Appraisals and/or Current			17.50%
				Market Conditions
Commercial Real Estate		5,652	Sales Comparison	Management Adjustments for		0.00%	-	10.00%
				Age of Appraisals and/or Current			5.00%
				Market Conditions
			Income Approach	Capitalization Rate			10.67%
Farmland		350	Sales Comparison	Adjustment for Differences		0.00%	-	15.00%
				Between the Comparable Sales			7.50%
				Management Adjustments for		10.00%	-	75.00%
				Age of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		1,857	Sales Comparison	Adjustment for Differences		(15.00)%	-	37.60%
				Between the Comparable Sales			11.30%
				Management Adjustments for		6.25%	-	81.27%
				Age of Appraisals and/or Current			31.23%
				Market Conditions

36

PART I (Continued)

Item 1 (Continued)

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

			Valuation	Unobservable	Range
	December 31, 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		1,105	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		5,445	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		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		2,505	Sales Comparison	Adjustment for Differences		(50.80)%	-	316.00%
				Between the Comparable Sales			132.60%
				Management Adjustment for		6.25%	-	76.92%
				Age of Appraisals and/or Current			36.31%
				Market Conditions
			Income Approach	Discount Rate			12.50%

37

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 three months ended June 30, 2017 and the twelve months ended December 31, 2016.

	Available for Sale Securities
	June 30, 2017		December 31, 2016
Balance, Beginning	$	576	$	930
Transfers out of Level 3		-		-
Maturities				(330	)
Loss on OTTI Impairment Included in Noninterest Income		-		-
Unrealized Gains included in Other Comprehensive Income (Loss)		-		(24	)
Balance, Ending	$	576	$	576

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 six months ended June 30, 2017 and the twelve months ended December 31, 2016.

The following table presents quantitative information about recurring level 3 fair value measurements as of June 30, 2017.

			Valuation	Unobservable	Range
	Fair Value		Techniques	Inputs	Weighted Avg
State, County and Municipal	$	576	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.

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 June 30, 2017, 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 June 30, 2017, 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. 

38

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 June 30, 2017 and December 31, 2016 on a consolidated basis and for the subsidiary, as defined.  Regulatory capital ratios for June 30, 2017 and December 31, 2016 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 June 30, 2017
Total Capital to Risk-Weighted Assets
Consolidated	$	124,460		15.32	%	$	65,001		8.00	%		N/A		N/A
Colony Bank		127,134		15.67			64,915		8.00		$	81,144		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		116,417		14.33			48,751		6.00			N/A		N/A
Colony Bank		119,091		14.68			48,686		6.00			64,915		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated		92,917		11.44			36,563		4.50			N/A		N/A
Colony Bank		119,091		14.68			36,515		4.50			52,743		6.50
Tier I Capital to Average Assets
Consolidated		116,417		9.72			47,930		4.00			N/A		N/A
Colony Bank		119,091		9.95			47,856		4.00			59,820		5.00

39

PART I (Continued)

Item 1 (Continued)

(12) Regulatory Capital Matters (Continued)

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2016
Total Capital to Risk-Weighted Assets
Consolidated	$	130,785		16.64	%	$	62,880		8.00	%		N/A		N/A
Colony Bank		127,646		16.26			62,796		8.00		$	78,495		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		121,862		15.50			47,160		6.00			N/A		N/A
Colony Bank		118,723		15.12			47,097		6.00			62,796		8.00
Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		89,002		11.32			35,370		4.50			N/A		N/A
Colony Bank		118,723		15.12			35,323		4.50			51,022		6.50
Tier 1 Capital to Average Assets
Consolidated		121,862		10.29			47,368		4.00			N/A		N/A
Colony Bank		118,723		10.04			47,290		4.00			59,113		5.00

40

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 six month period ended June 30, 2017 and 2016.

	Three Months Ended				Six Months Ended
	June 30				June 30
	2017		2016		2017		2016
Numerator
Net Income Available to Common Stockholders	$	2,433	$	1,761	$	4,339	$	3,417
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		191		59		193		52
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,630		8,498		8,632		8,491
Earnings Per Share - Basic	$	0.29	$	0.21	$	0.51	$	0.40
Earnings Per Share - Diluted	$	0.28	$	0.21	$	0.50	$	0.40

(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 June 30, 2017 and the year ended December 31, 2016 are as follows:

	June 30, 2017			December 31, 2016
Beginning Balance	$	(5,022	)	$	(4,434	)
Other Comprehensive Income Before Reclassification		1,047			(334	)
Amounts Reclassified from Accumulated Other Comprehensive Income		-			(254	)
Net Current Period Other Comprehensive Income		1,047			(588	)
Ending Balance	$	(3,975	)	$	(5,022	)

41

Part I (Continued)

Item 2

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

Future Outlook

During the recent financial crisis, the financial industry experienced tremendous adversities as a result of the collapse of the real estate markets across the country. The Company, like most banking companies, has been affected by these economic challenges that started with a rapid stall of real estate sales and developments throughout the country. While much has been accomplished in addressing problem assets the past several years, there is still work to be done in bringing our problem assets to an acceptable level. Our focus in 2017 has been and will continue to be directed toward further reduction of problem assets.

In 2017 we have committed to improving earnings, reducing problem assets and redeeming TARP preferred stock. In the first quarter of 2017 we received approval from the Federal Reserve and the Department of Banking and Finance to completely eliminate the Preferred Stock. Given the improved condition of the company, we are also considering product and market expansion. In 2016, we opened new offices in Tifton and Statesboro, while closing four offices in smaller rural markets. In January 2017, the Company opened its third office in Savannah. In June 2017, the Company committed to purchase land in Statesboro for a new office.

In addition to improving earnings, reducing problem assets and maintaining strong capital levels, we reinstated quarterly dividend payments beginning first quarter 2017. The Company’s board of directors suspended the payment of dividends in the third quarter of 2009.

We continue to explore opportunities to improve core non-interest income. Revenue enhancement initiatives to accomplish this include new product lines and services. The Company will also invest in new technology with the implementation of a new loan platform which will offer much efficiency with our “back-office” operations.

In addition, we continue to make efforts to attract and retain top talent to improve business operations. To that end, the Company entered into Retention Agreements with members of management in the first quarter of 2015. The Company expects that these agreements will facilitate the retention of key individuals responsible for maintaining current operations and spearheading future product and market expansion.

Major Trends/Significant Considerations

The following discussion sets forth management’s discussion and analysis of our consolidated financial condition as of June 30, 2017, and the consolidated results of operations for the six months ended June 30, 2017. 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, 2017. Readers should also carefully review all other disclosures we file from time to time with the SEC.

Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (GAAP) in the United States and prevailing practices in the banking industry. However, management uses certain non-GAAP measures to supplement the evaluation of our performance. These include the fully-taxable equivalent measures: tax-equivalent net interest income, tax-equivalent net interest margin, and tax-equivalent net interest spread, which include the effects of taxable-equivalent adjustments using a federal income tax rate of 34% to increase tax-exempt interest income to a tax-equivalent basis.  Tax-equivalent adjustments are reported in Notes 1 and 2 to the Average Balances with Average Yields and Rates table under Rate/Volume Analysis. Tangible book value per common share is also a non-GAAP measure used in the selected Financial Data Section.

Tax-equivalent net interest income, net interest margin and net interest spread.  Net interest income on a tax-equivalent basis is a non-GAAP measure that adjusts for the tax-favored status of net interest income from loans and investments. We believe this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. The most directly comparable financial measure calculated in accordance with GAAP is our net interest income. Net interest margin on a tax-equivalent basis is net interest income on a tax-equivalent basis divided by average interest-earning assets on a tax-equivalent basis. The most directly comparable financial measure calculated in accordance with GAAP is our net interest margin. Net interest spread on a tax-equivalent basis is the difference in the average yield on average interest-earning assets on a tax equivalent basis and the average rate paid on average interest-bearing liabilities. The most directly comparable financial measure calculated in accordance with GAAP is our net interest spread.

42

Part I (Continued)

Item 2 (Continued)

These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements, and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently.

A reconciliation of these performance measures to GAAP performance measures is included in the tables below.

Non-GAAP Performance Measures Reconciliation
	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Interest Income Reconciliation
Interest Income – Taxable Equivalent	$	11,578	$	11,199	$	22,733	$	22,316
Tax Equivalent Adjustment		40		58		74		86
Interest Income (GAAP)	$	11,538	$	11,141	$	22,659	$	22,230
Net Interest Income Reconciliation
Net Interest Income – Taxable Equivalent	$	9,856	$	9,583	$	19,352	$	19,067
Tax Equivalent Adjustment		40		58		74		86
Net Interest Income (GAAP)	$	9,816	$	9,525	$	19,278	$	18,981

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net Interest Margin Reconciliation
Net Interest Margin – Taxable Equivalent		3.49	%		3.53	%		3.42	%		3.50	%
Tax Equivalent Adjustment		0.01			0.02			0.01			0.02
Net Interest Margin (GAAP)		3.48	%		3.51	%		3.41	%		3.48	%
Interest Rate Spread Reconciliation
Interest Rate Spread – Taxable Equivalent		3.41	%		3.42	%		3.31	%		3.39	%
Tax Equivalent Adjustment		0.02			0.03			0.02			0.02
Interest Rate Spread (GAAP)		3.39	%		3.39	%		3.29	%		3.37	%

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 19 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 June 30, 2017 and December 31, 2016, and results of operations for each of the six months in the periods ended June 30, 2017 and 2016. 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.

43

Part I (Continued)

Item 2 (Continued)

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 $2.43 million, or $0.28 diluted per common share, in the three months ended June 30, 2017 compared to net income available to common shareholders of 1.76 million, or $0.21 diluted per common share, in the three months ended June 30, 2016. Net income available to common shareholders totaled $4.34 million, or $0.50 diluted per common share, in six months ended June 30, 2017 compared to net income available to common shareholders of $3.42 million, or $0.40 diluted per common share, in six months ended June 30, 2016. The Company did not have any material changes to its results of operations in the second quarter of 2017.

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 June 30												Six Months Ended June 30
							$			%									$			%
	2017			2016			Variance			Variance			2017			2016			Variance			Variance
Taxable-equivalent net interest income	$	9,856		$	9,583		$	273			2.85	%	$	19,352		$	19,067		$	285			1.49	%
Taxable-equivalent adjustment		40			58			(18	)		(31.03	)		74			86			(12	)		(13.95	)
Net interest income		9,816			9,525			291			3.06			19,278			18,981			297			1.56
Provision for loan losses		-			354			(354	)		(100.00	)		335			708			(373	)		(52.68	)
Noninterest income		2,394			2,352			42			1.79			4,794			4,524			270			5.97
Noninterest expense		8,620			8,354			266			3.18			17,028			16,589			439			2.65
Income before income taxes		3,590			3,169			421			13.28			6,709			6,208			501			8.07
Income taxes		1,157			1,002			155			15.47			2,159			1,980			179			9.04
Net income		2,433			2,167			266			12.28			4,550			4,228			322			7.62
Preferred stock dividends		-			406			(406	)		(100.00	)		211			811			(600	)		(73.98	)
Net income available to common shareholders	$	2,433		$	1,761		$	672			38.16	%	$	4,339		$	3,417		$	922			26.98	%
Net income available to common shareholders:
Basic	$	0.29		$	0.21		$	0.08			38.10	%	$	0.51		$	0.40		$	0.11			27.50	%
Diluted	$	0.28		$	0.21		$	0.07			33.33	%	$	0.50		$	0.40		$	0.10			25.00	%
Return on average assets		0.81	%		0.61	%		0.20	%		32.79	%		0.72	%		0.59	%		0.13	%		22.03	%
Return on average total equity		11.10	%		6.99	%		4.11	%		58.80	%		9.56	%		6.87	%		2.69	%		39.16	%

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

44

Part I (Continued)

Item 2 (Continued)

Net Interest Income

Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is the Company’s largest source of revenue, representing 80.08 percent of total revenue for six months ended June 30, 2017 and 80.75 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.

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 4.25 percent. The rate increased 25 basis points in the first and second quarter of 2017. The federal funds rate moved similarly to the prime rate with interest rates currently at 1.25 percent. We expect another additional rate increase in 2017.

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.

45

Part I (Continued)

Item 2 (Continued)

Rate/Volume Analysis

The rate/volume analysis presented hereafter illustrates the change from June 30, 2016 to June 30, 2017 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 June 30, 2016 to June 30, 2017
($ in thousands)	Volume			Rate			Total
Interest Income
Loans, Net-taxable	$	72		$	(276	)	$	(204	)
Investment Securities
Taxable		323			248			571
Tax-exempt		(7	)		(2	)		(9	)
Total Investment Securities		316			246			562
Interest-Bearing Deposits in other Banks		4			49			53
Other Interest - Earning Assets		7			(1	)		6
Total Interest Income		399			18			417
Interest Expense
Interest-Bearing Demand and Savings Deposits		91			11			102
Time Deposits		(125	)		(2	)		(127	)
Subordinated Debentures		-			121			121
Other Borrowed Money		126			(93	)		33
Federal Funds Purchased		3			-			3
Total Interest Expense		95			37			132
Net Interest Income	$	304		$	(19	)	$	285

(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.

The Company maintains about 21 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 decreased to 3.42 percent for the six months ended June 30, 2017 compared to 3.50 percent for the same period a year ago. We anticipate the net interest margin remaining relatively flat for 2017.

Taxable-equivalent net interest income for the six months ended June 30, 2017 increased by $285 thousand, or 1.49 percent compared to the same period a year ago. The average volume of earning assets during six months ended June 30, 2017 increased $40.69 million compared to the same period a year ago. Growth in average earning assets during 2017 was primarily in investments and loans.

The average volume of loans increased $2.80 million for the six months ended June 30, 2017 compared to the same period a year ago. The average yield on loans decreased 7 basis points for the six months ended June 30, 2017 compared to the same period a year ago. The average volume of investment securities increased $35.93 million for the six months ended June 30, 2017 compared to the same year ago period, while the average yield on investment securities increased 14 basis points for the same period comparison. The average volume of deposits increased $36.03 million for the six months ended June 30, 2017 compared to the same period a year ago, with interest-bearing deposits increasing $19.24 million for the six months ended June 30, 2017.

46

Part I (Continued)

Item 2 (Continued)

Accordingly, the ratio of average interest-bearing deposits to total average deposits was 85.19 percent for the six months ended June 30, 2017 compared to 86.34 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 six months ended June 30, 2017 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 3.31 percent in six months ended June 30, 2017 compared to 3.39 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.

47

Part I (Continued)

Item 2 (Continued)

AVERAGE BALANCE SHEETS	Six Months Ended								Six Months Ended
	June 30, 2017								June 30, 2016
	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)	$	757,190		$	19,189		5.07	%	$	754,392		$	19,393		5.14	%
Investment Securities
Taxable		344,011			3,316		1.93	%		307,751			2,745		1.78	%
Tax-Exempt (2)		2,285			43		3.76	%		2,618			52		3.97	%
Total Investment Securities		346,296			3,359		1.94	%		310,369			2,797		1.80	%
Interest-Bearing Deposits		24,884			114		0.92	%		23,221			61		0.53	%
Federal Funds Sold		-			-		-	%		-			-		-	%
Interest-Bearing Other Assets		3,042			71		4.67	%		2,744			65		4.74	%
Total Interest-Earning Assets	$	1,131,412		$	22,733		4.02	%	$	1,090,726		$	22,316		4.09	%
Non-interest-Earning Assets
Cash and Cash Equivalents		19,935								15,074
Allowance for Loan Losses		(8,985	)							(9,384	)
Other Assets		55,111								64,635
Total Noninterest-Earning Assets		66,061								70,325
Total Assets	$	1,197,473							$	1,161,051
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities
Interest-Bearing Deposits
Interest-Bearing Demand and Savings	$	517,250		$	931		0.36	%	$	466,730		$	829		0.36	%
Other Time		360,200			1,437		0.80	%		391,476			1,564		0.80	%
Total Interest-Bearing Deposits		877,450			2,368		0.54	%		858,206			2,393		0.56	%
Other Interest-Bearing Liabilities
Other Borrowed Money		48,934			599		2.45	%		40,000			566		2.83	%
Subordinated Debentures		24,229			411		3.39	%		24,229			290		2.39	%
Federal Funds Purchased		350			3		1.71	%		-			-		-	%
Total Other Interest-Bearing Liabilities		73,513			1,013		2.76	%		64,229			856		2.67	%
Total Interest-Bearing Liabilities	$	950,963		$	3,381		0.71	%	$	922,435		$	3,249		0.70	%
Noninterest-Bearing Liabilities and Stockholders' Equity
Demand Deposits		152,593								135,812
Other Liabilities		3,098								3,344
Stockholders' Equity		90,819								99,460
Total Noninterest-Bearing Liabilities and Stockholders' Equity		246,510								238,616
Total Liabilities and Stockholders' Equity	$	1,197,473							$	1,161,051
Interest Rate Spread							3.31	%							3.39	%
Net Interest Income				$	19,352							$	19,067
Net Interest Margin							3.42	%							3.50	%

(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 $59 and $68 for six month periods ended June 30, 2017 and 2016, respectively, are included in tax-exempt interest on loans.

