10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

(Fee Required)

For the Fiscal Year Ended December 31, 2017

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

(No Fee Required)

For the Transition Period from _____________to ______________

Commission File Number 000-12436

COLONY BANKCORP, INC.

(Exact Name of Registrant Specified in its Charter)

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

(229) 426-6000

Issuer’s Telephone Number, Including Area Code

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

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

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

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

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

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, a smaller reporting company, or 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 [ X ]
Nonaccelerated 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 Section 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 Act): Yes[   ] No [ X ]

State the aggregate market value of the voting and non-voting common equity held by nonaffiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of June 30, 2017: $84,569,114 based on stock price of $13.70.

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date: 8,439,258 shares of $1.00 par value common stock as of March 15, 2018.

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DOCUMENTS INCORPORATED BY REFERENCE

Portions of the information required by Part III of this Annual Report are incorporated by reference from the Registrant’s definitive Proxy Statement for the 2017 annual meeting of shareholders to be filed with Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report.

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TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	25
Item 1B.	Unresolved Staff Comments	37
Item 2.	Properties	37
Item 3.	Legal Proceedings	37
Item 4.	Not Applicable	37
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	38
Item 6.	Selected Financial Data	40
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	77
Item 8.	Financial Statements and Supplementary Data	77
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	79
Item 9A.	Controls and Procedures	79
Item 9B.	Other Information	80
PART III
Item 10.	Directors and Executive Officers and Corporate Governance	80
Item 11.	Executive Compensation	80
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	81
Item 13.	Certain Relationships and Related Transactions and Director Independence	81
Item 14.	Principal Accounting Fees and Services	81
PART IV
Item 15.	Exhibits, Financial Statement Schedules	82
Signatures		85

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Part I

Item 1

Business

COLONY BANKCORP, INC.

General

Colony Bankcorp, Inc. (the “Company” or “Colony”) is a Georgia business corporation which was incorporated on November 8, 1982. The Company was organized for the purpose of operating as a bank holding company under the Bank Holding Company Act of 1956, as amended, and the bank holding company laws of Georgia (Georgia Laws 1976, p. 168, et. seq.). On July 22, 1983, the Company, after obtaining the requisite regulatory approvals, acquired 100 percent of the issued and outstanding common stock of Colony Bank (formerly Colony Bank of Fitzgerald and The Bank of Fitzgerald), Fitzgerald, Georgia (the “Bank” or “Colony Bank”), through the merger of the Bank with a subsidiary of the Company which was created for the purpose of organizing the Bank into a one-bank holding company. Since that time, Colony Bank has operated as a wholly-owned subsidiary of the Company. Our business is conducted primarily through our wholly-owned bank subsidiary, which provides a broad range of banking services to its retail and commercial customers. The company headquarters is located at 115 South Grant Street, Fitzgerald, Georgia 31750, its telephone number is 229-426-6000 and its Internet address is http://www.colonybank.com. We operate twenty-seven domestic banking offices and one corporate operations office and, at December 31, 2017, we had approximately $1.23 billion in total assets, $765.28 million in total loans, $1.07 billion in total deposits and $90.32 million in stockholder’s equity. Deposits are insured, up to applicable limits, by the Federal Deposit Insurance Corporation.

The Parent Company

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

Colony Bank - Banking Services

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

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

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Part I (Continued)

Item 1 (Continued)

Subordinated Debentures (Trust Preferred Securities)

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

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

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

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

Markets and Competition

The banking industry in general is highly competitive. Our market areas of central, south and coastal Georgia have experienced good economic and population growth the past several years. In contrast to our rural markets, in which we typically rank in the top three in terms of market share, in our larger markets, we face competitive pressures in attracting deposits and making loans from larger regional banks and smaller community banks, thrift institutions, credit unions, consumer finance companies, mortgage bankers, brokerage firms and insurance companies. The principal factors in competing for deposits and loans include interest rates, fee structures, range of products and services offered and convenience of office and ATM locations. The banking industry is also experiencing increased competition for deposits from less traditional sources such as money market and mutual funds. In addition, intense market demands, economic concerns, volatile interest rates and customer awareness of product and services have forced banks to be more competitive - often resulting in margin compression and a decrease in operating efficiency.

Correspondents

Colony Bank has correspondent relationships with the following banks: Federal Reserve Bank of Atlanta; SunTrust Bank in Atlanta, Georgia; FTN Financial in Memphis, Tennessee, CenterState Bank in Lake Wales, Florida and the Federal Home Loan Bank of Atlanta. These correspondent relationships facilitate the transactions of business by means of loans, collections, investment services, lines of credit and exchange services, particularly in markets in which Colony Bank does not have a physical presence. As compensation for these services, the Bank maintains balances with its correspondents in primarily interest-bearing accounts and pays some service charges.

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Part I (Continued)

Item 1 (Continued)

Employees

On December 31, 2017, the Company had a total of 326 employees, 318 of which are full-time employees.   We consider our relationship with our employees to be satisfactory.

The Company has a profit-sharing plan covering all employees, subject to certain minimum age and service requirements. In addition, the Company maintains a comprehensive employee benefit program providing, among other benefits, hospitalization, major medical, life insurance and disability insurance. Management considers these benefits to be competitive with those offered by other financial institutions in our market area. Colony’s employees are not represented by any collective bargaining group.

SUPERVISION AND REGULATION

BANK HOLDING COMPANY REGULATION

General

As a bank holding company under federal and state law, we are subject to regulation, supervision and examination by the Board of Governors of the Federal Reserve System (“Federal Reserve”). Our bank subsidiary, Colony Bank, is chartered in the State of Georgia and is subject to regulation, supervision and examination by the Georgia Department of Banking and Finance (the “Georgia Department”) and the Federal Deposit Insurance Corporation (“FDIC”). In addition, as discussed in more detail below, Colony Bank is subject to regulation by, and potentially supervision and examination by the Consumer Financial Protection Bureau (“CFPB”). Supervision, regulation, and examination of the company and the Bank by the bank regulatory agencies are intended primarily for the protection of consumers, bank depositors and the Deposit Insurance Fund (“DIF”) of the FDIC, rather than holders of our capital stock.

This discussion is qualified in its entirety by reference to the particular statutory and regulatory provisions described below and is not intended to be an exhaustive description of the statutes or regulations applicable to the Company and the Bank’s business. Any change in laws, regulations, or supervisory actions, whether by the FDIC, the Federal Reserve, the Georgia Department, the CFPB, Congress or the Georgia legislature, could have a material adverse impact on the Company and the Bank.

We are also required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC, the Public Company Accounting Oversight Board, and Nasdaq. We have evaluated our controls, including compliance with the SEC rules on internal controls, and have and expect to continue to spend significant amounts of time and money on compliance with these rules. Our failure to comply with these internal control rules may materially adversely affect our reputation, ability to obtain the necessary certifications to financial statements, and the values of our securities. The assessments of our financial reporting controls as of December 31, 2017 are included in this report under “Section 9A. Controls and Procedures.”

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

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Part I (Continued)

Item 1 (Continued)

Recent Regulatory Developments-- The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

On July 21, 2010, President Obama signed into law the Dodd-Frank Act. The Dodd-Frank Act has and will continue to have a broad impact on the financial services industry, imposing significant regulatory and compliance changes, the imposition of increased capital, leverage and liquidity requirements, and numerous other provisions designed to improve supervision and oversight of, and strengthen safety and soundness within, the financial services sector. Provisions of the Dodd-Frank Act that have affected or are likely to affect our operations or the operations of Colony Bank include:

● Creation of the CFPB with centralized authority, including examination and enforcement authority, for consumer protection in the banking industry.

● New prohibitions and restrictions on the ability of a banking entity to engage in proprietary trading for its own account and have certain interests in, or relationships with, certain unregistered hedge funds, private equity funds and commodity pools.

● Application of new regulatory capital requirements, including changes to leverage and risk-based capital standards and changes to the components of permissible tiered capital.

● Requirement that holding companies and their subsidiary banks be well capitalized and well managed in order to engage in activities permitted for financial holding companies.

● Changes to the assessment base for deposit insurance premiums.

● Permanently raising the FDIC’s standard maximum insurance amount to $250,000.

● Repealed the prohibition on the payment of interest on demand deposits.

● Restrictions on compensation, including a prohibition on incentive-based compensation arrangements that encourage inappropriate risk taking by covered financial institutions that are deemed to be excessive, or that may lead to material losses.

● Requirement that sponsors of asset-backed securities retain a percentage of the credit risk underlying the securities.

● Requirement that banking regulators remove references to and requirements of reliance upon credit ratings from their regulations and replace them with appropriate alternatives for evaluating creditworthiness.

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Part I (Continued)

Item 1 (Continued)

While most of the requirements called for in the Dodd-Frank Act have been implemented, others will continue to be implemented over time. Given the extent of the changes brought about by the Dodd-Frank Act and the significant discretion afforded to federal regulators to implement those changes, we cannot fully predict the extent of the impact such requirements will have on our operations. The changes resulting from the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage requirements or otherwise adversely affect our business. These changes may also require us to invest significant management attention and resources to evaluate and make any changes necessary to comply with new statutory and regulatory requirements. Failure to comply with the new requirements may negatively impact our results of operations and financial condition. While we cannot predict what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these changes could be materially adverse to our investors.

The following items and information provided in subsequent sections provide a further description of certain relevant provisions of the Dodd-Frank Act and their potential impact on our operations and activities, both currently and prospectively.

Creation of New Governmental Authorities.  The Dodd-Frank Act created various new governmental authorities such as the CFPB, an independent regulatory authority housed within the Federal Reserve. The CFPB has broad authority to regulate the offering and provision of consumer financial products. The CFPB’s authority to supervise and examine depository institutions with $10 billion or less in assets, such as us, for compliance with federal consumer laws remains largely with those institutions’ primary regulators. However, the CFPB may participate in examinations of these smaller institutions on a “sampling basis” and may refer potential enforcement actions against such institutions to their primary regulators. The CFPB also may participate in examinations of Colony Bank, which currently has assets of less than $10 billion, and could supervise and examine other direct or indirect subsidiaries that offer consumer financial products or services. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the CFPB, and state attorneys general are permitted to enforce consumer protection rules adopted by the CFPB against certain institutions.

Corporate Governance.  The Dodd-Frank Act addresses many investor protection, corporate governance, and executive compensation matters that will affect most U.S. publicly traded companies. The Dodd-Frank Act (1) grants shareholders of U.S. publicly traded companies an advisory vote on executive compensation; (2) enhances independence requirements for Compensation Committee members; and (3) requires companies listed on national securities exchanges to adopt incentive-based compensation clawback policies for executive officers.

Incentive Compensation. The Dodd-Frank Act requires the banking agencies and the SEC to establish joint rules or guidelines for financial institutions with more than $1 billion in assets, such as us and Colony Bank, which prohibit incentive compensation arrangements that the agencies determine encourage inappropriate risks by the institution. The banking agencies issued proposed rules in 2011 and previously issued guidance on sound incentive compensation policies. In 2016, the Federal Reserve and the FDIC have also proposed rules that would, depending upon the assets of the institution, directly regulate incentive compensation arrangements and would require enhanced oversight and recordkeeping. As of December 31, 2017, these rules have not been implemented.

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Part I (Continued)

Item 1 (Continued)

Shareholder Say-On-Pay Votes. The Dodd-Frank Act requires public companies to take shareholders' votes on proposals addressing compensation (known as say-on-pay), the frequency of a say-on-pay vote, and the golden parachutes available to executives in connection with change-in-control transactions. Public companies must give shareholders the opportunity to vote on the compensation at least every three years and the opportunity to vote on frequency at least every six years, indicating whether the say-on-pay vote should be held annually, biennially, or triennially. The first say-on-pay vote occurred at our 2011 annual shareholders meeting. The say-on-pay, the say-on-parachute and the say-on-frequency votes are explicitly nonbinding and cannot override a decision of our board of directors.

Volcker Rule. In December 2013, the Federal Reserve and other regulators jointly issued final rules implementing requirements of a new Section 13 to the Bank Holding Company Act, commonly referred to as the “Volcker Rule.” The Volcker Rule generally prohibits us and our subsidiaries from (i) engaging in proprietary trading for our own account, and (ii) acquiring or retaining an ownership interest in or sponsoring a “covered fund,” all subject to certain exceptions. The Volcker Rule also specifies certain limited activities in which we and our subsidiaries may continue to engage. The regulators provided for a Volcker Rule conformance date of July 21, 2015. The Federal Reserve extended the conformance deadline to July 21, 2016 for certain legacy “covered funds” activities and investments in place before December 31, 2013, and the Federal Reserve expressed its intention to grant the last available statutory extension for such covered funds activities until July 21, 2017. Further, the Federal Reserve Board permits limited exemptions, upon application, for divestiture of certain “illiquid” covered funds, for an additional period of up to 5 years beyond that date.

Bank Holding Company Regulation

As a bank holding company, we are subject to supervision and regulation by the Federal Reserve under the BHCA. Bank holding companies generally are limited to the business of banking, managing or controlling banks, and other activities that the Federal Reserve determines to be so closely related to banking, or managing or controlling banks as to be a proper incident thereto. We are required to file with the Federal Reserve periodic reports and such other information as the Federal Reserve may request. Ongoing supervision is provided through regular examinations by the Federal Reserve and other means that allow the regulators to gauge management’s ability to identify, assess and control risk in all areas of operations in a safe and sound manner and to ensure compliance with laws and regulations. The Federal Reserve may also examine our non-bank subsidiaries.

Expansion and Activity Limitations. The BHCA permits acquisitions of banks by bank holding companies, such that we and any other bank holding company, whether located in Georgia or elsewhere, may acquire a bank located in any other state, subject to certain deposit-percentage, age of bank charter requirements, and other restrictions. Federal law also permits national and state-chartered banks to branch interstate through acquisitions of banks in other states, subject to certain requirements.

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Part I (Continued)

Item 1 (Continued)

Subject to prior notice or Federal Reserve approval, under the BHCA, a bank holding company is generally permitted to engage in, or acquire direct or indirect control of more than 5 percent of the voting shares of, any company engaged in the following activities:

● Banking or managing or controlling banks;

● Furnishing services to or performing services for our subsidiaries; and

● Any activity that the Federal Reserve determines to be so closely related to banking as to be a proper incident to the business of banking, including:

• Factoring accounts receivable;

• Making, acquiring, brokering or servicing loans and usual related activities;

• Leasing personal or real property;

• Operating a non-bank depository institution, such as a savings association;

• Performing trust company functions;

• Providing financial and investment advisory activities;

• Conducting discount securities brokerage activities;

• Underwriting and dealing in government obligations and money market instruments;

• Providing specified management consulting and counseling activities;

• Performing selected data processing services and support services;

• Acting as agent or broker in selling credit life insurance and other types of insurance in connection with credit transactions;

• Performing selected insurance underwriting activities;

• Providing certain community development activities (such as making investments in projects designed primarily to promote community welfare); and

• Issuing and selling money orders and similar consumer-type payment instruments.

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Part I (Continued)

Item 1 (Continued)

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

Other Restrictions on the Company’s Activities

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

● Require periodic reports and such additional information as the Federal Reserve may require bank holding companies to meet or exceed minimum capital requirements;

● In certain circumstances, limit dividends payable to shareholders and restrict the ability of bank holding companies to obtain dividends or other distributions from their subsidiary banks;

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

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

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

● Require prior approval of acquisitions and mergers with other banks or bank holding companies and consider certain competitive, management, financial, and compliance concerns.

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Part I (Continued)

Item 1 (Continued)

Source of Strength

Federal Reserve policy requires a bank holding company to act as a source of financial and managerial strength and to support its bank subsidiary in situations where additional investments in a troubled bank may not otherwise be warranted. The holding company could be required to guarantee the capital plan of the Bank if it becomes undercapitalized for purposes of banking regulations. Any capital loans by a bank holding company to its subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. The BHCA provides that, in the event of a bank holding company’s bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a bank subsidiary will be assumed by the bankruptcy trustee and entitled to priority of payment. Notably, the Dodd-Frank Act has codified the Federal Reserve’s “source of strength” doctrine. In addition, the Dodd-Frank Act’s new provisions authorize the Federal Reserve to require a company that directly or indirectly controls a bank to submit reports that are designed both to assess the ability of such company to comply with its “source of strength” obligations and to enforce the company’s compliance with these obligations.

Change in Control

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

Capital Adequacy Requirements

We and Colony Bank were required to comply with higher minimum capital requirements as of January 1, 2015. These new rules (“Revised Capital Rules”) implement the Dodd-Frank Act and a separate international regulatory regime known as “Basel III” (which is discussed below). Prior to January 1, 2015, we and Colony Bank were subject to risk-based capital guidelines issued by the Federal Reserve and the FDIC for bank holding companies and state non-member banks, respectively. The risk-based capital guidelines that applied to us and Colony Bank through December 31, 2014 were based upon the 1988 capital accord of the international Basel Committee on Banking Supervision, a committee of central banks and bank supervisors, as implemented by the U.S. federal banking agencies on an interagency basis.

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Part I (Continued)

Item 1 (Continued)

The following is a brief description of the relevant provisions of the Revised Capital Rules and their impact on our capital levels. Among other things, the Revised Capital Rules (i) introduced a new capital measure called “Common Equity Tier 1” (“CET1”), (ii) specified that Tier 1 Capital consist of CET1 and “Additional Tier 1 Capital” instruments meeting certain requirements, (iii) defined CET1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital and (iv) expanded the scope of the deductions/adjustments from capital as compared to existing regulation that apply to us and other banking organizations.

New Minimum Capital Requirements. The Revised Capital Rules required the following initial minimum capital ratios as of January 1, 2015:

● 4.5% CET1 to risk-weighted assets

● 6.0% Tier 1 capital to risk-weighted assets

● 8.0% Total capital to risk-weighted assets

● 4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known as the "leverage ratio")

Capital Conservation Buffer.  The Revised Capital Rules also introduced a new “capital conservation buffer,” composed entirely of CET1, on top of the minimum risk-weighted asset ratios, which is designed to absorb losses during periods of economic stress. Banking organizations with a ratio of CET1 to risk-weighted assets above the minimum but below the capital conservation buffer will face constraints on dividends, equity repurchases and compensation based on the amount of this difference.

When fully phased in on January 1, 2019, the Revised Capital Rules will require us and Colony Bank to maintain (i) a minimum ratio of CET1 to risk-weighted assets of 7% (4.5% attributable to CET1 plus the 2.5% capital conservation buffer); (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 8.5% (6.0% attributable to Tier 1 capital plus the 2.5% capital conservation buffer), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 10.5% (8.0% attributable to Total capital plus the 2.5% capital conservation buffer) and (iv) a minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average assets (as compared to a current minimum leverage ratio of 3% for banking organizations that either have the highest supervisory rating or have implemented the appropriate federal regulatory authority's risk-adjusted measure for market risk).

Regulatory Deductions.  The Revised Capital Rules provide for a number of deductions from and adjustments to CET1, including the requirement that mortgage servicing rights, deferred tax assets that arise from operating loss and tax credit carryforwards, net of associated DTLs, and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1. Implementation of the deductions and other adjustments to CET1 began on January 1, 2015 and will be phased-in over a three-year period (beginning at 40% on January 1, 2015 and an additional 20% per year thereafter until fully phased-in at January 1, 2018).

Under the Revised Capital Rules, the effects of certain accumulated other comprehensive items (except gains and losses on cash flow hedges where the hedged item is not recognized on a banking organization’s balance sheet at fair value) are not excluded; however, certain banking organizations, including us and Colony Bank, may make a one-time permanent election to continue to exclude these items. We and Colony Bank each made this election as of January 1, 2015. The Revised Capital Rules also preclude counting certain hybrid securities, such as trust preferred securities, as Tier 1 capital of bank or thrift holding companies. However, for bank or thrift holding companies that had assets of less than $15 billion as of December 31, 2009 like us, trust preferred securities issued prior to May 19, 2010 can be treated as Tier 1 capital to the extent that they do not exceed 25% of Tier 1 capital after applying all capital deductions and adjustments.

Management believes, at December 31, 2017, that we and Colony Bank meet all capital adequacy requirements under the Revised Capital Rules on a fully phased-in basis if such requirements were currently effective.

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Part I (Continued)

Item 1 (Continued)

Dividends

The Company is a legal entity separate and distinct from the Bank. The principal source of the Company’s cash flow, including cash flow to pay dividends to its stockholders, is dividends that the Bank pays to it. A variety of federal and state laws and regulations affect the ability of the Bank and the Company to pay dividends. For example, Georgia law requires prior approval for a bank to pay dividends where the aggregate amount of dividends to be declared or anticipated to be declared during the current calendar year exceeds 50 percent of its net after-tax profits before dividends for the previous calendar year. A depository institution may not pay any dividend if payment would cause it to become undercapitalized or if it already is undercapitalized. The federal banking agencies may prevent the payment of a dividend if they determine that the payment would be an unsafe and unsound banking practice. Moreover, the federal agencies have issued policy statements that provide that bank holding companies and insured banks should generally only pay dividends out of current operating earnings. Under a Federal Reserve policy adopted in 2009, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to maintaining a strong financial position, and is not based on overly optimistic earnings scenarios, such as potential events that could affect its ability to pay, while still maintaining a strong financial position. As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce the bank holding company’s dividends if:

● Its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;

● Its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or

● It will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.

Neither the Company nor Colony Bank can give assurances that it will receive all required regulatory approvals to pay dividends. Subject to these regulatory restrictions, future cash dividends by the Company and the Bank will depend upon management’s assessment of future capital requirements, contractual restrictions and other factors.

Colony Bank received regulatory approvals in 2015 to pay total dividend payments of $10 million to the Company, and the Company used these proceeds to redeem $9.979 million of Preferred Stock during 2015. The Bank was granted approval to pay total dividend payments of $9.1 million to the Company during 2016, and the Company used these proceeds to redeem $8.661 million of Preferred Stock during 2016. The Bank was also granted approval to pay total dividend payments of $8.7 million to the Company during 2017, and the Company used these proceeds to redeem $9.360 million of Preferred Stock during 2017.

The Company paid a cash dividend of $843,934, or $0.10 per share of common stock in 2017. No cash dividends were paid on its common stock in 2016 and 2015.

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Part I (Continued)

Item 1 (Continued)

BANK REGULATION

General

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

FDICIA and Prompt Corrective Action

The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), among other things, requires the federal bank regulatory agencies to take “prompt corrective action” regarding depository institutions that do not meet minimum capital requirements. FDICIA establishes five regulatory capital tiers: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”, and “critically undercapitalized”. A depository institution’s capital tier will depend upon how its capital levels compare to various relevant capital measures and certain other factors, as established by regulation. The FDICIA imposes progressively more restrictive restraints on operations, management and capital distributions, depending on the category in which an institution is classified.

All of the federal bank regulatory agencies have adopted regulations establishing relevant capital measures and relevant capital levels for federally insured depository institutions. Notably, the Revised Capital Rule updated the prompt corrective action framework to correspond to the rule’s new minimum capital thresholds, which took effect on January 1, 2015. Under this new framework, (i) a well-capitalized insured depository institution is one having a total risk-based capital ratio of 10 percent or greater, a Tier 1 risk-based capital ratio of 8 percent or greater, a CET1 capital ratio of 6.5 percent or greater, a leverage capital ratio of 5 percent or greater and that is not subject to any order or written directive to meet and maintain a specific capital level for any capital measure; (ii) an adequately-capitalized depository institution is one having a total risk based capital ratio of 8 percent or more, a Tier 1 capital ratio of 6 percent or more, a CET1 capital ratio of 4.5 percent or more, and a leverage ratio of 4 percent or more; (iii) an undercapitalized depository institution is one having a total capital ratio of less than 8 percent, a Tier 1 capital ratio of less than 6 percent, a CET1 capital ratio of less than 4.5 percent, or a leverage ratio of less than 4 percent; and (iv) a significantly undercapitalized institution is one having a total risk-based capital ratio of less than 6 percent, a Tier 1 capital ratio of less than 4 percent, a CET1 ratio of less than 3 percent or a leverage capital ratio of less than 3 percent. The Revised Capital Rules retain the 2 percent threshold for critically undercapitalized institutions, but make certain changes to the framework for calculating an institution’s ratio of tangible equity to total assets.

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Part I (Continued)

Item 1 (Continued)

As of December 31, 2017, Colony Bank was considered “well capitalized,” and the consolidated capital ratios of the Company were as follows:

	December 31, 2017
	Amount		Percent
Leverage Ratio
Actual	$	120,279		9.89	%
Well-Capitalized Requirement		60,793		5.00
Minimum Required (1)		48,635		4.00
Risk Based Capital:
Tier 1 Capital
Actual		120,279		14.64
Well-Capitalized Requirement		65,718		8.00
Minimum Required (1)		49,289		6.00
Common Equity Tier 1 Capital
Actual		96,779		11.78
Well-Capitalized Requirement		53,396		6.50
Minimum Required (1)		36,967		4.50
Total Capital
Actual		127,786		15.56
Well-Capitalized Requirement		82,148		10.00
Minimum Required (1)		65,718		8.00

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

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

FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions are subject to growth limitations and are required to submit a capital restoration plan for approval within 90 days of becoming undercapitalized. For a capital restoration plan to be acceptable, the depository institution’s parent holding company must guarantee that the institution will comply with such capital restoration plan. The aggregate liability of the parent holding company is limited to the lesser of 5% of the depository institution’s total assets at the time it became undercapitalized and the amount necessary to bring the institution into compliance with applicable capital standards. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. If the controlling holding company fails to fulfill its obligations under FDICIA and files (or has filed against it) a petition under the federal Bankruptcy Code, the claim for such liability would be entitled to a priority in such bankruptcy proceeding over third party creditors of the bank holding company. In addition, an undercapitalized institution is subject to increased monitoring and asset growth restrictions and is required to obtain prior regulatory approval for acquisitions, new lines of business, and branching. Such an institution also is barred from soliciting, taking or rolling over brokered deposits.

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Part I (Continued)

Item 1 (Continued)

Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, and cessation of receipt of deposits from correspondent banks. Critically undercapitalized institutions are subject to the appointment of a receiver or conservator within 90 days of becoming significantly undercapitalized, except under limited circumstances. Because our company and Colony Bank exceed applicable capital requirements, the respective managements of our company and Colony Bank do not believe that the provisions of FDICIA have had any material effect on our company and Colony Bank or our respective operations.

FDICIA also contains a variety of other provisions that may affect the operations of our company and Colony Bank, including reporting requirements, regulatory standards for real estate lending, “truth in savings” provisions, the requirement that a depository institution give 90 days’ prior notice to customers and regulatory authorities before closing any branch, and a prohibition on the acceptance or renewal of brokered deposits by depository institutions that are not well capitalized, or are adequately capitalized and have not received a waiver from the FDIC. Colony Bank was well capitalized at December 31, 2017, and brokered deposits are not restricted.

Standards for Safety and Soundness

The Federal Deposit Insurance Act requires the federal bank regulatory agencies to prescribe, by regulation or guideline, operational and managerial standards for all insured depository institutions relating to: (1) internal controls; (2) information systems and audit systems; (3) loan documentation; (4) credit underwriting; (5) interest rate risk exposure; and (6) asset quality.

The agencies also must prescribe standards for asset quality, earnings, and stock valuation, as well as standards for compensation, fees and benefits. The federal banking agencies have adopted regulations and Interagency Guidelines Establishing Standards for Safety and Soundness to implement these required standards. These guidelines set forth the safety and soundness standards used to identify and address problems at insured depository institutions before capital becomes impaired. Under the regulations, if a regulator determines that a bank fails to meet any standards prescribed by the guidelines, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans.

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Part I (Continued)

Item 1 (Continued)

The federal and Georgia regulatory structures give the bank regulatory agencies extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. If, as a result of an examination, the Georgia Department or the FDIC should determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, or other aspects of the Bank’s operations are unsatisfactory or that the Bank or its management is violating or has violated any law or regulation, the Georgia Department and the FDIC, and separately the FDIC as insurer of the Bank’s deposits, have residual authority to:

● Require affirmative action to correct any conditions resulting from any violation or practice;

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

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

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

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

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

FDIC Insurance Assessments

Colony Bank’s deposits are insured by the FDIC’s DIF, and Colony Bank is subject to FDIC assessments for its deposit insurance, as well as assessments by the FDIC to pay interest on Financing Corporation (“FICO”) bonds.