(2) Taxable-equivalent adjustments totaling $15 and $18 for six month periods ended June 30, 2017 and 2016, 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.

48

Part I (Continued)

Item 2 (Continued)

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 $335 thousand in the six months ended June 30, 2017 compared to $708 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 June 30										Six Months Ended June 30
					$			%							$			%
	2017		2016		Variance			Variance			2017		2016		Variance			Variance
Service Charges on Deposit Accounts	$	1,091	$	1,055	$	36			3.41	%	$	2,146	$	2,057	$	89			4.33	%
Other Charges, Commissions and Fees		772		714		58			8.12			1,559		1,418		141			9.94
Mortgage Fee Income		202		153		49			32.03			388		253		135			53.36
Securities Gains (Losses)		-		127		(127	)		(100.00	)		-		129		(129	)		(100.00	)
Other		329		303		26			8.58			701		667		34			5.10
Total	$	2,394	$	2,352	$	42			1.79	%	$	4,794	$	4,524	$	270			5.97	%

Other Charges, Commissions and Fees. Debit card interchange fees and foreign fees increased $123 thousand in 2017 compared to the same period in 2016. The Company also received a refund on credit life insurance in 2017 of $27 thousand.

Mortgage Fee Income. The volume of mortgage loans has shown an increase in 2017 compared to the same period in 2016 which contributed to the increase in mortgage fee income.

Securities Gains (Losses). The Bank did not sale any securities in 2017; therefore the decrease is attributable to the gain on sale of securities in the prior year.

Noninterest Expense

The components of noninterest expense were as follows:

	Three Months Ended June 30										Six Months Ended June 30
					$			%							$			%
	2017		2016		Variance			Variance			2017		2016		Variance			Variance
Salaries and Employee Benefits	$	4,880	$	4,625	$	255			5.51	%	$	9,665	$	9,099	$	566			6.22	%
Occupancy and Equipment		991		978		13			1.33			1,951		1,942		9			0.46
Other		2,749		2,751		(2	)		(0.07	)		5,412		5,548		(136	)		(2.45	)
Total	$	8,620	$	8,354	$	266			3.18	%	$	17,028	$	16,589	$	439			2.65	%

Salaries and Employee Benefits. The increase in 2017 is primarily attributable to merit pay increases.

Occupancy and Equipment. The increase in the three months ended June 30, 2017 as compared to comparable periods is primarily attributable to an increase in depreciation expense in 2017.

Other. The decrease in 2017 as compared to 2016 is primarily attributable to the decrease in FDIC assessments by $218 thousand in 2017. Advertising also decreased by $135 thousand in 2017. The decrease was offset by $166 thousand increase in ATM expense, $90 thousand increase in software expense and $90 thousand increase in legal & professional fees.

49

Part I (Continued)

Item 2 (Continued)

Loans

The following table presents the composition of the Company’s loan portfolio as of June 30, 2017 and December 31, 2016:

	June 30, 2017			December 31, 2016			$ Variance			% Variance
Commercial and Agricultural
Commercial	$	44,883		$	47,025		$	(2,142	)		(4.56	)%
Agricultural		21,810			17,080			4,730			27.69
Real Estate
Commercial Construction		35,151			30,358			4,793			15.79
Residential Construction		9,230			11,830			(2,600	)		(21.98	)
Commercial		355,801			349,090			6,711			1.92
Residential		200,572			195,580			4,992			2.55
Farmland		70,194			66,877			3,317			4.96
Consumer and Other
Consumer		19,134			19,695			(561	)		(2.85	)
Other		18,791			16,748			2,043			12.20
Gross Loans		775,566			754,283			21,283			2.82
Unearned Interest and Fees		(454	)		(361	)		(93	)		(25.76	)
Allowance for Loan Losses		(8,043	)		(8,923	)		880			9.86
Net Loans	$	767,069		$	744,999		$	22,070			2.96	%

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.

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.

50

Part I (Continued)

Item 2 (Continued)

Commercial and Agricultural. Commercial and agricultural loans at June 30, 2017 increased 4.04 percent to $66.7 million from December 31, 2016 at $64.1 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 increased by $2.19 million, or 5.20 percent, at June 30, 2017 to $44.38 million from $42.2 million at December 31, 2016.  Commercial real estate increased $6.71 million, or 1.92 percent, at June 30, 2017 to $355.80 million from $349.09 million at December 31, 2016. The Company also had several new large loans that attributed to the increase in commercial real estate for the period ending June 30, 2017.

Other.Other loans at June 30, 2017 increased 12.20 percent to $18.79 million from $16.75 million at December 31, 2016.

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 June 30, 2017, approximately 87 percent of the Company’s loan portfolio was concentrated in loans secured by real estate. A substantial portion of borrowers’ ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector. In addition, a large portion of the Company’s foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions. Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis. 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.

51

Part I (Continued)

Item 2 (Continued)

Nonperforming Assets and Potential Problem Loans

Nonperforming assets and accruing past due loans as of June 30, 2017, December 31, 2016 and June 30, 2016 were as follows:

	June 30, 2017			December 31, 2016			June 30, 2016
Loans Accounted for on Nonaccrual	$	8,176		$	12,350		$	13,149
Loans Accruing Past Due 90 Days or More		-			-			-
Other Real Estate Foreclosed		4,525			6,439			10,178
Total Nonperforming Assets	$	12,701		$	18,789		$	23,327
Nonperforming Assets by Segment Construction and Land Development	$	2,900		$	3,376		$	4,414
1-4 Family Residential		3,436			4,375			4,875
Nonfarm Residential		4,582			9,182			12,213
Farmland		678			800			933
Commercial and Consumer		1,105			1,056			892
Total Nonperforming Assets	$	12,701		$	18,789		$	23,327
Nonperforming Assets as a Percentage of:
Total Loans and Foreclosed Assets		1.63	%		2.47	%		3.01	%
Total Assets		1.06	%		1.55	%		2.03	%
Nonperforming Loans as a Percentage of:
Total Loans		1.05	%		1.64	%		1.72	%
Supplemental Data:
Trouble Debt Restructured Loans In Compliance with Modified Terms	$	16,890		$	17,992		$	19,346
Trouble Debt Restructured Loans Past Due 30-89 Days		-			319			338
Accruing Past Due Loans:
30-89 Days Past Due	$	6,218		$	4,469		$	5,611
90 or More Days Past Due		-			-			-
Total Accruing Past Due Loans	$	6,218		$	4,469		$	5,611
Allowance for Loan Losses	$	8,043		$	8,923		$	9,390
ALLL as a Percentage of:
Total Loans		1.04	%		1.18	%		1.23	%
Nonperforming Loans		98.37	%		72.25	%		71.41	%

Nonperforming assets include nonaccrual loans, loans past due 90 days or more and foreclosed real estate. Nonperforming assets at June 30, 2017 decreased 32.40 percent from December 31, 2016.

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.

52

Part I (Continued)

Item 2 (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.

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

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.

53

Part I (Continued)

Item 2 (Continued)

Deposits

The following table presents the average amount outstanding and the average rate paid on deposits by the Company for the three month periods ended June 30, 2017 and June 30, 2016.

	June 30, 2017					June 30, 2016
	Average		Average			Average		Average
	Amount		Rate (1)			Amount		Rate (1)
Noninterest-Bearing Demand Deposits	$	152,593				$	135,812
Interest-Bearing Demand and Savings Deposits		517,250		0.36	%		466,730		0.36	%
Time Deposits		360,200		0.80	%		391,476		0.80	%
Total Deposits	$	1,030,043		0.46	%	$	994,018		0.48	%

(1) Average rate is an annualized rate.

Average deposits increased $36.03 million to $1.03 billion at June 30, 2017 from $994.02 million at June 30, 2016. The increase included an increase of $16.78 million, or 12.36 percent in noninterest-bearing demand deposits while, at the same time, interest-bearing demand and savings deposits increased $50.52 million, or 10.82 percent and time deposits decreased $31.28 million, or 7.99 percent. Accordingly the ratio of average noninterest-bearing deposits to total average deposits was 14.81 percent for six months ended June 30, 2017 compared to 13.66 percent for six months ended June 30, 2016. The general decrease in market rates, had the effect of decreasing the average cost of total deposits by 2 basis points in six months ended June 30, 2017 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.

54

Part I (Continued)

Item 2 (Continued)

As of June 30, 2017 and December 31, 2016, financial instruments with off-balance sheet risk were as follows:

	Contract Amount
	June 30, 2017		December 31, 2016
Loan Commitments	$	96,380	$	71,359
Letters of Credit		1,445		1,551

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 June 30, 2017 are included in the table in Footnote 10 of the Consolidated Financial Statements.

Capital and Liquidity

At June 30, 2017, stockholders’ equity totaled $88.99 million compared to $93.39 million at December 31, 2016. In addition to net income of $4.55 million, other significant changes in stockholders’ equity during six months ended June 30, 2017 included $211 thousand of preferred stock dividends paid and $9.36 million redemption of preferred stock. The Company also had $422 thousand of common stock dividends paid during the six months ended June 30, 2017. The accumulated other comprehensive income (loss) component of stockholders’ equity totaled $(3.97) thousand at June 30, 2017 compared to $(5.02) million at December 31, 2016. 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 June 30, 2017 was 14.33 percent and total Tier 1 and 2 risk-based capital was 15.32 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 June 30, 2017 was 11.44, which exceeds the regulatory minimum of 4.50 percent. The Company’s Tier 1 leverage ratio as of June 30, 2017 was 9.72 percent, which exceeds the required ratio standard of 4 percent.

As of June 30, 2017, average capital was $90.82 million, representing 7.58 percent of average assets for the year. This compares to 8.57 percent for June 2016.

After suspending common stock dividend payments beginning in the third quarter of 2009 for capital retention purposes, the Company reinstated common stock dividends in the first quarter of 2017. The Company paid $0.025 per common stock in the first and second quarter of 2017.

The Company declared dividends of $211 thousand and $811 thousand on preferred stock on June 30, 2017 and 2016, respectively. Additional information is provided in the Notes to the Consolidated Financial Statements for Preferred Stock and Warrants.

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.

55

Part I (Continued)

Item 2 (Continued)

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 June 30, 2017, the available for sale bond portfolio totaled $337.7 million. At December 31, 2016, the available for sale bond portfolio totaled $323.7 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 75.6 percent as of June 30, 2017 and 72.2 percent at December 31, 2016. 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 June 30, 2017 and December 31, 2016 were 71.6 percent and 69.2 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 June 30, 2017 and December 31, 2016, the Company had $26.3 million and $32.2 million in certificates of deposit of $250 or more. These larger deposits represented 2.6 percent and 3.1 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 June 30, 2017, the Company had $49.1 million, or 4.78 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 June 30, 2017, the Company had $17.95 million, or 1.75 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.

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.

56

Part I (Continued)

Item 2 (Continued)

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						Six Months Ended
	June 30						June 30
	2017			2016			2017			2016
Return on Average Assets (1)		0.81	%		0.61	%		0.72	%		0.59	%
Return on Average Total Equity (1)		11.10	%		6.99	%		9.56	%		6.87	%
Average Total Equity to Average Assets		7.34	%		8.71	%		7.58	%		8.57	%

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

57

Part I (Continued)

Item 3

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk is the change in value due to changes in interest rates. The Company is exposed only to U. S. dollar interest rate changes and, accordingly, the Company manages exposure by considering the possible changes in the net interest margin. In order to reduce the exposure to interest rate fluctuations, we have implemented strategies to more closely match our balance sheet composition. There have been no material changes in market risk from the information provided in the Company’s annual report on Form 10-K for the year ended December 31, 2016.

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 June 30, 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

58

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.

59

Part II (Continued)

Item 6 (Continued)

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.

60

Part II (Continued)

Item 6 (Continued)

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

61

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:	August 2, 2017	Edward P. Loomis, Jr.
		President/Director/Chief Executive Officer
		/s/ Edward P. Loomis, Jr.
Date:	August 2, 2017	Terry L. Hester
		Executive Vice-President/Director/Chief Financial Officer

62 

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.

August 2, 2017

/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.

August 2, 2017

/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 June 30, 2017 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.

August 2, 2017

/s/ Edward P. Loomis, Jr.                                            
Edward P. Loomis, Jr.

President and Chief Executive Officer

August 2, 2017

/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	6 Months Ended
	Jun. 30, 2017	Aug. 02, 2017
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	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
ASSETS
Cash and Due from Banks	$ 19,071	$ 28,822
Interest-Bearing Deposits	10,988	46,345
Available for Sale, at Fair Value	337,710	323,658
Federal Home Loan Bank Stock, at Cost	3,255	3,010
Loans	775,566	754,283
Allowance for Loan Losses	(8,043)	(8,923)
Unearned Interest and Fees	(454)	(361)
	767,069	744,999
Premises and Equipment	27,654	27,969
Other Real Estate (Net of Allowance of $1,350 and $1,878 as of June 30, 2017 and December 31, 2016, Respectively)	4,525	6,439
Other Intangible Assets	63	81
Other Assets	28,114	29,119
Total Assets	1,198,449	1,210,442
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-Bearing	162,928	159,059
Interest-Bearing	863,610	885,298
	1,026,538	1,044,357
Borrowed Money
Subordinated Debentures	24,229	24,229
Other Borrowed Money	56,000	46,000
	80,229	70,229
Other Liabilities	2,690	2,468
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued Shares of 0 and 9,360 as of June 30, 2017 and December 31, 2016, Respectively		9,360
Common Stock, Par Value $1 a Share; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of June 30, 2017 and December 31, 2016	8,439	8,439
Paid-In Capital	29,145	29,145
Retained Earnings	55,383	51,466
Accumulated Other Comprehensive (Loss), Net of Tax Benefits	(3,975)	(5,022)
	88,992	93,388
Total Liabilities and Stockholders' Equity	$ 1,198,449	$ 1,210,442

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Other Real Estate, Allowance	$ 1,350	$ 1,878
Preferred stock, par 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)	0	9,360
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		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest Income
Loans, Including Fees	$ 9,733	$ 9,693	$ 19,130	$ 19,325
Deposits with Other Banks	34	23	114	61
Investment Securities
U.S. Government Agencies	1,685	1,359	3,248	2,712
State, County and Municipal	30	33	60	67
Corporate Debt	21		36
Dividends on Other Investments	35	33	71	65
	11,538	11,141	22,659	22,230
Interest Expense
Deposits	1,177	1,189	2,368	2,393
Federal Funds Purchased	3		3
Borrowed Money	542	427	1,010	856
	1,722	1,616	3,381	3,249
Net Interest Income	9,816	9,525	19,278	18,981
Provision for Loan Losses		354	335	708
Net Interest Income After Provision for Loan Losses	9,816	9,171	18,943	18,273
Noninterest Income
Service Charges on Deposits	1,091	1,055	2,146	2,057
Other Service Charges, Commissions and Fees	772	714	1,559	1,418
Mortgage Fee Income	202	153	388	253
Securities Gains (Losses)		127		129
Other	329	303	701	667
	2,394	2,352	4,794	4,524
Noninterest Expenses
Salaries and Employee Benefits	4,880	4,625	9,665	9,099
Occupancy and Equipment	991	978	1,951	1,942
Other	2,749	2,751	5,412	5,548
	8,620	8,354	17,028	16,589
Income Before Income Taxes	3,590	3,169	6,709	6,208
Income Taxes	1,157	1,002	2,159	1,980
Net Income	2,433	2,167	4,550	4,228
Preferred Stock Dividends		406	211	811
Net Income Available to Common Stockholders	$ 2,433	$ 1,761	$ 4,339	$ 3,417
Net Income Per Share of Common Stock
Basic (in dollars per share)	$ 0.29	$ 0.21	$ 0.51	$ 0.40
Diluted (in dollars per share)	0.28	0.21	0.50	0.40
Cash Dividends Declared Per Share of Common Stock (in dollars per share)	$ 0.025		$ 0.05
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)	8,630,207	8,497,618	8,632,465	8,490,540

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net Income	$ 2,433	$ 2,167	$ 4,550	$ 4,228
Other Comprehensive Income:
Gains (Losses) on Securities Arising During the Year	1,377	1,886	1,586	7,087
Tax Effect	(468)	(641)	(539)	(2,410)
Realized Gains on Sale of AFS Securities		(127)		(129)
Tax Effect		43		44
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	909	1,161	1,047	4,592
Comprehensive Income	$ 3,342	$ 3,328	$ 5,597	$ 8,820

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 4,550,000	$ 4,228,000
Adjustments to Reconcile Net Income to Net Cash
Depreciation	823,000	771,000
Provision for Loan Losses	335,000	708,000
Securities (Gains)		(129,000)
Amortization and Accretion	750,000	750,000
(Gain) on Sale of Other Real Estate and Repossessions	(93,000)	(31,000)
Provision for Losses on Other Real Estate	206,000	78,000
Increase in Cash Surrender Value of Life Insurance	(305,000)	(313,000)
(Gain) Loss on Sale of Premises & Equipment	(15,000)	77,000
Other Prepaids, Deferrals and Accruals, Net	1,080,000	498,000
	7,331,000	6,637,000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Investment Securities Available for Sale	(41,269,000)	(46,069,000)
Proceeds from Maturities, Calls, and Paydowns of Investment Securities:
Proceeds from Maturities, Calls, and Paydowns of Investment Securities: Available for Sale	28,074,000	24,656,000
Proceeds from Sale of Investment Securities Available for Sale	0	16,010,000
Interest-Bearing Deposits in Other Banks	35,357,000	37,151,000
Net Loans to Customers	(22,848,000)	(8,724,000)
Purchase of Premises and Equipment	(531,000)	(1,795,000)
Proceeds from Sale of Other Real Estate and Repossessions	2,259,000	1,873,000
Federal Home Loan Bank Stock	(245,000)	(24,000)
Proceeds from Sale of Premises and Equipment	38,000	14,000
	835,000	23,092,000
CASH FLOWS FROM FINANCING ACTIVITIES
Noninterest-Bearing Customer Deposits	3,869,000	776,000
Interest-Bearing Customer Deposits	(21,688,000)	(35,763,000)
Dividends Paid for Preferred Stock	(316,000)	(811,000)
Dividends Paid for Common Stock	(422,000)
Redemption of Preferred Stock	(9,360,000)
Payments on Other Borrowed Money	(16,000)
Proceeds from Federal Home Loan Bank Advances	5,000,000
Proceeds from Other Borrowed Money	5,016,000
	(17,917,000)	(35,798,000)
Net Decrease in Cash and Cash Equivalents	(9,751,000)	(6,069,000)
Cash and Cash Equivalents at Beginning of Period	28,822,000	22,257,000
Cash and Cash Equivalents at End of Period	$ 19,071,000	$ 16,188,000

XML

Note 1 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

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, 2016

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

six

months ended

June 30, 2017

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, Statesboro, 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

2017.

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. At

June 30, 2017,

approximately

87

percent of the Company’s loan portfolio was concentrated in loans secured by real estate. A substantial portion of borrowers’ ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector. Collateral real estate values that secure land development, construction and speculative real estate loans in the Company’s larger Metropolitan Statistical Area (MSA) markets have resulted in high loan loss provisions in recent years. In addition, a large portion of the Company’s foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions. Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis.

The success of the Company is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves. Adverse changes in the economic conditions in these geographic markets would likely have a material adverse effect on the Company’s results of operations and financial condition. The operating results of the Company depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment.

At times, the Company

may

have cash and cash equivalents at financial institutions in excess of federal deposit insurance limits. The Company places its cash and cash equivalents with high credit quality financial institutions whose credit 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

$15,724

and

$15,419

as of

June 30, 2017

and

December 31, 2016,

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

-

01,

 

Financial Instruments – Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities.

 ASU  

2016

-

01,

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

-

01

 will be effective for the Company on 

January 

1,

2018.

The Company is currently evaluating the impact of the pending adoption of ASU

2016

-

01

on the consolidated financial statements.

ASU

2016

-

02,

Leases

(Topic

842

)

.

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

-

13,

Financial Instruments – Credit Losses

(Topic

326

).

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.

ASU

2016

-

15,

Statement of Cash Flows (Topic

230

) - Classification of Certain Cash Receipts and Cash Payments.

ASU 

2016

-

15

provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. ASU 

2016

-

15

will be effective for us on

January 

1,

2018

and is

not

expected to have a significant impact on our financial statements.

ASU

2016

-

18,

 Statement of Cash Flows (Topic

230

) - Restricted Cash.  

ASU

2016

-

18

requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this guidance will only affect the Consolidated Statements of Cash Flows. ASU

2016

-

18

is effective for fiscal years beginning after 

December 15, 2017 

and interim periods within those fiscal years, and is

not

expected to have a significant impact on the Company's consolidated financial statements.

ASU

2017

-

08,

Premium Amortization on Purchased Callable Debt Securities.

This ASU shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. Today, entities generally amortize the premium over the contractual life of the security. The new guidance does

not

change the accounting for purchased callable debt securities held at a discount; the discount continues to be amortized to maturity. ASU

No.

2017

-

08

is effective for interim and annual reporting periods beginning after 

December 15, 2018;

early adoption is permitted. The guidance calls for a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the

first

reporting period in which the guidance is adopted. The Company is currently evaluating the provisions of ASU

No.

2017

-

08

to determine the potential impact the new standard will have on the Company’s Consolidated Financial Statements. 

XML

Note 2 - Investment Securities

6 Months Ended

Jun. 30, 2017

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

June 30, 2017

and

December 31, 2016

are summarized as follows:

June 30, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	336,786	$	204	$	(6,248	)	$	330,742
State, County & Municipal		4,891		40		(27	)		4,904
Corporate Bonds		2,056		8		-			2,064
	$	343,733	$	252	$	(6,275	)	$	337,710

December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	326,694	$	76	$	(7,673	)	$	319,097
State, County & Municipal		4,573		18		(30	)		4,561
	$	331,267	$	94	$	(7,703	)	$	323,658

The amortized cost and fair value of investment securities as of

June 30, 2017,

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	$	665	$	667
Due After One Year Through Five Years		4,535		4,524
Due After Five Years Through Ten Years		1,053		1,077
Due After Ten Years		694		700
	$	6,947	$	6,968
Mortgage-Backed Securities		336,786		330,742
	$	343,733	$	337,710

The Bank did

not

sell any investments during the

first

six

months of

2017.

Therefore the Bank did

not

have any proceeds, gains or losses during the

first

six

months of

2017.

Proceeds from the sale of investments available for sale totaled

$16,010

for the

first

six

months of

2016.

The sale of investments available for sale during the

first

six

months of

2016

resulted in gross realized gains of

$135

and losses of

$6.

Investment securities having a carrying value approximating

$147,765

and

$144,854

as of

June 30, 2017

and

December 31, 2016,

respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at

June 30, 2017

and

December 31, 2016

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
June 30, 2017
U. S. Government Agencies Mortgage-Backed	$	170,412	$	(2,499	)	$	108,285	$	(3,749	)	$	278,697	$	(6,248	)
State, County and Municipal		1,776		(27	)		-		-			1,776		(27	)
	$	172,188	$	(2,526	)	$	108,285	$	(3,749	)	$	280,473	$	(6,275	)
December 31. 2016
U.S. Government Agencies Mortgage-Backed	$	174,201	$	(3,460	)	$	107,482	$	(4,213	)	$	281,683	$	(7,673	)
State, County and Municipal		3,488		(30	)		-		-			3,488		(30	)
	$	177,689	$	(3,490	)	$	107,482	$	(4,213	)	$	285,171	$	(7,703	)

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

June 30, 2017,

108

securities have unrealized losses which have depreciated

2.19

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.

XML

Note 3 - Loans

6 Months Ended

Jun. 30, 2017

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

June 30, 2017

and

December 31, 2016.

	June 30, 2017		December 31, 2016
Commercial and Agricultural
Commercial	$	44,883	$	47,025
Agricultural		21,810		17,080
Real Estate
Commercial Construction		35,151		30,358
Residential Construction		9,230		11,830
Commercial		355,801		349,090
Residential		200,572		195,580
Farmland		70,194		66,877
Consumer and Other
Consumer		19,134		19,695
Other		18,791		16,748
Total Loans	$	775,566	$	754,283

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

June 30, 2017

and

December 31, 2016.

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

June 30, 2017,

the Company did

not

have any loans classified as “doubtful” or a “loss”.

June 30, 2017
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	42,156	$	1,864	$	863	$	44,883
Agricultural		21,110		163		537		21,810
Real Estate
Commercial Construction		31,324		1,211		2,616		35,151
Residential Construction		9,031		-		199		9,230
Commercial		341,986		4,158		9,657		355,801
Residential		185,981		3,636		10,955		200,572
Farmland		68,144		1,102		948		70,194
Consumer and Other
Consumer		18,649		114		371		19,134
Other		18,791		-		-		18,791
Total Loans	$	737,172	$	12,248	$	26,146	$	775,566

December 31, 2016
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	44,250	$	1,862	$	913	$	47,025
Agricultural		16,586		192		302		17,080
Real Estate
Commercial Construction		28,425		1,349		584		30,358
Residential Construction		11,630		-		200		11,830
Commercial		327,561		9,403		12,126		349,090
Residential		178,618		5,659		11,303		195,580
Farmland		65,075		839		963		66,877
Consumer and Other
Consumer		19,072		226		397		19,695
Other		16,748		-		-		16,748
Total Loans	$	707,965	$	19,530	$	26,788	$	754,283

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

June 30, 2017

and

December 31, 2016:

June 30, 2017
	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	$	615	$	-	$	615	$	608	$	43,660	$	44,883
Agricultural		202		-		202		348		21,260		21,810
Real Estate
Commercial Construction		792		-		792		102		34,257		35,151
Residential Construction		-		-		-		199		9,031		9,230
Commercial		1,233		-		1,233		3,079		351,489		355,801
Residential		2,984		-		2,984		3,013		194,575		200,572
Farmland		187		-		187		678		69,329		70,194
Consumer and Other
Consumer		205		-		205		149		18,780		19,134
Other		-		-		-		-		18,791		18,791
Total Loans	$	6,218	$	-	$	6,218	$	8,176	$	761,172	$	775,566

December 31, 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	$	420	$	-	$	420	$	635	$	45,970	$	47,025
Agricultural		33		-		33		209		16,838		17,080
Real Estate
Commercial Construction		54		-		54		190		30,114		30,358
Residential Construction		-		-		-		-		11,830		11,830
Commercial		492		-		492		6,360		342,238		349,090
Residential		3,179		-		3,179		3,944		188,457		195,580
Farmland		95		-		95		800		65,982		66,877
Consumer and Other
Consumer		196		-		196		212		19,287		19,695
Other		-		-		-		-		16,748		16,748
Total Loans	$	4,469	$	-	$	4,469	$	12,350	$	737,464	$	754,283

The following table details impaired loan data as of

June 30, 2017:

June 30, 2017
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	608	$	608	$	-	$	639	$	11		$	15
Agricultural		370		349		-		254		11			13
Commercial Construction		102		102		-		159		1			1
Residential Construction		199		199				66		5			5
Commercial Real Estate		10,454		10,454		-		13,543		226			222
Residential Real Estate		5,667		4,871		-		4,511		98			115
Farmland		679		678		-		759		56			56
Consumer		149		149		-		188		3			3
Other		-		-		-		-		-			-
		18,228		17,410		-		20,119		411			430
With An Allowance Recorded
Commercial		-		-		-		-		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		71		71		4		72		2			2
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		7,169		7,169		1,517		6,714		135			134
Residential Real Estate		49		41		20		755		(2	)		2
Farmland		376		376		26		378		11			11
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		7,665		7,657		1,567		7,919		146			149
Total
Commercial		608		608		-		639		11			15
Agricultural		370		349		-		254		11			13
Commercial Construction		173		173		4		231		3			3
Residential Construction		199		199		-		66		5			5
Commercial Real Estate		17,623		17,623		1,517		20,257		361			356
Residential Real Estate		5,716		4,912		20		5,266		96			117
Farmland		1,055		1,054		26		1,137		67			67
Consumer		149		149		-		188		3			3
Other		-		-		-		-		-			-
	$	25,893	$	25,067	$	1,567	$	28,038	$	557		$	579

The following table details impaired loan data as of

December 31, 2016:

December 31, 2016
	Unpaid
	Contractual						Average		Interest		Interest
	Principal		Impaired		Related		Recorded		Income		Income
	Balance		Balance		Allowance		Investment		Recognized		Collected
With No Related Allowance Recorded
Commercial	$	635	$	635	$	-	$	539	$	24	$	27
Agricultural		229		209		-		210		9		12
Commercial Construction		191		191		-		698		7		7
Commercial Real Estate		14,358		14,276		-		14,275		567		560
Residential Real Estate		4,261		3,952		-		4,553		73		191
Farmland		921		799		-		1,016		22		26
Consumer		212		212		-		213		10		12
		20,807		20,274		-		21,504		712		835
With An Allowance Recorded
Commercial		-		-		-		30		-		-
Agricultural		-		-		-		-		-		-
Commercial Construction		72		72		21		74		1		2
Commercial Real Estate		8,557		8,467		3,022		8,340		239		236
Residential Real Estate		1,476		1,468		363		1,043		28		32
Farmland		380		380		29		384		21		21
Consumer		-		-		-		-		-		-
		10,485		10,387		3,435		9,871		289		291
Total
Commercial		635		635		-		569		24		27
Agricultural		229		209		-		210		9		12
Commercial Construction		263		263		21		772		8		9
Commercial Real Estate		22,915		22,743		3,022		22,615		806		796
Residential Real Estate		5,737		5,420		363		5,596		101		223
Farmland		1,301		1,179		29		1,400		43		47
Consumer		212		212		-		213		10		12
	$	31,292	$	30,661	$	3,435	$	31,375	$	1,001	$	1,126

The following table details impaired loan data as of

June 30, 2016:

June 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	$	460	$	460	$	-	$	472	$	4		$	5
Agricultural		213		192		-		188		9			13
Commercial Construction		453		428		-		930		8			7
Residential Construction		-		-				-		-			-
Commercial Real Estate		16,383		15,615		-		13,577		271			270
Residential Real Estate		5,227		4,956		-		4,606		(7	)		119
Farmland		935		933		-		1,121		(3	)		1
Consumer		248		240				205		4			6
Other		-		-		-		-		-			-
		23,919		22,824		-		21,099		286			421
With An Allowance Recorded
Commercial		-		-		-		50		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		74		74		22		75		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		8,709		8,695		2,886		8,305		127			124
Residential Real Estate		864		856		440		965		3			3
Farmland		384		384		33		386		10			11
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		10,031		10,009		3,381		9,781		140			138
Total
Commercial		460		460		-		522		4			5
Agricultural		213		192		-		188		9			13
Commercial Construction		527		502		22		1,005		8			7
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		25,092		24,310		2,886		21,882		398			394
Residential Real Estate		6,091		5,812		440		5,571		(4	)		122
Farmland		1,319		1,317		33		1,507		7			12
Consumer		248		240		-		205		4			6
Other		-		-		-		-		-			-
	$	33,950	$	32,833	$	3,381	$	30,880	$	426		$	559

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

June 30, 2017.

The following tables present the number of loan contracts restructured during the

three

month and

six

month period ended

June 30, 2017

and

2016.

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 June 30, 2017

Six Months Ended June 30, 2017

Troubled Debt Restructurings

# of Contracts

Pre-Modification

Post-Modification

# of Contracts

Pre-Modification

Post-Modification

Residential Real Estate

-

$

-

$

-

-

$

-

$

-

Total Loans

-

$

-

$

-

-

$

-

$

-

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

The company did

not

have any TDRs that subsequently defaulted for the

three

months and

six

months ended

June 30, 2017.