Effective April 1, 2011, the FDIC began calculating assessments based on an institution’s average consolidated total assets less its average tangible equity in accordance with changes mandated by the Dodd-Frank Act. The FDIC also established a new assessment rate schedule, as well as alternative rate schedules that become effective when the DIF reserve ratio reaches certain levels. In determining the deposit insurance assessments to be paid by insured depository institutions, the FDIC generally assigns institutions to one of four risk categories based on supervisory ratings and capital ratios. Under the FDIC’s risk-based assessment system, insured institutions are assigned to risk categories based on supervisory evaluations, regulatory capital levels and certain other factors. The FDIC’s current system represents a change, required by the Dodd-Frank Act, from its prior practice of basing the assessment on an institution’s aggregate deposits.

The Dodd-Frank Act also increased the minimum designated reserve ratio of the DIF from 1.15% to 1.35% of the estimated amount of total insured deposits, and eliminated the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. Under FDIC rules, banks with at least $10 billion in assets would also pay a surcharge to enable the reserve ratio to reach 1.35%. In addition, the FDIC collects FICO deposit assessments, which are calculated off of the assessment base described above.

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Part I (Continued)

Item 1 (Continued)

The Bank’s FDIC insurance expense totaled $387 thousand for 2017. We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance. If there are additional bank or financial institution failures or if the FDIC otherwise determines, we may be required to pay even higher FDIC premiums. Any future increases in FDIC insurance premiums may have a material and adverse effect on our earnings and could have a material adverse effect on the value of, or market for, our common stock.

Other Regulations

Anti-Money Laundering. The International Money Laundering Abatement and Anti-Terrorism Funding Act of 2001 specifies “know your customer” requirements that obligate financial institutions to take actions to verify the identity of the account holders in connection with opening an account at any U.S. financial institution. Banking regulators will consider compliance with the Act’s money laundering provisions in acting upon acquisition and merger proposals. Sanctions for violations of the Act can be imposed in an amount equal to twice the sum involved in the violating transaction, up to $1 million.

Under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (“USA PATRIOT”) Act of 2001, financial institutions are subject to prohibitions against specified financial transactions and account relationships as well as enhanced due diligence and “know your customer” standards in their dealings with foreign financial institutions and foreign customers.

The USA PATRIOT Act requires financial institutions to establish anti-money laundering programs with minimum standards that include:

● The development of internal policies, procedures, and controls;

● The designation of a compliance officer;

● An ongoing employee training program; and

● An independent audit function to test the programs.

Bank regulators routinely examine institutions for compliance with these anti-money laundering obligations and recently have been active in imposing “cease and desist” and other regulatory orders and money penalty sanctions against institutions found to be in violation of these requirements. In addition, the Financial Crimes Enforcement Network has proposed new regulations that would require financial institutions to obtain beneficial ownership information for certain accounts, however, it has yet to establish final regulations on this topic.

Economic Sanctions. The Office of Foreign Assets Control (“OFAC”) is responsible for helping to ensure that U.S. entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and acts of Congress. OFAC publishes, and routinely updates, lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals and Blocked Persons List. If we find a name on any transaction, account or wire transfer that is on an OFAC list, we must undertake certain specified activities, which could include blocking or freezing the account or transaction requested, and we must notify the appropriate authorities.

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Part I (Continued)

Item 1 (Continued)

Transactions with Related Parties. We are a legal entity separate and distinct from Colony Bank and our other subsidiaries. Various legal limitations restrict our banking subsidiary from lending or otherwise supplying funds to us or our non-bank subsidiaries. We and our banking subsidiary are subject to Section 23A of the Federal Reserve Act and the corresponding provisions of Federal Reserve Regulation W thereunder. Section 23A defines “covered transactions” to include, among other types of transactions, extensions of credit, and limits a bank’s covered transactions with any of its “affiliates” to 10% of such bank’s capital and surplus. All covered and exempt transactions between a bank and its affiliates must be on terms and conditions consistent with safe and sound banking practices, and banks and their operating subsidiaries are prohibited from purchasing low-quality assets from the bank’s affiliates. Finally, Section 23A requires that all of a bank’s extensions of credit to its affiliates be appropriately secured by acceptable collateral, generally United States government or agency securities.

We and our bank subsidiary also are subject to Section 23B of the Federal Reserve Act and the corresponding provisions of Federal Reserve Regulation W thereunder, which generally require covered transactions and certain other transactions between a bank and its affiliates to be on terms, including credit standards, that are substantially the same, or at least as favorable to, the bank as those prevailing at the time for similar transactions with unaffiliated companies.

The Dodd-Frank Act generally enhanced the restrictions on banks’ transactions with affiliates under Sections 23A and 23B of the Federal Reserve Act, including an expansion of the definition of “covered transactions” and an increase in the amount of time for which collateral requirements regarding covered credit transactions must be satisfied. Specifically, Section 608 of the Dodd-Frank Act broadened the definition of “covered transactions” to include derivative transactions and the borrowing or lending of securities if the transaction will cause a bank to have credit exposure to an affiliate. The revised definition also includes the acceptance of debt obligations of an affiliate as collateral for a loan or extension of credit to a third party. Furthermore, reverse repurchase transactions will be viewed as extensions of credit (instead of asset purchases) and thus become subject to collateral requirements. The ability of the Federal Reserve to grant exemptions from these restrictions is also narrowed by the Dodd-Frank Act, including with respect to the requirement for the OCC, FDIC and Federal Reserve to coordinate with one another.

Concentrations in Lending. During 2006, the federal bank regulatory agencies released guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) and advised financial institutions of the risks posed by commercial real estate (“CRE”) lending concentrations. The Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations. Higher allowances for loan losses and capital levels may also be required. The Guidance is triggered when CRE loan concentrations exceed either:

● Total reported loans for construction, land development, and other land of 100 percent or more of a bank’s total risk based capital; or

● Total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300 percent or more of a bank’s total risk based capital.

The Guidance also applies when a bank has a sharp increase in CRE loans or has significant concentrations of CRE secured by a particular property type.

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Part I (Continued)

Item 1 (Continued)

Community Reinvestment Act. We and our banking subsidiary are subject to the provisions of the Community Reinvestment Act (“CRA”) and related federal bank regulatory agencies’ regulations. Under the CRA, all banks and thrifts have a continuing and affirmative obligation, consistent with their safe and sound operation, to help meet the credit needs for their entire communities, including low- and moderate-income neighborhoods. The CRA requires a depository institution’s primary federal regulator, in connection with its examination of the institution, to assess the institution’s record of assessing and meeting the credit needs of the communities served by that institution, including low- and moderate-income neighborhoods. The bank regulatory agency’s assessment of the institution’s record is made available to the public. Further, such assessment is required of any institution which has applied to: (i) charter a national bank; (ii) obtain deposit insurance coverage for a newly-chartered institution; (iii) establish a new branch office that accepts deposits; (iv) relocate an office; (v) merge or consolidate with, or acquire the assets or assume the liabilities of, a federally regulated financial institution, or (vi) expand other activities, including engaging in financial services activities authorized by the GLBA. A less than satisfactory CRA rating will slow, if not preclude, expansion of banking activities and prevent a company from becoming or remaining a financial holding company.

Following the enactment of the GLBA, CRA agreements with private parties must be disclosed and annual CRA reports must be made to a bank’s primary federal regulator. A bank holding company will not be permitted to become or remain a financial holding company and no new activities authorized under GLBA may be commenced by a holding company or by a bank financial subsidiary if any of its bank subsidiaries received less than a “satisfactory” CRA rating in its latest CRA examination. Federal CRA regulations require, among other things, that evidence of discrimination against applicants on a prohibited basis, and illegal or abusive lending practices be considered in the CRA evaluation.

Privacy and Data Security.  The GLBA generally prohibits disclosure of consumer information to non-affiliated third parties unless the consumer has been given the opportunity to object and has not objected to such disclosure. Financial institutions are further required to disclose their privacy policies to consumers annually. Financial institutions, however, will be required to comply with state law if it is more protective of consumer privacy than the GLBA. The GLBA also directed federal regulators, including the FDIC and the OCC, to prescribe standards for the security of consumer information. Colony Bank is subject to such standards, as well as standards for notifying customers in the event of a security breach. Under federal law, Colony Bank must disclose its privacy policy to consumers, permit customers to opt out of having nonpublic customer information disclosed to third parties in certain circumstances, and allow customers to opt out of receiving marketing solicitations based on information about the customer received from another subsidiary. States may adopt more extensive privacy protections. We are similarly required to have an information security program to safeguard the confidentiality and security of customer information and to ensure proper disposal. Customers must be notified when unauthorized disclosure involves sensitive customer information that may be misused.

Consumer Regulation.The Bank must also comply with numerous federal and state consumer protection statutes and implementing regulations, including the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Fair Housing Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the National Flood Insurance Act, and various federal and state privacy protection laws. Noncompliance with these laws could subject the Bank to lawsuits and could also result in administrative penalties, including, fines and reimbursements. The Bank and the Company are also subject to federal and state laws prohibiting unfair, deceptive, or abusive acts and practices.

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Part I (Continued)

Item 1 (Continued)

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

These laws and regulations include, among numerous other things, provisions that:

● Limit the interest and other charges collected or contracted for by Colony Bank, including new rules respecting the terms of credit cards and of debit card overdrafts;

● Govern Colony Bank’s disclosures of credit terms to consumer borrowers;

● Require Colony Bank to provide information to enable the public and public officials to determine whether it is fulfilling its obligation to help meet the housing needs of the community it serves;

● Prohibit Colony Bank from discriminating on the basis of race, creed or other prohibited factors when it makes decisions to extend credit; 

● Govern the manner in which Colony Bank may collect consumer debts; and

● Prohibit unfair, deceptive or abusive acts or practices in the provision of consumer financial products and services.

Mortgage-Related Reforms. The CFPB adopted a rule that implements the ability-to-repay and qualified mortgage provisions of the Dodd-Frank Act (the “ATR/QM rule”), which took effect on January 10, 2014, and has impacted our residential mortgage lending practices, and the residential mortgage market generally. The ATR/QM rule requires lenders to consider, among other things, income, employment status, assets, payment amounts, and credit history before approving a mortgage, and provides a compliance “safe harbor” for lenders that issue certain “qualified mortgages.” The ATR/QM rule defines a “qualified mortgage” to have certain specified characteristics, and generally prohibit loans with negative amortization, interest-only payments, balloon payments, or terms exceeding 30 years from being qualified mortgages. The rule also establishes general underwriting criteria for qualified mortgages, including that monthly payments be calculated based on the highest payment that will apply in the first five years of the loan and that the borrower have a total debt-to-income ratio that is less than or equal to 43 percent. While “qualified mortgages” will generally be afforded safe harbor status, a rebuttable presumption of compliance with the ability-to-repay requirements will attach to “qualified mortgages” that are “higher priced mortgages” (which are generally subprime loans). In particular, it will prevent banks from making “no doc” and “low doc” home loans, as the rules require that banks determine a consumer’s ability to pay based in part on verified and documented information. Because we do not originate “no doc” or “low doc” loans, we do not believe this regulation will have a significant effect on our operations.

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Part I (Continued)

Item 1 (Continued)

In addition, under rules that became effective December 24, 2015, the securitizer of asset-backed securities must retain not less than 5 percent of the credit risk of the assets collateralizing the asset-backed securities, unless subject to an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages.” These definitions are expected to significantly shape the parameters for the majority of consumer mortgage lending in the U.S.

Reflecting the CFPB's focus on the residential mortgage lending market, the CFPB has also issued rules to implement requirements of the Dodd-Frank Act pertaining to mortgage loan origination (including with respect to loan originator compensation and loan originator qualifications) and has finalized integrated mortgage disclosure rules that replace and combine certain requirements under the Truth in Lending Act and the Real Estate Settlement Procedures Act. In addition, the CFPB has issued rules that require servicers to comply with new standards and practices with regard to: error correction; information disclosure; force-placement of insurance; information management policies and procedures; requiring information about mortgage loss mitigation options be provided to delinquent borrowers; providing delinquent borrowers access to servicer personnel with continuity of contact about the borrower’s mortgage loan account; and evaluating borrowers’ applications for available loss mitigation options. These rules also address initial rate adjustment notices for adjustable-rate mortgages (ARMs), periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts. The CFPB has indicated that it expects to issue additional mortgage-related rules in the future.

The CFPB has indicated that, in addition to specific statutory mandates, it is working on a wide range of initiatives to address issues in markets for consumer financial products and services. The CFPB has also undertaken an effort to “streamline” consumer regulations and has established a database to collect, track and make public consumer complaints, including complaints against individual financial institutions.

The CFPB also has broad authority to prohibit unfair, deceptive and abusive acts and practices (“UDAAP”) and to investigate and penalize financial institutions that violate this prohibition. While the statutory language of the Dodd-Frank Act sets forth the standards for acts and practices that violate this prohibition, certain aspects of these standards are untested, which has created some uncertainty regarding how the CFPB will exercise this authority. The CFPB has, however, brought enforcement actions against certain financial institutions for UDAAP violations and issued some guidance on the topic, which provides insight into the agency’s expectations regarding these standards. Among other things, CFPB guidance and its UDAAP-related enforcement actions have emphasized that management of third-party service providers is essential to effective UDAAP compliance and that the CFPB is particularly focused on marketing and sales practices.

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Part I (Continued)

Item 1 (Continued)

We cannot fully predict the effect that implementing regulations or revisions to existing regulations enforcement actions or other activity of the CFPB may have on our businesses. 

The deposit operations of Colony Bank are also subject to laws and regulations that:

● Require Colony Bank to adequately disclose the interest rates and other terms of consumer deposit accounts;

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

● Require escheatment of unclaimed funds to the appropriate state agencies after the passage of certain statutory time frames; and

● Govern automatic deposits to and withdrawals from deposit accounts with Colony Bank and the rights and liabilities of customers who use automated teller machines, or ATMs, and other electronic banking services.

● Limit the Bank’s ability to charge fees for the payment of overdrafts for one-time debit and ATM card transactions.

Non-Discrimination Policies. Colony Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act (the “ECOA”) and the Fair Housing Act (the “FHA”), both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction. The Department of Justice (the “DOJ”), and the federal bank regulatory agencies have issued an Interagency Policy Statement on Discrimination in Lending that provides guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices. The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA.

Enforcement Authority. Colony Bank and its “institution-affiliated parties,” including management, employees, agents, independent contractors and consultants, such as attorneys and accountants and others who participate in the conduct of the institution’s affairs, are subject to potential civil and criminal penalties for violations of law, regulations or written orders of a government agency. Violations can include failure to timely file required reports, filing false or misleading information or submitting inaccurate reports. Civil penalties may be as high as $1,000,000 a day for such violations, and criminal penalties for some financial institution crimes may include imprisonment for 20 years. Regulators have flexibility to commence enforcement actions against institutions and institution-affiliated parties, and the FDIC has the authority to terminate deposit insurance. When issued by a banking agency, cease-and-desist orders may, among other things, require affirmative action to correct any harm resulting from a violation or practice, including restitution, reimbursement, indemnifications or guarantees against loss. A financial institution may also be ordered to restrict its growth, dispose of certain assets, rescind agreements or contracts, or take other actions determined to be appropriate by the ordering agency. The federal banking agencies also may remove a director or officer from an insured depository institution (or bar them from the industry) if a violation is willful or reckless.

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Part I (Continued)

Item 1 (Continued)

Evolving Legislation and Regulatory Action. Proposals for new statutes and regulations are frequently circulated at both the federal and state levels, and may include wide-ranging changes to the structures, regulations and competitive relationships of financial institutions. We cannot predict whether new legislation will be enacted and, if enacted, the effect that it, or any regulations, would have on our business, financial condition or results of operations.

Other Regulatory Matters. We and our subsidiaries are subject to oversight by the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Public Company Accounting Oversight Board (“PCAOB”), Nasdaq and various state securities regulators. We and our subsidiaries have from time to time received requests for information from regulatory authorities in various states, including state attorneys general, securities regulators and other regulatory authorities, concerning our business practices. Such requests are considered incidental to the normal conduct of business.

Iran Sanctions Related Disclosure

Under the Iran Threat Reduction and Syrian Human Rights Act of 2012, which added Section 13(r) to the Securities Exchange Act of 1934, as amended, we are required to include certain disclosures in our periodic reports if we or any of our “affiliates” knowingly engaged in certain specified activities during the period covered by this Annual Report on Form 10-K. Because the SEC defines the term “affiliate” broadly, it includes any entity controlled by us as well as any person or entity that controls us or is under common control with us. We do not believe we and our consolidated subsidiary have knowingly engaged in any transaction or dealing reportable under Section 13(r) of the Exchange Act during fiscal year 2015.

Risk Factors

Strong competition and changing banking environment may limit growth and profitability.

Competition in the banking and financial services industry is intense. We compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking firms operating locally and elsewhere, and non-traditional financial institutions, including non-depository financial services providers. Many of these competitors (whether regional or national institutions) have substantially greater resources and lending limits than we have and may offer certain services that we do not or cannot provide. Additionally, non-traditional financial institutions may not have the same regulatory requirements or burdens as we do. Despite playing a rapidly increasing role in the financial services industry including providing services previously limited to commercial banks. Such competition could ultimately limit our growth, profitability and shareholder value. Our profitability depends upon our ability to successfully compete in our market areas and adapt to the ever changing banking environment.

Any future economic downturn could have a material adverse effect on our capital, financial condition, results of operations, and future growth.

Our management continually monitors market conditions and economic factors throughout our footprint. While recent economic data suggests that overall economic conditions have improved, as supported by our improved credit trends, we cannot make any assurance that these economic conditions - both nationally and in our principal markets - will not worsen in the future. If these conditions were to worsen, then we could see a sharp increase in our total net charge-offs and also be required to significantly increase our allowance for loan losses. Furthermore, the demand for loans and our other products and services could decline. Any future increase in our non-performing assets and related increases in our provision for loan losses, coupled with a potential decrease in the demand for loans and our other products and services, could negatively affect our business and could have a material adverse effect on our capital, financial condition, results of operations and future growth.

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Part I (Continued)

Item 1A

A reduction in consumer confidence could negatively impact our results of operations and financial condition.

The beginning of 2017 has seen significant market volatility driven in part by concerns relating to, among other things, the 2016 U.S. presidential election. The continued impact of this issue could adversely affect the U.S. or global economies, with direct or indirect impacts on the Company and its business. Results could include drops in consumer and business confidence, credit deterioration, diminished capital markets activity, and delays in the Federal Reserve Board increases in interest rates.

Our business may be adversely affected by downturns in our national and local economies.

Our operations are significantly affected by national and local economic conditions. Substantially all of our loans are to businesses and individuals in Georgia. All of our branches and most of our deposit customers are also located in this area. A decline in the economies in which we operate could have a material adverse effect on our business, financial condition and results of operations.

A deterioration in economic conditions in the market areas we serve could result in the following consequences, any of which could have a material adverse effect on our business, financial condition and results of operations:

● Demand for our loans, deposits and services may decline;

● Loan delinquencies, problem assets and foreclosures may increase;

● Weak economic conditions may continue to limit the demand for loans by creditworthy borrowers, limiting our capacity to leverage our retail deposits and maintain our net interest income;

● Collateral for our loans may decline further in value; and

● The amount of our low-cost or non-interest bearing deposits may decrease.

Changes in interest rates could adversely affect our results of operations and financial condition.

Our results of operations and financial condition are significantly affected by changes in interest rates. Our results of operations depend substantially on our net interest income, which is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest expense we pay on our interest-bearing liabilities, such as deposits and borrowings. Because our interest-bearing liabilities generally reprice or mature more quickly than our interest-earning assets, a sustained increase in interest rates generally would tend to reduce our interest income.

In an attempt to help the overall economy, the Federal Reserve Board has kept interest rates low through its targeted Fed Funds rate. In December 2017, the Federal Reserve Board increased the Fed Funds rate by 25 basis points and intends further increases during 2018, subject to economic conditions. As the Federal Reserve Board increases the Fed Funds rate, overall interest rates will likely rise, which may negatively impact the U.S. economic recovery. Further, changes in monetary policy, including changes in interest rates, could influence (i) the amount of interest we receive on loans and securities, (ii) the amount of interest we pay on deposits and borrowings, (iii) our ability to originate loans and obtain deposits, (iv) the fair value of our assets and liabilities, and (v) the reinvestment risk associated with a reduced duration of our mortgage-backed securities portfolio as borrowers refinance to reduce borrowing costs. When interest-bearing liabilities reprice or mature more quickly than interest-earning assets, an increase in interest rates generally would tend to result in a decrease in net interest income.

- 26 -

Part I (Continued)

Item 1A (Continued)

Changes in interest rates also affect the current fair value of our interest-earning securities portfolio. Generally, the value of securities moves inversely with changes in interest rates. At December 31, 2017, the fair value of our portfolio of investment securities totaled $354,246,904. Net unrealized losses on these securities totaled $8,217,657 at December 31, 2017.

Additionally, 6.30% of our one- to four-family loan portfolio is comprised of adjustable-rate loans. Any rise in market interest rates may result in increased payments for borrowers who have adjustable-rate mortgage loans, which would increase the possibility of default.

Although management believes it has implemented an effective asset and liability management strategy to manage the potential effects of changes in interest rates, including the use of adjustable rate and/or short-term assets, and FHLB advances or longer term repurchase agreements, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of our operation and/or our strategies may not always be successful in managing the risk associated with changes in interest rates.

Our allowance for loan losses may not cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition and results of operations.

We derive the most significant portion of our revenues from our lending activities. When we lend money, commit to lend money or enter into a letter of credit or other contract with a counterparty, we incur credit risk, which is the risk of losses if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts. We estimate and maintain an allowance for loan losses, which is a reserve established through a provision for loan losses charged to expenses, which represents management's best estimate of probable credit losses that have been incurred within the existing portfolio of loans, as described under [Note 5 of Notes to Consolidated Financial Statements in this Report and under “Allowance for Loan Losses” under “Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Report.]

- 27 -

Part I (Continued)

Item 1A (Continued)

The allowance, in the judgment of management, is established to reserve for estimated loan losses and risks inherent in the loan portfolio. The determination of the appropriate level of the allowance for loan losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks using existing qualitative and quantitative information, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans, risk ratings, and other factors, both within and outside of our control, may require an increase in the allowance for loan losses.

Because the risk rating of the loans is dependent on some subjective information and subject to changes in the borrower's credit risk profile, evolving local market conditions and other factors, it can be difficult for us to predict the effects that those factors will have on the classifications assigned to the loan portfolio, and thus difficult to anticipate the velocity or volume of the migration of loans through the classification process and effect on the level of the allowance for loan losses. An increase in the allowance for loan losses would result in a decrease in net income and capital, and could have a material adverse effect on our capital, financial condition and results of operations. Accordingly, we monitor our credit quality and our reserve requirements and use that as a basis for capital planning and other purposes. [See “Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Capital and Liquidity” of this Report for further information.]

Our commercial real estate, real estate construction, and commercial business loans increase our exposure to credit risks.

Over the last several years, we have increased our non-residential lending in order to improve the yield and reduce the average duration of our assets. At December 31, 2017, our portfolio of commercial real estate, commercial real estate construction, and commercial business loans totaled $444,507,891, or 58.08% of total loans, compared to $426,473,271, or 56.54% of total loans at December 31, 2016 and $434,150,355, or 57.23% of total loans at December 31, 2015. At December 31, 2017, the amount of nonperforming commercial real estate, commercial real estate construction, and commercial business loans was $3,247,577, or 43.29% of total nonperforming loans. These loans may expose us to a greater risk of non-payment and loss than residential real estate loans because, in the case of commercial loans, repayment often depends on the successful operation and earnings of the borrower's businesses and, in the case of consumer loans, the applicable collateral is subject to rapid depreciation. Additionally, commercial real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential real estate loans. If loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest due on the loan, which could cause us to increase our provision for loan losses and adversely affect our financial condition and operating results.

We hold certain intangible assets that in the future could be classified as either partially or fully impaired, which would reduce our earnings and the book values of these assets.

Pursuant to applicable accounting requirements, we are required to periodically test our goodwill and core deposit intangible assets for impairment. The impairment testing process considers a variety of factors, including the current market price of our common shares, the estimated net present value of our assets and liabilities and information concerning the terminal valuation of similarly situated insured depository institutions. Future impairment testing may result in a partial or full impairment of the value of our goodwill or core deposit intangible assets, or both. If an impairment determination is made in a future reporting period, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment.

- 28 -

Part I (Continued)

Item 1A (Continued)

Acquisitions could disrupt our business and adversely affect our operating results.

To the extent that we grow through acquisitions, we may not be able to adequately or profitably manage this growth. In addition, such acquisitions may involve the issuance of securities, which may have a dilutive effect on earnings per share. Acquiring banks, bank branches or businesses involves risks commonly associated with acquisitions, including:

● Potential exposure to unknown or contingent liabilities we acquire;

● Exposure to potential asset quality problems of the acquired financial institutions, businesses or branches;

● Difficulty and expense of integrating the operations and personnel of financial institutions, businesses or branches we acquire;

● Higher than expected deposit attrition;

● Potential diversion of our management’s time and attention;

● The possible loss of key employees and customers of financial institutions, businesses or branches we acquire;

● Difficulty in safely investing any cash generated by the acquisition;

● Inability to utilize potential tax benefits from such transactions;

● Difficulty in estimating the fair value of the financial institutions, businesses or branches to be acquired which affects the profits we generate from the acquisitions; and

● Potential changes in banking or tax laws or regulations that may affect the financial institutions or businesses to be acquired.

Reductions in service charge income or failure to comply with payment network rules could negatively impact our earnings.

We derive significant revenue from service charges on deposit accounts, the bulk of which comes from overdraft-related fees. Changes in banking regulations could have an adverse impact on our ability to derive income from service charges. Increased competition from other financial institutions or changes in consumer behavior could lead to declines in our deposit balances, which would result in a decline in service charge fees. Such a reduction could have a material impact on our earnings.

- 29 -

Part I (Continued)

Item 1A (Continued)

Reductions in interchange income could negatively impact our earnings.

Interchange income is derived from fees paid by merchants to the interchange network in exchange for the use of the network's infrastructure and payment facilitation. These fees are paid to card issuers to compensate them for the costs associated with issuance and operation. We earn interchange fees on card transactions from debit cards, including $2,588,678 during the year ended December 31, 2017. Merchants have attempted to negotiate lower interchange rates, and the Durbin Amendment to the Dodd-Frank Act limits the amount of interchange fees that may be charged for certain debit card transactions. Merchants may also continue to pursue alternative payment platforms, such as Apple Pay, to lower their processing costs. Any such new payment system may reduce our interchange income. Our failure to comply with the operating regulations set forth by payment card networks, which may change, could subject us to penalties, fees or the termination of our license to use the networks. Any of these scenarios could have a material impact on our business, financial condition and results of operations.

Because the nature of the financial services business involves a high volume of transactions, we face significant operational risks.

We are exposed to many types of operation risks, including reputational risk, legal and regulatory and compliance risk, the risk of fraud or theft by employees or persons outside our company, including the execution of unauthorized transactions by employees or operational errors, clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems. Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance and acquisitions and from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can adversely affect our ability to attract and keep customers and can expose us to litigation and regulatory action. Actual or alleged conduct by Colony Bank can result in negative public opinion about our business. Negative public opinion could also affect our credit ratings, which are important to our access to unsecured wholesale borrowings.

Our business involves storing and processing sensitive consumer and business customer data. If personal, non-public, confidential or proprietary information of customers in our possession were to be mishandled or misused, we could suffer significant regulatory consequences, reputational damage and financial loss. Such mishandling or misuse could include, for example, if such information were erroneously provided to parties who were not permitted to have that information, either by fault of our systems, employees, or counterparties, or where such information is intercepted or otherwise inappropriately taken by third parties. Furthermore, a cybersecurity breach could result in theft of such data.

Because we operate in diverse markets and rely on the ability of our employees and systems to process a high number of transactions, certain errors may be repeated or compounded before they are discovered and successfully rectified. Our necessary dependence upon automated systems to record and process transactions, and our large transaction volume, may further increase the risk that technical flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect. We also may be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control (for example, security breaches, denial of service attacks, viruses, worms and other disruptive problems caused by hackers, computer break-ins, phishing and other disruptions or electrical or telecommunications outages, or natural disasters, disease pandemics or other damage to property or physical assets) which may result in violations of consumer privacy laws including the Gramm-Leach-Bliley Act, cause significant liability to us and give reason for existing and potential customers to refrain from doing business with us. Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures to prevent such damage and potential liability, there can be no assurance that these security measures will be successful. In addition, advances in computer capabilities, new discoveries in the field of cryptography or other developments could result in a compromise or breach of the algorithms we and our third-party service providers use to encrypt and protect customer transaction data. We are further exposed to the risk that our external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees as we are) and to the risk that our (or our vendors’) business continuity and data security systems prove to be inadequate. The occurrence of any of these risks could result in a diminished ability of us to operate our business (for example, by requiring us to expend significant resources to correct the defect), as well as potential liability to clients, reputational damage and regulatory intervention, which could adversely affect our business, financial condition or operations results, perhaps materially.

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Part I (Continued)

Item 1A (Continued)

As an issuer of debit cards, we are exposed to losses in the event that holders of our cards experience fraud on their card accounts.

Our customers regularly use Colony Bank-issued debit cards to pay for transactions with retailers and other businesses. There is the risk of data security breaches at these retailers and other businesses that could result in the misappropriation of our customers’ debit card information. When our customers use Colony Bank-issued cards to make purchases from those businesses, card account information is provided to the business. If the business’s systems that process or store card account information are subject to a data security breach, holders of our cards who have made purchases from that business may experience fraud on their card accounts. Colony Bank may suffer losses associated with reimbursing our customers for such fraudulent transactions on customers’ card accounts, as well as for other costs related to data security compromise events, such as replacing cards associated with compromised card accounts.

The financial services market is undergoing rapid technological changes, and if we are unable to stay current with those changes, we will not be able to effectively compete.

The financial services market, including banking services, is undergoing rapid changes with frequent introductions of new technology-driven products and services. Our future success will depend, in part, on our ability to keep pace with the technological changes and to use technology to satisfy and grow customer demand for our products and services and to create additional efficiencies in our operations. We expect that we will need to make substantial investments in our technology and information systems to compete effectively and to stay current with technological changes. Some of our competitors have substantially greater resources to invest in technological improvements and will be able to invest more heavily in developing and adopting new technologies, which may put us at a competitive disadvantage.

We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. As a result, our ability to effectively compete to retain or acquire new business may be impaired, and our business, financial condition or results of operations may be adversely affected.

- 31 -

Part I (Continued)

Item 1A (Continued)

We face significant cyber and data security risk that could result in the dissemination of confidential and sensitive information, adversely affecting our business or reputation and exposing us to material liabilities.

Our business model enables our customers to utilize the Internet and other remote channels to transact business. As a financial institution, we are under continuous threat of loss due to the swiftness and sophistication of hacking and cyber-attacks. This risk, although considerable at the present, will only increase in the future. Two of the most significant cyber-attack risks that we face are electronic fraud and loss of sensitive customer data. Loss from electronic fraud occurs when cybercriminals breach and extract funds directly from customer accounts or our own accounts. The attempts to breach sensitive customer data, such as account numbers, social security numbers, or other personal information are less frequent but would present significant legal and/or regulatory costs to us if successful, as well as potentially damage our reputation among the markets we serve. Our risk and exposure to these matters will remain relevant because of the evolving nature and complexity of the threats posed by cybercriminals and hackers along with our plans to continue to provide Internet banking and mobile banking avenues for transacting business. While we have not experienced material losses relating to cyber-attacks or other information security breaches to date, we have been the subject of attempted hacking and cyber-attacks and there can be no assurance that we will not suffer such losses in the future.

The occurrence of any cyber-attack or information security breach could result in material adverse consequences including damage to our reputation and the loss of current or potential customers. We also could face litigation or additional regulatory scrutiny due to such an occurrence. Litigation or regulatory actions in turn could lead to material liability, including, but not limited to, fines and penalties or reimbursement to customers adversely affected by a data breach. Even if we do not suffer any material adverse consequences as a result of events affecting us directly, successful attacks or systems failures at other financial institutions could lead to a general loss of customer confidence in our company.

We continually review our network and systems security and make the necessary investments to improve the resiliency of our systems and their security from attack. Nonetheless, there remains the risk that we may be materially harmed by a cyber-attack or information security breach. Methods used to attack information systems continue to evolve in sophistication, swiftness, and frequency and can occur from a variety of sources, such as foreign governments, hacktivists, or other well-financed entities, and may originate from remote and less regulated areas of the world. If such an attack or breach were to occur, we might not be able to address and find a solution in a timely and adequate manner. We will, however, promptly take reasonable and customary measures to address the situation.

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Part I (Continued)

Item 1A (Continued)

As a community bank, our recruitment and retention efforts may not be sufficient enough to implement our business strategy and execute successful operations.

Our financial success depends upon our ability to attract and retain highly motivated, well-qualified personnel. We face significant competition in the recruitment of qualified employees from financial institutions and others. As we continue to grow, we may find our recruitment and retention efforts more challenging. If we do not succeed in attracting, hiring, and integrating experienced or qualified personnel, we may not be able to successfully implement our business strategy, and we may be required to substantially increase our overall compensation or benefits to attract and retain such employees. Furthermore, in June 2010, the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the FDIC jointly issued comprehensive final guidance designed to ensure that incentive compensation policies do not undermine the safety and soundness of banking organizations by encouraging employees to take imprudent risks. This regulation significantly restricts the amount, form, and context in which we pay incentive-based compensation and may put us at a competitive disadvantage compared to non-financial institutions in terms of attracting and retaining senior level employees.

We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.

Our reputation is one of the most valuable components of our business. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates. If our reputation is negatively affected, by the actions of our employees or otherwise, our business and, therefore, our operating results may be materially adversely affected.

We rely on third-party vendors for key components of our business.

Many key components of our operations, including data processing, recording and monitoring transactions, online interfaces and services, internet connections and network access are provided by other companies. Our vendor management process selects third-party vendors carefully, but we do not control their actions. Problems, including disruptions in communication, security breaches, or failure of a vendor to provide services, could hurt our operations or our relationships with customers. If our vendors suffer financial or operational issues, our operations and reputation could suffer if it harms the vendors’ ability to serve us and our customers. Third-party vendors are also a source of operational and information security risk to us. Replacing or renegotiating contracts with vendors could entail significant operational expense and delays. The use of third-party vendors represents an unavoidable inherent risk to our company.

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Part I (Continued)

Item 1A (Continued)

Hurricanes or other adverse weather events would negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations.

Our market area is located in the southeastern region of the United States and is susceptible to natural disasters, such as hurricanes, tornadoes, tropical storms, other severe weather events and related flooding and wind damage, and man-made disasters. These natural disasters could negatively impact regional economic conditions, cause a decline in the value or destruction of mortgaged properties and an increase in the risk of delinquencies, foreclosures or loss on loans originated by us, damage our banking facilities and offices and negatively impact our growth strategy. Such weather events can disrupt operations, result in damage to properties and negatively affect the local economies in the markets where they operate. We cannot predict whether or to what extent damage that may be caused by future hurricanes or tornadoes will affect our operations or the economies in our current or future market areas, but such weather events could negatively impact economic conditions in these regions and result in a decline in local loan demand and loan originations, a decline in the value or destruction of properties securing our loans and an increase in delinquencies, foreclosures or loan losses. Our business or results of operations may be adversely affected by these and other negative effects of natural or man-made disasters.

We may be adversely affected by the soundness of other financial institutions.

Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries and counterparties and routinely execute transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks, and other institutional clients. Many of these transactions expose us to credit risk in the event of a default by a counterparty or client. Any such losses could have a material adverse effect on our financial condition and results of operations.

Regulation of the financial services industry continues to undergo major changes, and future legislation could increase our cost of doing business or harm our competitive position.

The Dodd-Frank Act brought about a significant overhaul of many aspects of the regulation of the financial services industry, addressing, among other things, systemic risk, capital adequacy, deposit insurance assessments, consumer financial protection, interchange fees, derivatives, lending limits, mortgage lending practices, registration of investment advisors and changes among the bank regulatory agencies.

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Part I (Continued)

Item 1A (Continued)

Major changes in the law could materially impact the profitability of our business, the value of assets we hold or the collateral available for our loans, require changes to business practices or force us to discontinue businesses and expose us to additional costs, taxes, liabilities, enforcement actions and reputational risk. We cannot fully predict the effect that compliance with changing laws or any implementing regulations will have on the Company’s or the Bank’s businesses or our ability to pursue future business opportunities, our financial condition or results of operations. [See “Part I - Item 1. Business - Supervision, Regulation and Other Factors” of this Report for further information.] We cannot predict whether new legislation will be enacted and, if enacted, the effect that it, or any regulations, would have on our business, financial condition, or results of operations.

New regulations could restrict our ability to originate and sell mortgage loans.

The Consumer Financial Protection Bureau has issued a rule designed to clarify for lenders how they can avoid monetary damages under the Dodd-Frank Act, which would hold lenders accountable for ensuring a borrower’s ability to repay a mortgage. Loans that meet this “qualified mortgage” definition will be presumed to have complied with the new ability-to-repay standard. Under the Consumer Financial Protection Bureau’s rule, a “qualified mortgage” loan must not contain certain specified features, including:

● Excessive upfront points and fees (those exceeding 3% of the total loan amount, less “bona fide discount points” for prime loans);

● Interest-only payments;

● Negative-amortization; and

● Terms longer than 30 years.

Also, to qualify as a “qualified mortgage,” a borrower’s total monthly debt-to-income ratio may not exceed 43%. Lenders must also verify and document the income and financial resources relied upon to qualify the borrower for the loan and underwrite the loan based on a fully amortizing payment schedule and maximum interest rate during the first five years, taking into account all applicable taxes, insurance and assessments. The Consumer Financial Protection Bureau’s rule on qualified mortgages could limit our ability or desire to make certain types of loans or loans to certain borrowers, or could make it more expensive/and or time consuming to make these loans, which could limit our growth or profitability.

Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and our income.

Bank regulatory agencies, such as the FDIC, govern the activities in which we may engage, primarily for the protection of depositors, and not for the protection or benefit of potential investors. In addition, new laws and regulations are likely to increase our costs of regulatory compliance and costs of doing business, and otherwise affect our operations. New laws and regulations may significantly affect the markets in which we do business, the markets for and value of our loans and investments, the fees we can charge, and our ongoing operations, costs and profitability. For example, regulatory changes to our overdraft protection programs could decrease the amount of fees we receive for these services. We cannot fully predict the effect that changes in law or regulation will have on the Company’s or the Bank’s businesses or our ability to pursue future business opportunities, our financial condition or results of operations.

- 35 -

Part I (Continued)

Item 1A (Continued)

Our management team’s strategies for the enhancement of shareholder value may not succeed.

Our management team is taking and considering actions to enhance shareholder value, including reviewing personnel, developing new products, issuing dividends and exploring acquisition opportunities. These actions may not enhance shareholder value. For example, holders of our common stock are only entitled to receive such dividends as our Board of Directors may declare out of funds legally available for such payments. We are not legally required to do so. Further, the Federal Reserve could decide at any time that paying any dividends on our common stock could be an unsafe or unsound banking practice. The reduction or elimination of dividends paid on our common stock could adversely affect the market price of our common stock.

Our stock price may be volatile due to limited trading volume.

Our common stock is traded on the NASDAQ Global Select Market. However, the average daily trading volume in the Company’s common stock has been relatively small, averaging approximately 19 total trades per day during 2017. As a result, trades involving a relatively small number of shares may have a significant effect on the market price of the common stock, and it may be difficult for investors to acquire or dispose of large blocks of stock without significantly affecting the market price.

The costs and effects of litigation, investigations or similar matters involving us or other financial institutions or counterparties, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition.

We may be involved from time to time in a variety of litigation, investigations, inquiries or similar matters arising out of our business, including those described in [“Part I - Item 3. Legal Proceedings” and "Part II - Item 8. Financial Statements and Supplementary Data" of this Report.] We cannot predict the outcome of these or any other legal matters. We establish reserves for legal claims when payments associated with the claims become probable and the losses can be reasonably estimated. We may still incur legal costs for a matter even if we have not established a reserve. In addition, the actual cost of resolving a legal claim may be substantially higher than any amounts reserved for that matter. In addition, in the future, we may need to record additional litigation reserves with respect to these matters. Further, regardless of how these matters proceed, it could divert our management's attention and other resources away from our business. Our insurance may not cover all claims that may be asserted against it and indemnification rights to which we are entitled may not be honored, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any litigation or investigation significantly exceed our insurance coverage, they could have a material adverse effect on our business, financial condition and results of operations. In addition, premiums for insurance covering the financial and banking sectors are rising. We may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms or at historic rates, if at all.

Our stock price is subject to fluctuations, and the value of your investment may decline.

The trading price of our common stock is subject to wide fluctuations. The stock market in general, and the market for the stocks of commercial banks and other financial services companies in particular, has experienced significant price and volume fluctuations that sometimes have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance, and the value of your investment may decline.

- 36 -

Part I (Continued)

Item 1B

Unresolved Staff Comments

None.

Item 2

Properties

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

Item 3

Legal Proceedings

The Company and its subsidiary may become parties to various legal proceedings arising from the normal course of business. As of December 31, 2017, there are no material pending legal proceedings to which Colony or its subsidiary are a party or of which any of its property is the subject.

Item 4

Mine Safety Disclosures

Not Applicable.

- 37 -

Part II

Item 5

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

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

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

Year Ended December 31, 2017	High	Low	Close	Dividends Per Share
Fourth Quarter	14.75	13.00	14.60	0.025
Third Quarter	14.20	11.10	13.75	0.025
Second Quarter	14.00	13.45	13.70	0.025
First Quarter	14.55	13.00	13.85	0.025
Year Ended December 31, 2016
Fourth Quarter	13.30	9.45	13.20	0.000
Third Quarter	10.06	8.80	9.89	0.000
Second Quarter	10.00	9.20	9.51	0.000
First Quarter	10.04	8.11	9.19	0.000

During 2017, the Company paid $843,934 in cash dividends on its common stock. No cash dividends were paid on its common stock in 2016. For a description of the restrictions and limitations on the Company’s ability to pay dividends, please see “Dividends” on Page 14.

As of December 31, 2017, the Company had approximately 1,814 common stockholders of record.

Issuer Purchase of Equity Securities

The Company purchased no shares of the Company’s common stock during the quarter ended December 31, 2017.

- 38 -

Part II (Continued)

Item 5 (Continued)

Performance Graph

The performance graph below compares the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return on the equity securities of companies included in the NASDAQ Composite Index and the SNL Southeast Bank Index, measured at the last trading day of each year shown. The graph assumes an investment of $100 on December 31, 2012. The performance graph represents past performance and should not be considered to be an indication of future performance.

		Period Ending
Index	12/31/12	12/31/13	12/31/14	12/31/15	12/31/16	12/31/17
Colony Bankcorp, Inc.	100.00	169.44	218.89	264.72	366.67	408.55
NASDAQ Composite Index	100.00	140.12	160.78	171.97	187.22	242.71
SNL Southeast Bank Index	100.00	135.52	152.63	150.24	199.45	246.72

- 39 -

Part II (Continued)

Item 6

Selected Financial Data

	Year Ended December 31,
	2017		2016		2015		2014		2013
	(Dollars in Thousands, except per share data)
Selected Balance Sheet Data
Total Assets	$	1,232,755	$	1,210,442	$	1,174,149	$	1,146,898	$	1,148,551
Total Loans, Net of Unearned Interest and Fees		764,788		753,922		758,279		745,733		750,857
Total Deposits		1,067,985		1,044,357		1,011,554		979,303		987,529
Investment Securities		354,247		323,658		296,149		274,624		263,295
Federal Home Loan Bank Stock		3,043		3,010		2,731		2,831		3,164
Stockholders’ Equity		90,323		93,388		95,457		99,027		89,954
Selected Income Statement Data
Interest Income		45,916		44,589		44,275		44,762		45,186
Interest Expense		6,873		6,483		6,569		6,799		7,497
Net Interest Income		39,043		38,106		37,706		37,963		37,689
Provision for Loan Losses		390		1,062		866		1,308		4,485
Other Income		9,735		9,553		9,045		9,125		8,377
Other Expense		33,860		34,073		33,724		34,980		34,617
Income Before Tax		14,528		12,524		12,161		10,800		6,964
Income Tax Expense		6,777		3,851		3,788		3,268		2,335
Net Income		7,751		8,673		8,373		7,532		4,629
Preferred Stock Dividends		211		1,493		2,375		2,689		1,509
Net Income Available to Common Stockholders	$	7,540	$	7,180	$	5,998	$	4,843	$	3,120
Weighted Average
Common Shares Outstanding, Basic		8,439		8,439		8,439		8,439		8,439
Common Shares Outstanding, Diluted		8,634		8,513		8,458		8,439		8,439
Shares Outstanding		8,439		8,439		8,439		8,439		8,439
Intangible Assets	$	45	$	81	$	116	$	152	$	188
Dividends Declared		844		-		-		-		-
Average Assets		1,200,631		1,163,863		1,146,984		1,128,052		1,118,071
Average Stockholders’ Equity		91,045		100,114		101,710		94,751		93,358
Net Charge-Offs		1,805		743		1,064		4,312		5,416
Reserve for Loan Losses		7,508		8,923		8,604		8,802		11,806
OREO		4,256		6,439		8,839		10,402		15,502
Nonperforming Loans		7,503		12,350		14,416		18,341		24,118
Nonperforming Assets		11,759		18,789		23,255		28,743		39,620
Average Interest-Earning Assets		1,133,700		1,090,967		1,074,556		1,057,608		1,048,185
Noninterest-Bearing Deposits		190,928		159,059		133,886		128,340		115,261

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Part II (Continued)

Item 6 (Continued)

	Year Ended December 31,
	2017			2016			2015			2014			2013
	(Dollars in Thousands, except per share data)
Per Share Data:
Net Income Per Common Share (Diluted)	$	0.87		$	0.84		$	0.71		$	0.57		$	0.37
Common Book Value Per Share		10.70			9.96			9.18			8.42			7.34
Tangible Common Book Value Per Share		10.69			9.95			9.16			8.40			7.32
Dividends Per Common Share		0.10			0.00			0.00			0.00			0.00
Profitability Ratios:
Net Income to Average Assets		0.63	%		0.62	%		0.52	%		0.43	%		0.28	%
Net Income to Average Stockholders’ Equity		8.28			7.17			5.90			5.11			3.34
Net Interest Margin		3.46			3.51			3.52			3.60			3.61
Loan Quality Ratios:
Net Charge-Offs to Total Loans		0.24			0.10			0.14			0.58			0.72
Reserve for Loan Losses to Total Loans and OREO		0.98			1.17			1.12			1.16			1.54
Nonperforming Assets to Total Loans and OREO		1.53			2.47			3.03			3.80			5.17
Reserve for Loan Losses to Nonperforming Loans		100.06			72.25			59.68			47.99			48.95
Reserve for Loan Losses to Total Nonperforming Assets		63.85			47.49			37.00			30.62			29.80
Liquidity Ratios:
Loans to Total Deposits (1)		71.61			72.19			74.96			76.15			76.03
Loans to Average Interest-Earning Assets (1)		67.46			69.11			70.57			70.51			71.63
Noninterest-Bearing Deposits to Total Deposits		17.88			15.23			13.24			13.11			11.67
Capital Adequacy Ratios:
Common Stockholders’ Equity to Total Assets		7.33			6.94			6.60			6.20			5.39
Total Stockholders’ Equity to Total Assets		7.33			7.72			8.13			8.63			7.83
Dividend Payout Ratio		11.24			0.00			0.00			0.00			0.00

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

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Part II (Continued)

Item 7

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

Forward-Looking Statements and Factors that Could Affect Future Results

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

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

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

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

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

● Inflation, interest rate, market and monetary fluctuations;

● Political instability;

● Acts of war or terrorism;

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

● Changes in consumer spending, borrowings and savings habits;

● Technological changes;

● Acquisitions and integration of acquired businesses;

● The ability to increase market share and control expenses;

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Part II (Continued)

Item 7 (Continued)

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

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

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

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

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

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

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

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. Colony, 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. A focus in 2018 will be directed toward further reduction of problem assets.

As we look forward to 2018 we are committed to improving earnings and reducing problem assets. Given the improved condition of the company we are also considering product and market expansion. In January 2017, the Company opened its third office in Savannah. Currently, the Company is performing due diligence on a property for a new office in Statesboro.

While the Company has improved earnings, reduced problem assets and maintained strong capital levels, we have reinstated 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 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.

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Part II (Continued)

Item 7 (Continued)

Tax Cuts and Jobs Act

On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJ Act”) was enacted. The TCJ Act made broad changes to the U.S. tax code, including, but not limited to, a reduction of the U.S. federal corporate tax rate to 21 percent. As a result of the enactment of the TCJ Act, we have remeasured our deferred tax assets and liabilities based upon the new U.S. statutory federal income tax rate of 21%, which is the tax rate at which these assets and liabilities are expected to reverse in the future. We recognized additional income tax expense of $2,040,946 in the fourth quarter of 2017 related to the remeasurement of our deferred tax assets and liabilities. Currently, we are still analyzing certain aspects of the new law and refining our calculations, which could affect the measurement of these assets and liabilities or give rise to new deferred tax amounts. The table below illustrates the effect the additional tax expense resulting from the TCJ Act had on our results of operations for the year ended December 31, 2017.

	2017 As Reported			TCJ Act Impact			2017 Adjusted (Non-GAAP)
Net Income	$	7,751		$	(2,041	)	$	9,792
Earnings Per Share	$	0.89		$	(0.27	)	$	1.16
Return on Average Assets (1)		0.63	%		(0.19	)		0.80	%
Return on Average Equity (1)		8.28	%		(2.24	)		10.52	%

(1) Computed using Net Income Available to Common Stockholders.

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, certain non-GAAP measures are used by management 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.

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Part II (Continued)

Item 7 (Continued)

Non-GAAP Financial Measures (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
	Years Ended December 31,
	2017			2016			2015			2014			2013
	(Dollars in Thousands, except per share data)
Interest Income Reconciliation
Interest Income – Taxable Equivalent	$	46,079		$	44,762		$	44,407		$	44,879		$	45,356
Tax Equivalent Adjustment		(163	)		(173	)		(132	)		(117	)		(170	)
Interest Income (GAAP)	$	45,916		$	44,589		$	44,275		$	44,762		$	45,186
Net Interest Income Reconciliation
Net Interest Income – Taxable Equivalent	$	39,206		$	38,279		$	37,838		$	38,080		$	37,859
Tax Equivalent Adjustment		(163	)		(173	)		(132	)		(117	)		(170	)
Net Interest Income (GAAP)	$	39,043		$	38,106		$	37,706		$	37,963		$	37,689
Net Interest Margin Reconciliation
Net Interest Margin – Taxable Equivalent		3.46	%		3.51	%		3.52	%		3.60	%		3.61	%
Tax Equivalent Adjustment		(0.02	)		(.02	)		(.01	)		(.01	)		(.02	)
Net Interest Margin (GAAP)		3.44	%		3.49	%		3.51	%		3.59	%		3.59	%
Interest Rate Spread Reconciliation
Interest Rate Spread – Taxable Equivalent		3.34	%		3.40	%		3.41	%		3.49	%		3.50	%
Tax Equivalent Adjustment		(0.02	)		(.02	)		(.01	)		(.01	)		(.02	)
Interest Rate Spread (GAAP)		3.32	%		3.38	%		3.40	%		3.48	%		3.48	%
Selected Financial Data
Tangible Book Value Per Common Share	$	10.69		$	9.95		$	9.16		$	8.40		$	7.32
Effect of Other Intangible Assets		0.01			0.01			0.02			0.02			0.02
Book Value Per Common Share (GAAP)	$	10.70		$	9.96		$	9.18		$	8.42		$	7.34

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Part II (Continued)

Item 7 (Continued)

The Company

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

Overview

The following discussion and analysis presents the more significant factors affecting the Company’s financial condition as of December 31, 2017 and 2016, and results of operations for each of the years in the three-year period ended December 31, 2017. This discussion and analysis should be read in conjunction with the Company’s consolidated financial statements, notes thereto and other financial information appearing elsewhere in this report.

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

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

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Part II (Continued)

Item 7 (Continued)

Results of Operations

The Company’s results of operations are determined by its ability to effectively manage interest income and expense, to minimize loan and investment losses, to generate noninterest income and to control noninterest expense. Since market forces and economic conditions beyond the control of the Company determine interest rates, the ability to generate net interest income is dependent upon the Company’s ability to obtain an adequate spread between the rate earned on 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 $7.54 million, or $0.87 per diluted shares in 2017, compared to $7.18 million, or $0.84 per diluted common share in 2016 and compared to $6.00 million, or $0.71 per diluted common share in 2015.

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

							$			%									$			%
	2017			2016			Variance			Variance			2016			2015			Variance			Variance
Taxable-equivalent net interest income	$	39,206		$	38,279		$	927			2.42	%	$	38,279		$	37,838		$	441			1.17	%
Taxable-equivalent adjustment		163			173			(10	)		(5.78	)		173			132			41			31.06
Net interest income		39,043			38,106			937			2.46			38,106			37,706			400			1.06
Provision for loan losses		390			1,062			(672	)		(63.28	)		1,062			866			196			22.63
Noninterest income		9,735			9,553			182			1.91			9,553			9,045			508			5.62
Noninterest expense		33,860			34,073			(213	)		(0.63	)		34,073			33,724			349			1.03
Income before income taxes	$	14,528		$	12,524		$	2,004			16.00	%	$	12,524		$	12,161		$	363			2.98	%
Income Taxes		6,777			3,851			2,926			75.98			3,851			3,788			63			1.66
Net income	$	7,751		$	8,673		$	(922	)		(10.63	)%	$	8,673		$	8,373		$	300			3.58	%
Preferred stock dividends	$	211		$	1,493		$	(1,282	)		(85.87	)%	$	1,493		$	2,375		$	(882	)		(37.14	)%
Net income available to common shareholders	$	7,540		$	7,180		$	360			5.01	%	$	7,180		$	5,998		$	1,182			19.71	%
Net income available to common shareholders:
Basic	$	0.89		$	0.85		$	0.04			4.71	%	$	0.85		$	0.71		$	0.14			19.72	%
Diluted	$	0.87		$	0.84		$	0.03			3.57	%	$	0.84		$	0.71		$	0.13			18.31	%
Return on average assets (1)		0.63	%		0.62	%		0.01	%		1.61	%		0.62	%		0.52	%		0.10	%		19.23	%
Return on average common equity (1)		8.28	%		7.17	%		1.11	%		15.48	%		7.17	%		5.90	%		1.27	%		21.53	%

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

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Part II (Continued)

Item 7 (Continued)

Net Interest Income

Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is the Company’s largest source of revenue, representing 80.04 percent of total revenue during 2017, 79.96 percent of total revenue during 2016, and 80.65 percent of total revenue during 2015.

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 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 4.50 percent. The Federal Reserve Board sets general market rates of interest, including the deposit and loan rates offered by many financial institutions. For the first time in several years, the prime interest rate increased by 25 basis points in the fourth quarter of 2015, followed by a similar 25-point increase in the fourth quarter of 2016. During 2017, the prime interest rate increased overall by 75 basis points. Given that the federal funds rate moves in accordance with the movement of the prime interest rate, we anticipate that the federal funds rate will also increase from its current 1.5 percent.

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 Rate/Volume Analysis.

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Part II (Continued)

Item 7 (Continued)

Rate/Volume Analysis

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

	Changes From									Changes From
	2016 to 2017 (a)									2015 to 2016 (a)
	Volume			Rate			Total			Volume			Rate			Total
Interest Income
Loans, Net-Taxable	$	72		$	(407	)	$	(335	)	$	221		$	(951	)	$	(730	)
Investment Securities
Taxable		769			770			1,539			381			669			1,050
Tax-Exempt		(5	)		(9	)		(14	)		12			(15	)		(3	)
Total Investment Securities		764			761			1,525			393			654			1,047
Interest-Bearing Deposits in Other Banks		(12	)		120			108			(18	)		62			44
Federal Funds Sold		-			-			-			(15	)		-			(15	)
Other Interest - Earning Assets		12			7			19			4			5			9
Total Interest Income		836			481			1,317			585			(230	)		355
Interest Expense
Interest-Bearing Demand and Savings Deposits		174			28			202			137			62			199
Time Deposits		(240	)		15			(225	)		(271	)		(4	)		(275	)
Total Interest Expense On Deposits		(66	)		43			(23	)		(134	)		58			(76	)
Other Interest-Bearing Liabilities
Subordinated Debentures		-			126			126			-			98			98
Other Debt		231			54			285			74			(183	)		(109	)
Federal Funds Purchased		4			(2	)		2			-			1			1
Total Interest Expense		169			221			390			(60	)		(26	)		(86	)
Net Interest Income (Loss)	$	667		$	260		$	927		$	645		$	(204	)	$	441

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

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Part II (Continued)

Item 7 (Continued)

The Company maintains about 22.6 percent of its loan portfolio in adjustable rate loans that reprice with prime rate changes, while the bulk of its other loans mature within 3 years. The liabilities to fund assets are primarily in non-maturing core deposits and short term certificates of deposit that mature within one year. The Federal Reserve rates have remained flat since 2008 until the 25 basis point increase in the fourth quarter of 2015 and 2016 followed by the 75 basis point increase during 2017. We have seen the net interest margin change to 3.46 percent for 2017, compared to 3.51 percent for 2016 and 3.52 percent for 2015. We have seen our net interest margin reach a low of 3.35 percent in first quarter of 2017 to a high of 3.50 percent in the third and fourth quarters 2017.