XML

Note 4 - Allowance for Loan Losses

6 Months Ended

Jun. 30, 2017

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

six

month period ended

June

30,

2017

and

June 30, 2016.

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.

June 30, 2017
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	456	$	(124	)	$	100	$	(7	)	$	425
Agricultural		168		(4	)		2		72			238
Real Estate
Commercial Construction		323		(49	)		162		334			770
Residential Construction		13		-			-		(2	)		11
Commercial		5,751		(966	)		302		(424	)		4,663
Residential		1,396		(605	)		33		148			972
Farmland		722		-			-		137			859
Consumer and Other
Consumer		80		(117	)		51		70			84
Other		14		-			-		7			21
	$	8,923	$	(1,865	)	$	650	$	335		$	8,043

June 30, 2016
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	855	$	(225	)	$	25	$	(100	)	$	555
Agricultural		203		(18	)		2		64			251
Real Estate
Commercial Construction		691		(25	)		804		(1,032	)		438
Residential Construction		20		-			-		(2	)		18
Commercial		3,851		(569	)		180		2,136			5,598
Residential		1,990		(159	)		23		(242	)		1,612
Farmland		912		-			125		(241	)		796
Consumer and Other
Consumer		63		(111	)		21		123			96
Other		19		-			5		2			26
	$	8,604	$	(1,107	)	$	1,185	$	708		$	9,390

During the

first

quarter of

2017

Company management completed the transition to 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.  As of

June 30, 2017,

this change in the historical loss period resulted in an increase to the allowance for loan losses of

$431,600.

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

June 30, 2017,

there were

153

impaired loans totaling

$4.3

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

June 30, 2016,

there were

165

impaired loans totaling

$3.8

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

$13.04

million and

$12.64

million as of

June 30, 2017

and

2016,

respectively. Specific allowance allocations were made for these loans totaling

$1.19

million and

$791

thousand as of

June 30, 2017

and

2016,

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

June 30, 2017

and

2016:

June 30, 2017
	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	$	-	$	425	$	425	$	33	$	44,850	$	44,883
Agricultural		-		238		238		5		21,805		21,810
Real Estate
Commercial Construction		4		766		770		72		35,079		35,151
Residential Construction		-		11		11		-		9,230		9,230
Commercial		1,517		3,146		4,663		17,292		338,509		355,801
Residential		20		952		972		2,336		198,236		200,572
Farmland		26		833		859		1,040		69,154		70,194
Consumer and Other
Consumer		-		84		84		-		19,134		19,134
Other		-		21		21		-		18,791		18,791
Total End of Period Balance	$	1,567	$	6,476	$	8,043	$	20,778	$	754,788	$	775,566

June 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	$	-	$	555	$	555	$	9	$	47,925	$	47,934
Agricultural		-		251		251		-		24,307		24,307
Real Estate
Commercial Construction		22		416		438		384		31,908		32,292
Residential Construction		-		18		18		-		9,141		9,141
Commercial		2,886		2,712		5,598		17,463		327,718		345,181
Residential		440		1,172		1,612		3,609		192,531		196,140
Farmland		33		763		796		1,048		69,089		70,137
Consumer and Other
Consumer		-		96		96		-		19,936		19,936
Other		-		26		26		-		19,141		19,141
Total End of Period Balance	$	3,381	$	6,009	$	9,390	$	22,513	$	741,696	$	764,209

XML

Note 5 - Other Real Estate Owned

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Real Estate Owned [Text Block]

(

5

)

Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at

June 30, 2017

and

December 31, 2016

was

$4,525

and

$6,439,

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

six

months ended

June 30, 2017

and the year ended

December 31, 2016.

	Six Months Ended			Twelve Months Ended
	June 30, 2017			December 31, 2016
Balance, Beginning	$	6,439		$	8,839
Additions		432			5,664
Sales of OREO		(2,236	)		(7,416	)
Gains (Losses) on Sale		96			(146	)
Provision for Losses		(206	)		(502	)
Balance, Ending	$	4,525		$	6,439

At

June 30, 2017,

the Company held

$423

thousand of residential real estate property as foreclosed property compared to

$431

thousand as of

December 31, 2016. 

Also at

June 30, 2017,

$317

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. At

December 31, 2016,

only

$204

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.

XML

Note 6 - Deposits

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

(

6

) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled

$457

and

$414

as of

June 30, 2017

and

December 31, 2016.

Components of interest-bearing deposits as of

June 30, 2017

and

December 31, 2016

are as follows:

	Six Months Ended		Twelve Months Ended
	June 30, 2017		December 31, 2016
Interest-Bearing Demand	$	432,635	$	448,004
Savings		76,294		70,066
Time, $250,000 and Over		26,347		32,168
Other Time		328,334		335,060
	$	863,610	$	885,298

At

June 30, 2017

and

December 31, 2016,

the Company had brokered deposits of

$49,052

and

$49,303,

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

$250,000

was approximately

$21,359

and

$25,446

as of

June 30, 2017

and

December 31, 2016,

respectively. The aggregate amount of certificates of deposit, each with a minimum deposit of

$250,000

was

$26,347

and

$32,168

as of

June 30, 2017

and

December 31, 2016.

As of

June 30, 2017

and

December 31, 2016,

the scheduled maturities of certificates of deposits are as follows:

Maturity	June 30, 2017		December 31, 2016
One Year and Under	$	258,785	$	256,886
One to Three Years		73,550		85,794
Three Years and Over		22,346		24,548
	$	354,681	$	367,228

XML

Note 7 - Other Borrowed Money

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

(

7

) Other Borrowed Money

Other borrowed money at

June 30, 2017

and

December 31, 2016

is summarized as follows:

	June 30, 2017		December 31, 2016
Federal Home Loan Bank Advances	$	51,000	$	46,000
Other Borrowings		5,000		-
	$	56,000	$	46,000

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

June 30, 2017

the book value of those loans pledged is

$118,022.

At

June 30, 2017

the Company had remaining credit availability from the FHLB of

$250,736.

The Company

may

be required to pledge additional qualifying collateral in order to utilize the full amount of the remaining credit line.

The Company borrowed

$5,000

during the

first

quarter of

2017

as a short term loan to be paid off within

one

year with an interest rate of prime plus

0.75

percent, currently

5.00

percent.

The aggregate stated maturities of other borrowed money at

June 30, 2017

are as follows:

Year	Amount
2018	$	12,500
2019		5,000
2020		2,500
After 2020	$	36,000
		56,000

The Company also has available federal funds lines of credit with various financial institutions totaling

$43,500,

none

of which were outstanding at

June 30, 2017.

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

June 30, 2017,

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.

XML

Note 8 - Preferred Stock and Warrants

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Preferred Stock And Warrants [Text Block]

(

8

) Preferred Stock and Warrants

The Company redeemed

9,360

shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) outstanding with private investors on

March 31, 2017.

As a result, there is

no

outstanding Preferred Stock as of

June 30, 2017.

The Company redeemed

8,661

shares of Preferred Stock at

$1,000

per share in

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 in

2013.

The Preferred Stock qualified as Tier

1

capital and was nonvoting, other than class voting rights on certain matters that could adversely affect the Preferred Stock. The Preferred Stock was redeemable by the Company at the liquidation preference of

$1,000

per share, plus any accrued and unpaid dividends. The Warrant could 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 was exercised.

XML

Note 9 - Subordinated Debentures (Trust Preferred Securities)

6 Months Ended

Jun. 30, 2017

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		1.26744		2.68		3.94744	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155		1.29639		1.50		2.79639	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279		1.29639		1.65		2.94639	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155		1.16956		1.40		2.56956	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.

The Trust Preferred Securities pay interest quarterly.

XML

Note 10 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

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

June 30, 2017

and

December 31, 2016

the following financial instruments were outstanding whose contract amounts represent credit risk:

	Contract Amount
	June 30, 2017		December 31, 2016
Loan Commitments	$	96,380	$	71,359
Letters of Credit		1,445		1,551

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 the Company and the Bank. The aggregate liabilities, if any, arising from such proceedings would

not,

in the opinion of management, have a material adverse effect on the Company’s consolidated financial position.

XML

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

6 Months Ended

Jun. 30, 2017

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 that value. The assumptions used in the estimation of the fair value of the Company and the Bank’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.

Generally accepted accounting principles related to Fair Value Measurements define fair value, establish a framework for measuring fair value, establish a

three

-level valuation hierarchy for disclosure of fair value measurement and enhance disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The

three

levels are defined as follows:

●	Level 1	inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
●	Level 2	inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
●	Level 3	inputs to the valuation methodology are unobservable and represent the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

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

June 30, 2017

and

December 31, 2016

are as follows:

	Fair Value Measurements at
	June 30, 2017
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value		1		2		3
Assets
Cash and Short-Term Investments	$	30,059	$	30,059	$	30,059	$	-	$	-
Investment Securities Available for Sale		337,710		337,710		-		337,134		576
Federal Home Loan Bank Stock		3,255		3,255		3,255		-		-
Loans, Net		767,069		767,523		-		761,433		6,090
Bank-Owned Life Insurance		15,724		15,724		15,724		-		-
Liabilities
Deposits		1,026,538		1,026,846		671,857		354,989		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		56,000		56,251		-		56,251		-

	Fair Value Measurements at
	December 31, 2016
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value		1		2		3
Assets
Cash and Short-Term Investments	$	75,167	$	75,167	$	75,167	$	-	$	-
Investment Securities Available for Sale		323,658		323,658		-		323,082		576
Federal Home Loan Bank Stock		3,010		3,010		3,010		-		-
Loans, Net		744,999		745,240		-		738,288		6,952
Bank-Owned Life Insurance		15,419		15,419		15,419		-		-
Liabilities
Deposits		1,044,357		1,045,726		677,129		368,597		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		46,000		46,232		-		46,232		-

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.

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

June 30, 2017

and

December 31, 2016,

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

June 30, 2017.

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
June 30, 2017	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	330,742	$	-	$	330,742	$	-
State, County and Municipal		4,904		-		4,328		576
Corporate Bonds		2,064				2,064		-
	$	337,710	$	-	$	337,134	$	576
Nonrecurring
Impaired Loans	$	6,090	$	-	$	-	$	6,090
Other Real Estate	$	1,857	$	-	$	-	$	1,857

			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, 2016	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	319,097	$	-	$	319,097	$	-
State, County and Municipal		4,561		-		3,985		576
	$	323,658	$	-	$	323,082	$	576
Nonrecurring
Impaired Loans	$	6,952	$	-	$	-	$	6,952
Other Real Estate	$	2,505	$	-	$	-	$	2,505

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

June 30, 2017

and

December 31, 2016.

This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

			Valuation	Unobservable	Range
	June 30, 2017		Techniques	Inputs	Weighted Avg
Real Estate
Commercial Construction	$	67	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		21	Sales Comparison	Adjustment for Differences		(22.00 )%	-	(6.00)%
				Between the Comparable Sales			(14.00 )%
				Management Adjustments for		10.00%	-	25.00%
				Age of Appraisals and/or Current			17.50%
				Market Conditions
Commercial Real Estate		5,652	Sales Comparison	Management Adjustments for		0.00%	-	10.00%
				Age of Appraisals and/or Current			5.00%
				Market Conditions
			Income Approach	Capitalization Rate			10.67%
Farmland		350	Sales Comparison	Adjustment for Differences		0.00%	-	15.00%
				Between the Comparable Sales			7.50%
				Management Adjustments for		10.00%	-	75.00%
				Age of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		1,857	Sales Comparison	Adjustment for Differences		(15.00 )%	-	37.60%
				Between the Comparable Sales			11.30%
				Management Adjustments for		6.25%	-	81.27%
				Age of Appraisals and/or Current			31.23%
				Market Conditions

			Valuation	Unobservable	Range
	December 31, 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		1,105	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		5,445	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		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		2,505	Sales Comparison	Adjustment for Differences		(50.80)%	-	316.00%
				Between the Comparable Sales			132.60%
				Management Adjustment for		6.25%	-	76.92%
				Age of Appraisals and/or Current			36.31%
				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

three

months ended

June 30, 2017

and the

twelve

months ended

December 31, 2016.

	Available for Sale Securities
	June 30, 2017		December 31, 2016
Balance, Beginning	$	576	$	930
Transfers out of Level 3		-		-
Maturities				(330	)
Loss on OTTI Impairment Included in Noninterest Income		-		-
Unrealized Gains included in Other Comprehensive Income (Loss)		-		(24	)
Balance, Ending	$	576	$	576

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

six

months ended

June 30, 2017

and the

twelve

months ended

December 31, 2016.

The following table presents quantitative information about recurring level

3

fair value measurements as of

June 30, 2017.

			Valuation	Unobservable	Range
	Fair Value		Techniques	Inputs	Weighted Avg
State, County and Municipal	$	576	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.

XML

Note 12 - Regulatory Capital Matters

6 Months Ended

Jun. 30, 2017

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.

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

June 30, 2017,

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

June 30, 2017,

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

June 30, 2017

and

December 31, 2016

on a consolidated basis and for the subsidiary, as defined.  Regulatory capital ratios for

June 30, 2017

and

December 31, 2016

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 June 3 0 , 201 7
Total Capital to Risk-Weighted Assets
Consolidated	$	124,460		15.32	%	$	65,001		8.00	%		N/A		N/A
Colony Bank		127,134		15.67			64,915		8.00		$	81,144		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		116,417		14.33			48,751		6.00			N/A		N/A
Colony Bank		119,091		14.68			48,686		6.00			64,915		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated		92,917		11.44			36,563		4.50			N/A		N/A
Colony Bank		119,091		14.68			36,515		4.50			52,743		6.50
Tier I Capital to Average Assets
Consolidated		116,417		9.72			47,930		4.00			N/A		N/A
Colony Bank		119,091		9.95			47,856		4.00			59,820		5.00

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2016
Total Capital to Risk-Weighted Assets
Consolidated	$	130,785		16.64	%	$	62,880		8.00	%		N/A		N/A
Colony Bank		127,646		16.26			62,796		8.00		$	78,495		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		121,862		15.50			47,160		6.00			N/A		N/A
Colony Bank		118,723		15.12			47,097		6.00			62,796		8.00
Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		89,002		11.32			35,370		4.50			N/A		N/A
Colony Bank		118,723		15.12			35,323		4.50			51,022		6.50
Tier 1 Capital to Average Assets
Consolidated		121,862		10.29			47,368		4.00			N/A		N/A
Colony Bank		118,723		10.04			47,290		4.00			59,113		5.00

XML

Note 13 - Earnings Per Share

6 Months Ended

Jun. 30, 2017

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

six

month period ended

June 30, 2017

and

2016.

	Three Months Ended				Six Months Ended
	June 30				June 30
	2017		2016		2017		2016
Numerator
Net Income Available to Common Stockholders	$	2,433	$	1,761	$	4,339	$	3,417
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		191		59		193		52
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,630		8,498		8,632		8,491
Earnings Per Share - Basic	$	0.29	$	0.21	$	0.51	$	0.40
Earnings Per Share - Diluted	$	0.28	$	0.21	$	0.50	$	0.40

XML

Note 14 - Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2017

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

June 30, 2017

and the year ended

December 31, 2016

are as follows:

	June 30, 2017			December 31, 2016
Beginning Balance	$	(5,022	)	$	(4,434	)
Other Comprehensive Income Before Reclassification		1,047			(334	)
Amounts Reclassified from Accumulated Other Comprehensive Income		-			(254	)
Net Current Period Other Comprehensive Income		1,047			(588	)
Ending Balance	$	(3,975	)	$	(5,022	)

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Nature of Operations [Policy Text Block]

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, Statesboro, 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

2017.

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. At

June 30, 2017,

approximately

87

percent of the Company’s loan portfolio was concentrated in loans secured by real estate. A substantial portion of borrowers’ ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector. Collateral real estate values that secure land development, construction and speculative real estate loans in the Company’s larger Metropolitan Statistical Area (MSA) markets have resulted in high loan loss provisions in recent years. In addition, a large portion of the Company’s foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions. Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis.