Taxable-equivalent net interest income for 2017 increased by $927 thousand, or 2.42 percent, compared to 2016 while taxable-equivalent net interest income for 2016 increased by $441 thousand, or 1.17 percent compared to 2015. The average volume of interest-earning assets during 2017 increased $42.73 million compared to 2016 while over the same period the net interest margin dropped to 3.46 percent from 3.51 percent. The average volume of interest-earning assets during 2016 increased $16.41 million compared to 2015 while over the same period the net interest margin dropped to 3.51 percent from 3.52 percent. The change in the net interest margin in 2017 was primarily driven by a higher level of low yielding assets offset by an increase in the cost of funds. The change in the net interest margin in 2016 was primarily driven by reduction in the cost of funds and a higher level of low yielding assets. The increase in average interest-earning assets in 2017 was primarily in investments. The increase in average interest-earning assets in 2016 was in loans, investments and other interest-earning assets.

The average volume of loans increased $1.41 million in 2017 compared to 2016 and increased $4.20 million in 2016 compared to 2015. The average yield on loans decreased 5 basis points in 2017 compared to 2016 and decreased 13 basis points in 2016 compared to 2015. The average volume of deposits increased $36.78 million in 2017 compared to 2016. The average volume of deposits increased $17.35 million in 2016 compared to 2015. Demand deposits made up $18.59 million of the increase in average deposits in 2017 compared to $11.80 million of the increase in average deposits in 2016.

Accordingly, the ratio of average interest-bearing deposits to total average deposits was 84.6 percent in 2017, 85.9 percent in 2016 and 86.8 percent in 2015. This deposit mix, combined with a general decrease in interest rates, had the effect of (i) decreasing the average cost of total deposits by 2 basis points in 2017 compared to 2016 and decreasing the average cost of total deposits by 2 basis points in 2016 compared to 2015, and (ii) mitigating a portion of the impact of decreasing yields on interest-earning assets on the Company’s net interest income.

The Company’s net interest spread, which represents the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities, was 3.34 percent in 2017 compared to 3.40 percent in 2016 and 3.41 percent in 2015. The net interest spread, as well as the net interest margin, will be impacted by future changes in short-term and long-term interest rate levels, as well as the impact from the competitive environment. A discussion of the effects of changing interest rates on net interest income is set forth in Market Risk and Interest Rate Sensitivity included elsewhere in this report.

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Part II (Continued)

Item 7 (Continued)

Rate/Volume Analysis (Continued)

AVERAGE BALANCE SHEETS

	2017								2016								2015
	Average			Income/		Yields/			Average			Income/		Yields/			Average			Income/		Yields/
	Balances			Expense		Rates			Balances			Expense		Rates			Balances			Expense		Rates
Assets
Interest-Earning Assets
Loans, Net of Unearned Income (1)	$	762,554		$	38,749		5.08	%	$	761,149		$	39,084		5.13	%	$	756,953		$	39,814		5.26	%
Investment Securities
Taxable		344,790			6,867		1.99			301,357			5,328		1.77			276,807			4,278		1.55
Tax-Exempt (2)		2,310			81		3.51			2,440			95		3.89			2,171			98		4.51
Total Investment Securities		347,100			6,948		2.00			303,797			5,423		1.79			278,978			4,376		1.57
Interest-Bearing Deposits		20,920			232		1.11			23,167			124		0.54			29,815			80		0.27
Federal Funds Sold		-			-		-			-			-		-			6,056			15		0.25
Other Interest-Earning Assets		3,126			150		4.80			2,854			131		4.59			2,754			122		4.43
Total Interest-Earning Assets		1,133,700			46,079		4.06	%		1,090,967			44,762		4.10			1,074,556			44,407		4.13
Noninterest-Earning Assets
Cash		20,587								19,208								19,049
Allowance for Loan Losses		(8,442	)							(9,372	)							(8,587	)
Other Assets		54,786								63,060								61,966
Total Noninterest-Earning Assets		66,931								72,896								72,428
Total Assets	$	1,200,631							$	1,163,863							$	1,146,984
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities
Interest-Bearing Demand and Savings	$	517,974		$	1,896		0.37	%	$	469,740		$	1,694		0.36	%	$	430,731		$	1,495		0.35	%
Other Time		353,587			2,862		0.81			383,628			3,087		0.80			417,080			3,362		0.81
Total Interest-Bearing Deposits		871,561			4,758		0.55			853,368			4,781		0.56			847,811			4,857		0.57
Other Interest-Bearing Liabilities
Other Borrowed Money		51,388			1,385		2.70			42,470			1,100		2.59			40,000			1,209		3.02
Subordinated Debentures		24,229			727		3.00			24,229			601		2.48			24,229			503		2.08
Federal Funds Purchased and Repurchase Agreements		178			3		1.69			35			1		2.86			3			-		-
Total Other Interest-Bearing Liabilities		75,795			2,115		2.79			66,734			1,702		2.55			64,232			1,712		2.67
Total Interest-Bearing Liabilities		947,356			6,873		0.73			920,102			6,483		0.70			912,043			6,569		0.72
Noninterest-Bearing Liabilities and Stockholders' Equity
Demand Deposits		158,924								140,338								128,541
Other Liabilities		3,306								3,309								4,690
Stockholders' Equity		91,045								100,114								101,710
Total Noninterest-Bearing Liabilities and Stockholders' Equity		253,275								243,761								234,941
Total Liabilities and Stockholders' Equity	$	1,200,631							$	1,163,863							$	1,146,984
Interest Rate Spread							3.34	%							3.40	%							3.41	%
Net Interest Income				$	39,206							$	38,279							$	37,838
Net Interest Margin							3.46	%							3.51	%							3.52	%

(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 $135, $141 and $99 for 2017, 2016 and 2015, respectively, are included in interest on loans. The adjustments are based on a federal tax rate of 34 percent.

(2) Taxable-equivalent adjustments totaling $28, $32 and $33 for 2017, 2016 and 2015, respectively, are included in tax-exempt interest on investment securities. The adjustments are based on a federal tax rate of 34 percent with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.

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Part II (Continued)

Item 7 (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 $390 thousand in 2017 compared to $1.06 million in 2016 and $866 thousand in 2015. 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:

					$			%								$			a
	2017		2016		Variance			Variance			2016		2015			Variance			Variance
Service Charges on Deposit Accounts	$	4,467	$	4,307	$	160			3.71	%	$	4,307	$	4,269		$	38			0.89	%
Other Charges, Commissions and Fees		3,040		2,803		237			8.46			2,803		2,627			176			6.70
Mortgage Fee Income		859		682		177			25.95			682		527			155			29.41
Securities Gains (Losses)		-		385		(385	)		(100.00	)		385		(11	)		396			3,600.00
Other		1,369		1,377		(8	)		(0.58	)		1,377		1,633			(256	)		(15.68	)
Total	$	9,735	$	9,554	$	181			1.89	%	$	9,554	$	9,045		$	509			5.63	%

Other Charges, Commissions and Fees. Significant amounts impacting the comparable periods was primarily attributed to ATM and debit card interchange fees which increased $209 thousand in 2017 compared to 2016 and $184 thousand in 2016 compared to 2015.

Mortgage Fee Income. The increase in mortgage fee income in 2017 compared to the same period in 2016 is due to an increase in the volume of mortgage loans.

Securities Gains (Losses). The decrease in 2017 is attributable to no sale of securities in 2017 compared to a gain on sale of securities in 2016.

Other. The Bank did not have any significant changes for 2017 compared to 2016. Significant amounts impacting the comparable periods was primarily attributed to having income from the sale of a tax credit of $66 thousand and life insurance benefits of $137 that did not occur in 2016 when compared to 2015.

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Part II (Continued)

Item 7 (Continued)

Noninterest Expense

The components of noninterest expense were as follows:

					$			%							$			%
	2017		2016		Variance			Variance			2016		2015		Variance			Variance
Salaries and Employee Benefits	$	19,223	$	18,483	$	740			4.00	%	$	18,483	$	17,590	$	893			5.08	%
Occupancy and Equipment		3,948		3,970		(22	)		(0.55	)		3,970		3,989		(19	)		(0.48	)
Directors' Fees		298		349		(51	)		(14.61	)		349		358		(9	)		(2.51	)
Legal and Professional Fees		894		792		102			12.88			792		738		54			7.32
Foreclosed Property		363		1,143		(780	)		(68.24	)		1,143		1,683		(540	)		(32.09	)
FDIC Assessment		387		604		(217	)		(35.93	)		604		899		(295	)		(32.81	)
Advertising		350		610		(260	)		(42.62	)		610		625		(15	)		(2.40	)
Software		1,192		1,112		80			7.19			1,112		993		119			11.98
Telephone		814		737		77			10.45			737		710		27			3.80
ATM/Card Processing		1,467		1,136		331			29.14			1,136		1,061		75			7.07
Other		4,924		5,137		(213	)		(4.15	)		5,137		5,078		59			1.16
Total	$	33,860	$	34,073	$	(213	)		(0.63)	%	$	34,073	$	33,724	$	349			1.03	%

Salaries and Employee Benefits. The increase in salary and employee benefits for 2017 and 2016 is due to merit pay increases.

Foreclosed Property. The decrease in foreclosed property and repossession expense for 2017 and 2016 is primarily attributable to the decrease in the volume of OREO.

Advertising. The decrease in advertising expense for 2017 is due to management changing its approach to advertising by decreasing its television ads.

ATM/Card Processing. The increase is proportional to the Bank’s increase in deposits and to ATM and debit card interchange fees.

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Part II (Continued)

Item 7 (Continued)

Sources and Uses of Funds

The following table illustrates, during the years presented, the mix of the Company’s funding sources and the assets in which those funds are invested as a percentage of the Company’s average total assets for the period indicated. Average assets totaled $1.20 billion in 2017 compared to $1.16 billion in 2016 and $1.15 billion in 2015.

	2017				2016				2015
Sources of Funds:
Deposits:
Noninterest-Bearing	$	158,924	13.24	%	$	140,338	12.1	%	$	128,541	11.2	%
Interest-Bearing		871,561	72.59	%		853,368	73.3	%		847,811	73.9	%
Federal Funds Purchased and Repurchase Agreements		178	0.01	%		35	-	%		3	-	%
Subordinated Debentures and Other Borrowed Money		75,617	6.30	%		66,699	5.7	%		64,229	5.6	%
Other Noninterest-Bearing Liabilities		3,306	0.28	%		3,309	0.3	%		4,690	0.4	%
Equity Capital		91,045	7.58	%		100,114	8.6	%		101,710	8.9	%
Total	$	1,200,631	100.00	%	$	1,163,863	100.0	%	$	1,146,984	100.0	%
Uses of Funds:
Loans (Net of Allowance)	$	754,112	62.81	%	$	751,777	64.6	%	$	748,366	65.3	%
Investment Securities		347,100	28.91	%		303,797	26.1	%		278,978	24.3	%
Federal Funds Sold		-	-	%		-	-	%		6,056	0.5	%
Interest-Bearing Deposits		20,920	1.74	%		23,167	2.0	%		29,815	2.6	%
Other Interest-Earning Assets		3,126	0.26	%		2,854	0.2	%		2,754	0.2	%
Other Noninterest-Earning Assets		75,373	6.28	%		82,268	7.1	%		81,015	7.1	%
Total	$	1,200,631	100.00	%	$	1,163,863	100.0	%	$	1,146,984	100.0	%

Deposits continue to be the Company’s primary source of funding. Over the comparable periods, the relative mix of deposits continues to be high in interest-bearing deposits. Interest-bearing deposits totaled 84.6 percent of total average deposits in 2017 compared to 85.9 percent in 2016 and 86.8 percent in 2015.

The Company primarily invests funds in loans and securities. Loans continue to be the largest component of the Company’s mix of invested assets. Loan demand increased in 2017 as total loans were $765.3 million at December 31, 2017, up 1.46 percent, compared to loans of $754.3 million at December 31, 2016, which went down 0.57 percent, compared to loans of $758.6 million at December 31, 2015. See additional discussion regarding the Company’s loan portfolio in the section captioned “Loans” on the following page. The majority of funds provided by deposits have been invested in loans and securities.

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Part II (Continued)

Item 7 (Continued)

Loans

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

	2017			2016			2015			2014			2013
Commercial and Agricultural
Commercial	$	48,122		$	47,025		$	47,782		$	50,960		$	48,107
Agricultural		16,443			17,080			19,193			16,689			10,666
Real Estate
Commercial Construction		45,214			30,358			40,107			51,259			52,739
Residential Construction		8,583			11,830			9,413			11,221			6,549
Commercial		351,172			349,090			346,262			332,231			341,783
Residential		194,049			195,580			197,002			203,753			206,258
Farmland		67,768			66,877			61,780			49,951			47,034
Consumer and Other
Consumer		18,956			19,695			20,605			22,820			25,676
Other		14,977			16,748			16,492			7,210			12,406
		765,284			754,283			758,636			746,094			751,218
Unearned Interest and Fees		(495	)		(361	)		(357	)		(362	)		(360	)
Allowances for Loan Losses		(7,508	)		(8,923	)		(8,604	)		(8,802	)		(11,806	)
Loans	$	757,281		$	744,999		$	749,675		$	736,930		$	739,052

The following table presents total loans as of December 31, 2017 according to maturity distribution and/or repricing opportunity on adjustable rate loans.

Maturity and Repricing Opportunity

One Year or Less	$	279,145
After One Year through Three Years		270,161
After Three Years through Five Years		169,049
Over Five Years		46,929
	$	765,284

Overview. Loans totaled $765.3 million at December 31, 2017 up 1.46 percent from 754.3 million at December 31, 2016. The majority of the Company’s loan portfolio is comprised of the real estate loans. Commercial and residential real estate which is primarily 1-4 family residential properties and nonfarm nonresidential properties, made up 71.24 percent and 72.21 percent of total loans, real estate construction loans made up 7.03 percent and 5.59 percent while commercial and agricultural loans made up 8.44 percent and 8.50 percent of total loans at December 31, 2017 and December 31, 2016, respectively.

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Part II (Continued)

Item 7 (Continued)

Loan Origination/Risk Management. In accordance with the Company’s decentralized banking model, loan decisions are made at the local bank level. The Company utilizes 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 criterion may vary slightly by market. Overall, loans are extended after a review of the borrower’s repayment ability, collateral adequacy, and overall credit worthiness.

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

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

Commercial and Agricultural. Commercial and agricultural loans at December 31, 2017 increased 0.78 percent to $64.6 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.

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Part II (Continued)

Item 7 (Continued)

Real Estate.Commercial and residential construction loans increased by $11.6 million, or 27.49 percent, at December 31, 2017 to $53.8 million from $42.2 million at December 31, 2016. This increase is partially due to new commercial construction loans being financed during the year that were not completed by the end of the year.  Commercial real estate increased $2.1 million or 0.6 percent at December 31, 2017 to $351.17 million from $349.09 million at December 31, 2016.

Other.Other loans at December 31, 2017 decreased 10.6 percent to $14.98 million from $16.75 million in December 31, 2016.

Industry Concentrations. As of December 31, 2017 and December 31, 2016, there were no concentrations of loans within any single industry in excess of 10 percent of total loans, as segregated by Standard Industrial Classification code (“SIC code”). The SIC code is a federally designed standard industrial numbering system used by the Company to categorize loans by the borrower’s type of business. The Company has established industry-specific guidelines with respect to maximum loans permitted for each industry with which the Company does business.

Collateral Concentrations. Concentrations of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries, or certain geographic regions. The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market. At December 31, 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.

Large Credit Relationships. The Company is currently in eighteen counties in central, south and coastal Georgia and includes metropolitan markets in Dougherty, Lowndes, Houston, Chatham and Muscogee counties. As a result, the Company originates and maintains large credit relationships with several commercial customers in the ordinary course of business. The Company considers large credit relationships to be those with commitments equal to or in excess of $5.0 million prior to any portion being sold. Large relationships also include loan participations purchased if the credit relationship with the agent is equal to or in excess of $5.0 million. In addition to the Company’s normal policies and procedures related to the origination of large credits, the Company’s Executive Loan Committee and Director Loan Committee must approve all new and renewed credit facilities which are part of large credit relationships. The following table provides additional information on the Company’s large credit relationships outstanding at December 31, 2017 and December 31, 2016.

	December 31, 2017						December 31, 2016
			Period End Balances						Period End Balances
	Number of						Number of
	Relationships		Committed		Outstanding		Relationships		Committed		Outstanding
Large Credit Relationships:
$10 million or greater		1	$	11,541	$	8,718		-	$	-	$	-
$5 million to $9.9 million		15		98,718		89,556		14		96,807		86,712

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Part II (Continued)

Item 7 (Continued)

Maturities and Sensitivities of Loans to Changes in Interest Rates. The following table presents the maturity distribution of the Company’s loans at December 31, 2017. The table also presents the portion of loans that have fixed interest rates or variable interest rates that fluctuate over the life of the loans in accordance with changes in an interest rate index such as the prime rate.

	Due in One Year or Less		After One, but Within Three Years		After Three, but Within Five Years		After Five Years		Total
Loans with fixed interest rates	$	200,340	$	232,129	$	115,366	$	44,363	$	592,198
Loans with floating interest rates		78,805		38,032		53,683		2,566		173,086
Total	$	279,145	$	270,161	$	169,049	$	46,929	$	765,284

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

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Part II (Continued)

Item 7 (Continued)

Nonperforming Assets and Potential Problem Loans

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

	2017			2016			2015			2014			2013
Loans Accounted for on Nonaccrual	$	7,503		$	12,350		$	14,408		$	18,334		$	24,114
Loans Accruing Past Due 90 Days or More		-			-			8			7			4
Other Real Estate Foreclosed		4,256			6,439			8,839			10,402			15,502
Securities Accounted for on Nonaccrual		-			-			-			-			-
Total Nonperforming Assets	$	11,759		$	18,789		$	23,255		$	28,743		$	39,620
Nonperforming Assets by Segment
Construction and Land Development	$	2,630		$	3,376		$	7,106		$	9,655		$	17,323
1-4 Family Residential		3,309			4,375			4,197			8,237			5,926
Multifamily Residential		-			-			-			173			335
Nonfarm Residential		3,796			9,182			9,908			8,375			12,441
Farmland		839			800			1,103			1,449			1,629
Commercial and Consumer		1,185			1,056			941			854			1,966
Total Nonperforming Assets	$	11,759		$	18,789		$	23,255		$	28,743		$	39,620
Nonperforming Assets as a Percentage of:
Total Loans and Foreclosed Assets		1.53	%		2.47	%		3.03	%		3.80	%		5.17	%
Total Assets		0.95	%		1.55	%		1.98	%		2.51	%		3.45	%
Nonperforming Loans as a Percentage of:
Total Loans		0.98	%		1.64	%		1.90	%		2.46	%		3.21	%
Supplemental Data:
Trouble Debt Restructured Loans In Compliance with Modified Terms	$	18,363		$	17,992		$	19,375		$	19,229		$	20,715
Trouble Debt Restructured Loans Past Due 30-89 Days		131			319			344			757			435
Accruing Past Due Loans:
30-89 Days Past Due		4,558			4,469			10,959			9,701			9,366
90 or More Days Past Due		-			-			8			7			4
Total Accruing Past Due Loans	$	4,558		$	4,469		$	10,967		$	9,708		$	9,370
Allowance for Loan Losses	$	7,508		$	8,923		$	8,604		$	8,802		$	11,806
ALLL as a Percentage of:
Total Loans		0.98	%		1.18	%		1.13	%		1.18	%		1.57	%
Nonperforming Loans		100.06	%		72.25	%		59.68	%		47.99	%		48.95	%

Nonperforming assets include nonaccrual loans, loans past due 90 days or more, foreclosed real estate and nonaccrual securities. Nonperforming assets at December 31, 2017 decreased 37.42 percent from December 31, 2016.

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Part II (Continued)

Item 7 (Continued)

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

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

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

Allowance for Loan Losses

The allowance for loan losses 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.

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Part II (Continued)

Item 7 (Continued)

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. During the first quarter of 2016 Company management implemented a change to its allowance for loan loss methodology by expanding the historical loss period from a rolling 8 quarters to 16 quarters. Management believes the longer historical loss period better reflects the current and expected loss behavior of the loan portfolio within the current credit cycle. The transition to a rolling 16 quarter loss period was complete in the first quarter of 2017. As of December 31, 2017, this change in the historical loss period resulted in a decrease to the allowance for loan losses of $114,144. The loss history period used at December 31, 2016 and 2015 was based on the loss rate from the eight quarters ended September 30, 2016 and 2015, respectively.

Effective with the quarter ended June 30, 2015, the calculation of the amount needed in the Allowance for Loan Losses changed. Management determined that the segmentation method for the ASC 450-20 portion of the loan portfolio should be changed to bank call report categories. Prior to this change, the ASC 450-20 segmentation categorized loans by various non-owner occupied commercial real estate loan types and risk grades for the remainder of the ASC 450-20 portion of the portfolio. On the date of change, June 30, 2015, the change in methodology resulted in an increase to the calculated allowance for loan loss reserve of $1,621,424.

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.

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Part II (Continued)

Item 7 (Continued)

Management evaluates the adequacy of the allowance for each of these components on a quarterly basis. Peer comparisons, industry comparisons, and regulatory guidelines are also used in the determination of the general valuation allowance. Loans identified as losses by management, internal loan review, and/or bank examiners are charged off. Additional information about the Company’s allowance for loan losses is provided in the Notes to the Consolidated Financial Statements for Allowance for Loan Losses.

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

	2017					2016					2015					2014					2013
	Reserve		%*			Reserve		%*			Reserve		%*			Reserve		%*			Reserve		%*
Commercial and Agricultural
Commercial	$	447		6	%	$	456		6	%	$	855		6	%	$	497		7	%	$	1,017		6	%
Agricultural		186		2	%		168		2	%		203		3	%		304		2	%		294		2	%
Real Estate
Commercial Construction		1,216		6	%		323		4	%		691		5	%		1,223		7	%		1,782		7	%
Residential Construction		-		1	%		13		2	%		20		1	%		138		1	%		138		1	%
Commercial		3,874		46	%		5,751		46	%		3,851		46	%		3,665		45	%		4,380		46	%
Residential		968		25	%		1,396		26	%		1,990		26	%		2,425		27	%		3,278		27	%
Farmland		780		9	%		722		9	%		912		8	%		104		7	%		312		6	%
Consumer and Other
Consumer		34		3	%		80		3	%		63		3	%		67		3	%		243		3	%
Other		3		2	%		14		2	%		19		2	%		379		1	%		362		2	%
	$	7,508		100	%	$	8,923		100	%	$	8,604		100	%	$	8,802		100	%	$	11,806		100	%

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

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Part II (Continued)

Item 7 (Continued)

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

	2017			2016			2015			2014			2013
Allowance for Loan Losses at Beginning of Year	$	8,923		$	8,604		$	8,802		$	11,806		$	12,737
Charge-Offs
Commercial		299			305			455			625			121
Agricultural		159			19			5			-			34
Commercial Construction		52			25			98			1,543			2,071
Residential Construction		-			-			-			-			-
Commercial		966			992			275			1,327			2,873
Residential		1,048			362			930			1,034			706
Farmland		61			120			40			233			21
Consumer		330			265			255			342			398
Other		-			-			25			-			4
	$	2,915		$	2,088		$	2,083		$	5,104		$	6,228
Recoveries
Commercial		137			67			52			76			56
Agricultural		4			4			3			3			6
Commercial Construction		266			814			486			485			253
Residential Construction		-			-			-			-			-
Commercial		527			206			270			90			298
Residential		82			50			110			31			65
Farmland		17			145			20			20			22
Consumer		75			53			62			72			94
Other		2			6			16			15			18
		1,110			1,345			1,019			792			812
Net Charge-Offs		1,805			743			1,064			4,312			5,416
Provision for Loans Losses		390			1,062			866			1,308			4,485
Allowance for Loan Losses at End of Year	$	7,508		$	8,923		$	8,604		$	8,802		$	11,806
Ratio of Net Charge-Offs to Average Loans		0.24	%		0.10	%		0.14	%		0.58	%		0.73	%

The allowance for loan losses decreased from $8.92 million, or 1.18 percent of total loans at December 31, 2016 to $7.51 million, or 0.98 percent of total loans at December 31, 2017. The provision for loan losses reflects loan quality trends, including the level of net charge-offs or recoveries, among other factors. Significant changes in the allowance during 2017 was the increase in the net charge-offs in 2017 to $1.81 million from $743 thousand in 2016, or an increase of $1.06 million. Significant changes in the allowance during 2016 was the reduction in the net charge-offs in 2016 to $743 thousand from $1.06 million in 2015. The Company believes that collection efforts have reduced impaired loans and the reduction in net charge-offs runs parallel with the improvement in the substandard assets. As we begin to see stabilization in the economy and the housing and real estate market, we expect continued improvement in our substandard assets, including net charge-offs. There were no charge-offs or recoveries related to foreign loans during any of the periods presented.

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Part II (Continued)

Item 7 (Continued)

Investment Portfolio

The following table presents carrying values of investment securities held by the Company as of December 31, 2017, 2016 and 2015.

	2017		2016		2015
State, County and Municipal	$	4,493	$	4,561	$	5,099
Mortgage-Backed Securities		346,723		319,097		291,050
Corporate		2,060		-		-
Asset-Backed		971		-		-
Total Investment Securities and Mortgage-Backed Securities	$	354,247	$	323,658	$	296,149

The following table represents expected maturities and weighted-average yields of investment securities held by the Company as of December 31, 2017. (Mortgage-backed securities are based on the average life at the projected speed, while State and Political Subdivisions reflect anticipated calls being exercised.)

						After 1 Year But					After 5 Years But
	Within 1 Year					Within 5 Years					Within 10 Years					After 10 Years
	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield
Mortgage-Backed Securities	$	29,606		2.78	%	$	204,342		1.79	%	$	98,304		2.57	%	$	14,471		2.96	%
Obligations of State and Political Subdivisions		517		3.03			3,037		2.09			679		3.10			260		4.03
Corporate		-		-			2,060		4.03			-		-			-		-
Asset-Backed		-		-			971		3.12			-		-			-		-
Total Investment Portfolio	$	30,123		2.78	%	$	210,410		1.82	%	$	98,983		2.57	%	$	14,731		2.98	%

Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income. The Company has 100 percent of its portfolio classified as available for sale.

At December 31, 2017, there were no holdings of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10 percent of the Company’s stockholders’ equity.

The average yield of the securities portfolio was 2.00 percent in 2017 compared to 1.79 percent in 2016 and 1.57 percent in 2015. The increase in the average yield from 2016 to 2017 was primarily attributed to the purchase of new securities which have a higher yield. The increase in the average yield from 2015 to 2016 was primarily attributed to the adjustment in amortization resulting from the deceleration of prepayment speeds.

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Part II (Continued)

Item 7 (Continued)

Deposits

The following table presents the average amount outstanding and the average rate paid on deposits by the Company for the years 2017, 2016 and 2015.

	2017					2016					2015
	Average		Average			Average		Average			Average		Average
	Amount		Rate			Amount		Rate			Amount		Rate
Noninterest-Bearing Demand Deposits	$	158,924				$	140,338				$	128,541
Interest-Bearing Demand and Savings		517,974		0.37	%		469,740		0.36	%		430,731		0.35	%
Time Deposits		353,587		0.81	%		383,628		0.80	%		417,080		0.81	%
Total Deposits	$	1,030,485		0.46	%	$	993,706		0.48	%	$	976,352		0.50	%

The following table presents the maturities of the Company’s time deposits as of December 31, 2017.

	Time		Time
	Deposits		Deposits
	$250,000		Less Than
	or Greater		$250,000		Total
Months to Maturity
3 or Less	$	4,166	$	67,962	$	72,128
Over 3 through 6		7,316		62,163		69,479
Over 6 through 12		20,670		93,298		113,968
Over 12 Months		6,767		77,825		84,592
	$	38,919	$	301,248	$	340,167

Average deposits increased $36.78 million in 2017 compared to 2016 and increased $17.35 million in 2016 compared to 2015. The increase in 2017 included $48.23 million, or 10.27 percent in interest-bearing demand and savings deposits while, at the same time noninterest bearing deposits increased $18.59 million, or 13.24 percent and time deposits decreased $30.04 million, or 7.83 percent. The increase in 2016 included $39.01 million, or 9.06 percent in interest-bearing demand and savings deposits while, at the same time noninterest bearing deposits increased $11.80 million, or 9.18 percent and time deposits decreased $33.45 million, or 8.02 percent. Accordingly, the ratio of average noninterest-bearing deposits to total average deposits was 15.42 percent in 2017, 14.12 percent in 2016 and 13.17 percent in 2015. The general decrease in market rates in 2017 had the effect of (i) decreasing the average cost of interest-bearing deposits by 2 basis points in 2017 compared to 2016 and (ii) mitigating a portion of the impact of decreasing yields on interest-earning assets in the Company’s net interest income in 2017. The general decrease in market rates in 2016 had the effect of (i) decreasing the average cost of interest-bearing deposits by 2 basis points in 2016 compared to 2015 and (ii) mitigating a portion of the impact of decreasing yields on interest-earning assets in the Company’s net interest income in 2016.

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Part II (Continued)

Item 7 (Continued)

Total average interest-bearing deposits increased $18.19 million, or 2.13 percent in 2017 compared to 2016 and increased $5.56 million, or 0.66 percent in 2016 compared to 2015. This increase was primarily attributable to the increase in interest-bearing demand and savings accounts in 2017 and in 2016 as well.

The Company supplements deposit sources with brokered deposits. As of December 31, 2017, the Company had $46.33 million, or 4.34 percent of total deposits, in brokered certificates of deposit attracted by external third parties. Additional information is provided in the Notes to Consolidated Financial Statements for Deposits.

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

The following table summarizes the Company’s contractual obligations and other commitments to make future payments as of December 31, 2017. Payments for borrowings do not include interest. Payments related to leases are based on actual payments specified in the underlying contracts. Loan commitments and standby letters of credit are presented at contractual amounts; however, since many of these commitments are expected to expire unused or only partially used, the total amounts of these commitments do not necessarily reflect future cash requirements. The off-balance-sheet arrangements for loan commitments consist of approximately $10 million in 1-4 residential home equity and construction loans, $28 million in commercial real estate construction loans, $18 million in commercial/industrial loans and $40 million in the overdraft privilege program.

	Payments Due by Period
	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years
Contractual Obligations:
Subordinated Debentures	$	24,229	$	-	$	-	$	-	$	24,229
Federal Home Loan Bank Advances		46,000		2,500		5,000		29,500		9,000
Other Borrowings		1,500		1,500		-		-		-
Operating Leases		208		43		42		123		-
Deposits with Stated Maturity Dates		340,168		255,575		41,210		43,266		117
		412,105		259,618		46,252		72,889		33,346
Other Commitments:
Loan Commitments		96,374		96,374		-		-		-
Standby Letters of Credit		1,536		1,536		-		-		-
		97,910		97,910		-		-		-
Total Contractual Obligations and Other Commitments	$	510,015	$	357,528	$	46,252	$	72,889	$	33,346

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

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Part II (Continued)

Item 7 (Continued)

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

Loan Commitments. The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of the Company’s commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. The Company minimizes its exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for loan losses. Loan commitments outstanding at December 31, 2017 are included in the preceding table.

Standby Letters of Credit. Letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third party. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment is funded, the Company would be entitled to seek recovery from the customer. The Company’s policies generally require that standby letters of credit arrangements contain security and debt covenants similar to those contained in loan agreements. Standby letters of credit outstanding at December 31, 2017 are included in the preceding table.

Capital and Liquidity

At December 31, 2017, shareholders’ equity totaled $90.32 million compared to $93.39 million at December 31, 2016. In addition to net income of $7.75 million, other significant changes in shareholders’ equity during 2017 included $210.6 thousand of dividends declared on preferred stock, $843.9 thousand of dividends declared on common stock and $9.36 million redemption of preferred stock. The accumulated other comprehensive loss component of stockholders’ equity totaled $(6.49) million at December 31, 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. Under regulatory requirements, the unrealized gain or loss on securities available for sale does not increase or reduce regulatory capital and is not included in the calculation of risk-based capital and leverage ratios. Regulatory agencies for banks and bank holding companies utilize capital guidelines designed to measure Tier 1 and total capital and take into consideration the risk inherent in both on-balance sheet and off-balance sheet items. Tier 1 capital consists of common stock and qualifying preferred stockholders’ equity less goodwill and disallowed deferred tax assets. Tier 2 capital consists of certain convertible, subordinated and other qualifying debt and the allowance for loan losses up to 1.25 percent of risk-weighted assets. The Company has no Tier 2 capital other than the allowance for loan losses.

Using the capital requirements presently in effect, the Tier 1 ratio as of December 31, 2017 was 14.64 percent and total Tier 1 and 2 risk-based capital was 15.56 percent. Both of these measures compare favorably with the regulatory minimum of 6 percent for Tier 1 and 8 percent for total risk-based capital. The Company’s common equity Tier 1 ratio as of December 31, 2017 was 11.78, which exceeds the regulatory minimum of 4.50 percent. The Company’s Tier 1 leverage ratio as of December 31, 2017 was 9.89 percent, which exceeds the required ratio standard of 4 percent.

For 2017, average capital was $91.05 million, representing 7.58 percent of average assets for the year. This compares to 8.60 percent for 2016.

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Part II (Continued)

Item 7 (Continued)

For 2017, the Company did not have any material commitments for capital expenditures.

The Company reinstated payment of common stock dividends in 2017 with a cash dividend of $844 thousand. The Company did not pay any common stock dividends in 2016. The Company suspended common stock dividend payments beginning in the third quarter of 2009 for capital retention purposes.

The Company declared dividends of $211 thousand and $1,493 million on preferred stock during 2017 and 2016, respectively. On November 17, 2014 the Company reinstated dividend payments after being on deferral since February 12, 2012, on the Preferred Stock and paid $5.5 million of accumulated dividends in arrears to the holders of the Preferred Stock. Additional information is provided in the Notes to the Consolidated Financial Statements for Preferred Stock.

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

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

The investment portfolio provides a ready means to raise cash if liquidity needs arise. As of December 31, 2017, the available for sale bond portfolio totaled $354.2 million. At December 31, 2016, the available for sale bond portfolio totaled $323.7 million. Only marketable investment grade bonds are purchased. Although most of the Bank’s bond portfolio is encumbered as pledges to secure various public funds deposits, repurchase agreements, and for other purposes, management can restructure and free up investment securities for sale if required to meet liquidity needs.

Management continually monitors the relationship of loans to deposits as it primarily determines the Company’s liquidity posture. Colony had ratios of loans to deposits of 71.6 percent as of December 31, 2017 and 72.2 percent as of 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 December 31, 2017 and December 31, 2016 were 68.6 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 December 31, 2017 and December 31, 2016, the Bank had $38.9 million and $32.2 million, respectively, in certificates of deposit of $250,000 or more. These larger deposits represented 3.6 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.

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Part II (Continued)

Item 7 (Continued)

The Company supplemented deposit sources with brokered deposits. As of December 31, 2017, the Company had $46.3 million or 4.3 percent of total deposits in CDARS. Additional information is provided in the Notes to the Consolidated Financial Statements regarding these brokered deposits. Additionally, the Company uses external deposit listing services to obtain out-of-market certificates of deposit at competitive interest rates when funding is needed. The deposits obtained from listing services are often referred to as wholesale or Internet CDs. As of December 31, 2017, the Company had $13.5 million, or 1.3 percent of total deposits, in internet certificates of deposit obtained through deposit listing services.

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

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

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

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

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

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

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Part II (Continued)

Item 7 (Continued)

Impact of Inflation and Changing Prices

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

Regulatory and Economic Policies

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

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

Recently Issued Accounting Pronouncements

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

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Part II (Continued)

Item 7 (Continued)

Market Risk and Interest Rate Sensitivity

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

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

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

Our exposure to interest rate risk is reviewed at least quarterly by our Board of Directors and the ALCO. Interest rate risk exposure is measured using interest rate sensitivity analysis to determine our change in net portfolio value in the event of assumed changes in interest rates. In order to reduce the exposure to interest rate fluctuations, we have implemented strategies to more closely match our balance sheet composition. The Company has engaged FTN Financial to run a quarterly asset/liability model for interest rate risk analysis. We are generally focusing our investment activities on securities with terms or average lives in the 3 ½ - 5 ½ year range.

Market risk reflects the risk of economic loss resulting from adverse changes in market prices and interest rates. This risk of loss can be reflected in either reduced current market values or reduced current and potential net income. Colony’s most significant market risk is interest rate risk. This risk arises primarily from Colony’s extension of loans and acceptance of deposits.

Managing interest rate risk is a primary goal of the asset liability management function. Colony attempts to achieve stability in net interest income while limiting volatility arising from changes in interest rates. Colony seeks to achieve this goal by balancing the maturity and repricing characteristics of assets and liabilities. Colony manages its exposure to fluctuations in interest rates through policies established by ALCO and approved by the Board of Directors. ALCO meets at least quarterly and has responsibility for developing asset liability management policies, reviewing the interest rate sensitivity of Colony, and developing and implementing strategies to improve balance sheet structure and interest rate risk positioning.

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Part II (Continued)

Item 7 (Continued)

Colony measures the sensitivity of net interest income to changes in market interest rates through the utilization of Asset/Liability simulation modeling. On at least a quarterly basis, the following twenty-four month time period is simulated to determine a baseline net interest income forecast and the sensitivity of this forecast to changes in interest rates. These simulations include all of Colony’s earning assets and liabilities. Forecasted balance sheet changes, primarily reflecting loan and deposit growth and forecasts, are included in the periods modeled. Projected rates for loans and deposits are based on management’s outlook and local market conditions.

The magnitude and velocity of rate changes among the various asset and liability groups exhibit different characteristics for each possible interest rate scenario; additionally, customer loan and deposit preferences can vary in response to changing interest rates. Simulation modeling enables Colony to capture the expected effect of these differences. Assumptions utilized in the model are updated on an ongoing basis and are reviewed and approved by the ALCO Committee of the Board of Directors.

Colony has modeled its baseline net interest income forecast assuming a flat interest rate environment with the federal funds rate at the Federal Reserve's current targeted range of 1.25% to 1.50% and the current prime rate of 4.50%. Colony has modeled the impact of a gradual increase in short-term rates of 100 and 200 basis points and a decline of 100 basis points to determine the sensitivity of net interest income for the next twelve months. As illustrated in the table below, the net interest income sensitivity model indicates that, compared with a net interest income forecast assuming stable rates, net interest income is projected to increase by 0.58% and increase by 0.27% if interest rates increased by 100 and 200 basis points, respectively. Net interest income is projected to decline by 2.57% if interest rates decreased by 100 basis points. These changes were within Colony’s policy limit of a maximum 15% negative change.

Twelve Month Net Interest Income Sensitivity
	Estimated Change in Net Interest Income As of December 31,
Change in Short-term Interest Rates (in basis points)	2017			2016
+200		0.27	%		3.35	%
+100		0.58	%		1.88	%
Flat		-	%		-	%
-100		-2.57	%		-3.67	%

The measured interest rate sensitivity indicates an asset sensitive position over the next year, which could serve to improve net interest income in a rising interest rate environment. The actual realized change in net interest income would depend on several factors, some of which could serve to reduce or eliminate the asset sensitivity noted above. These factors include a higher than projected level of deposit customer migration to higher cost deposits, such as certificates of deposit, which would increase total interest expense and serve to reduce the realized level of asset sensitivity. Another factor which could impact the realized interest rate sensitivity in a rising rate environment is the repricing behavior of interest bearing non-maturity deposits. Assumptions for repricing are expressed as a beta relative to the change in the prime rate. For instance, a 25% beta would correspond to a deposit rate that would increase 0.25% for every 1% increase in the prime rate. Projected betas for interest bearing non-maturity deposit repricing are a key component of determining the Company's interest rate risk position. Should realized betas be higher than projected betas, the expected benefit from higher interest rates would be reduced.

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Part II (Continued)

Item 7 (Continued)

The net interest income simulation model is the primary tool utilized to evaluate potential interest rate risks over a shorter term time horizon. Colony also evaluates potential longer term interest rate risk through modeling and evaluation of economic value of equity (EVE). This EVE modeling allows Colony to capture longer-term repricing risk and options risk embedded in the balance sheet. Simulation modeling is utilized to measure the economic value of equity and its sensitivity to immediate changes in interest rates. These simulations value only the current balance sheet and do not incorporate growth assumptions used in the net interest income simulation. The economic value of equity is the net fair value of assets and liabilities derived from the present value of future cash flows discounted at current market interest rates. From this baseline valuation, Colony evaluates changes in the value of each of these items in various interest rate scenarios to determine the net impact on the economic value of equity. Key assumptions utilized in the model, namely loan prepayments, deposit pricing betas, and non-maturity deposit durations have a significant impact on the results of the EVE simulations.

As illustrated in the table below, the economic value of equity model indicates that, compared with a valuation assuming stable rates, EVE is projected to increase by 7.93% and 13.13%, assuming an immediate and sustained increase in interest rates of 100 and 200 basis points, respectively. The primary reason for the increase in asset sensitivity from the prior year is a more aggressive assumption regarding non-maturity deposit durations. Assuming an immediate 100 basis point decline in rates, EVE is projected to decrease by 11.73%. These changes were within Colony’s policy except in the -100 basis point change, which limits the maximum negative change in EVE to 10% of the base EVE. We believe this projection outside of policy is mitigated by the unlikely reduction in interest rates due to the current rate environment.

Economic Value of Equity Sensitivity
	Estimated Change in EVE As of December 31,
Immediate Change in Interest Rates (in basis points)	2017			2016
+200		13.13	%		16.27	%
+100		7.93	%		9.59	%
-100		-11.73	%		-12.44	%

Colony is also subject to market risk in certain of its fee income business lines. Financial management services revenues, which include trust, brokerage, and asset management fees, can be affected by risk in the securities markets, primarily the equity securities market. A significant portion of the fees in this unit are determined based upon a percentage of asset values. Weaker securities markets and lower equity values have an adverse impact on the fees generated by these operations. Trading account assets, maintained to facilitate brokerage customer activity, are also subject to market risk. This risk is not considered significant, as trading activities are limited and subject to risk policy limits. Mortgage banking income is also subject to market risk. Mortgage loan originations are sensitive to levels of mortgage interest rates and therefore, mortgage banking income could be negatively impacted during a period of rising interest rates. The extension of commitments to customers to fund mortgage loans also subjects Colony to market risk. This risk is primarily created by the time period between making the commitment and closing and delivering the loan. Colony seeks to minimize this exposure by utilizing various risk management tools, the primary of which are forward sales commitments and best efforts commitments.

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Part II (Continued)

Item 7 (Continued)

The following table is an analysis of the Company’s interest rate-sensitivity position at December 31, 2017. The interest-bearing rate-sensitivity gap, which is the difference between interest-earning assets and interest-bearing liabilities by repricing period, is based upon maturity or first repricing opportunity, along with a cumulative interest rate-sensitivity gap. It is important to note that the table indicates a position at a specific point in time and may not be reflective of positions at other times during the year or in subsequent periods. Major changes in the gap position can be, and are, made promptly as market outlooks change.

	Assets and Liabilities Repricing Within
	3 Months			4 to 12						1 to 5			Over 5
	or Less			Months			1 Year			Years			Years			Total
INTEREST-EARNING ASSETS:
Interest-Bearing Deposits	$	34,668		$	-		$	34,668		$	-		$	-		$	34,668
Investment Securities		302			2,883			3,185			215,082			135,980			354,247
Loans, Net of Unearned Income		142,947			135,950			278,897			438,962			46,929			764,788
Other Interest- Earning Assets		3,043			-			3,043			-			-			3,043
Total Interest-Earning Assets	$	180,960		$	138,833		$	319,793		$	654,044		$	182,909		$	1,156,746
INTEREST-BEARING LIABILITIES:
Interest-Bearing Demand Deposits (1)		458,717			-			458,717			-			-			458,717
Savings (1)		78,172			-			78,172			-			-			78,172
Time Deposits		72,128			183,447			255,575			84,476			117			340,168
Other Borrowings		4,000			-			4,000			34,500			9,000			47,500
Subordinated Debentures		24,229			-			24,229			-			-			24,229
Total Interest-Bearing Liabilities		637,246			183,447			820,693			118,976			9,117			948,786
Interest Rate-Sensitivity Gap		(456,286	)		(44,614	)		(500,900	)		535,068			173,792		$	207,960
Cumulative Interest-Sensitivity Gap	$	(456,286	)	$	(500,900	)	$	(500,900	)	$	34,168		$	207,960
Interest Rate-Sensitivity Gap as a Percentage of Interest-Earning Assets		(39.44	)%		(3.86	)%		(43.30	)%		46.26	%		15.02	%
Cumulative Interest Rate-Sensitivity as a Percentage of Interest-Earning Assets		(39.44	)%		(43.30	)%		(43.30	)%		2.96	%		17.98	%

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

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Part II (Continued)

Item 7 (Continued)

The foregoing table indicates that we had a one year negative gap of $500.9 million, or 43.30 percent of total interest-earning assets at December 31, 2017. In theory, this would indicate that at December 31, 2017, $500.9 million more in liabilities than assets would reprice if there were a change in interest rates over the next 365 days. Thus, if interest rates were to decline, the gap would indicate a resulting increase in net interest margin. However, changes in the mix of interest-earning assets or supporting liabilities can either increase or decrease the net interest margin without affecting interest rate sensitivity. In addition, the interest rate spread between an asset and our supporting liability can vary significantly while the timing of repricing of both the assets and our supporting liability can remain the same, thus impacting net interest income. This characteristic is referred to as a basis risk and, generally, relates to the repricing characteristics of short-term funding sources such as certificates of deposits.

Gap analysis has certain limitations. Measuring the volume of repricing or maturing assets and liabilities does not always measure the full impact on the portfolio value of equity or net interest income. Gap analysis does not account for rate caps on products; dynamic changes such as increasing prepay speeds as interest rates decrease, basis risk, or the benefit of non-rate funding sources. The majority of our loan portfolio reprices quickly and completely following changes in market rates, while non-term deposit rates in general move slowly and usually incorporate only a fraction of the change in rates. Products categorized as nonrate sensitive, such as our noninterest-bearing demand deposits, in the gap analysis behave like long term fixed rate funding sources. Both of these factors tend to make our actual behavior more asset sensitive than is indicated in the gap analysis. In fact, we experience higher net interest income when rates rise, opposite what is indicated by the gap analysis. Therefore, management uses gap analysis, net interest margin analysis and market value of portfolio equity as our primary interest rate risk management tools. The Company has established its one year gap to be 80 percent to 120 percent. The most recent analysis as of December 31, 2017 indicates a one year gap of 1.10 percent. The analysis reflects slight net interest margin compression in both a declining and increasing interest rate environment. Given that interest rates have shown a gradual increase with the Federal Reserve actions since 2015, the Company is anticipating interest rates to increase in the future though we believe that interest rates will increase modestly in 2018. The Company is focusing on areas to minimize margin compression in the future by minimizing longer term fixed rate loans, shortening on the yield curve with investments, securing longer term FHLB advances, securing certificates of deposit for longer terms and focusing on reduction of nonperforming assets.

The Company utilizes FTN Financial Asset/Liability Management Analysis for a more dynamic analysis of balance sheet structure. The Company has established policies for rate shock per basis point (bp) for earnings at risk for net interest income and for equity at risk. The following table shows the policy limits with the rate shock for earnings at risk and equity at risk as of December 31, 2017.

	Rate Shock	Policy Limit	Immediate Shock (-) decrease bp			Immediate Shock (+) increase bp
Net Interest Income – Earnings at Risk	+/- 100 bp	+/- 10%		-2.80	%		0.79	%
	+/- 200 bp	+/- 15%		-7.96			0.27
	+/- 300 bp	+/- 20%		-11.08			0.13
	+/- 400 bp	+/- 25%		-12.45			-1.24
Equity at Risk	+/- 100 bp	+/- 10%		-11.73			7.93
	+/- 200 bp	+/- 20%		-26.41			13.13
	+/- 300 bp	+/- 30%		-34.15			15.81
	+/- 400 bp	+/- 40%		-35.09			17.08

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Part II (Continued)

Item 7 (Continued)

Return on Assets and Stockholder’s Equity

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

	Years Ended December 31
	2017			2016			2015
Return on Average Assets(1)		0.63	%		0.62	%		0.52	%
Return on Average Equity(1)		8.28	%		7.17	%		5.90	%
Equity to Assets		7.33	%		7.72	%		8.13	%
Common Stock Dividends Declared	$	0.10		$	0.00		$	0.00

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

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Part II (Continued)

Item 7A

Quantitative and Qualitative Disclosures About Market Risk

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

Item 8

Financial Statements and Supplemental Data

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

Consolidated Balance Sheets - December 31, 2017 and 2016

Consolidated Statements of Income - Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Comprehensive Income - Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Stockholders’ Equity - Years Ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows - Years Ended December 31, 2017, 2016 and 2015

Notes to Consolidated Financial Statements

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Part II (Continued)

Item 8 (Continued)

Quarterly Results of Operations (Unaudited)

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2017 and 2016:

	Three Months Ended
	December 31		September 30		June 30		March 31
	($ in Thousands, Except Per Share Data)
2017
Interest Income	$	11,679	$	11,578	$	11,538	$	11,121
Interest Expense		1,757		1,735		1,722		1,659
Net Interest Income		9,922		9,843		9,816		9,462
Provision for Loan Losses		55		-		-		335
Securities Gains		-		-		-		-
Noninterest Income		2,517		2,424		2,394		2,400
Noninterest Expense		8,452		8,380		8,620		8,408
Income Before Income Taxes		3,932		3,887		3,590		3,119
Provision for Income Taxes		3,353		1,265		1,157		1,002
Net Income		579		2,622		2,433		2,117
Preferred Stock Dividends		-		-		-		211
Net Income Available to Common Stockholders	$	579	$	2,622	$	2,433	$	1,906
Net Income Per Common Share
Basic	$	0.06	$	0.31	$	0.29	$	0.23
Diluted	$	0.07	$	0.30	$	0.28	$	0.22
2016
Interest Income	$	11,203	$	11,156	$	11,141	$	11,089
Interest Expense		1,634		1,600		1,616		1,633
Net Interest Income		9,569		9,556		9,525		9,456
Provision for Loan Losses		-		354		354		354
Securities Gains		-		256		127		2
Noninterest Income		2,392		2,381		2,225		2,170
Noninterest Expense		8,830		8,654		8,354		8,235
Income Before Income Taxes		3,131		3,185		3,169		3,039
Provision for Income Taxes		944		927		1,002		978
Net Income		2,187		2,258		2,167		2,061
Preferred Stock Dividends		304		378		406		405
Net Income Available to Common Stockholders	$	1,883	$	1,880	$	1,761	$	1,656
Net Income Per Common Share
Basic	$	0.22	$	0.22	$	0.21	$	0.20
Diluted	$	0.22	$	0.22	$	0.21	$	0.20

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Part II (Continued)

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

The Company did not change auditors in 2017. In addition, there was no accounting or disclosure disagreement or reportable event with the current auditors that would have required the filing of a report on Form 8-K.

Item 9A

Controls and Procedures

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

During the year ended December 31, 2017, there was not any change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

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

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

Colony’s management assessed the effectiveness of Colony’s internal control over financial reporting as of December 31, 2017 based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, management determined that Colony maintained effective internal control over financial reporting as of December 31, 2017.

McNair, McLemore, Middlebrooks & Co., LLC, the independent registered public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, has issued an audit report on the effectiveness of Colony’s internal control over financial reporting as of December 31, 2017. The report, which expresses an unqualified opinion on Colony’s internal control over financial reporting as of December 31, 2017 is included in this Annual Report on Form 10-K.

Colony Bankcorp, Inc.

March 15, 2018

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Part II (Continued)

Item 9A (Continued)

Changes in Internal Controls

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

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

Item 9B

Other Information

None.

Part III

Item 10

Directors and Executive Officers and Corporate Governance

Code of Ethics

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

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

Item 11

Executive Compensation

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

- 80 -

Part III (Continued)

Item 12

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

EQUITY COMPENSATION PLAN INFORMATION

The Company does not currently have any securities authorized for issuance pursuant to the grant or exercise of awards under an equity compensation plan.

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

Item 13

Certain Relationships and Related Transactions and Director Independence

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

Item 14

Principal Accounting Fees and Services

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

- 81 -

Part IV

Item 15

Exhibits, Financial Statement Schedules

(a)	The following documents are filed as part of this report:
	(1)	Financial Statements
	(2)	Financial Statements Schedules:
			All schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or the related notes.
	(3)	A list of the exhibits required by Item 601 of Regulation S-K to be filed as a part of this report is shown on the “Exhibit Index” filed herewith.
Exhibit Index
3.1	Articles of Incorporation, As Amended
		-filed as Exhibit 99.1 to the Registrant’s 10-Q for the period ended June 30, 2014 (File No. 0-12436), filed with the Commission on August 4, 2014 and incorporated herein by reference.
3.2	Bylaws, as Amended
		-filed as Exhibit 3(b) to the Registrant’s Registration Statement on Form 10 (File No. 0-18486), filed with the Commission on April 25, 1990 and incorporated herein by reference.
3.3	Articles of Amendment to the Company’s Articles of Incorporation Authorizing Additional Capital Stock in the Form of Ten Million Shares of Preferred Stock
		-filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436) filed with the Commission on January 13, 2009 and incorporated herein by reference.
3.4	Articles of Amendment to the Company’s Articles of Incorporation Establishing the Terms of the Series A Preferred Stock
		-filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 000-12436) filed with the Commission on January 13, 2009 and incorporated herein by reference.
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	Instruments Defining the Rights of Security Holders
		-incorporated herein by reference to page 1 of the Company’s Definitive Proxy Statement for Annual Meeting of Stockholders to be held on April 26, 2005, filed with the Securities and Exchange Commission on March 2, 2005 (File No. 000-12436).

- 82 -

Part IV (Continued)

Item 15 (Continued)

4.2	Warrant to Purchase up to 500,000 shares of Common Stock
		-filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.
4.3	Form of Series A Preferred Stock Certificate
		-filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.
10.1	Deferred Compensation Plan and Sample Director Agreement
		-filed as Exhibit 10(a) to the Registrant’s Registration Statement on Form 10 (File No. 0-18486), filed with the Commission on April 25, 1990 and incorporated herein by reference.
10.2	Profit-Sharing Plan Dated January 1, 1979
		-filed as Exhibit 10(b) to the Registrant’s Registration Statement on Form 10 (File No. 0-18486), filed with the Commission on April 25, 1990 and incorporated herein by reference.
10.3	1999 Restricted Stock Grant Plan and Restricted Stock Grant Agreement
		-filed as Exhibit 10(c) the Registrant’s Annual Report on Form 10-K (File 000-12436), filed with the Commission on March 30, 2001 and incorporated herein by reference.
10.4	2004 Restricted Stock Grant Plan and Restricted Stock Grant Agreement
		-filed as Exhibit C to the Registrant’s Definitive Proxy Statement for Annual Meeting of Stockholders held on April 27, 2004, filed with the Securities and Exchange Commission on March 3, 2004 (File No. 000-12436) and incorporated herein by reference.
10.5	Lease Agreement - Mobile Home Tracks, LLC c/o Stafford Properties, Inc. and Colony Bank Worth
		-filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10Q (File No. 000-12436), filed with Securities and Exchange Commission on November 5, 2004 and incorporated herein by reference.
10.6	Letter Agreement, Dated January 9, 2009, Including Securities Purchase Agreement – Standard Terms Incorporated by Reference Therein, Between the Company and the United States Department of the Treasury
		-filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.

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Part IV (Continued)

Item 15 (Continued)

10.7	Form of Waiver, Executed by Each of Messrs Al D. Ross, Terry L. Hester, Henry F. Brown, Jr., Walter P. Patten and Larry E. Stevenson
		-filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on January 13, 2009 and incorporated herein by reference.
10.8	Employment Agreement, Dated April 27, 2012 Between Edward P. Loomis, Jr. and Colony Bankcorp, Inc.
		-filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-12436), filed with the Commission on May 2, 2012 and incorporated herein by reference.
10.9	Retention Agreements
		-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.

13	Consolidated Financial Statements of Colony Bankcorp, Inc. as of December 31, 2017, 2016 and 2015
21	Subsidiaries of the Company
31.1	Certificate of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certificate of Chief Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certificate of the Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

- 84 -

SIGNATURES

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

COLONY BANKCORP, INC.

/s/ Edward P. Loomis, Jr.

Edward P. Loomis, Jr.