The success of the Company is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves. Adverse changes in the economic conditions in these geographic markets would likely have a material adverse effect on the Company’s results of operations and financial condition. The operating results of the Company depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment.

At times, the Company

may

have cash and cash equivalents at financial institutions in excess of federal deposit insurance limits. The Company places its cash and cash equivalents with high credit quality financial institutions whose credit 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

$15,724

and

$15,419

as of

June 30, 2017

and

December 31, 2016,

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

-

01,

 

Financial Instruments – Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities.

 ASU  

2016

-

01,

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

-

01

 will be effective for the Company on 

January 

1,

2018.

The Company is currently evaluating the impact of the pending adoption of ASU

2016

-

01

on the consolidated financial statements.

ASU

2016

-

02,

Leases

(Topic

842

)

.

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

-

13,

Financial Instruments – Credit Losses

(Topic

326

).

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.

ASU

2016

-

15,

Statement of Cash Flows (Topic

230

) - Classification of Certain Cash Receipts and Cash Payments.

ASU 

2016

-

15

provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. ASU 

2016

-

15

will be effective for us on

January 

1,

2018

and is

not

expected to have a significant impact on our financial statements.

ASU

2016

-

18,

 Statement of Cash Flows (Topic

230

) - Restricted Cash.  

ASU

2016

-

18

requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this guidance will only affect the Consolidated Statements of Cash Flows. ASU

2016

-

18

is effective for fiscal years beginning after 

December 15, 2017 

and interim periods within those fiscal years, and is

not

expected to have a significant impact on the Company's consolidated financial statements.

ASU

2017

-

08,

Premium Amortization on Purchased Callable Debt Securities.

This ASU shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. Today, entities generally amortize the premium over the contractual life of the security. The new guidance does

not

change the accounting for purchased callable debt securities held at a discount; the discount continues to be amortized to maturity. ASU

No.

2017

-

08

is effective for interim and annual reporting periods beginning after 

December 15, 2018;

early adoption is permitted. The guidance calls for a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the

first

reporting period in which the guidance is adopted. The Company is currently evaluating the provisions of ASU

No.

2017

-

08

to determine the potential impact the new standard will have on the Company’s Consolidated Financial Statements. 

XML

Note 1 - Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Estimated Useful Lives and Methods of Depreciation [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

XML

Note 2 - Investment Securities (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Marketable Securities [Table Text Block]

June 30, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	336,786	$	204	$	(6,248	)	$	330,742
State, County & Municipal		4,891		40		(27	)		4,904
Corporate Bonds		2,056		8		-			2,064
	$	343,733	$	252	$	(6,275	)	$	337,710

December 31, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale:
U. S. Government Agencies
Mortgage-Backed	$	326,694	$	76	$	(7,673	)	$	319,097
State, County & Municipal		4,573		18		(30	)		4,561
	$	331,267	$	94	$	(7,703	)	$	323,658

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities
	Available for Sale
	Amortized Cost		Fair Value
Due In One Year or Less	$	665	$	667
Due After One Year Through Five Years		4,535		4,524
Due After Five Years Through Ten Years		1,053		1,077
Due After Ten Years		694		700
	$	6,947	$	6,968
Mortgage-Backed Securities		336,786		330,742
	$	343,733	$	337,710

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
June 30, 2017
U. S. Government Agencies Mortgage-Backed	$	170,412	$	(2,499	)	$	108,285	$	(3,749	)	$	278,697	$	(6,248	)
State, County and Municipal		1,776		(27	)		-		-			1,776		(27	)
	$	172,188	$	(2,526	)	$	108,285	$	(3,749	)	$	280,473	$	(6,275	)
December 31. 2016
U.S. Government Agencies Mortgage-Backed	$	174,201	$	(3,460	)	$	107,482	$	(4,213	)	$	281,683	$	(7,673	)
State, County and Municipal		3,488		(30	)		-		-			3,488		(30	)
	$	177,689	$	(3,490	)	$	107,482	$	(4,213	)	$	285,171	$	(7,703	)

XML

Note 3 - Loans (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

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

	June 30, 2017		December 31, 2016
Commercial and Agricultural
Commercial	$	44,883	$	47,025
Agricultural		21,810		17,080
Real Estate
Commercial Construction		35,151		30,358
Residential Construction		9,230		11,830
Commercial		355,801		349,090
Residential		200,572		195,580
Farmland		70,194		66,877
Consumer and Other
Consumer		19,134		19,695
Other		18,791		16,748
Total Loans	$	775,566	$	754,283

Financing Receivable Credit Quality Indicators [Table Text Block]

June 30, 2017
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	42,156	$	1,864	$	863	$	44,883
Agricultural		21,110		163		537		21,810
Real Estate
Commercial Construction		31,324		1,211		2,616		35,151
Residential Construction		9,031		-		199		9,230
Commercial		341,986		4,158		9,657		355,801
Residential		185,981		3,636		10,955		200,572
Farmland		68,144		1,102		948		70,194
Consumer and Other
Consumer		18,649		114		371		19,134
Other		18,791		-		-		18,791
Total Loans	$	737,172	$	12,248	$	26,146	$	775,566

December 31, 2016
	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	44,250	$	1,862	$	913	$	47,025
Agricultural		16,586		192		302		17,080
Real Estate
Commercial Construction		28,425		1,349		584		30,358
Residential Construction		11,630		-		200		11,830
Commercial		327,561		9,403		12,126		349,090
Residential		178,618		5,659		11,303		195,580
Farmland		65,075		839		963		66,877
Consumer and Other
Consumer		19,072		226		397		19,695
Other		16,748		-		-		16,748
Total Loans	$	707,965	$	19,530	$	26,788	$	754,283

Past Due Financing Receivables [Table Text Block]

June 30, 2017
	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	$	615	$	-	$	615	$	608	$	43,660	$	44,883
Agricultural		202		-		202		348		21,260		21,810
Real Estate
Commercial Construction		792		-		792		102		34,257		35,151
Residential Construction		-		-		-		199		9,031		9,230
Commercial		1,233		-		1,233		3,079		351,489		355,801
Residential		2,984		-		2,984		3,013		194,575		200,572
Farmland		187		-		187		678		69,329		70,194
Consumer and Other
Consumer		205		-		205		149		18,780		19,134
Other		-		-		-		-		18,791		18,791
Total Loans	$	6,218	$	-	$	6,218	$	8,176	$	761,172	$	775,566

December 31, 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	$	420	$	-	$	420	$	635	$	45,970	$	47,025
Agricultural		33		-		33		209		16,838		17,080
Real Estate
Commercial Construction		54		-		54		190		30,114		30,358
Residential Construction		-		-		-		-		11,830		11,830
Commercial		492		-		492		6,360		342,238		349,090
Residential		3,179		-		3,179		3,944		188,457		195,580
Farmland		95		-		95		800		65,982		66,877
Consumer and Other
Consumer		196		-		196		212		19,287		19,695
Other		-		-		-		-		16,748		16,748
Total Loans	$	4,469	$	-	$	4,469	$	12,350	$	737,464	$	754,283

Impaired Financing Receivables [Table Text Block]

June 30, 2017
	Unpaid
	Contractual						Average		Interest			Interest
	Principal		Impaired		Related		Recorded		Income			Income
	Balance		Balance		Allowance		Investment		Recognized			Collected
With No Related Allowance Recorded
Commercial	$	608	$	608	$	-	$	639	$	11		$	15
Agricultural		370		349		-		254		11			13
Commercial Construction		102		102		-		159		1			1
Residential Construction		199		199				66		5			5
Commercial Real Estate		10,454		10,454		-		13,543		226			222
Residential Real Estate		5,667		4,871		-		4,511		98			115
Farmland		679		678		-		759		56			56
Consumer		149		149		-		188		3			3
Other		-		-		-		-		-			-
		18,228		17,410		-		20,119		411			430
With An Allowance Recorded
Commercial		-		-		-		-		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		71		71		4		72		2			2
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		7,169		7,169		1,517		6,714		135			134
Residential Real Estate		49		41		20		755		(2	)		2
Farmland		376		376		26		378		11			11
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		7,665		7,657		1,567		7,919		146			149
Total
Commercial		608		608		-		639		11			15
Agricultural		370		349		-		254		11			13
Commercial Construction		173		173		4		231		3			3
Residential Construction		199		199		-		66		5			5
Commercial Real Estate		17,623		17,623		1,517		20,257		361			356
Residential Real Estate		5,716		4,912		20		5,266		96			117
Farmland		1,055		1,054		26		1,137		67			67
Consumer		149		149		-		188		3			3
Other		-		-		-		-		-			-
	$	25,893	$	25,067	$	1,567	$	28,038	$	557		$	579

December 31, 2016
	Unpaid
	Contractual						Average		Interest		Interest
	Principal		Impaired		Related		Recorded		Income		Income
	Balance		Balance		Allowance		Investment		Recognized		Collected
With No Related Allowance Recorded
Commercial	$	635	$	635	$	-	$	539	$	24	$	27
Agricultural		229		209		-		210		9		12
Commercial Construction		191		191		-		698		7		7
Commercial Real Estate		14,358		14,276		-		14,275		567		560
Residential Real Estate		4,261		3,952		-		4,553		73		191
Farmland		921		799		-		1,016		22		26
Consumer		212		212		-		213		10		12
		20,807		20,274		-		21,504		712		835
With An Allowance Recorded
Commercial		-		-		-		30		-		-
Agricultural		-		-		-		-		-		-
Commercial Construction		72		72		21		74		1		2
Commercial Real Estate		8,557		8,467		3,022		8,340		239		236
Residential Real Estate		1,476		1,468		363		1,043		28		32
Farmland		380		380		29		384		21		21
Consumer		-		-		-		-		-		-
		10,485		10,387		3,435		9,871		289		291
Total
Commercial		635		635		-		569		24		27
Agricultural		229		209		-		210		9		12
Commercial Construction		263		263		21		772		8		9
Commercial Real Estate		22,915		22,743		3,022		22,615		806		796
Residential Real Estate		5,737		5,420		363		5,596		101		223
Farmland		1,301		1,179		29		1,400		43		47
Consumer		212		212		-		213		10		12
	$	31,292	$	30,661	$	3,435	$	31,375	$	1,001	$	1,126

June 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	$	460	$	460	$	-	$	472	$	4		$	5
Agricultural		213		192		-		188		9			13
Commercial Construction		453		428		-		930		8			7
Residential Construction		-		-				-		-			-
Commercial Real Estate		16,383		15,615		-		13,577		271			270
Residential Real Estate		5,227		4,956		-		4,606		(7	)		119
Farmland		935		933		-		1,121		(3	)		1
Consumer		248		240				205		4			6
Other		-		-		-		-		-			-
		23,919		22,824		-		21,099		286			421
With An Allowance Recorded
Commercial		-		-		-		50		-			-
Agricultural		-		-		-		-		-			-
Commercial Construction		74		74		22		75		-			-
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		8,709		8,695		2,886		8,305		127			124
Residential Real Estate		864		856		440		965		3			3
Farmland		384		384		33		386		10			11
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
		10,031		10,009		3,381		9,781		140			138
Total
Commercial		460		460		-		522		4			5
Agricultural		213		192		-		188		9			13
Commercial Construction		527		502		22		1,005		8			7
Residential Construction		-		-		-		-		-			-
Commercial Real Estate		25,092		24,310		2,886		21,882		398			394
Residential Real Estate		6,091		5,812		440		5,571		(4	)		122
Farmland		1,319		1,317		33		1,507		7			12
Consumer		248		240		-		205		4			6
Other		-		-		-		-		-			-
	$	33,950	$	32,833	$	3,381	$	30,880	$	426		$	559

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

Three Months Ended June 30, 2017

Six Months Ended June 30, 2017

Troubled Debt Restructurings

# of Contracts

Pre-Modification

Post-Modification

# of Contracts

Pre-Modification

Post-Modification

Residential Real Estate

-

$

-

$

-

-

$

-

$

-

Total Loans

-

$

-

$

-

-

$

-

$

-

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

XML

Note 4 - Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

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

June 30, 2017
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	456	$	(124	)	$	100	$	(7	)	$	425
Agricultural		168		(4	)		2		72			238
Real Estate
Commercial Construction		323		(49	)		162		334			770
Residential Construction		13		-			-		(2	)		11
Commercial		5,751		(966	)		302		(424	)		4,663
Residential		1,396		(605	)		33		148			972
Farmland		722		-			-		137			859
Consumer and Other
Consumer		80		(117	)		51		70			84
Other		14		-			-		7			21
	$	8,923	$	(1,865	)	$	650	$	335		$	8,043

June 30, 2016
	Beginning										Ending
	Balance		Charge-Offs			Recoveries		Provision			Balance
Commercial and Agricultural
Commercial	$	855	$	(225	)	$	25	$	(100	)	$	555
Agricultural		203		(18	)		2		64			251
Real Estate
Commercial Construction		691		(25	)		804		(1,032	)		438
Residential Construction		20		-			-		(2	)		18
Commercial		3,851		(569	)		180		2,136			5,598
Residential		1,990		(159	)		23		(242	)		1,612
Farmland		912		-			125		(241	)		796
Consumer and Other
Consumer		63		(111	)		21		123			96
Other		19		-			5		2			26
	$	8,604	$	(1,107	)	$	1,185	$	708		$	9,390

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

June 30, 2017
	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	$	-	$	425	$	425	$	33	$	44,850	$	44,883
Agricultural		-		238		238		5		21,805		21,810
Real Estate
Commercial Construction		4		766		770		72		35,079		35,151
Residential Construction		-		11		11		-		9,230		9,230
Commercial		1,517		3,146		4,663		17,292		338,509		355,801
Residential		20		952		972		2,336		198,236		200,572
Farmland		26		833		859		1,040		69,154		70,194
Consumer and Other
Consumer		-		84		84		-		19,134		19,134
Other		-		21		21		-		18,791		18,791
Total End of Period Balance	$	1,567	$	6,476	$	8,043	$	20,778	$	754,788	$	775,566

June 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	$	-	$	555	$	555	$	9	$	47,925	$	47,934
Agricultural		-		251		251		-		24,307		24,307
Real Estate
Commercial Construction		22		416		438		384		31,908		32,292
Residential Construction		-		18		18		-		9,141		9,141
Commercial		2,886		2,712		5,598		17,463		327,718		345,181
Residential		440		1,172		1,612		3,609		192,531		196,140
Farmland		33		763		796		1,048		69,089		70,137
Consumer and Other
Consumer		-		96		96		-		19,936		19,936
Other		-		26		26		-		19,141		19,141
Total End of Period Balance	$	3,381	$	6,009	$	9,390	$	22,513	$	741,696	$	764,209

XML

Note 5 - Other Real Estate Owned (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Other Real Estate, Roll Forward [Table Text Block]

	Six Months Ended			Twelve Months Ended
	June 30, 2017			December 31, 2016
Balance, Beginning	$	6,439		$	8,839
Additions		432			5,664
Sales of OREO		(2,236	)		(7,416	)
Gains (Losses) on Sale		96			(146	)
Provision for Losses		(206	)		(502	)
Balance, Ending	$	4,525		$	6,439

XML

Note 6 - Deposits (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Components Of Interest Bearing Deposits [Table Text Block]

	Six Months Ended		Twelve Months Ended
	June 30, 2017		December 31, 2016
Interest-Bearing Demand	$	432,635	$	448,004
Savings		76,294		70,066
Time, $250,000 and Over		26,347		32,168
Other Time		328,334		335,060
	$	863,610	$	885,298

Scheduled Maturities Of Certificates Of Deposits [Table Text Block]

Maturity	June 30, 2017		December 31, 2016
One Year and Under	$	258,785	$	256,886
One to Three Years		73,550		85,794
Three Years and Over		22,346		24,548
	$	354,681	$	367,228

XML

Note 7 - Other Borrowed Money (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

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

	June 30, 2017		December 31, 2016
Federal Home Loan Bank Advances	$	51,000	$	46,000
Other Borrowings		5,000		-
	$	56,000	$	46,000

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

Year	Amount
2018	$	12,500
2019		5,000
2020		2,500
After 2020	$	36,000
		56,000

XML

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

6 Months Ended

Jun. 30, 2017

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		1.26744		2.68		3.94744	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155		1.29639		1.50		2.79639	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279		1.29639		1.65		2.94639	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155		1.16956		1.40		2.56956	9/14/2037	9/14/2012