President/Director/Chief Executive Officer

March 15, 2018

Date

/s/ Terry L. Hester

Terry L. Hester

Executive Vice-President/Chief Financial Officer/Director

March 15, 2018

Date

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

/s/ Mark H. Massee	March 15, 2018
Mark H. Massee, Director	Date
/s/ Jonathan W. R. Ross	March 15, 2018
Jonathan W. R. Ross, Director	Date
/s/ Frederick Dwozan	March 15, 2018
M. Frederick Dwozan, Director	Date
/s/ Scott Lowell Downing	March 15, 2018
Scott Lowell Downing, Director	Date

- 85 -

EX-13

EXHIBIT NO. 13

McNair, McLemore, Middlebrooks & Co., LLC

CERTIFIED PUBLIC ACCOUNTANTS

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

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

mmmcpa.com

March 15, 2018

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Colony Bankcorp, Inc.

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Colony Bankcorp, Inc. and subsidiary (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively, the financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Basis for Opinions

The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included under Item 9A, Controls and Procedures, in the Company’s Annual Report on Form 10-K. Our responsibility is to express an opinion on the Company's financial statements and an opinion on the company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

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Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

McNAIR, McLEMORE, MIDDLEBROOKS & CO., LLC

We have served as the Company’s auditor since 1995.

Macon, Georgia

March 15, 2018

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COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31

	2017			2016
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks	$	23,145,136		$	28,822,104
Interest-Bearing Deposits		34,667,715			46,344,859
Investment Securities
Available for Sale, at Fair Value		354,246,904			323,657,870
Federal Home Loan Bank Stock, at Cost		3,042,900			3,010,000
Loans		765,283,855			754,283,563
Allowance for Loan Losses		(7,507,508	)		(8,923,293	)
Unearned Interest and Fees		(495,500	)		(361,042	)
		757,280,847			744,999,228
Premises and Equipment		27,639,430			27,969,260
Other Real Estate (Net of Allowance of $1,451,492 and $1,878,127 in 2017 and 2016, Respectively)		4,256,469			6,439,226
Other Intangible Assets		44,766			80,515
Other Assets		28,431,150			29,118,555
Total Assets	$	1,232,755,317		$	1,210,441,617

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

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COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31

	2017			2016
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Noninterest-Bearing	$	190,927,928		$	159,058,633
Interest-Bearing		877,057,477			885,297,895
		1,067,985,405			1,044,356,528
Borrowed Money
Subordinated Debentures		24,229,000			24,229,000
Other Borrowed Money		47,500,000			46,000,000
		71,729,000			70,229,000
Other Liabilities		2,718,249			2,468,356
Commitments and Contingencies
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; 10,000,000 Shares Authorized, 0 and 9,360 Shares Issued and Outstanding as of December 31, 2017 and 2016		-			9,360,000
Common Stock, Par Value $1; 20,000,000 Shares Authorized, 8,439,258 Shares Issued and Outstanding as of December 31, 2017 and 2016		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		59,230,260			51,465,521
Accumulated Other Comprehensive Loss, Net of Tax		(6,491,949	)		(5,022,140	)
		90,322,663			93,387,733
Total Liabilities and Stockholders’ Equity	$	1,232,755,317		$	1,210,441,617

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

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COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31

	2017		2016		2015
Interest Income
Loans, Including Fees	$	38,613,540	$	38,942,503	$	39,716,269
Federal Funds Sold		3		-		14,561
Deposits with Other Banks		232,397		124,459		79,735
Investment Securities
U.S. Government Agencies		6,717,827		5,263,741		4,235,207
State, County and Municipal		115,097		127,379		107,638
Corporate		87,387		-		-
Dividends on Other Investments		150,172		131,007		122,070
		45,916,423		44,589,089		44,275,480
Interest Expense
Deposits		4,758,073		4,781,228		4,856,673
Federal Funds Purchased		2,639		581		26
Borrowed Money		2,112,017		1,701,522		1,712,548
		6,872,729		6,483,331		6,569,247
Net Interest Income		39,043,694		38,105,758		37,706,233
Provision for Loan Losses		390,000		1,062,000		865,500
Net Interest Income After Provision for Loan Losses		38,653,694		37,043,758		36,840,733
Noninterest Income
Service Charges on Deposits		4,466,997		4,307,214		4,268,438
Other Service Charges, Commissions and Fees		3,040,262		2,802,651		2,627,157
Mortgage Fee Income		858,658		681,806		527,187
Securities Gains (Losses)		-		385,223		(11,466	)
Other		1,368,648		1,376,860		1,633,205
		9,734,565		9,553,754		9,044,521
Noninterest Expenses
Salaries and Employee Benefits		19,222,594		18,482,693		17,589,631
Occupancy and Equipment		3,947,941		3,970,244		3,989,347
Directors’ Fees		298,100		348,755		358,291
Legal and Professional Fees		893,938		791,563		737,731
Foreclosed Property		363,519		1,143,518		1,682,783
FDIC Assessment		386,823		603,654		899,302
Advertising		349,722		609,892		624,844
Software		1,192,025		1,112,065		992,593
Telephone		813,592		737,063		710,038
ATM/Card Processing		1,467,411		1,136,122		1,061,262
Other		4,924,163		5,137,400		5,078,932
		33,859,828		34,072,969		33,724,754
Income Before Income Taxes		14,528,431		12,524,543		12,160,500
Income Taxes		6,777,453		3,851,333		3,787,803
Net Income		7,750,978		8,673,210		8,372,697
Preferred Stock Dividends		210,600		1,493,310		2,375,010
Net Income Available to Common Stockholders	$	7,540,378	$	7,179,900	$	5,997,687
Net Income Per Share of Common Stock
Basic	$	0.89	$	0.85	$	0.71
Diluted	$	0.87	$	0.84	$	0.71
Cash Dividends Declared Per Share of Common Stock	$	0.10	$	0.00	$	0.00
Weighted Average Shares Outstanding, Basic		8,439,258		8,439,258		8,439,258
Weighted Average Shares Outstanding, Diluted		8,633,581		8,513,295		8,458,461

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

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COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31

	2017			2016			2015
Net Income	$	7,750,978		$	8,673,210		$	8,372,697
Other Comprehensive Income (Loss)
Gains (Losses) on Securities Arising During the Year		(608,355	)		(505,367	)		610,689
Tax Effect		206,841			171,825			(207,634	)
Realized (Gains) Losses on Sale of AFS Securities		-			(385,223	)		11,466
Tax Effect		-			130,976			(3,898	)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects		(401,514	)		(587,789	)		410,623
Comprehensive Income	$	7,349,464		$	8,085,421		$	8,783,320

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

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COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015

	Preferred Shares Issued			Preferred Stock			Common Shares Issued		Common Stock		Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, December 31, 2014		28,000		$	28,000,000			8,439,258	$	8,439,258	$	29,145,094	$	38,287,934		$	(4,844,974	)	$	99,027,312
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects																	410,623			410,623
Dividends on Preferred Shares														(2,375,010	)					(2,375,010	)
Redemption of Preferred Stock		(9,979	)		(9,979,000	)														(9,979,000	)
Net Income														8,372,697						8,372,697
Balance, December 31, 2015		18,021		$	18,021,000			8,439,258	$	8,439,258	$	29,145,094	$	44,285,621		$	(4,434,351	)	$	95,456,622
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects																	(587,789	)		(587,789	)
Dividends on Preferred Shares														(1,493,310	)					(1,493,310	)
Redemption of Preferred Stock		(8,661	)		(8,661,000	)														(8,661,000	)
Net Income														8,673,210						8,673,210
Balance, December 31, 2016		9,360		$	9,360,000			8,439,258	$	8,439,258	$	29,145,094	$	51,465,521		$	(5,022,140	)	$	93,387,733
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects																	(401,514	)		(401,514	)
Dividends on Common Shares														(843,934	)					(843,934	)
Dividends on Preferred Shares														(210,600	)					(210,600	)
TCJ Act Reclassification														1,068,295			(1,068,295	)		-
Redemption of Preferred Stock		(9,360	)		(9,360,000	)														(9,360,000	)
Net Income														7,750,978						7,750,978
Balance, December 31, 2017		-		$	-			8,439,258	$	8,439,258	$	29,145,094	$	59,230,260		$	(6,491,949	)	$	90,322,663

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

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PART I (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2017			2016			2015
Cash Flows from Operating Activities
Net Income	$	7,750,978		$	8,673,210		$	8,372,697
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Depreciation		1,647,813			1,574,249			1,657,229
Amortization and Accretion		1,413,362			1,609,339			1,797,152
Provision for Loan Losses		390,000			1,062,000			865,500
Deferred Income Taxes		2,833,958			222,120			625,436
Securities (Gains) Losses		-			(385,223	)		11,466
(Gain) Loss on Sale of Premises and Equipment		(10,735	)		80,329			11,047
Loss on Sale of Other Real Estate and Repossessions		(208,329	)		160,682			600,663
Provision for Losses on Other Real Estate		333,767			501,736			453,148
Increase in Cash Surrender Value of Life Insurance		(1,669,424	)		(589,408	)		(299,010	)
Change In
Interest Receivable		(90,204	)		176,766			(354,274	)
Prepaid Expenses		139,382			(372,380	)		278,637
Interest Payable		21,188			(46,284	)		32,253
Accrued Expenses and Accounts Payable		361,005			(252,617	)		(202,343	)
Other		(367,626	)		973,972			217,686
		12,545,135			13,388,491			14,067,287
Cash Flows from Investing Activities
Interest-Bearing Deposits in Other Banks		11,677,144			(7,729,560	)		(17,409,260	)
Purchase of Investment Securities Available for Sale		(87,160,178	)		(109,634,793	)		(102,336,227	)
Proceeds from Sale of Investment Securities Available for Sale		-			25,209,851			28,273,634
Proceeds from Maturities, Calls and Paydowns of Investment Securities
Available for Sale		54,587,986			54,868,726			51,423,541
Held to Maturity		-			-			9,734
Proceeds from Sale of Premises and Equipment		37,650			89,551			28,608
Net Loans to Customers		(14,459,526	)		(2,167,126	)		(21,255,018	)
Purchase of Premises and Equipment		(1,344,898	)		(3,259,859	)		(3,189,969	)
Proceeds from Sale of Other Real Estate and Repossessions		3,863,576			7,529,131			8,154,596
Proceeds from Sale of Federal Home Loan Bank Stock		-			-			100,300
Purchase of Federal Home Loan Bank Stock		(32,900	)		(279,500	)		-
		(32,831,146	)		(35,373,579	)		(56,200,061	)
Cash Flows from Financing Activities
Interest-Bearing Customer Deposits		(8,240,418	)		7,629,930			26,704,254
Noninterest-Bearing Customer Deposits		31,869,295			25,172,362			5,546,508
Proceeds from Other Borrowed Money		10,015,500			10,000,000			27,000,000
Principal Payments on Other Borrowed Money		(8,515,500	)		(4,000,000	)		(27,000,000	)
Dividends Paid on Preferred Stock		(315,900	)		(1,590,746	)		(2,487,274	)
Redemption of Preferred Stock		(9,360,000	)		(8,661,000	)		(9,979,000	)
Dividends Paid on Common Stock		(843,934	)		-			-
		14,609,043			28,550,546			19,784,488
Net Increase (Decrease) in Cash and Cash Equivalents		(5,676,968	)		6,565,458			(22,348,286	)
Cash and Cash Equivalents, Beginning		28,822,104			22,256,646			44,604,932
Cash and Cash Equivalents, Ending	$	23,145,136		$	28,822,104		$	22,256,646

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

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PART I (Continued)

Item 1 (Continued)

COLONY BANKCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Principles of Consolidation

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

Nature of Operations

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

Use of Estimates

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date and revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans.

Reclassifications

In certain instances, amounts reported in prior years’ consolidated financial statements and note disclosures have been reclassified to conform to statement presentations selected for 2017. Such reclassifications had no effect on previously reported stockholders’ equity or net income.

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

Concentrations of Credit Risk

Concentrations of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions. The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market. At December 31, 2017, approximately 87.1 percent of the Company’s loan portfolio was concentrated in loans secured by real estate. A substantial portion of borrowers’ ability to honor their contractual obligations is dependent upon the viability of the real estate economic sector. Declining collateral real estate values that secure land development, construction and speculative real estate loans in the Company’s larger MSA markets have resulted in high loan loss provisions in recent years. In addition, a large portion of the Company’s foreclosed assets are also located in these same geographic markets, making the recovery of the carrying amount of foreclosed assets susceptible to changes in market conditions. Management continues to monitor these concentrations and has considered these concentrations in its allowance for loan loss analysis.

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

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

Investment Securities

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

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

Investment Securities (Continued)

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

Federal Home Loan Bank Stock

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

Loans

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

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

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

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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 nonaccrual loan that has been modified in a TDR remains on nonaccrual status for a period of six months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status. Once a loan is modified in a troubled debt restructuring, it is accounted for as an impaired loan, regardless of its accrual status, until the loan is paid in full, sold or charged off.

Allowance for Loan Losses

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

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

The allowance consists of specific, historical and general components. The specific component relates to loans that are classified as either doubtful, substandard or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan 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.

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

Allowance for Loan Losses (Continued)

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

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

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

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

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.   

Other Intangible Assets

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

Transfers of Financial Assets

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

Statement of Cash Flows

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

Advertising Costs

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

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

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 basis. The differences relate primarily to depreciable assets (use of different depreciation methods for financial statement and income tax purposes) and allowance for loan losses (use of the allowance method for financial statement purposes and the direct write-off method for tax purposes). In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with effects included in the income tax provision. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company and its subsidiary file a consolidated federal income tax return. The subsidiary pays its proportional share of federal income taxes to the Company based on its taxable income.

The Company’s federal and state income tax returns for tax years 2017, 2016, 2015 and 2014 are subject to examination by the Internal Revenue Service (IRS) and the Georgia Department of Revenue, generally for three years after filing.

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

Other Real Estate

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

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

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 $17,088,693 and $15,419,269 as of December 31, 2017 and 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. Such items are considered components of other comprehensive income (loss). Accounting standards codification requires the presentation in the consolidated financial statements of net income and all items of other comprehensive income (loss) as total comprehensive income (loss).

Off-Balance Sheet Credit Related Financial Instruments

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

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

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.

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PART I (Continued)

Item 1 (Continued)

(1) Summary of Significant Accounting Policies (Continued)

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

ASU 2016-13, Financial Instruments – Credit Losses (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 became effective for us on January 1, 2018 and is not expected to have a significant impact on our 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.

ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220). Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (TCJ Act). ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company elected to early adopt the provisions of ASU 2018-02 in the fourth quarter of 2017 and, as a result, reclassified $1,068,295 from AOCI to retained earnings as of December 31, 2017.

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PART I (Continued)

Item 1 (Continued)

(2) Cash and Balances Due from Banks

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

	2017		2016
Cash on Hand and Cash Items	$	9,746,132	$	8,509,530
Noninterest-Bearing Deposits with Other Banks		13,399,004		20,312,574
	$	23,145,136	$	28,822,104

The Company is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank based on a percentage of deposits. Reserve balances totaled approximately $1,515,000 and $1,417,000 at December 31, 2017 and 2016, respectively.

(3) Investment Securities

Investment securities as of December 31, 2017 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	354,931,318	$	258,049	$	(8,465,948	)	$	346,723,419
State, County and Municipal		4,493,085		22,835		(23,094	)		4,492,826
Corporate		2,047,517		12,483		-			2,060,000
Asset-Backed		992,641		-		(21,982	)		970,659
	$	362,464,561	$	293,367	$	(8,511,024	)	$	354,246,904

The amortized cost and fair value of investment securities as of December 31, 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	$	301,299	$	301,605
Due After One Year Through Five Years		4,668,954		4,658,344
Due After Five Years Through Ten Years		877,788		894,743
Due After Ten Years		1,685,202		1,668,793
	$	7,533,243	$	7,523,485
Mortgage-Backed Securities		354,931,318		346,723,419
	$	362,464,561	$	354,246,904

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PART I (Continued)

Item 1 (Continued)

(3) Investment Securities (Continued)

Investment securities as of December 31, 2016 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	326,694,417	$	75,743	$	(7,672,786	)	$	319,097,374
State, County and Municipal		4,572,756		18,350		(30,610	)		4,560,496
	$	331,267,173	$	94,093	$	(7,703,396	)	$	323,657,870

Proceeds from sales of investments available for sale were $0 in 2017, $25,209,851 in 2016 and $28,273,634 in 2015. Gross realized gains totaled $0 in 2017, $391,976 in 2016 and $207,896 in 2015. Gross realized losses totaled $0 in 2017, $6,753 in 2016 and $196,316 in 2015.

Investment securities having a carrying value totaling $175,484,021 and $144,853,885 as of December 31, 2017 and 2016, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at December 31, 2017 and 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
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2017
U.S. Government Agencies
Mortgage-Backed	$	120,139,340	$	(1,655,223	)	$	190,196,101	$	(6,810,725	)	$	310,335,441	$	(8,465,948	)
State, County and Municipal		2,598,344		(23,094	)		-		-			2,598,344		(23,094	)
Asset – Backed		970,659		(21,982	)		-		-			970,659		(21,982	)
	$	123,708,343	$	(1,700,299	)	$	190,196,101	$	(6,810,725	)	$	313,904,444	$	(8,511,024	)
December 31, 2016
U.S. Government Agencies
Mortgage-Backed	$	174,200,881	$	(3,459,564	)	$	107,481,698	$	(4,213,222	)	$	281,682,579	$	(7,672,786	)
State, County and Municipal		3,487,647		(30,610	)		-		-			3,487,647		(30,610	)
	$	177,688,528	$	(3,490,174	)	$	107,481,698	$	(4,213,222	)	$	285,170,226	$	(7,703,396	)

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.

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PART I (Continued)

Item 1 (Continued)

(3) Investment Securities (Continued)

At December 31, 2017, 130 securities have unrealized losses which have depreciated 2.64 percent from the Company’s amortized cost basis. These securities are guaranteed by either the U.S. Government, other governments or U.S. corporations. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale, no declines are deemed to be other than temporary. However, the Company did own one asset-backed security at December 31, 2017 which was completely written off during prior years. This investment is comprised of one issuance of a trust preferred security and has no book value.

(4) Loans

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

	2017		2016
Commercial and Agricultural
Commercial	$	48,122,263	$	47,024,878
Agricultural		16,442,581		17,079,579
Real Estate
Commercial Construction		45,213,960		30,358,362
Residential Construction		8,583,446		11,830,447
Commercial		351,171,668		349,090,031
Residential		194,048,945		195,579,967
Farmland		67,767,655		66,877,197
Consumer and Other
Consumer		18,956,028		19,695,241
Other		14,977,309		16,747,861
Total Loans	$	765,283,855	$	754,283,563

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PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

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

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

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

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

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

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

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

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

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PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

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

2017	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	46,468,726	$	825,607	$	827,930	$	48,122,263
Agricultural		15,868,191		174,356		400,034		16,442,581
Real Estate
Commercial Construction		41,282,295		577,765		3,353,900		45,213,960
Residential Construction		8,583,446		-		-		8,583,446
Commercial		338,775,805		7,662,637		4,733,226		351,171,668
Residential		177,962,870		4,864,893		11,221,182		194,048,945
Farmland		66,334,906		444,095		988,654		67,767,655
Consumer and Other
Consumer		18,495,798		52,970		407,260		18,956,028
Other		14,968,677		8,632		-		14,977,309
Total Loans	$	728,740,714	$	14,610,955	$	21,932,186	$	765,283,855
2016
Commercial and Agricultural
Commercial	$	44,249,874	$	1,861,757	$	913,247	$	47,024,878
Agricultural		16,585,646		192,445		301,488		17,079,579
Real Estate
Commercial Construction		28,425,373		1,349,447		583,542		30,358,362
Residential Construction		11,630,165		-		200,282		11,830,447
Commercial		327,561,169		9,403,077		12,125,785		349,090,031
Residential		178,618,510		5,658,526		11,302,931		195,579,967
Farmland		65,074,715		839,362		963,120		66,877,197
Consumer and Other
Consumer		19,071,739		225,959		397,543		19,695,241
Other		16,747,861		-		-		16,747,861
Total Loans	$	707,965,052	$	19,530,573	$	26,787,938	$	754,283,563

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.

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PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provision. Loans may be placed on nonaccrual status regardless of whether such loans are considered past due.

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

	Accruing Loans
2017	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loans		Total Loans
Commercial and Agricultural
Commercial	$	328,483	$	-	$	328,483	$	598,305	$	47,195,475	$	48,122,263
Agricultural		110,482		-		110,482		398,509		15,933,590		16,442,581
Real Estate
Commercial Construction		27,062		-		27,062		477,043		44,709,855		45,213,960
Residential Construction		119,443		-		119,443		-		8,464,003		8,583,446
Commercial		918,997		-		918,997		2,172,229		348,080,442		351,171,668
Residential		2,482,276		-		2,482,276		2,829,966		188,736,703		194,048,945
Farmland		318,329		-		318,329		838,577		66,610,749		67,767,655
Consumer and Other
Consumer		246,175				246,175		188,073		18,521,780		18,956,028
Other		7,158		-		7,158		-		14,970,151		14,977,309
Total Loans	$	4,558,405	$	-	$	4,558,405	$	7,502,702	$	753,222,748	$	765,283,855
2016
Commercial and Agricultural
Commercial	$	419,969	$	-	$	419,969	$	634,955	$	45,969,954	$	47,024,878
Agricultural		33,046		-		33,046		208,522		16,838,011		17,079,579
Real Estate
Commercial Construction		54,001		-		54,001		190,494		30,113,867		30,358,362
Residential Construction		-		-		-		-		11,830,447		11,830,447
Commercial		491,468		-		491,468		6,360,176		342,238,387		349,090,031
Residential		3,178,833		-		3,178,833		3,944,337		188,456,797		195,579,967
Farmland		95,309		-		95,309		799,556		65,982,332		66,877,197
Consumer and Other
Consumer		196,242		122		196,364		212,026		19,286,851		19,695,241
Other		-		-		-		-		16,747,861		16,747,861
Total Loans	$	4,468,868	$	122	$	4,468,990	$	12,350,066	$	737,464,507	$	754,283,563

- 24 -

PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

Had nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately $205,000, $387,300 and $418,400 for the years ended December 31, 2017, 2016 and 2015, respectively.

The following table details impaired loan data as of December 31, 2017:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	598,305	$	598,305	$	-	$	633,528	$	33,283	$	33,868
Agricultural		485,132		398,509		-		296,578		11,046		19,376
Commercial Construction		54,306		54,306		-		141,396		3,526		3,836
Residential Construction		-		-		-		79,295		-		-
Commercial Real Estate		12,637,057		12,637,057		-		12,808,414		559,601		549,825
Residential Real Estate		4,977,769		4,579,614		-		4,566,041		211,318		226,684
Farmland		840,110		838,577		-		790,967		54,367		58,085
Consumer		188,073		188,073		-		186,348		8,576		9,452
	$	19,780,752	$	19,294,441	$	-	$	19,502,567	$	881,717	$	901,126
With An Allowance Recorded
Commercial	$	-	$	-	$	-	$	-	$	-	$	-
Agricultural		-		-		-		-		-		-
Commercial Construction		493,067		493,067		65,635		241,063		22,626		32,922
Residential Construction		-		-		-		-		-		-
Commercial Real Estate		5,729,300		5,729,300		1,712,557		6,599,144		228,745		237,066
Residential Real Estate		108,859		108,859		27,123		482,228		4,261		7,446
Farmland		371,376		371,376		21,369		375,595		22,121		22,021
Consumer		-		-		-		-		-		-
	$	6,702,602	$	6,702,602	$	1,826,684	$	7,698,030	$	277,753	$	299,455
Total
Commercial	$	598,305	$	598,305	$	-	$	633,528	$	33,283	$	33,868
Agricultural		485,132		398,509		-		296,578		11,046		19,376
Commercial Construction		547,373		547,373		65,635		382,459		26,152		36,758
Residential Construction		-		-		-		79,295		-		-
Commercial Real Estate		18,366,357		18,366,357		1,712,557		19,407,558		788,346		786,891
Residential Real Estate		5,086,628		4,688,473		27,123		5,048,269		215,579		234,130
Farmland		1,211,486		1,209,953		21,369		1,166,562		76,488		80,106
Consumer		188,073		188,073		-		186,348		8,576		9,452
	$	26,483,354	$	25,997,043	$	1,826,684	$	27,200,597	$	1,159,470	$	1,200,581

- 25 -

PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

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

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	634,955	$	634,955	$	-	$	539,099	$	24,563	$	27,142
Agricultural		229,182		208,522		-		210,372		8,794		12,412
Commercial Construction		190,494		190,494		-		697,893		6,630		7,127
Commercial Real Estate		14,357,601		14,276,688		-		14,274,719		567,349		560,354
Residential Real Estate		4,261,558		3,952,139		-		4,553,322		73,099		190,373
Farmland		920,666		799,556		-		1,016,395		21,526		26,012
Consumer		212,376		212,026		-		213,309		9,599		12,036
	$	20,806,832	$	20,274,380	$	-	$	21,505,109	$	711,560	$	835,456
With An Allowance Recorded
Commercial	$	-	$	-	$	-	$	30,270	$	-	$	-
Agricultural		-		-		-		-		-		-
Commercial Construction		72,296		72,296		21,135		74,098		1,532		1,416
Commercial Real Estate		8,557,582		8,467,135		3,021,943		8,339,666		238,684		235,749
Residential Real Estate		1,475,594		1,467,833		362,521		1,042,750		27,759		32,260
Farmland		379,851		379,851		29,173		384,056		21,098		21,310
Consumer		-		-		-		-		-		-
	$	10,485,323	$	10,387,115	$	3,434,772	$	9,870,840	$	289,073	$	290,735
Total
Commercial	$	634,955	$	634,955	$	-	$	569,369	$	24,563	$	27,142
Agricultural		229,182		208,522		-		210,372		8,794		12,412
Commercial Construction		262,790		262,790		21,135		771,991		8,162		8,543
Commercial Real Estate		22,915,183		22,743,823		3,021,943		22,614,385		806,033		796,103
Residential Real Estate		5,737,152		5,419,972		362,521		5,596,072		100,858		222,633
Farmland		1,300,517		1,179,407		29,173		1,400,451		42,624		47,322
Consumer		212,376		212,026		-		213,309		9,599		12,036
	$	31,292,155	$	30,661,495	$	3,434,772	$	31,375,949	$	1,000,633	$	1,126,191

- 26 -

PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

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

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	454,423	$	454,013	$	-	$	534,814	$	17,259		$	21,253
Agricultural		195,654		178,021		-		163,078		(9,957	)		10,334
Commercial Construction		6,887,522		1,896,938		-		2,867,061		25,788			27,007
Commercial Real Estate		15,569,340		15,122,486		-		15,430,252		529,376			530,699
Residential Real Estate		5,429,121		4,575,547		-		4,715,162		175,484			159,148
Farmland		1,104,887		1,103,353		-		1,339,863		583			2,076
Consumer		179,908		178,435		-		190,566		13,745			14,907
Other		-		-		-		48,438		-			-
	$	29,820,855	$	23,508,793	$	-	$	25,289,234	$	752,278		$	765,424
With An Allowance Recorded
Commercial	$	122,928	$	122,928	$	94,538	$	99,749	$	2,275		$	2,438
Agricultural		-		-		-		-		-			-
Commercial Construction		76,644		76,644		25,344		92,200		375			375
Commercial Real Estate		8,969,329		8,955,503		1,607,962		6,673,087		213,693			208,657
Residential Real Estate		1,083,127		1,075,367		308,188		1,088,380		16,380			15,873
Farmland		387,968		387,969		37,386		391,060		20,880			20,954
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
	$	10,639,996	$	10,618,411	$	2,073,418	$	8,344,476	$	253,603		$	248,297
Total
Commercial	$	577,351	$	576,941	$	94,538	$	634,563	$	19,534		$	23,691
Agricultural		195,654		178,021		-		163,078		(9,957	)		10,334
Commercial Construction		6,964,166		1,973,582		25,344		2,959,261		26,163			27,382
Commercial Real Estate		24,538,669		24,077,989		1,607,962		22,103,339		743,069			739,356
Residential Real Estate		6,512,248		5,650,914		308,188		5,803,542		191,864			175,021
Farmland		1,492,855		1,491,322		37,386		1,730,923		21,463			23,030
Consumer		179,908		178,435		-		190,566		13,745			14,907
Other		-		-		-		48,438		-			-
	$	40,460,851	$	34,127,204	$	2,073,418	$	33,633,710	$	1,005,881		$	1,013,721

- 27 -

PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

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

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

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

● Principal reductions - These are often the result of commercial real estate loan workouts where two new notes are created. The primary note is underwritten based upon the Company’s 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.

- 28 -

PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

As discussed in Note 1, Summary of Significant Accounting Policies, once a loan is identified as a TDR, it is accounted for as an impaired loan. The Company had no unfunded commitments to lend to a customer that has a troubled debt restructured loan as of December 31, 2017. The following tables present the number of loan contracts restructured during the 12 months ended December 31, 2017, 2016 and 2015. It shows the pre- and post-modification recorded investment as well as the number of contracts and the recorded investment for those TDRs modified during the previous 12 months which subsequently defaulted during the period. Loans modified in a troubled debt restructuring are considered to be in default once the loan becomes 90 days past due. A TDR may cease being classified as impaired if the loan is subsequently modified at market terms, has performed according to the modified terms for at least six months, and has not had any prior principal forgiveness on a cumulative basis.

Troubled Debt Restructurings
2017	# of Contracts		Pre-Modification		Post-Modification
Commercial Real Estate		-	$	-	$	-
Residential Real Estate		-		-		-
Total Loans		-	$	-	$	-
2016
Commercial Real Estate		1	$	91,280	$	91,097
Residential Real Estate		1		354,784		354,784
Total Loans		2	$	446,064	$	445,881
2015
Commercial Real Estate		1	$	513,868	$	505,978
Residential Real Estate		2		1,106,345		1,035,590
Total Loans		3	$	1,620,213	$	1,541,568

- 29 -

PART I (Continued)

Item 1 (Continued)

(4) Loans (Continued)

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

	2017				2016				2015
	# of Contracts		Recorded Investment		# of Contracts		Recorded Investment		# of Contracts		Recorded Investment
Residential Real Estate		-	$	-		1	$	89,297		-	$	-
Total Loans		-	$	-		1	$	89,297		-	$	-

At December 31, 2017, all restructured loans were performing as agreed. During December 2016, a restructured loan totaling $89,297 failed to continue to perform as agreed and was charged off in June 2016. At December 31, 2015, all restructured loans were performing as agreed.

(5) Allowance for Loan Losses

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

	2017			2016			2015
Balance, Beginning of Year	$	8,923,293		$	8,603,905		$	8,802,316
Provision for Loan Losses		390,000			1,062,000			865,500
Loans Charged Off		(2,915,753	)		(2,087,850	)		(2,083,347	)
Recoveries of Loans Previously Charged Off		1,109,968			1,345,238			1,019,436
Balance, End of Year	$	7,507,508		$	8,923,293		$	8,603,905

- 30 -

PART I (Continued)

Item 1 (Continued)

(5) Allowance for Loan Losses (Continued)

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

2017	Beginning Balance		Charge-Offs			Recoveries		Provision			Ending Balance
Commercial and Agricultural
Commercial	$	456,197	$	(299,079	)	$	136,499	$	153,058		$	446,675
Agricultural		167,692		(159,500	)		3,963		173,749			185,904
Real Estate
Commercial Construction		322,725		(51,977	)		266,459		678,808			1,216,015
Residential Construction		13,491		-			-		(13,491	)		-
Commercial		5,750,998		(966,014	)		527,150		(1,438,175	)		3,873,959
Residential		1,396,099		(1,048,337	)		82,079		538,260			968,101
Farmland		722,331		(60,902	)		16,750		101,352			779,531
Consumer and Other
Consumer		80,265		(329,944	)		74,933		208,739			33,993
Other		13,495		-			2,135		(12,300	)		3,330
	$	8,923,293	$	(2,915,753	)	$	1,109,968	$	390,000		$	7,507,508
2016
Commercial and Agricultural
Commercial	$	855,364	$	(304,918	)	$	66,738	$	(160,987	)	$	456,197
Agricultural		203,091		(19,258	)		4,150		(20,291	)		167,692
Real Estate
Commercial Construction		690,766		(25,318	)		814,586		(1,157,309	)		322,725
Residential Construction		19,890		-			-		(6,399	)		13,491
Commercial		3,850,527		(992,067	)		206,154		2,686,384			5,750,998
Residential		1,990,355		(361,630	)		49,660		(282,286	)		1,396,099
Farmland		911,692		(119,576	)		145,000		(214,785	)		722,331
Consumer and Other
Consumer		63,377		(265,083	)		52,629		229,342			80,265
Other		18,843		-			6,321		(11,669	)		13,495
	$	8,603,905	$	(2,087,850	)	$	1,345,238	$	1,062,000		$	8,923,293

- 31 -

PART I (Continued)

Item 1 (Continued)

(5) Allowance for Loan Losses (Continued)

2015	Beginning Balance		Charge-Offs			Recoveries		Provision			Ending Balance
Commercial and Agricultural
Commercial	$	497,561	$	(454,971	)	$	52,111	$	760,663		$	855,364
Agricultural		304,172		(5,000	)		3,600		(99,681	)		203,091
Real Estate
Commercial Construction		1,222,695		(97,698	)		485,834		(920,065	)		690,766
Residential Construction		138,092		-			-		(118,202	)		19,890
Commercial		3,664,777		(275,297	)		270,003		191,044			3,850,527
Residential		2,425,327		(929,668	)		109,626		385,070			1,990,355
Farmland		103,800		(40,000	)		20,000		827,892			911,692
Consumer and Other
Consumer		66,914		(255,062	)		61,976		189,549			63,377
Other		378,978		(25,651	)		16,286		(350,770	)		18,843
	$	8,802,316	$	(2,083,347	)	$	1,019,436	$	865,500		$	8,603,905

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. During the first quarter of 2016 Company management implemented a change to its allowance for loan loss methodology by expanding the historical loss period from a rolling 8 quarters to 16 quarters. Management believes the longer historical loss period better reflects the current and expected loss behavior of the loan portfolio within the current credit cycle. The transition to a rolling 16 quarter loss period was completed in the first quarter of 2017. As of December 31, 2017, this change in the historical loss period resulted in a decrease to the allowance for loan losses of $114,144. The loss history period used at December 31, 2016 and 2015 was based on the loss rate from the eight quarters ended September 30, 2016 and 2015, respectively.

Effective with the quarter ended June 30, 2015, the calculation of the amount needed in the Allowance for Loan Losses changed. Management determined that the segmentation method for the ASC 450-20 portion of the loan portfolio should be changed to bank call report categories. Prior to this change, the ASC 450-20 segmentation categorized loans by various non-owner occupied commercial real estate loan types and risk grades for the remainder of the ASC 450-20 portion of the portfolio. On the date of change, June 30, 2015, the change in methodology resulted in an increase to the calculated allowance for loan loss reserve of $1,621,424.

- 32 -

PART I (Continued)

Item 1 (Continued)

(5) Allowance for Loan Losses (Continued)

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

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.

Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on nonimpaired loans. Management considers those loans graded substandard, but not classified as impaired, to be higher risk loans and, therefore, makes specific allocations to the allowance for those loans if warranted. The total of such loans is $9,470,621 and $10,786,699 as of December 31, 2017 and 2016, respectively. Specific allowance allocations were made for these loans totaling $1,510,868 and $632,706 as of December 31, 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.

At December 31, 2017, there were 149 impaired loans totaling $4,335,524 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 December 31, 2016 and 2015, impaired loans totaling $4,204,156 and $3,744,733, respectively, 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.

	Ending Allowance Balance						Ending Loan Balance
2017	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	-	$	446,675	$	446,675	$	77,599	$	48,044,664	$	48,122,263
Agricultural		-		185,904		185,904		5,121		16,437,460		16,442,581
Real Estate
Commercial Construction		65,635		1,150,380		1,216,015		493,067		44,720,893		45,213,960
Residential Construction		-		-		-		-		8,583,446		8,583,446
Commercial		1,712,557		2,161,402		3,873,959		18,010,035		333,161,633		351,171,668
Residential		27,123		940,978		968,101		2,040,125		192,008,820		194,048,945
Farmland		21,369		758,162		779,531		1,035,572		66,732,083		67,767,655
Consumer and Other
Consumer		-		33,993		33,993		-		18,956,028		18,956,028
Other		-		3,330		3,330		-		14,977,309		14,977,309
Total End of Year Balance	$	1,826,684	$	5,680,824	$	7,507,508	$	21,661,519	$	743,622,336	$	765,283,855

- 33 -

PART I (Continued)

Item 1 (Continued)

(5) Allowance for Loan Losses (Continued)

	Ending Allowance Balance						Ending Loan Balance
2016	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Commercial and Agricultural
Commercial	$	-	$	456,197	$	456,197	$	6,671	$	47,018,207	$	47,024,878
Agricultural		-		167,692		167,692		-		17,079,579		17,079,579
Real Estate
Commercial Construction		21,135		301,590		322,725		72,296		30,286,066		30,358,362
Residential Construction		-		13,491		13,491		-		11,830,447		11,830,447
Commercial		3,021,943		2,729,055		5,750,998		22,422,451		326,667,580		349,090,031
Residential		362,522		1,033,577		1,396,099		2,911,874		192,668,093		195,579,967
Farmland		29,172		693,159		722,331		1,044,047		65,833,150		66,877,197
Consumer and Other
Consumer		-		80,265		80,265		-		19,695,241		19,695,241
Other		-		13,495		13,495		-		16,747,861		16,747,861
Total End of Year Balance	$	3,434,772	$	5,488,521	$	8,923,293	$	26,457,339	$	727,826,224	$	754,283,563
2015
Commercial and Agricultural
Commercial	$	94,538	$	760,826	$	855,364	$	122,928	$	47,658,761	$	47,781,689
Agricultural		-		203,091		203,091		8,445		19,185,052		19,193,497
Real Estate
Commercial Construction		25,344		665,422		690,766		1,622,560		38,484,073		40,106,633
Residential Construction		-		19,890		19,890		-		9,413,263		9,413,263
Commercial		1,607,962		2,242,565		3,850,527		23,628,213		322,633,820		346,262,033
Residential		308,188		1,682,167		1,990,355		3,597,386		193,405,033		197,002,419
Farmland		37,386		874,306		911,692		1,402,939		60,376,920		61,779,859
Consumer and Other
Consumer		-		63,377		63,377		-		20,605,465		20,605,465
Other		-		18,843		18,843		-		16,490,737		16,490,737
Total End of Year Balance	$	2,073,418	$	6,530,487	$	8,603,905	$	30,382,471	$	728,253,124	$	758,635,595

- 34 -

PART I (Continued)

Item 1 (Continued)

(6) Premises and Equipment

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

	2017			2016
Land	$	9,668,722		$	9,668,722
Building		26,893,354			25,239,165
Furniture, Fixtures and Equipment		13,090,366			12,461,043
Leasehold Improvements		655,166			653,939
Construction in Progress		68,253			1,530,359
		50,375,861			49,553,228
Accumulated Depreciation		(22,736,431	)		(21,583,968	)
	$	27,639,430		$	27,969,260

Depreciation charged to operations totaled $1,647,813 in 2017, $1,574,249 in 2016 and $1,657,229 in 2015.

Certain Company facilities and equipment are leased under various operating leases. Rental expense approximated $427,000 for 2017, $437,000 for 2016 and $560,000 for 2015.

Future minimum rental payments as of December 31, 2017 are as follows:

Year Ending December 31	Amount
2018	$	43,320
2019		42,000
2020		42,000
2021		42,000
2022 and Thereafter		38,500
	$	207,820

(7) Other Real Estate Owned

The aggregate carrying amount of Other Real Estate Owned (OREO) at December 31, 2017, 2016 and 2015 was $4,256,469, $6,439,226 and $8,839,103, respectively. All of the Company’s other real estate owned represents properties acquired through foreclosure or deed in lieu of foreclosure. The following table details the change in OREO during 2017, 2016 and 2015 as of December 31:

	2017			2016			2015
Balance, Beginning of Year	$	6,439,226		$	8,839,103		$	10,401,832
Additions		1,724,936			5,664,554			7,536,165
Sales of OREO		(3,786,567	)		(7,416,293	)		(8,054,675	)
Loss on Sale		212,641			(146,402	)		(591,071	)
Provision for Losses		(333,767	)		(501,736	)		(453,148	)
Balance, End of Year	$	4,256,469		$	6,439,226		$	8,839,103

- 35 -

PART I (Continued)

Item 1 (Continued)

(7) Other Real Estate Owned (Continued)

At December 31, 2017, the Company held $479,352 of residential real estate property as foreclosed property. Also at December 31, 2017, $183,588 of consumer mortgage loans collateralized by residential real estate property was in the process of foreclosure according to local requirements of the applicable jurisdictions.

(8) Other Intangible Assets

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

	Core Deposit Intangible		Accumulated Amortization			Net Core Deposit Intangible
Core Deposit Intangible
Balance, December 31, 2015	$	1,056,693	$	(940,429	)	$	116,264
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2016	$	1,056,693	$	(976,178	)	$	80,515
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2017	$	1,056,693	$	(1,011,927	)	$	44,766

Amortization expense related to the core deposit intangible was $35,749, $35,749 and $35,748 for the years ended December 31, 2017, 2016 and 2015. Amortizations expense will continue at an annual rate of approximately $35,749 through the first quarter of 2019, at which point the core deposit will be fully amortized.

(9) Income Taxes

The Tax Cuts and Jobs Act (the "TCJ Act"), enacted on December 22, 2017, reduced the U.S. federal corporate tax rate to 21 percent. As a result of the enactment of the TCJ Act we have remeasured our deferred tax assets and liabilities based upon the new U.S. statutory federal income tax rate of 21%, which is the tax rate at which these assets and liabilities are expected to reverse in the future. Notwithstanding the foregoing, we are still analyzing certain aspects of the new law and refining our calculations, which could affect the measurement of these assets and liabilities or give rise to new deferred tax amounts. Nonetheless, we recognized additional income tax expense of $2,040,946 in the fourth quarter of 2017 related to the remeasurement of our deferred tax assets and liabilities.

- 36 -

PART I (Continued)

Item 1 (Continued)

(9) Income Taxes (Continued)

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

	2017		2016		2015
Current Federal Expense	$	3,943,495	$	3,629,213	$	3,162,367
Deferred Federal Expense		793,012		222,120		625,436
Deferred Tax Expense from Tax Rate Changes		2,040,946		-		-
Federal Income Tax Expense		6,777,453		3,851,333		3,787,803
Current State Income Tax Expense		-		-		-
Federal and State Income Tax Expense	$	6,777,453	$	3,851,333	$	3,787,803

The federal income tax expense of $6,777,453 in 2017, $3,851,333 in 2016 and $3,787,803 in 2015 is different than the income taxes computed by applying the federal statutory rates to income before income taxes. The reasons for the differences are as follows:

	2017			2016			2015
Statutory Federal Income Taxes	$	4,954,199		$	4,283,394		$	4,134,570
Tax-Exempt Interest		(102,345	)		(109,759	)		(83,903	)
Income from Cash Value Life Insurance, net of premiums		(198,730	)		(182,532	)		(232,988	)
Meal and Entertainment Disallowance		14,354			16,813			21,600
Other		69,029			(156,583	)		(51,476	)
Tax Expense from Tax Rate Changes		2,040,946			-			-
Actual Federal Income Taxes	$	6,777,453		$	3,851,333		$	3,787,803

- 37 -

PART I (Continued)

Item 1 (Continued)

(9) Income Taxes (Continued)

Deferred taxes, which are included in Other Assets, in the accompanying consolidated balance sheets as of December 31 include the following:

	2017			2016
Deferred Tax Assets
Allowance for Loan Losses	$	1,576,577		$	3,033,920
Other Real Estate		304,813			688,162
Deferred Compensation		161,000			280,704
Investments		210,000			340,000
Goodwill		76,058			167,666
Other		237,591			379,304
	$	2,566,039			4,889,756
Deferred Tax Liabilities
Premises and Equipment		(995,190	)		(1,553,460	)
Other		(2,585	)		(4,185	)
		(997,775	)		(1,557,645	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		1,725,708			2,587,163
Net Deferred Tax Assets	$	3,293,972		$	5,919,274

(10) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $475,161 and $413,563 as of December 31, 2017 and 2016, respectively.

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

	2017		2016
Interest-Bearing Demand	$	458,717,332	$	448,003,985
Savings		78,172,441		70,066,140
Time, $250,000 and Over		38,919,469		32,168,191
Other Time		301,248,235		335,059,579
	$	877,057,477	$	885,297,895

At December 31, 2017 and 2016, the Company had brokered deposits of $46,328,995 and $49,303,139, respectively. All of these brokered deposits represent Certificate of Deposit Account Registry Service (CDARS) reciprocal deposits. The CDARS deposits are ones in which customers placed core deposits into the CDARS program for FDIC insurance coverage and the Company receives reciprocal brokered deposits in a like amount. The aggregate amount of jumbo certificates of deposit, each with a minimum denomination of $250,000 was $38,919,469 and $32,168,191 as of December 31, 2017 and December 31, 2016, respectively.

- 38 -

PART I (Continued)

Item 1 (Continued)

(10) Deposits (Continued)

As of December 31, 2017, the scheduled maturities of certificates of deposit are as follows:

Year	Amount
2018	$	255,574,623
2019		41,210,289
2020		22,116,817
2021		11,206,127
2022 and Thereafter		10,059,848
	$	340,167,704

(11) Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:

	2017		2016
Federal Home Loan Bank Advances	$	46,000,000	$	46,000,000
Other Borrowings		1,500,000		-
	$	47,500,000	$	46,000,000

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 December 31, 2017, the book value of those loans pledged is $109,771,074. At December 31, 2017, the Company had remaining credit availability from the FHLB of $252,395,250. 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 $5,000,000 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 5.25 percent. The Company paid down $3,500,000 during November 2017. The remaining amount was paid off during January 2018. As of December 31, 2017, the balance of $1,500,000 is included in Other Borrowings.

The aggregate stated maturities of other borrowed money at December 31, 2017 are as follows:

Year	Amount
2018	$	4,000,000
2019		5,000,000
2020		2,500,000
2021		-
2022		27,000,000
2023 and Thereafter		9,000,000
	$	47,500,000

- 39 -

PART I (Continued)

Item 1 (Continued)

(11) Other Borrowed Money (Continued)

At December 31, 2017, $13,000,000 of FHLB advances are subject to fixed rates of interest, while the remaining $33,000,000 is subject to floating interest rates which will convert to fixed rates of interests in the next few years.

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

(12) Subordinated Debentures (Trust Preferred Securities)

								Total
				3-Month		Added		Interest			5-Year
Description	Date	Amount		Libor Rate		Points		Rate		Maturity	Call Option
	(In Thousands)
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,640		1.60042		2.68		4.28042	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155		1.69465		1.50		3.19465	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279		1.69465		1.65		3.34465	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155		1.37796		1.40		2.77796	9/14/2037	9/14/2012

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

(13) Preferred Stock

At December 31, 2016, 9,360 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the Preferred Stock) was outstanding with private investors. On March 31, 2017 the Company redeemed these 9,360 shares of Preferred Stock at the stated rate of $1,000 per share. Previously, the Company redeemed 8,661 shares in 2016 and 9,979 shares in 2015, all at the stated rate of $1,000 per share. As a result, there is no outstanding Preferred Stock as of December 31, 2017. While outstanding, the Preferred Stock qualified as Tier I Capital and was nonvoting, other than class voting rights on certain matters that could adversely affect the Preferred Stock. The Preferred Stock paid cumulative cash dividends on a quarterly basis at a rate of 9 percent per annum for the years 2017, 2016 and 2015.

The Company issued a warrant (the Warrant) to private investors for the purchase of up to 500,000 shares of the Company’s outstanding common stock. The Warrant originated in 2009 through transactions with the United States Department of the Treasury in conjunction with the issuance of the Preferred Stock. The Warrant may be exercised on or before January 9, 2019 at an exercise price of $8.40 per share. No voting rights may be exercised with respect to the shares of the Warrant until the Warrant has been exercised.

- 40 -

PART I (Continued)

Item 1 (Continued)

(14) Employee Benefit Plan

The Company offers a defined contribution 401(k) Profit Sharing Plan (the Plan) which covers substantially all employees who meet certain age and service requirements. The Plan allows employees to make voluntary pre-tax salary deferrals to the Plan. The Company, at its discretion, may elect to make an annual contribution to the Plan equal to a percentage of each participating employee’s salary. Such discretionary contributions must be approved by the Company’s board of directors. Employees are fully vested in the Company contributions after six years of service. In 2017, 2016 and 2015, the Company made total contributions of $686,580, $408,303 and $385,453 to the Plan, respectively.

(15) Commitments and Contingencies

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

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

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

	Contract Amount
	2017		2016
Commitments to Extend Credit	$	96,374,000	$	71,359,000
Standby Letters of Credit		1,536,000		1,551,000

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

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

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

- 41 -

PART I (Continued)

Item 1 (Continued)

(15) Commitments and Contingencies (Continued)

Legal Contingencies. In the ordinary course of business, there are various legal proceedings pending against Colony and its subsidiary. The aggregate liabilities, if any, arising from such proceedings would not, in the opinion of management, have a material adverse effect on Colony’s consolidated financial position.

(16) Deferred Compensation Plan

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

Liabilities accrued under the plans totaled $766,667 and $825,599 as of December 31, 2017 and 2016, respectively. Benefit payments under the contracts were $110,080 in 2017 and $135,885 in 2016.

Provisions charged to operations totaled $55,572 in 2017, $57,125 in 2016 and $196,869 in 2015.

The Company has purchased life insurance policies on the plans’ participants and uses the cash flow from these policies to partially fund the plan. Fee income recognized with these plans totaled $233,064 in 2017, $165,128 in 2016 and $174,675 in 2015. In addition death benefits recognized as income totaled $137,058 in 2015.

(17) Supplemental Cash Flow Information

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

	2017		2016		2015
Interest Expense	$	6,851,541	$	6,529,615	$	6,536,994
Income Taxes	$	4,000,000	$	3,365,000	$	4,738,000

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

	2017			2016			2015
Acquisitions of Real Estate Through Loan Foreclosures	$	1,724,936		$	5,664,554		$	7,536,165
Change in Unrealized Gain (Loss) on AFS Investment Securities	$	(608,355	)	$	(890,590	)	$	622,155

- 42 -

PART I (Continued)

Item 1 (Continued)  

(18) Related Party Transactions

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

	2017			2016
Balance, Beginning	$	1,025,543		$	1,816,609
New Loans		1,050,393			2,379,026
Repayments		(1,106,606	)		(3,170,092	)
Transactions Due to Changes in Directors		(224,693	)		-
Balance, Ending	$	744,637		$	1,025,543

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

Generally accepted accounting standards in the U.S. require disclosure of fair value information about financial instruments, whether or not recognized on the face of the balance sheet, for which it is practicable to estimate that value. The assumptions used in the estimation of the fair value of Colony Bankcorp, Inc. and Subsidiary’s financial instruments are detailed hereafter. Where quoted prices are not available, fair values are based on estimates using discounted cash flows and other valuation techniques. The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.

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.

- 43 -

PART I (Continued)

Item 1 (Continued)

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

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

Investment Securities - Fair values for investment securities are based on quoted market prices where available and classified as Level 1. If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable instruments and classified as Level 2. If a comparable is not available, the investment securities are classified as Level 3.

Federal Home Loan Bank Stock - The fair value of Federal Home Loan Bank stock approximates carrying value and is classified as Level 1.

Loans - The fair value of fixed rate loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. For variable rate loans, the carrying amount is a reasonable estimate of fair value. Most loans are classified as Level 2, but impaired loans with a related allowance are classified as Level 3.

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

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

Subordinated Debentures – 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. Subordinated 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.

- 44 -

PART I (Continued)

Item 1 (Continued)

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

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

	Carrying		Estimated		Level
2017	Amount		Fair Value		1		2		3
	(in Thousands)
Assets
Cash and Short-Term Investments	$	57,813	$	57,813	$	57,813	$	-	$	-
Investment Securities Available for Sale		354,247		354,247		-		346,950		7,297
Federal Home Loan Bank Stock		3,043		3,043		3,043		-		-
Loans, Net		757,281		757,163		-		752,287		4,876
Bank-Owned Life Insurance		17,089		17,089		17,089		-		-
Liabilities
Deposits		1,067,985		1,068,392		727,818		340,574		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		47,500		47,626		-		47,626		-
2016
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.

- 45 -

PART I (Continued)

Item 1 (Continued)

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

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.

- 46 -

PART I (Continued)

Item 1 (Continued)

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

Assets (Continued)

Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis - The following table presents the recorded amount of the Company’s assets measured at fair value on a recurring and nonrecurring basis as of December 31, 2017 and 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 December 31, 2017 and 2016. Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
2017
Recurring
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	346,723,419	$	-	$	341,701,288	$	5,022,131
State, County and Municipal		4,492,826		-		4,277,460		215,366
Corporate		2,060,000		-		-		2,060,000
Asset-Backed		970,659		-		970,659		-
	$	354,246,904	$	-	$	346,949,407	$	7,297,497
Nonrecurring
Impaired Loans	$	4,875,918	$	-	$	-	$	4,875,918
Other Real Estate	$	2,014,904	$	-	$	-	$	2,014,904
2016
Recurring
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	319,097,374	$	-	$	319,097,374	$	-
State, County and Municipal		4,560,496		-		3,984,112		576,384
	$	323,657,870	$	-	$	323,081,486	$	576,384
Nonrecurring
Impaired Loans	$	6,952,343	$	-	$	-	$	6,952,343
Other Real Estate	$	2,505,188	$	-	$	-	$	2,505,188

Liabilities

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

- 47 -

PART I (Continued)

Item 1 (Continued)

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

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following tables present quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at December 31, 2017 and 2016. These tables are comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 2017		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Real Estate
Commercial Construction	$	427,433	Sales Comparison	Adjustment for Differences		(16.00)%	-	1,975.00%
				Between the Comparable Sales			979.50%
				Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
Residential Real Estate		81,736	Sales Comparison	Adjustment for Differences		(43.30)%	-	83.30%
				Between the Comparable Sales			20.00%
				Management Adjustments for Age		0.00%	-	25.00%
				of Appraisals and/or Current			12.50%
				Market Conditions
Commercial Real Estate		4,016,742	Income Approach	Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
				Capitalization Rate			10.75%
Farmland		350,007	Sales Comparison	Adjustment for Differences		(71.00)%	-	88.70%
				Between the Comparable Sales			8.85%
				Management Adjustments for Age		10.00%	-	75.00%
				of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		2,014,904	Sales Comparison	Adjustment for Differences		(22.74)%	-	15.00%
				Between the Comparable Sales			(3.87)%
				Management Adjustments for Age		5.44%	-	87.24%
				of Appraisals and/or Current			24.44%
				Market Conditions
			Income Approach	Capitalization Rate			10.00%

- 48 -

PART I (Continued)

Item 1 (Continued)

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

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

	December 31, 2016		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Real Estate
Commercial Construction	$	51,161	Sales Comparison	Adjustment for Differences		(5.00)%	-	99.00%
				Between the Comparable Sales			47.00%
				Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
Residential Real Estate		1,105,312	Sales Comparison	Adjustment for Differences		(22.00)%	-	0.00%
				Between the Comparable Sales			(11.00)%
				Management Adjustments for Age		0.00%	-	40.00%
				of Appraisals and/or Current			20.00%
				Market Conditions
Commercial Real Estate		5,445,192	Sales Comparison	Adjustment for Differences		(14.08)%	-	24.62%
				Between the Comparable Sales			5.27%
				Management Adjustments for Age		0.00%	-	100.00%
				of Appraisals and/or Current			50.00%
				Market Conditions
			Income Approach	Capitalization Rate			10.67%
Farmland		350,678	Sales Comparison	Adjustment for Differences		(27.00)%	-	15.00%
				Between the Comparable Sales			(6.00)%
				Management Adjustments for Age		10.00%	-	75.00%
				of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		2,505,188	Sales Comparison	Adjustment for Differences		(50.80)%	-	316.00%
				Between the Comparable Sales			132.60%
				Management Adjustments for Age		6.25%	-	76.92%
				of Appraisals and/or Current			36.31%
				Market Conditions
			Income Approach	Discount Rate			12.50%

- 49 -

PART I (Continued)

Item 1 (Continued)

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

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

The following table presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the years ended December 31, 2017, 2016 and 2015:

	Available for Sale Securities
	2017			2016			2015
Balance, Beginning	$	576,384		$	930,311		$	948,390
Transfers into Level 3								-
Transfers out of Level 3								-
Securities Purchased During the Year		7,069,649						-
Securities Matured During the Year		(360,000	)		(330,000	)		-
Loss on OTTI Impairment Included in Noninterest Income								-
Unrealized Gains(Losses) Included in Other Comprehensive Income		11,464			(23,927	)		(18,079	)
Balance, Ending	$	7,297,497		$	576,384		$	930,311

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 level 1 and level 2 or level 3 for the years ended December 31, 2017, 2016 or 2015.