XML

Note 10 - Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Summary Of Financial Instrument Outstanding [Table Text Block]

	Contract Amount
	June 30, 2017		December 31, 2016
Loan Commitments	$	96,380	$	71,359
Letters of Credit		1,445		1,551

XML

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

6 Months Ended

Jun. 30, 2017

Notes Tables

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

	Fair Value Measurements at
	June 30, 2017
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value		1		2		3
Assets
Cash and Short-Term Investments	$	30,059	$	30,059	$	30,059	$	-	$	-
Investment Securities Available for Sale		337,710		337,710		-		337,134		576
Federal Home Loan Bank Stock		3,255		3,255		3,255		-		-
Loans, Net		767,069		767,523		-		761,433		6,090
Bank-Owned Life Insurance		15,724		15,724		15,724		-		-
Liabilities
Deposits		1,026,538		1,026,846		671,857		354,989		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		56,000		56,251		-		56,251		-

	Fair Value Measurements at
	December 31, 2016
	Carrying		Estimated		Level		Level		Level
	Value		Fair Value		1		2		3
Assets
Cash and Short-Term Investments	$	75,167	$	75,167	$	75,167	$	-	$	-
Investment Securities Available for Sale		323,658		323,658		-		323,082		576
Federal Home Loan Bank Stock		3,010		3,010		3,010		-		-
Loans, Net		744,999		745,240		-		738,288		6,952
Bank-Owned Life Insurance		15,419		15,419		15,419		-		-
Liabilities
Deposits		1,044,357		1,045,726		677,129		368,597		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		46,000		46,232		-		46,232		-

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
June 30, 2017	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	330,742	$	-	$	330,742	$	-
State, County and Municipal		4,904		-		4,328		576
Corporate Bonds		2,064				2,064		-
	$	337,710	$	-	$	337,134	$	576
Nonrecurring
Impaired Loans	$	6,090	$	-	$	-	$	6,090
Other Real Estate	$	1,857	$	-	$	-	$	1,857

			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, 2016	Value		(Level 1)		Inputs (Level 2)		(Level 3)
Recurring Securities Available for Sale
U.S. Government Agencies Mortgage-Backed	$	319,097	$	-	$	319,097	$	-
State, County and Municipal		4,561		-		3,985		576
	$	323,658	$	-	$	323,082	$	576
Nonrecurring
Impaired Loans	$	6,952	$	-	$	-	$	6,952
Other Real Estate	$	2,505	$	-	$	-	$	2,505

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

			Valuation	Unobservable	Range
	June 30, 2017		Techniques	Inputs	Weighted Avg
Real Estate
Commercial Construction	$	67	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		21	Sales Comparison	Adjustment for Differences		(22.00 )%	-	(6.00)%
				Between the Comparable Sales			(14.00 )%
				Management Adjustments for		10.00%	-	25.00%
				Age of Appraisals and/or Current			17.50%
				Market Conditions
Commercial Real Estate		5,652	Sales Comparison	Management Adjustments for		0.00%	-	10.00%
				Age of Appraisals and/or Current			5.00%
				Market Conditions
			Income Approach	Capitalization Rate			10.67%
Farmland		350	Sales Comparison	Adjustment for Differences		0.00%	-	15.00%
				Between the Comparable Sales			7.50%
				Management Adjustments for		10.00%	-	75.00%
				Age of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		1,857	Sales Comparison	Adjustment for Differences		(15.00 )%	-	37.60%
				Between the Comparable Sales			11.30%
				Management Adjustments for		6.25%	-	81.27%
				Age of Appraisals and/or Current			31.23%
				Market Conditions

			Valuation	Unobservable	Range
	December 31, 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		1,105	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		5,445	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		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		2,505	Sales Comparison	Adjustment for Differences		(50.80)%	-	316.00%
				Between the Comparable Sales			132.60%
				Management Adjustment for		6.25%	-	76.92%
				Age of Appraisals and/or Current			36.31%
				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
	June 30, 2017		December 31, 2016
Balance, Beginning	$	576	$	930
Transfers out of Level 3		-		-
Maturities				(330	)
Loss on OTTI Impairment Included in Noninterest Income		-		-
Unrealized Gains included in Other Comprehensive Income (Loss)		-		(24	)
Balance, Ending	$	576	$	576

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	$	576	Discounted Cash Flow	Discount Rate		N/A*

XML

Note 12 - Regulatory Capital Matters (Tables)

6 Months Ended

Jun. 30, 2017

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 June 3 0 , 201 7
Total Capital to Risk-Weighted Assets
Consolidated	$	124,460		15.32	%	$	65,001		8.00	%		N/A		N/A
Colony Bank		127,134		15.67			64,915		8.00		$	81,144		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		116,417		14.33			48,751		6.00			N/A		N/A
Colony Bank		119,091		14.68			48,686		6.00			64,915		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated		92,917		11.44			36,563		4.50			N/A		N/A
Colony Bank		119,091		14.68			36,515		4.50			52,743		6.50
Tier I Capital to Average Assets
Consolidated		116,417		9.72			47,930		4.00			N/A		N/A
Colony Bank		119,091		9.95			47,856		4.00			59,820		5.00

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2016
Total Capital to Risk-Weighted Assets
Consolidated	$	130,785		16.64	%	$	62,880		8.00	%		N/A		N/A
Colony Bank		127,646		16.26			62,796		8.00		$	78,495		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		121,862		15.50			47,160		6.00			N/A		N/A
Colony Bank		118,723		15.12			47,097		6.00			62,796		8.00
Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		89,002		11.32			35,370		4.50			N/A		N/A
Colony Bank		118,723		15.12			35,323		4.50			51,022		6.50
Tier 1 Capital to Average Assets
Consolidated		121,862		10.29			47,368		4.00			N/A		N/A
Colony Bank		118,723		10.04			47,290		4.00			59,113		5.00

XML

Note 13 - Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

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

	Three Months Ended				Six Months Ended
	June 30				June 30
	2017		2016		2017		2016
Numerator
Net Income Available to Common Stockholders	$	2,433	$	1,761	$	4,339	$	3,417
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		191		59		193		52
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,630		8,498		8,632		8,491
Earnings Per Share - Basic	$	0.29	$	0.21	$	0.51	$	0.40
Earnings Per Share - Diluted	$	0.28	$	0.21	$	0.50	$	0.40

XML

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

6 Months Ended

Jun. 30, 2017

Notes Tables

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

	June 30, 2017			December 31, 2016
Beginning Balance	$	(5,022	)	$	(4,434	)
Other Comprehensive Income Before Reclassification		1,047			(334	)
Amounts Reclassified from Accumulated Other Comprehensive Income		-			(254	)
Net Current Period Other Comprehensive Income		1,047			(588	)
Ending Balance	$	(3,975	)	$	(5,022	)

XML

Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Percentage of Loan Portfolio Concentrated in Loans Secured by Real Estate.	87.00%
Discounted Percentage to Account for Selling and Marketing Costs	10.00%
Probability of Uncertain Tax Positions of Being Realized upon Settlement, Minimum	50.00%
Other Assets [Member]
Cash Surrender Value of Life Insurance	$ 15,724	$ 15,419

XML

Note 1 - Summary of Significant Accounting Policies - Estimated Useful Lives and Methods of Depreciation (Details)	6 Months Ended
	Jun. 30, 2017
Banking Premises [Member]
Property, plant and equipment, depreciation method	Straight-Line and Accelerated
Banking Premises [Member] | Minimum [Member]
Property, plant and equipment, useful life (Year)	15 years
Banking Premises [Member] | Maximum [Member]
Property, plant and equipment, useful life (Year)	40 years
Furniture and Equipment [Member]
Property, plant and equipment, depreciation method	Straight-Line and Accelerated
Furniture and Equipment [Member] | Minimum [Member]
Property, plant and equipment, useful life (Year)	5 years
Furniture and Equipment [Member] | Maximum [Member]
Property, plant and equipment, useful life (Year)	10 years

XML

Note 2 - Investment Securities (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Proceeds from Sale of Available-for-sale Securities	$ 0	$ 16,010,000
Available-for-sale Securities, Gross Realized Gains	$ 0	135,000
Depreciated Debt Securities With Unrealized Losses	2.19%
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities	$ 0
Available-for-sale Securities, Gross Realized Losses	0	$ 6,000
Security Owned and Pledged as Collateral, Fair Value	$ 147,765,000		$ 144,854,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	108

XML

Note 2 - Investment Securities - Schedule of Investment Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Available for sale securities, amortized cost	$ 343,733	$ 331,267
Available for sale securities, gross unrealized gains	252	94
Available for sale securities, gross unrealized losses	(6,275)	(7,703)
Available for sale securities, fair value	337,710	323,658
US Government Agencies Debt Securities [Member]
Available for sale securities, amortized cost	336,786	326,694
Available for sale securities, gross unrealized gains	204	76
Available for sale securities, gross unrealized losses	(6,248)	(7,673)
Available for sale securities, fair value	330,742	319,097
US States and Political Subdivisions Debt Securities [Member]
Available for sale securities, amortized cost	4,891	4,573
Available for sale securities, gross unrealized gains	40	18
Available for sale securities, gross unrealized losses	(27)	(30)
Available for sale securities, fair value	4,904	$ 4,561
Corporate Debt Securities [Member]
Available for sale securities, amortized cost	2,056
Available for sale securities, gross unrealized gains	8
Available for sale securities, gross unrealized losses
Available for sale securities, fair value	$ 2,064

XML

Note 2 - Investment Securities - Amortized Cost and Fair Value of Investment Securities by Contractual Maturity (Details) $ in Thousands	Jun. 30, 2017 USD ($)
Due In One Year or Less, amortized cost	$ 665
Due In One Year or Less, fair value	667
Due After One Year Through Five Years, amortized cost	4,535
Due After One Year Through Five Years, fair value	4,524
Due After Five Years Through Ten Years, amortized cost	1,053
Due After Five Years Through Ten Years, fair value	1,077
Due After Ten Years, amortized cost	694
Due After Ten Years, fair value	700
Amortized cost with single maturity date	6,947
Fair value with single maturity date	6,968
Mortgage-Backed Securities, amortized cost	336,786
Mortgage-Backed Securities, fair value	330,742
Amortized cost	343,733
Fair value	$ 337,710

XML

Note 2 - Investment Securities - Continuous Unrealized Loss Position (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Continuous unrealized loss, greater than 12 months, gross unrealized losses	$ (3,749)	$ (4,213)
Continuous unrealized loss, fair value	280,473	285,171
Continuous unrealized loss, gross unrealized losses	(6,275)	(7,703)
Continuous unrealized loss, less than 12 months, fair value	172,188	177,689
Continuous unrealized loss, less than 12 months, gross unrealized losses	(2,526)	(3,490)
Continuous unrealized loss, greater than 12 months, fair value	108,285	107,482
US Government Agencies Debt Securities [Member]
Continuous unrealized loss, greater than 12 months, gross unrealized losses	(3,749)	(4,213)
Continuous unrealized loss, fair value	278,697	281,683
Continuous unrealized loss, gross unrealized losses	(6,248)	(7,673)
Continuous unrealized loss, less than 12 months, fair value	170,412	174,201
Continuous unrealized loss, less than 12 months, gross unrealized losses	(2,499)	(3,460)
Continuous unrealized loss, greater than 12 months, fair value	108,285	107,482
US States and Political Subdivisions Debt Securities [Member]
Continuous unrealized loss, greater than 12 months, gross unrealized losses
Continuous unrealized loss, fair value	1,776	3,488
Continuous unrealized loss, gross unrealized losses	(27)	(30)
Continuous unrealized loss, less than 12 months, fair value	1,776	3,488
Continuous unrealized loss, less than 12 months, gross unrealized losses	(27)	(30)
Continuous unrealized loss, greater than 12 months, fair value

XML

Note 3 - Loans (Details Textual)	3 Months Ended	6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2016 USD ($)
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	0
Loans and Leases Receivable, Gross	$ 775,566,000	$ 775,566,000	$ 754,283,000	$ 764,209,000
Loan Balance For Reviewing High Risk Loans Minimum	250,000	250,000
Loans and Leases Receivable, Impaired, Commitment to Lend	0	0
Doubtful [Member]
Loans and Leases Receivable, Gross	0	0
Unlikely to be Collected Financing Receivable [Member]
Loans and Leases Receivable, Gross	$ 0	$ 0

XML

Note 3 - Loans - Segregated by Class of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Loans	$ 775,566	$ 754,283	$ 764,209
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Loans	44,883	47,025	47,934
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Loans	21,810	17,080	24,307
Real Estate Portfolio Segment [Member] | Commercial [Member]
Loans	355,801	349,090	345,181
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Loans	35,151	30,358	32,292
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Loans	9,230	11,830	9,141
Real Estate Portfolio Segment [Member] | Residential [Member]
Loans	200,572	195,580	196,140
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans	70,194	66,877	70,137
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Loans	19,134	19,695	19,936
Consumer and Other Portfolio Segment [Member] | Other [Member]
Loans	$ 18,791	$ 16,748	$ 19,141

XML

Note 3 - Loans - Loan Portfolio by Credit Quality Indicator (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Loans	$ 775,566	$ 754,283	$ 764,209
Pass [Member]
Loans	737,172	707,965
Special Mention [Member]
Loans	12,248	19,530
Substandard [Member]
Loans	26,146	26,788
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Loans	44,883	47,025	47,934
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Pass [Member]
Loans	42,156	44,250
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Special Mention [Member]
Loans	1,864	1,862
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Substandard [Member]
Loans	863	913
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Loans	21,810	17,080	24,307
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Pass [Member]
Loans	21,110	16,586
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Special Mention [Member]
Loans	163	192
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Substandard [Member]
Loans	537	302
Real Estate Portfolio Segment [Member] | Commercial [Member]
Loans	355,801	349,090	345,181
Real Estate Portfolio Segment [Member] | Commercial [Member] | Pass [Member]
Loans	341,986	327,561
Real Estate Portfolio Segment [Member] | Commercial [Member] | Special Mention [Member]
Loans	4,158	9,403
Real Estate Portfolio Segment [Member] | Commercial [Member] | Substandard [Member]
Loans	9,657	12,126
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Loans	35,151	30,358	32,292
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Pass [Member]
Loans	31,324	28,425
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Special Mention [Member]
Loans	1,211	1,349
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Substandard [Member]
Loans	2,616	584
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Loans	9,230	11,830	9,141
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Pass [Member]
Loans	9,031	11,630
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Special Mention [Member]
Loans	0
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Substandard [Member]
Loans	199	200
Real Estate Portfolio Segment [Member] | Residential [Member]
Loans	200,572	195,580	196,140
Real Estate Portfolio Segment [Member] | Residential [Member] | Pass [Member]
Loans	185,981	178,618
Real Estate Portfolio Segment [Member] | Residential [Member] | Special Mention [Member]
Loans	3,636	5,659
Real Estate Portfolio Segment [Member] | Residential [Member] | Substandard [Member]
Loans	10,955	11,303
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans	70,194	66,877	70,137
Real Estate Portfolio Segment [Member] | Farmland [Member] | Pass [Member]
Loans	68,144	65,075
Real Estate Portfolio Segment [Member] | Farmland [Member] | Special Mention [Member]
Loans	1,102	839
Real Estate Portfolio Segment [Member] | Farmland [Member] | Substandard [Member]
Loans	948	963
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Loans	19,134	19,695	19,936
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Pass [Member]
Loans	18,649	19,072
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Special Mention [Member]
Loans	114	226
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Substandard [Member]
Loans	371	397
Consumer and Other Portfolio Segment [Member] | Other [Member]
Loans	18,791	16,748	$ 19,141
Consumer and Other Portfolio Segment [Member] | Other [Member] | Pass [Member]
Loans	18,791	16,748
Consumer and Other Portfolio Segment [Member] | Other [Member] | Special Mention [Member]
Loans	0
Consumer and Other Portfolio Segment [Member] | Other [Member] | Substandard [Member]
Loans

XML

Note 3 - Loans - Age Analysis of Past Due Loans and Nonaccrual Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Accruing loans past due	$ 6,218	$ 4,469
Nonaccrual loans	8,176	12,350
Current loans	761,172	737,464
Loans	775,566	754,283	$ 764,209
Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	6,218	4,469
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Accruing loans past due	615	420
Nonaccrual loans	608	635
Current loans	43,660	45,970
Loans	44,883	47,025	47,934
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	615	420
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Accruing loans past due	202	33
Nonaccrual loans	348	209
Current loans	21,260	16,838
Loans	21,810	17,080	24,307
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	202	33
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Real Estate Portfolio Segment [Member] | Commercial [Member]
Accruing loans past due	1,233	492
Nonaccrual loans	3,079	6,360
Current loans	351,489	342,238
Loans	355,801	349,090	345,181
Real Estate Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	1,233	492
Real Estate Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Accruing loans past due	792	54
Nonaccrual loans	102	190
Current loans	34,257	30,114
Loans	35,151	30,358	32,292
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	792	54
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Accruing loans past due
Nonaccrual loans	199
Current loans	9,031	11,830
Loans	9,230	11,830	9,141
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Real Estate Portfolio Segment [Member] | Residential [Member]
Accruing loans past due	2,984	3,179
Nonaccrual loans	3,013	3,944
Current loans	194,575	188,457
Loans	200,572	195,580	196,140
Real Estate Portfolio Segment [Member] | Residential [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	2,984	3,179
Real Estate Portfolio Segment [Member] | Residential [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Real Estate Portfolio Segment [Member] | Farmland [Member]
Accruing loans past due	187	95
Nonaccrual loans	678	800
Current loans	69,329	65,982
Loans	70,194	66,877	70,137
Real Estate Portfolio Segment [Member] | Farmland [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	187	95
Real Estate Portfolio Segment [Member] | Farmland [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Accruing loans past due	205	196
Nonaccrual loans	149	212
Current loans	18,780	19,287
Loans	19,134	19,695	19,936
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	205	196
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due
Consumer and Other Portfolio Segment [Member] | Other [Member]
Accruing loans past due
Nonaccrual loans
Current loans	18,791	16,748
Loans	18,791	16,748	$ 19,141
Consumer and Other Portfolio Segment [Member] | Other [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due
Consumer and Other Portfolio Segment [Member] | Other [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due

XML

Note 3 - Loans - Impaired Loan Data (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Impaired balance with an allowance	$ 7,657	$ 10,009	$ 10,387
Average recorded investment with an allowance	7,919	9,781	9,871
Interest income recognized with an allowance	146	140	289
Interest income collected with an allowance	149	138	291
Unpaid contractual principal balance	25,893	33,950	31,292
Impaired balance	25,067	32,833	30,661
Related allowance	1,567	3,381	3,435
Average recorded investment	28,038	30,880	31,375
Interest income recognized	557	426	1,001
Interest income collected	579	559	1,126
Unpaid contractual principal balance with no related allowance	18,228	23,919	20,807
Impaired balance with no related allowance	17,410	22,824	20,274
Average recorded investment with no related allowance	20,119	21,099	21,504
Interest income recognized with no related allowance	411	286	712
Interest income collected with no related allowance	430	421	835
Unpaid contractual principal balance with an allowance	7,665	10,031	10,485
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Impaired balance with an allowance
Average recorded investment with an allowance		50	30
Interest income recognized with an allowance
Interest income collected with an allowance
Unpaid contractual principal balance	608	460	635
Impaired balance	608	460	635
Related allowance
Average recorded investment	639	522	569
Interest income recognized	11	4	24
Interest income collected	15	5	27
Unpaid contractual principal balance with no related allowance	608	460	635
Impaired balance with no related allowance	608	460	635
Average recorded investment with no related allowance	639	472	539
Interest income recognized with no related allowance	11	4	24
Interest income collected with no related allowance	15	5	27
Unpaid contractual principal balance with an allowance
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Impaired balance with an 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	370	213	229
Impaired balance	349	192	209
Related allowance	0	0	0
Average recorded investment	254	188	210
Interest income recognized	11	9	9
Interest income collected	13	13	12
Unpaid contractual principal balance with no related allowance	370	213	229
Impaired balance with no related allowance	349	192	209
Average recorded investment with no related allowance	254	188	210
Interest income recognized with no related allowance	11	9	9
Interest income collected with no related allowance	13	13	12
Unpaid contractual principal balance with an allowance	0	0	0
Real Estate Portfolio Segment [Member] | Commercial [Member]
Impaired balance with an allowance	7,169	8,695	8,467
Average recorded investment with an allowance	6,714	8,305	8,340
Interest income recognized with an allowance	135	127	239
Interest income collected with an allowance	134	124	236
Unpaid contractual principal balance	17,623	25,092	22,915
Impaired balance	17,623	24,310	22,743
Related allowance	1,517	2,886	3,022
Average recorded investment	20,257	21,882	22,615
Interest income recognized	361	398	806
Interest income collected	356	394	796
Unpaid contractual principal balance with no related allowance	10,454	16,383	14,358
Impaired balance with no related allowance	10,454	15,615	14,276
Average recorded investment with no related allowance	13,543	13,577	14,275
Interest income recognized with no related allowance	226	271	567
Interest income collected with no related allowance	222	270	560
Unpaid contractual principal balance with an allowance	7,169	8,709	8,557
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Impaired balance with an allowance	71	74	72
Average recorded investment with an allowance	72	75	74
Interest income recognized with an allowance	2		1
Interest income collected with an allowance	2		2
Unpaid contractual principal balance	173	527	263
Impaired balance	173	502	263
Related allowance	4	22	21
Average recorded investment	231	1,005	772
Interest income recognized	3	8	8
Interest income collected	3	7	9
Unpaid contractual principal balance with no related allowance	102	453	191
Impaired balance with no related allowance	102	428	191
Average recorded investment with no related allowance	159	930	698
Interest income recognized with no related allowance	1	8	7
Interest income collected with no related allowance	1	7	7
Unpaid contractual principal balance with an allowance	71	74	72
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Impaired balance with an allowance
Average recorded investment with an allowance
Interest income recognized with an allowance
Interest income collected with an allowance
Unpaid contractual principal balance	199
Impaired balance	199
Related allowance
Average recorded investment	66
Interest income recognized	5
Interest income collected	5
Unpaid contractual principal balance with no related allowance	199
Impaired balance with no related allowance	199
Average recorded investment with no related allowance	66
Interest income recognized with no related allowance	5
Interest income collected with no related allowance	5
Unpaid contractual principal balance with an allowance
Real Estate Portfolio Segment [Member] | Residential [Member]
Impaired balance with an allowance	41	856	1,468
Average recorded investment with an allowance	755	965	1,043
Interest income recognized with an allowance	(2)	3	28
Interest income collected with an allowance	2	3	32
Unpaid contractual principal balance	5,716	6,091	5,737
Impaired balance	4,912	5,812	5,420
Related allowance	20	440	363
Average recorded investment	5,266	5,571	5,596
Interest income recognized	96	(4)	101
Interest income collected	117	122	223
Unpaid contractual principal balance with no related allowance	5,667	5,227	4,261
Impaired balance with no related allowance	4,871	4,956	3,952
Average recorded investment with no related allowance	4,511	4,606	4,553
Interest income recognized with no related allowance	98	(7)	73
Interest income collected with no related allowance	115	119	191
Unpaid contractual principal balance with an allowance	49	864	1,476
Real Estate Portfolio Segment [Member] | Farmland [Member]
Impaired balance with an allowance	376	384	380
Average recorded investment with an allowance	378	386	384
Interest income recognized with an allowance	11	10	21
Interest income collected with an allowance	11	11	21
Unpaid contractual principal balance	1,055	1,319	1,301
Impaired balance	1,054	1,317	1,179
Related allowance	26	33	29
Average recorded investment	1,137	1,507	1,400
Interest income recognized	67	7	43
Interest income collected	67	12	47
Unpaid contractual principal balance with no related allowance	679	935	921
Impaired balance with no related allowance	678	933	799
Average recorded investment with no related allowance	759	1,121	1,016
Interest income recognized with no related allowance	56	(3)	22
Interest income collected with no related allowance	56	1	26
Unpaid contractual principal balance with an allowance	376	384	380
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Impaired balance with an 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	149	248	212
Impaired balance	149	240	212
Related allowance	0	0	0
Average recorded investment	188	205	213
Interest income recognized	3	4	10
Interest income collected	3	6	12
Unpaid contractual principal balance with no related allowance	149	248	212
Impaired balance with no related allowance	149	240	212
Average recorded investment with no related allowance	188	205	213
Interest income recognized with no related allowance	3	4	10
Interest income collected with no related allowance	3	6	12
Unpaid contractual principal balance with an allowance	0	0	$ 0
Consumer and Other Portfolio Segment [Member] | Other [Member]
Impaired balance with an allowance
Average recorded investment with an allowance
Interest income recognized with an allowance
Interest income collected with an allowance
Unpaid contractual principal balance
Impaired balance
Related allowance
Average recorded investment
Interest income recognized
Interest income collected
Unpaid contractual principal balance with no related allowance
Impaired balance with no related allowance
Average recorded investment with no related allowance
Interest income recognized with no related allowance
Interest income collected with no related allowance
Unpaid contractual principal balance with an allowance

XML

Note 3 - Loans - Modified in a Troubled Debt Restructuring (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)
Post-modification		$ 91		$ 91
Number of contracts		1		1
Pre-modification		$ 91		$ 91
Real Estate Portfolio Segment [Member] | Residential [Member]
Post-modification		$ 91		$ 91
Number of contracts		1		1
Pre-modification		$ 91		$ 91

XML

Note 4 - Allowance for Loan Losses (Details Textual)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2015 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2016 USD ($)
Allowance for Loan Losses, Loss History Period, Number of Quarters	16	8
Allowance for Credit Losses, Change in Method of Calculating Impairment			$ 431,600
Loan Balance For Reviewing High Risk Loans Minimum			250,000
Impaired Financing Receivable Recorded Investment Below Review Threshold			$ 4,300,000		$ 3,800,000
Impaired Financing Receivable, Number of Loans Below Review Threshold			153		165
Loans and Leases Receivable, Gross			$ 775,566,000	$ 754,283,000	$ 764,209,000
Loans and Leases Receivable, Allowance		$ 8,604,000	8,043,000	8,923,000	9,390,000
Substandard [Member]
Loans and Leases Receivable, Gross			26,146,000	$ 26,788,000
Loans Not Classified as Impaired [Member] | Substandard [Member]
Loans and Leases Receivable, Gross			13,040,000		12,640,000
Loans and Leases Receivable, Allowance			$ 1,190,000		$ 791,000

XML

Note 4 - Allowance for Loan Losses - Segregated by Class of Loan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Provision for Loan Losses		$ 354	$ 335	$ 708
Allowance for loan losses, ending balance	8,043	9,390	8,043	9,390
Allowance for loan losses, beginning balance			8,923	8,604
Allowance for loan losses, charge-offs			(1,865)	(1,107)
Allowance for loan losses, recoveries			650	1,185
Commercial [Member] | Commercial and Agricultural Portfolio Segment [Member]
Provision for Loan Losses			(7)	(100)
Allowance for loan losses, ending balance	425	555	425	555
Allowance for loan losses, beginning balance			456	855
Allowance for loan losses, charge-offs			(124)	(225)
Allowance for loan losses, recoveries			100	25
Commercial [Member] | Real Estate Portfolio Segment [Member]
Provision for Loan Losses			(424)	2,136
Allowance for loan losses, ending balance	4,663	5,598	4,663	5,598
Allowance for loan losses, beginning balance			5,751	3,851
Allowance for loan losses, charge-offs			(966)	(569)
Allowance for loan losses, recoveries			302	180
Agricultural [Member] | Commercial and Agricultural Portfolio Segment [Member]
Provision for Loan Losses			72	64
Allowance for loan losses, ending balance	238	251	238	251
Allowance for loan losses, beginning balance			168	203
Allowance for loan losses, charge-offs			(4)	(18)
Allowance for loan losses, recoveries			2	2
Commercial Construction [Member] | Real Estate Portfolio Segment [Member]
Provision for Loan Losses			334	(1,032)
Allowance for loan losses, ending balance	770	438	770	438
Allowance for loan losses, beginning balance			323	691
Allowance for loan losses, charge-offs			(49)	(25)
Allowance for loan losses, recoveries			162	804
Residential Construction [Member] | Real Estate Portfolio Segment [Member]
Provision for Loan Losses			(2)	(2)
Allowance for loan losses, ending balance	11	18	11	18
Allowance for loan losses, beginning balance			13	20
Allowance for loan losses, charge-offs
Allowance for loan losses, recoveries
Residential [Member] | Real Estate Portfolio Segment [Member]
Provision for Loan Losses			148	(242)
Allowance for loan losses, ending balance	972	1,612	972	1,612
Allowance for loan losses, beginning balance			1,396	1,990
Allowance for loan losses, charge-offs			(605)	(159)
Allowance for loan losses, recoveries			33	23
Farmland [Member] | Real Estate Portfolio Segment [Member]
Provision for Loan Losses			137	(241)
Allowance for loan losses, ending balance	859	796	859	796
Allowance for loan losses, beginning balance			722	912
Allowance for loan losses, charge-offs
Allowance for loan losses, recoveries				125
Consumer [Member] | Consumer and Other Portfolio Segment [Member]
Provision for Loan Losses			70	123
Allowance for loan losses, ending balance	84	96	84	96
Allowance for loan losses, beginning balance			80	63
Allowance for loan losses, charge-offs			(117)	(111)
Allowance for loan losses, recoveries			51	21
Other [Member] | Consumer and Other Portfolio Segment [Member]
Provision for Loan Losses			7	2
Allowance for loan losses, ending balance	$ 21	$ 26	21	26
Allowance for loan losses, beginning balance			14	19
Allowance for loan losses, charge-offs
Allowance for loan losses, recoveries				$ 5

XML

Note 4 - Allowance for Loan Losses - Segregated by Impairment Methodology (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Ending allowance balance, collectively evaluated for impairment	$ 6,476		$ 6,009
Ending allowance balance	8,043	$ 8,923	9,390	$ 8,604
Ending loan balance, individually evaluated for impairment	20,778		22,513
Ending loan balance, collectively evaluated for impairment	754,788		741,696
Ending loan balance	775,566	754,283	764,209
Ending allowance balance, individually evaluated for impairment	1,567		3,381
Commercial [Member] | Commercial and Agricultural Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	425		555
Ending allowance balance	425	456	555	855
Ending loan balance, individually evaluated for impairment	33		9
Ending loan balance, collectively evaluated for impairment	44,850		47,925
Ending loan balance	44,883	47,025	47,934
Ending allowance balance, individually evaluated for impairment
Commercial [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	3,146		2,712
Ending allowance balance	4,663	5,751	5,598	3,851
Ending loan balance, individually evaluated for impairment	17,292		17,463
Ending loan balance, collectively evaluated for impairment	338,509		327,718
Ending loan balance	355,801	349,090	345,181
Ending allowance balance, individually evaluated for impairment	1,517		2,886
Agricultural [Member] | Commercial and Agricultural Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	238		251
Ending allowance balance	238	168	251	203
Ending loan balance, individually evaluated for impairment	5
Ending loan balance, collectively evaluated for impairment	21,805		24,307
Ending loan balance	21,810	17,080	24,307
Ending allowance balance, individually evaluated for impairment
Commercial Construction [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	766		416
Ending allowance balance	770	323	438	691
Ending loan balance, individually evaluated for impairment	72		384
Ending loan balance, collectively evaluated for impairment	35,079		31,908
Ending loan balance	35,151	30,358	32,292
Ending allowance balance, individually evaluated for impairment	4		22
Residential Construction [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	11		18
Ending allowance balance	11	13	18	20
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	9,230		9,141
Ending loan balance	9,230	11,830	9,141
Ending allowance balance, individually evaluated for impairment
Residential [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	952		1,172
Ending allowance balance	972	1,396	1,612	1,990
Ending loan balance, individually evaluated for impairment	2,336		3,609
Ending loan balance, collectively evaluated for impairment	198,236		192,531
Ending loan balance	200,572	195,580	196,140
Ending allowance balance, individually evaluated for impairment	20		440
Farmland [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	833		763
Ending allowance balance	859	722	796	912
Ending loan balance, individually evaluated for impairment	1,040		1,048
Ending loan balance, collectively evaluated for impairment	69,154		69,089
Ending loan balance	70,194	66,877	70,137
Ending allowance balance, individually evaluated for impairment	26		33
Consumer [Member] | Consumer and Other Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	84		96
Ending allowance balance	84	80	96	63
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	19,134		19,936
Ending loan balance	19,134	19,695	19,936
Ending allowance balance, individually evaluated for impairment
Other [Member] | Consumer and Other Portfolio Segment [Member]
Ending allowance balance, collectively evaluated for impairment	21		26
Ending allowance balance	21	14	26	$ 19
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	18,791		19,141
Ending loan balance	18,791	$ 16,748	19,141
Ending allowance balance, individually evaluated for impairment

XML

Note 5 - Other Real Estate Owned (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Other Real Estate	$ 4,525	$ 6,439	$ 8,839
Other Real Estate, Foreclosed Assets, and Repossessed Assets	423	431
Mortgage Loans in Process of Foreclosure, Amount	$ 317	$ 204

XML

Note 5 - Other Real Estate Owned - Change in OREO (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Balance, Beginning	$ 6,439	$ 8,839
Additions	432	5,664
Sales of OREO	(2,236)	(7,416)
Gains (Losses) on Sale	96	(146)
Provision for Losses	(206)	(502)
Balance, Ending	$ 4,525	$ 6,439

XML

Note 6 - Deposits (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Deposit Liabilities Reclassified as Loans Receivable	$ 457	$ 414
Interest-bearing Domestic Deposit, Brokered	49,052	49,303
Short-term Jumbo Certificates of Deposit [Member]
Time Deposits, at or Above FDIC Insurance Limit	21,359	25,446
Certificates of Deposit [Member]
Time Deposits, at or Above FDIC Insurance Limit	$ 26,347	$ 32,168

XML

Note 6 - Deposits - Components of Interest-bearing Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Interest-Bearing Demand	$ 432,635	$ 448,004
Savings	76,294	70,066
Time, $250,000 and Over	26,347	32,168
Other Time	328,334	335,060
	$ 863,610	$ 885,298

XML

Note 6 - Deposits - Scheduled Maturities of Certificates of Deposit (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
One Year and Under	$ 258,785	$ 256,886
One to Three Years	73,550	85,794
Three Years and Over	22,346	24,548
	$ 354,681	$ 367,228

XML

Note 7 - Other Borrowed Money (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
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	$ 118,022
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds	250,736
Long-term Line of Credit	0
Line of Credit Facility, Current Borrowing Capacity	43,500
Notes Payable to Banks [Member]
Short-term Debt	$ 5,000
Debt Instrument, Term	1 year
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Notes Payable to Banks [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	0.75%
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%

XML

Note 7 - Other Borrowed Money - Summary of Other Borrowed Money (Details) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Federal Home Loan Bank Advances	$ 51	$ 46
Other Borrowings	5
	$ 56	$ 46

XML

Note 7 - Other Borrowed Money - Aggregate Stated Maturities (Details) - Other Borrowings [Member] $ in Millions	Jun. 30, 2017 USD ($)
2018	$ 12.5
2019	5.0
2020	2.5
After 2020	36.0
	$ 56.0

XML

Note 8 - Preferred Stock and Warrants (Details Textual) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2017
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
Series A Preferred Stock [Member]
Preferred Stock, Redemption Price Per Share		$ 1,000	$ 1,000
Stock Redeemed or Called During Period, Shares	9,360	8,661	9,979
Preferred Stock, Shares Outstanding				0

XML

Note 9 - Subordinated Debentures (Trusted Preferred Securities) - Schedule of Subordinated Debentures (Details) - Trust Preferred Securities Subject to Mandatory Redemption [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Colony Bankcorp Statutory Trust III [Member]
Total interest rate	3.94744%
Maturity date	Jun. 14, 2034
5 year call option	Jun. 17, 2009
Issuance date	Jun. 17, 2004
Debt amount	$ 4,640
Colony Bankcorp Statutory Trust III [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.26744%
Added points	2.68%
Colony Bankcorp Capital Trust I [Member]
Total interest rate	2.79639%
Maturity date	Apr. 13, 2036
5 year call option	Apr. 13, 2011
Issuance date	Apr. 13, 2006
Debt amount	$ 5,155
Colony Bankcorp Capital Trust I [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.29639%
Added points	1.50%
Colony Bankcorp Capital Trust II [Member]
Total interest rate	2.94639%
Maturity date	Mar. 12, 2037
5 year call option	Mar. 12, 2012
Issuance date	Mar. 12, 2007
Debt amount	$ 9,279
Colony Bankcorp Capital Trust II [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.29639%
Added points	1.65%
Colony Bankcorp Capital Trust III [Member]
Total interest rate	2.56956%
Maturity date	Sep. 14, 2037
5 year call option	Sep. 14, 2012
Issuance date	Sep. 14, 2007
Debt amount	$ 5,155
Colony Bankcorp Capital Trust III [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.16956%
Added points	1.40%

XML

Note 10 - Commitments and Contingencies (Details Textual)	6 Months Ended
	Jun. 30, 2017
Expiration Period Of Letter Of Credit Issued	1 year

XML

Note 10 - Commitments and Contingencies - Financial Instruments Outstanding Whose Contract Amount Represents Credit Risk (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Letters of Credit	$ 1,445	$ 1,551
Loan Origination Commitments [Member]
Loan Commitments	$ 96,380	$ 71,359

XML

Note 11 - Fair Value of Financial Instruments and Fair Value Measurements (Details Textual)	Jun. 30, 2017
Discounted Rate To Account For Selling And Marketing Costs	10.00%

XML

Note 11 - Fair Value of Financial Instruments and Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Investment Securities Available for Sale	$ 337,710	$ 323,658
Reported Value Measurement [Member]
Cash and Short-Term Investments	30,059	75,167
Investment Securities Available for Sale	337,710	323,658
Federal Home Loan Bank Stock	3,255	3,010
Loans, Net	767,069	744,999
Bank-Owned Life Insurance	15,724	15,419
Liabilities
Deposits	1,026,538	1,044,357
Subordinated Debentures	24,229	24,229
Other Borrowed Money	56,000	46,000
Estimate of Fair Value Measurement [Member]
Cash and Short-Term Investments	30,059	75,167
Investment Securities Available for Sale	337,710	323,658
Federal Home Loan Bank Stock	3,255	3,010
Loans, Net	767,523	745,240
Bank-Owned Life Insurance	15,724	15,419
Liabilities
Deposits	1,026,846	1,045,726
Subordinated Debentures	24,229	24,229
Other Borrowed Money	56,251	46,232
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and Short-Term Investments	30,059	75,167
Investment Securities Available for Sale
Federal Home Loan Bank Stock	3,255	3,010
Loans, Net
Bank-Owned Life Insurance	15,724	15,419
Liabilities
Deposits	671,857	677,129
Subordinated Debentures
Other Borrowed Money
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and Short-Term Investments
Investment Securities Available for Sale	337,134	323,082
Federal Home Loan Bank Stock
Loans, Net	761,433	738,288
Bank-Owned Life Insurance
Liabilities
Deposits	354,989	368,597
Subordinated Debentures	24,229	24,229
Other Borrowed Money	56,251	46,232
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and Short-Term Investments
Investment Securities Available for Sale	576	576
Federal Home Loan Bank Stock
Loans, Net	$ 6,090	6,952
Bank-Owned Life Insurance
Liabilities
Deposits
Subordinated Debentures
Other Borrowed Money

XML

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 ($)	Jun. 30, 2017	Dec. 31, 2016
Impaired Loans [Member]
Assets, fair value, nonrecurring	$ 6,090,000	$ 6,952,000
Other Real Estate [Member]
Assets, fair value, nonrecurring	1,857,000	2,505,000
Fair Value, Inputs, Level 3 [Member] | Impaired Loans [Member]
Assets, fair value, nonrecurring	6,090,000	6,952,000
Fair Value, Inputs, Level 3 [Member] | Other Real Estate [Member]
Assets, fair value, nonrecurring	1,857,000	2,505,000
Available-for-sale Securities [Member]
Assets, fair value, recurring	337,710,000	323,658,000
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value, recurring	337,134,000	323,082,000
Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value, recurring	576,000	576,000
US Government Agencies Debt Securities [Member] | Available-for-sale Securities [Member]
Assets, fair value, recurring	330,742	319,097
US Government Agencies Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, fair value, recurring
US Government Agencies Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value, recurring	330,742	319,097
US Government Agencies Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value, recurring
US States and Political Subdivisions Debt Securities [Member] | Available-for-sale Securities [Member]
Assets, fair value, recurring	4,904,000	4,561,000
US States and Political Subdivisions Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value, recurring	4,328,000	3,985,000
US States and Political Subdivisions Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value, recurring	576,000	$ 576,000
Corporate Debt Securities [Member] | Available-for-sale Securities [Member]
Assets, fair value, recurring	2,064,000
Corporate Debt Securities [Member] | Available-for-sale Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value, recurring	$ 2,064,000

XML

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	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Commercial Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member]
Assets measured at fair value	$ 67
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member]
Assets measured at fair value		$ 51
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member] | Minimum [Member]
Fair value inputs, management adjustments	0.00%	0.00%
Fair value inputs, comparability adjustments	(5.00%)	(5.00%)
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member] | Maximum [Member]
Fair value inputs, management adjustments	10.00%	10.00%
Fair value inputs, comparability adjustments	99.00%	99.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial Construction [Member] | Weighted Average [Member]
Fair value inputs, management adjustments	5.00%	5.00%
Fair value inputs, comparability adjustments	47.00%	47.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member]
Assets measured at fair value	$ 21	$ 1,105
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member] | Minimum [Member]
Fair value inputs, management adjustments	10.00%	0.00%
Fair value inputs, comparability adjustments	(22.00%)	(22.00%)
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member] | Maximum [Member]
Fair value inputs, management adjustments	25.00%	40.00%
Fair value inputs, comparability adjustments	(6.00%)	0.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Residential [Member] | Weighted Average [Member]
Fair value inputs, management adjustments	17.50%	20.00%
Fair value inputs, comparability adjustments	(14.00%)	(11.00%)
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member]
Assets measured at fair value	$ 5,652	$ 5,445
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member] | Minimum [Member]
Fair value inputs, management adjustments	0.00%	0.00%
Fair value inputs, comparability adjustments		(14.08%)
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member] | Maximum [Member]
Fair value inputs, management adjustments	10.00%	100.00%
Fair value inputs, comparability adjustments		24.62%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Commercial [Member] | Weighted Average [Member]
Fair value inputs, management adjustments	5.00%	50.00%
Fair value inputs, comparability adjustments		5.27%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member]
Assets measured at fair value	$ 350	$ 351
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member] | Minimum [Member]
Fair value inputs, management adjustments	10.00%	10.00%
Fair value inputs, comparability adjustments	0.00%	(27.00%)
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member] | Maximum [Member]
Fair value inputs, management adjustments	75.00%	75.00%
Fair value inputs, comparability adjustments	15.00%	15.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Farmland [Member] | Weighted Average [Member]
Fair value inputs, management adjustments	42.50%	42.50%
Fair value inputs, comparability adjustments	7.50%	(6.00%)
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Assets measured at fair value	$ 1,857	$ 2,505
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Minimum [Member]
Fair value inputs, management adjustments	6.25%	6.25%
Fair value inputs, comparability adjustments	(15.00%)	(50.80%)
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Maximum [Member]
Fair value inputs, management adjustments	81.27%	76.92%
Fair value inputs, comparability adjustments	37.60%	316.00%
Real Estate Portfolio Segment [Member] | Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Fair value inputs, management adjustments	31.23%	36.31%
Fair value inputs, comparability adjustments	11.30%	132.60%
Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Commercial [Member] | Weighted Average [Member]
Fair value inputs, management adjustments		10.67%
Fair value inputs, capitalization rate	10.67%
Real Estate Portfolio Segment [Member] | Income Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Range Weighted Average		12.50%

XML

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	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Balance, available for sale securities	$ 576	$ 930
Maturities		(330)
Loss on OTTI Impairment Included in Noninterest Income
Unrealized Gains included in Other Comprehensive Income (Loss)		(24)
Balance, available for sale securities	$ 576	$ 576

XML

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	6 Months Ended
	Jun. 30, 2017 USD ($)
Fair Value	$ 576
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.

XML

Note 12 - Regulatory Capital Matters (Details Textual)	Jun. 30, 2017
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%

XML

Note 12 - Regulatory Capital Matters - Summary of Regulatory Capital Information (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Tier I Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Capital	$ 124,460	$ 130,785
Capital to Risk-Weighted Assets	15.32%	16.64%
Capital Required for Capital Adequacy	$ 65,001	$ 62,880
Capital Required for Capital Adequacy to Risk-Weighted Assets	8.00%	8.00%
Tier I Risk Based Capital	$ 116,417	$ 121,862
Tier I Risk Based Capital to Risk-Weighted Assets	14.33%	15.50%
Tier I Risk Based Capital Required for Capital Adequacy	$ 48,751	$ 47,160
Tier I Risk Based Capital Required for Capital Adequacy to Risk-Weighted Assets	6.00%	6.00%
Common Equity Tier I Risk Based Capital	$ 92,917	$ 89,002
Common Equity Tier I Risk Based Capital to Risk-Weighted Assets	11.44%	11.32%
Common Equity Tier I Risk Based Capital Required for Capital Adequacy	$ 36,563	$ 35,370
Common Equity Tier I Risk Based Capital Required for Capital Adequacy to Risk-Weighted Assets	4.50%	4.50%
Tier I Leverage Capital	$ 116,417	$ 121,862
Tier I Leverage Capital to Average Assets	9.72%	10.29%
Tier I Leverage Capital Required for Capital Adequacy	$ 47,930	$ 47,368
Colony Bank [Member]
Tier I Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Tier I Leverage Capital Required to Be Well Capitalized	$ 59,820	$ 59,113
Tier I Leverage Capital Required to Be Well Capitalized to Average Assets	5.00%	5.00%
Capital	$ 127,134	$ 127,646
Capital to Risk-Weighted Assets	15.67%	16.26%
Capital Required for Capital Adequacy	$ 64,915	$ 62,796
Capital Required for Capital Adequacy to Risk-Weighted Assets	8.00%	8.00%
Capital Required to be Well Capitalized	$ 81,144	$ 78,495
Capital Requited to be Well Capitalized to Risk-Weighted Assets	10.00%	10.00%
Tier I Risk Based Capital	$ 119,091	$ 118,723
Tier I Risk Based Capital to Risk-Weighted Assets	14.68%	15.12%
Tier I Risk Based Capital Required for Capital Adequacy	$ 48,686	$ 47,097
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	$ 64,915	$ 62,796
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	$ 119,091	$ 118,723
Common Equity Tier I Risk Based Capital to Risk-Weighted Assets	14.68%	15.12%
Common Equity Tier I Risk Based Capital Required for Capital Adequacy	$ 36,515	$ 35,323
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	$ 52,743	$ 51,022
Common Equity Tier I Risk Based Capital Required to Be Well Capitalized to Risk-Weighted Assets	6.50%	6.50%
Tier I Leverage Capital	$ 119,091	$ 118,723
Tier I Leverage Capital to Average Assets	9.95%	10.04%
Tier I Leverage Capital Required for Capital Adequacy	$ 47,856	$ 47,290

XML

Note 13 - Earnings Per Share - Summary of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net Income Available to Common Stockholders	$ 2,433	$ 1,761	$ 4,339	$ 3,417
Weighted Average Basic Shares Outstanding (in shares)	8,439,258	8,439,258	8,439,258	8,439,258
Restricted Stock (in shares)
Stock Warrants (in shares)	191,000	59,000	193,000	52,000
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share (in shares)	8,630,207	8,497,618	8,632,465	8,490,540
Basic (in dollars per share)	$ 0.29	$ 0.21	$ 0.51	$ 0.40
Diluted (in dollars per share)	$ 0.28	$ 0.21	$ 0.50	$ 0.40

XML

Note 14 - Accumulated Other Comprehensive Income (Loss) - Changes for Unrealized Gains and Losses Securities Available for Sale (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Beginning Balance			$ (5,022)	$ (4,434)	$ (4,434)
Other Comprehensive Income Before Reclassification			1,047		(334)
Amounts Reclassified from Accumulated Other Comprehensive Income					(254)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	$ 909	$ 1,161	1,047	$ 4,592	(588)
Ending Balance	$ (3,975)		$ (3,975)		$ (5,022)