The following table presents quantitative information about recurring level 3 fair value measurements as of December 31, 2017 and 2016:

December 31, 2017	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
State, County and Municipal	$	215,366	Discounted Cash Flow	Discount Rate or Yield		N/A*
U. S. Government Agencies Mortgage - Backed		5,022,131	Fundamental Analysis	Discount Rate or Yield		N/A*
Corporate		2,060,000	Option Pricing	Discount Rate or Yield		N/A*
December 31, 2016
State, County and Municipal	$	576,384	Discounted Cash Flow	Discount Rate or Yield		N/A*

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

- 50 -

PART I (Continued)

Item 1 (Continued)

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

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets. As of December 31, 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 December 31, 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 conditions or events 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 was phased in beginning January 1, 2016 at 0.625% of risk-weighted assets, with subsequent increases of 0.625% each year until reaching its final level of 2.5% on January 1, 2019.

The following table summarizes regulatory capital information as of December 31, 2017 and December 31, 2016 on a consolidated basis and for the subsidiary, as defined. Regulatory capital ratios for December 31, 2017 and 2016 were calculated in accordance with the Basel III rules.

- 51 -

PART I (Continued)

Item 1 (Continued)

(20) Regulatory Capital Matters (Continued)

The following table summarizes regulatory capital information as of December 31, 2017 and 2016 on a consolidated basis and for its wholly-owned subsidiary, as defined:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(In Thousands)
As of December 31, 2017
Total Capital to Risk-Weighted Assets
Consolidated	$	127,786		15.56	%	$	65,718		8.00	%		N/A		N/A
Colony Bank		127,470		15.54			65,628		8.00		$	82,036		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		120,279		14.64			49,289		6.00			N/A		N/A
Colony Bank		119,963		14.62			49,221		6.00			65,628		8.00
Common Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		96,779		11.78			36,967		4.50			N/A		N/A
Colony Bank		119,963		14.62			36,916		4.50			53,323		6.50
Tier I Capital to Average Assets
Consolidated		120,279		9.89			48,635		4.00			N/A		N/A
Colony Bank		119,963		9.88			48,566		4.00			60,708		5.00
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 I 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 I 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

- 52 -

PART I (Continued)

Item 1 (Continued)

(20) Regulatory Capital Matters (Continued)

In 2017, the Bank obtained approval of its regulators and paid a $8,725,000 dividend to the Company. The dividend was utilized to redeem 9,360 shares of Preferred Stock. In 2016, the Bank obtained approval of its regulators and paid a $9,100,000 dividend to the Company. The dividend was utilized to redeem 8,661 shares of Preferred Stock. In 2015, the Bank obtained approval of its regulators and paid a $10,000,000 dividend to the Company. The dividend was utilized to redeem 9,979 shares of Preferred Stock.

- 53 -

PART I (Continued)

Item 1 (Continued)

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

The parent company’s balance sheets as of December 31, 2017 and 2016 and the related statements of operations and comprehensive income (loss) and cash flows for each of the years in the three-year period then ended are as follows:

COLONY BANKCORP, INC. (PARENT ONLY)

BALANCE SHEETS

DECEMBER 31

	2017			2016
ASSETS
Cash	$	910,239		$	2,307,008
Premises and Equipment, Net		1,099,626			1,074,884
Investment in Subsidiary, at Equity		114,235,955			114,478,277
Other		24,458			20,990
Total Assets	$	116,270,278		$	117,881,159
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Other Borrowed Money	$	1,500,000		$	-
Dividends Payable		-			105,300
Other		218,615			159,126
	$	1,718,615		$	264,426
Subordinated Debt		24,229,000			24,229,000
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; 10,000,000 Shares Authorized, 0 and 9,360 Shares Issued and Outstanding as of December 31, 2017 and 2016		-			9,360,000
Common Stock, Par Value $1; 20,000,000 Shares Authorized, 8,439,258 Shares Issued and Outstanding as of December 31, 2017 and 2016		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		59,230,260			51,465,521
Accumulated Other Comprehensive Loss, Net of Tax		(6,491,949	)		(5,022,140	)
		90,322,663			93,387,733
Total Liabilities and Stockholders’ Equity	$	116,270,278		$	117,881,159

- 54 -

PART I (Continued)

Item 1 (Continued)

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

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED  DECEMBER 31

	2017		2016		2015
Income
Dividends from Subsidiary	$	8,746,882	$	9,118,104	$	10,015,147
Management Fees		601,080		601,080		581,334
Other		97,103		103,612		112,876
	$	9,445,065	$	9,822,796	$	10,709,357
Expenses
Interest		900,113		601,567		503,286
Salaries and Employee Benefits		917,259		840,130		811,150
Other		604,166		554,434		666,872
		2,421,538		1,996,131		1,981,308
Income Before Taxes and Equity in Undistributed Earnings of Subsidiary		7,023,527		7,826,665		8,728,049
Income Tax Benefits		568,258		457,934		444,764
Income Before Equity in Undistributed Earnings of Subsidiary		7,591,785		8,284,599		9,172,813
Dividends Received in Excess of Earnings of Subsidiary		-		-		(800,116	)
Equity in Undistributed Earnings of Subsidiary		159,193		388,611		-
Net Income		7,750,978		8,673,210		8,372,697
Preferred Stock Dividends		210,600		1,493,310		2,375,010
Net Income Available to Common Stockholders	$	7,540,378	$	7,179,900	$	5,997,687

- 55 -

PART I (Continued)

Item 1 (Continued)

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

COLONY BANKCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31

	2017			2016			2015
Net Income	$	7,750,978		$	8,673,210		$	8,372,697
Other Comprehensive Income (Loss)
Gains (Losses) on Securities Arising During the Year		(608,355	)		(505,367	)		610,689
Tax Effect		206,841			171,825			(207,634	)
Realized (Gains) Losses on Sale of AFS Securities		-			(385,223	)		11,466
Tax Effect		-			130,976			(3,898	)
Change in Unrealized Gains (Losses) on SecuritiesAvailable for Sale, Net of ReclassificationAdjustment and Tax Effects		(401,514	)		(587,789	)		410,623
Comprehensive Income	$	7,349,464		$	8,085,421		$	8,783,320

- 56 -

PART I (Continued)

Item 1 (Continued)

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

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31

	2017			2016			2015
Cash Flows from Operating Activities
Net Income	$	7,750,978		$	8,673,210		$	8,372,697
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Depreciation and Amortization		70,183			66,476			73,999
Equity in Undistributed Earnings of Subsidiary		(159,193	)		(388,611	)		-
Dividends Received in Excess of Earnings of Subsidiary		-			-			800,116
Change in Interest Payable		17,887			5,367			23,072
Other		38,135			108,288			1,555,482
		7,717,990			8,464,730			10,825,366
Cash Flows from Investing Activities
Purchases of Premises and Equipment		(94,925	)		(6,836	)		(8,884	)
Cash Flows from Financing Activities
Proceeds from Other Borrowed Money		5,000,000			-			-
Principal Payments on Other Borrowed Money		(3,500,000	)		-			-
Dividends Paid on Common Stock		(843,934	)		-			-
Dividends Paid on Preferred Stock		(315,900	)		(1,590,746	)		(2,487,274	)
Redemption of Preferred Stock		(9,360,000	)		(8,661,000	)		(9,979,000	)
		(9,019,834	)		(10,251,746	)		(12,466,274	)
Increase (Decrease) in Cash		(1,396,769	)		(1,793,852	)		(1,649,792	)
Cash, Beginning		2,307,008			4,100,860			5,750,652
Cash, Ending	$	910,239		$	2,307,008		$	4,100,860

- 57 -

PART I (Continued)

Item 1 (Continued)

(22) 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 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 years ended December 31, 2017, 2016 and 2015:

	2017		2016		2015
Numerator
Net Income Available to Common Stockholders	$	7,540,378	$	7,179,900	$	5,997,687
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,439,258
Dilutive Effect of Potential Common Stock
Stock Warrants		194,323		74,037		19,203
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share		8,633,581		8,513,295		8,458,461
Earnings Per Share - Basic	$	0.89	$	0.85	$	0.71
Earnings Per Share - Diluted	$	0.87	$	0.84	$	0.71

(23) Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) for unrealized gains and losses securities available for sale for the years ended December 31, 2017, 2016 and 2015 are as follows:

	2017			2016			2015
Beginning Balance	$	(5,022,140	)	$	(4,434,351	)	$	(4,844,974	)
Other Comprehensive Income Before Reclassification		(401,514	)		(333,542	)		403,055
Amounts Reclassified from Accumulated Other Comprehensive Income		-			(254,247	)		7,568
TCJ Act		(1,068,295	)		-			-
Net Current Period Other Comprehensive Income		(1,469,809	)		(587,789	)		410,623
Ending Balance	$	(6,491,949	)	$	(5,022,140	)	$	(4,434,351	)

- 58 -

EX-21

EXHIBIT NO. 21

SUBSIDIARIES OF THE COMPANY

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

EX-31.1

EXHIBIT NO. 31.1

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

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

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

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

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

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

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

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

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

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

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

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

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

March 15, 2018	/s/ Edward P. Loomis, Jr.
	EDWARD P. LOOMIS, JR. President and Chief Executive Officer

EX-31.2

EXHIBIT NO. 31.2

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

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Terry L. Hester, certify that:

1.	I have reviewed this Form 10-K of Colony Bankcorp, Inc.
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report.
4.	The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

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

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

March 15, 2018	/s/ Terry L. Hester
	TERRY L. HESTER Executive Vice President and Chief Financial Officer

EX-32

EXHIBIT NO. 32

CERTIFICATION OF CEO AND CFO PURSUANT TO

18 U.S.C. §1350

AS ADOPTED PURSUANT TO

§906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-K of Colony Bankcorp, Inc. (the Company) for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Edward P. Loomis, Jr., President and Chief Executive Officer of the Company, and Terry L. Hester, Chief Financial and Accounting Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of our knowledge and belief that:

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

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

/s/ Edward P. Loomis, Jr.

Edward P. Loomis, Jr.

President and Chief Executive Officer

March 15, 2018

/s/ Terry L. Hester

Terry L. Hester

Chief Financial and Accounting Officer

March 15, 2018

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.

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Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 15, 2018	Jun. 30, 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	Accelerated Filer
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
Entity Public Float			$ 84,569,114
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Cash and Cash Equivalents
Cash and Due from Banks	$ 23,145,136	$ 28,822,104
Interest-Bearing Deposits	34,667,715	46,344,859
Investment Securities
Investment Securities Available for Sale, at Fair Value	354,246,904	323,657,870
Federal Home Loan Bank Stock, at Cost	3,042,900	3,010,000
Loans	765,283,855	754,283,563
Allowance for Loan Losses	(7,507,508)	(8,923,293)
Unearned Interest and Fees	(495,500)	(361,042)
	757,280,847	744,999,228
Premises and Equipment	27,639,430	27,969,260
Other Real Estate (Net of Allowance of $1,451,492 and $1,878,127 in 2017 and 2016, Respectively)	4,256,469	6,439,226
Other Intangible Assets	44,766	80,515
Other Assets	28,431,150	29,118,555
Total Assets	1,232,755,317	1,210,441,617
Deposits
Noninterest-Bearing	190,927,928	159,058,633
Interest-Bearing	877,057,477	885,297,895
	1,067,985,405	1,044,356,528
Borrowed Money
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	47,500,000	46,000,000
	71,729,000	70,229,000
Other Liabilities	2,718,249	2,468,356
Commitments and Contingencies
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; 10,000,000 Shares Authorized, 0 and 9,360 Shares Issued and Outstanding as of December 31, 2017 and 2016		9,360,000
Common Stock, Par Value $1; 20,000,000 Shares Authorized, 8,439,258 Shares Issued and Outstanding as of December 31, 2017 and 2016	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	59,230,260	51,465,521
Accumulated Other Comprehensive Loss, Net of Tax	(6,491,949)	(5,022,140)
	90,322,663	93,387,733
Total Liabilities and Stockholders’ Equity	$ 1,232,755,317	$ 1,210,441,617

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Other Real Estate, Allowance	$ 1,451,492	$ 1,878,127
Preferred stock, stated value (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	9,360
Preferred stock, shares outstanding (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
Common stock, shares outstanding (in shares)	8,439,258	8,439,258

XML

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest Income
Loans, Including Fees	$ 38,613,540	$ 38,942,503	$ 39,716,269
Federal Funds Sold	3		14,561
Deposits with Other Banks	232,397	124,459	79,735
U.S. Government Agencies	6,717,827	5,263,741	4,235,207
State, County and Municipal	115,097	127,379	107,638
Corporate	87,387
Dividends on Other Investments	150,172	131,007	122,070
	45,916,423	44,589,089	44,275,480
Interest Expense
Deposits	4,758,073	4,781,228	4,856,673
Federal Funds Purchased	2,639	581	26
Borrowed Money	2,112,017	1,701,522	1,712,548
	6,872,729	6,483,331	6,569,247
Net Interest Income	39,043,694	38,105,758	37,706,233
Provision for Loan Losses	390,000	1,062,000	865,500
Net Interest Income After Provision for Loan Losses	38,653,694	37,043,758	36,840,733
Noninterest Income
Service Charges on Deposits	4,466,997	4,307,214	4,268,438
Other Service Charges, Commissions and Fees	3,040,262	2,802,651	2,627,157
Mortgage Fee Income	858,658	681,806	527,187
Securities Gains (Losses)		385,223	(11,466)
Other	1,368,648	1,376,860	1,633,205
	9,734,565	9,553,754	9,044,521
Noninterest Expenses
Salaries and Employee Benefits	19,222,594	18,482,693	17,589,631
Occupancy and Equipment	3,947,941	3,970,244	3,989,347
Directors’ Fees	298,100	348,755	358,291
Legal and Professional Fees	893,938	791,563	737,731
Foreclosed Property	363,519	1,143,518	1,682,783
FDIC Assessment	386,823	603,654	899,302
Advertising	349,722	609,892	624,844
Software	1,192,025	1,112,065	992,593
Telephone	813,592	737,063	710,038
ATM/Card Processing	1,467,411	1,136,122	1,061,262
Other	4,924,163	5,137,400	5,078,932
	33,859,828	34,072,969	33,724,754
Income Before Income Taxes	14,528,431	12,524,543	12,160,500
Income Taxes	6,777,453	3,851,333	3,787,803
Net Income	7,750,978	8,673,210	8,372,697
Preferred Stock Dividends	210,600	1,493,310	2,375,010
Net Income Available to Common Stockholders	$ 7,540,378	$ 7,179,900	$ 5,997,687
Net Income Per Share of Common Stock
Basic (in dollars per share)	$ 0.89	$ 0.85	$ 0.71
Diluted (in dollars per share)	0.87	0.84	0.71
Cash Dividends Declared Per Share of Common Stock (in dollars per share)	$ 0.10	$ 0	$ 0
Weighted Average Shares Outstanding, Basic (in shares)	8,439,258	8,439,258	8,439,258
Weighted Average Shares Outstanding, Diluted (in shares)	8,633,581	8,513,295	8,458,461

XML

Consolidated Statements of Comprehensive Income - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net Income	$ 7,750,978	$ 8,673,210	$ 8,372,697
Other Comprehensive Income (Loss)
Gains (Losses) on Securities Arising During the Year	(608,355)	(505,367)	610,689
Tax Effect	206,841	171,825	(207,634)
Realized (Gains) Losses on Sale of AFS Securities		(385,223)	11,466
Tax Effect		130,976	(3,898)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	(401,514)	(587,789)	410,623
Comprehensive Income	$ 7,349,464	$ 8,085,421	$ 8,783,320

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2014	28,000	8,439,258
Balance at Dec. 31, 2014	$ 28,000,000	$ 8,439,258	$ 29,145,094	$ 38,287,934	$ (4,844,974)	$ 99,027,312
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects					410,623	410,623
Dividends on Preferred Shares				(2,375,010)		(2,375,010)
Redemption of Preferred Stock (in shares)	(9,979)
Redemption of Preferred Stock	$ (9,979,000)					(9,979,000)
Net Income				8,372,697		8,372,697
Redemption of Preferred Stock (in shares)	9,979
Balance (in shares) at Dec. 31, 2015	18,021	8,439,258
Balance at Dec. 31, 2015	$ 18,021,000	$ 8,439,258	29,145,094	44,285,621	(4,434,351)	95,456,622
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects					(587,789)	(587,789)
Dividends on Preferred Shares				(1,493,310)		(1,493,310)
Redemption of Preferred Stock (in shares)	8,661
Redemption of Preferred Stock	$ (8,661,000)					(8,661,000)
Net Income				8,673,210		8,673,210
Redemption of Preferred Stock (in shares)	(8,661)
Balance (in shares) at Dec. 31, 2016	9,360	8,439,258
Balance at Dec. 31, 2016	$ 9,360,000	$ 8,439,258	29,145,094	51,465,521	(5,022,140)	93,387,733
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects					(401,514)	(401,514)
Dividends on Preferred Shares				(210,600)		(210,600)
Redemption of Preferred Stock (in shares)	9,360
Redemption of Preferred Stock	$ (9,360,000)					(9,360,000)
Net Income				7,750,978		7,750,978
Redemption of Preferred Stock (in shares)	(9,360)
Dividends on Common Shares				(843,934)		(843,934)
TCJ Act Reclassification				1,068,295	(1,068,295)
Balance (in shares) at Dec. 31, 2017		8,439,258
Balance at Dec. 31, 2017		$ 8,439,258	$ 29,145,094	$ 59,230,260	$ (6,491,949)	$ 90,322,663

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash Flows from Operating Activities
Net Income	$ 7,750,978	$ 8,673,210	$ 8,372,697
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Depreciation	1,647,813	1,574,249	1,657,229
Amortization and Accretion	1,413,362	1,609,339	1,797,152
Provision for Loan Losses	390,000	1,062,000	865,500
Deferred Income Taxes	2,833,958	222,120	625,436
Securities (Gains) Losses		(385,223)	11,466
(Gain) Loss on Sale of Premises and Equipment	(10,735)	80,329	11,047
Loss on Sale of Other Real Estate and Repossessions	(208,329)	160,682	600,663
Provision for Losses on Other Real Estate	333,767	501,736	453,148
Increase in Cash Surrender Value of Life Insurance	(1,669,424)	(589,408)	(299,010)
Change In
Interest Receivable	(90,204)	176,766	(354,274)
Prepaid Expenses	139,382	(372,380)	278,637
Interest Payable	21,188	(46,284)	32,253
Accrued Expenses and Accounts Payable	361,005	(252,617)	(202,343)
Other	(367,626)	973,972	217,686
	12,545,135	13,388,491	14,067,287
Cash Flows from Investing Activities
Interest-Bearing Deposits in Other Banks	11,677,144	(7,729,560)	(17,409,260)
Purchase of Investment Securities Available for Sale	(87,160,178)	(109,634,793)	(102,336,227)
Proceeds from Sale of Investment Securities Available for Sale	0	25,209,851	28,273,634
Proceeds from Maturities, Calls and Paydowns of Investment Securities
Available for Sale	54,587,986	54,868,726	51,423,541
Held to Maturity			9,734
Proceeds from Sale of Premises and Equipment	37,650	89,551	28,608
Net Loans to Customers	(14,459,526)	(2,167,126)	(21,255,018)
Purchase of Premises and Equipment	(1,344,898)	(3,259,859)	(3,189,969)
Proceeds from Sale of Other Real Estate and Repossessions	3,863,576	7,529,131	8,154,596
Proceeds from Sale of Federal Home Loan Bank Stock			100,300
Purchase of Federal Home Loan Bank Stock	(32,900)	(279,500)
	(32,831,146)	(35,373,579)	(56,200,061)
Cash Flows from Financing Activities
Interest-Bearing Customer Deposits	(8,240,418)	7,629,930	26,704,254
Noninterest-Bearing Customer Deposits	31,869,295	25,172,362	5,546,508
Proceeds from Other Borrowed Money	10,015,500	10,000,000	27,000,000
Principal Payments on Other Borrowed Money	(8,515,500)	(4,000,000)	(27,000,000)
Dividends Paid on Preferred Stock	(315,900)	(1,590,746)	(2,487,274)
Redemption of Preferred Stock	(9,360,000)	(8,661,000)	(9,979,000)
Dividends Paid on Common Stock	(843,934)
	14,609,043	28,550,546	19,784,488
Net Increase (Decrease) in Cash and Cash Equivalents	(5,676,968)	6,565,458	(22,348,286)
Cash and Cash Equivalents, Beginning	28,822,104	22,256,646	44,604,932
Cash and Cash Equivalents, Ending	$ 23,145,136	$ 28,822,104	$ 22,256,646

XML

Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(

1

)

Summary

of

Significant

Accounting

Policies

Principles

of

Consolidation

Colony

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

Nature

of

Operations

The

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

Use

of

Estimates

In

preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date and revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans.

Reclassifications

In

certain instances, amounts reported in prior years’ consolidated financial statements and note disclosures have been reclassified to conform to statement presentations selected for

2017.

Such reclassifications had

no

effect on previously reported stockholders’ equity or net income.

Concentrations

of

Credit

Risk

Concentrations

of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions. The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market. At

December 31, 2017,

approximately

87.1

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

The

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

At

times, the Company

may

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

Investment

Securities

The

Company classifies its investment securities as trading, available for sale or held to maturity. Securities that are held principally for resale in the near term are classified as trading. Trading securities are carried at fair value, with realized and unrealized gains and losses included in noninterest income. Currently,

no

securities are classified as trading. Securities acquired with both the intent and ability to be held to maturity are classified as held to maturity and reported at amortized cost. All securities

not

classified as trading or held to maturity are considered available for sale. Securities available for sale are reported at estimated fair value. Unrealized gains and losses on securities available for sale are excluded from earnings and are reported, net of deferred taxes, in accumulated other comprehensive income (loss), a component of stockholders’ equity. Gains and losses from sales of securities available for sale are computed using the specific identification method. Securities available for sale includes securities, which

may

be sold to meet liquidity needs arising from unanticipated deposit and loan fluctuations, changes in regulatory capital requirements, or unforeseen changes in market conditions.

The

Company evaluates each held to maturity and available for sale security in a loss position for other-than-temporary impairment (OTTI). In estimating other-than-temporary impairment losses, management considers such factors as the length of time and the extent to which the market value has been below cost, the financial condition of the issuer and the Company’s intent to sell and whether it is more likely than

not

that the Company will be required to sell the security before anticipated recovery of the amortized cost basis. If the Company intends to sell or if it is more likely than

not

that the Company will be required to sell the security before recovery, the OTTI write-down is recognized in earnings. If the Company does

not

intend to sell the security or it is

not

more likely than

not

that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in other comprehensive income (loss).

Federal

Home

Loan

Bank

Stock

Investment

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

Loans

Loans

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

A

loan is considered to be delinquent when payments have

not

been made according to contractual terms, typically evidenced by nonpayment of a monthly installment by the due date.

When

management believes there is sufficient doubt as to the collectibility of principal or interest on any loan or generally when loans are

90

days or more past due, the accrual of applicable interest is discontinued and the loan is designated as nonaccrual, unless the loan is well secured and in the process of collection. Interest payments received on nonaccrual loans are either applied against principal or reported as income, according to management’s judgment as to the collectibility of principal. Loans are returned to an accrual status when factors indicating doubtful collectibility on a timely basis

no

longer exist.

Loans Modified in a Troubled Debt Restructuring (TDR)

Loans are considered to have been modified in a

TDR when, due to a borrower’s financial difficulty, the Company makes certain concessions to the borrower that it would

not

otherwise consider for new debt with similar risk characteristics. Modifications

may

include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of the collateral. Generally, a nonaccrual loan that has been modified in a TDR remains on nonaccrual status for a period of

six

months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and

may

result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status. Once a loan is modified in a troubled debt restructuring, it is accounted for as an impaired loan, regardless of its accrual status, until the loan is paid in full, sold or charged off.

A

llowance

for

Loan

Losses

The

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

The

allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that

may

affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revisions as more information becomes available.

The

allowance consists of specific, historical and general components. The specific component relates to loans that are classified as either doubtful, substandard or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan 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 Bank examiners are charged off.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are

not

classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

A significant portion of the Company

’s impaired loans are deemed to be collateral dependent. Management therefore measures impairment on these loans based on the fair value of the collateral. Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company or by senior members of the Company’s credit administration staff. The decision whether to obtain an external

third

-party appraisal usually depends on the type of property being evaluated. External appraisals are usually obtained on more complex, income producing properties such as hotels, shopping centers and businesses. Less complex properties such as residential lots, farm land and single family houses

may

be evaluated internally by senior credit administration staff. When the Company does obtain appraisals from external

third

-parties, the values utilized in the impairment calculation are “as is” or current market values. The appraisals, whether prepared internally or externally,

may

utilize a single valuation approach or a combination of approaches including the comparable sales, income and cost approach. Appraised amounts used in the impairment calculation are typically discounted

10

percent to account for selling and marketing costs, if the repayment of the loan is to come from the sale of the collateral. Although appraisals

may

not

be obtained each year on all impaired loans, the collateral values used in the impairment calculations are evaluated quarterly by management. Based on management’s knowledge of the collateral and the current real estate market conditions, appraised values

may

be further discounted to reflect facts and circumstances known to management since the initial appraisal was performed.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a

level

3

classification of the inputs for determining fair value. Because of the high degree of judgment required in estimating the fair value of collateral underlying impaired loans and because of the relationship between fair value and general economic conditions, we consider the fair value of impaired loans to be highly sensitive to changes in market conditions.

Premises

and

Equipment

Premises

and equipment are recorded at acquisition cost net of accumulated depreciation.

Depreciation

is charged to operations over the estimated useful lives of the assets. The estimated useful lives and methods of depreciation are as follows:

Description	Life in Years			Method
Banking  Premises	15	-	40	Straight-Line  and Accelerated
Furniture  and Equipment	5	-	10	Straight-Line  and Accelerated

Expenditures

for major renewals and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. When property and equipment are retired or sold, the cost and accumulated depreciation are removed from the respective accounts and any gain or loss is reflected in other income or expense.   

Other

Intangible

Assets

Intangible

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

Transfers

of

Financial

Assets

Transfers

of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (

1

) the assets have been isolated from the Company, (

2

) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (

3

) the Company does

not

maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Statement

of

Cash

Flows

For

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

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 basis. The differences relate primarily to depreciable assets (use of different depreciation methods for financial statement and income tax purposes) and allowance for loan losses (use of the allowance method for financial statement purposes and the direct write-off method for tax purposes). In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with effects included in the income tax provision. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized. The Company and its subsidiary file a consolidated federal income tax return. The subsidiary pays its proportional share of federal income taxes to the Company based on its taxable income.

The Company

’s federal and state income tax returns for tax years

2017,

2016,

2015

and

2014

are subject to examination by the Internal Revenue Service (IRS) and the Georgia Department of Revenue, generally for

three

years after filing.

Positions

taken in the Company’s tax returns

may

be subject to challenge by the taxing authorities upon examination. Uncertain tax positions are initially recognized in the consolidated financial statements when it is more likely than

not

the position will be sustained upon examination by the tax authorities. Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than

50

percent likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts. The Company provides for interest and, in some cases, penalties on tax positions that

may

be challenged by the taxing authorities. Interest expense is recognized beginning in the

first

period that such interest would begin accruing. Penalties are recognized in the period that the Company claims the position in the tax return. Interest and penalties on income tax uncertainties are classified within income tax expense in the consolidated statements of operations.

Other

Real

Estate

Other

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

Bank-Owned Life Insurance

The Company has purchased life insurance on the lives of certain key members of management and directors. The life insurance policies are recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement, if applicable. Increases in the cash surrender value are recorded as other income in the consolidated statements of income.

The cash surrender value of the insurance contracts is recorded in other assets on the consolidated balance sheets in the amount of

$17,088,693

and

$15,419,269

as of

December 31, 2017

and

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

Off-Balance

Sheet

Credit

Related

Financial

Instruments

In

the ordinary course of business, the Company has entered into commitments to extend credit, commercial letters of credit and standby letters of credit. Such financial instruments are recorded on the consolidated balance sheets 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

became effective for us on

January 

1,

2018

and is

not

expected to have a significant impact on our 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.

ASU

2018

-

02,

 Income Statement – Reporting Comprehensive Income (Topic

220

)

.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

This ASU allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (TCJ Act). ASU

2018

-

02

is effective for all entities for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years, with early adoption permitted. The Company elected to early adopt the provisions of ASU

2018

-

02

in the

fourth

quarter of

2017

and, as a result, reclassified

$1,068,295

from AOCI to retained earnings as of

December 31, 2017.

XML

Note 2 - Cash and Balances Due From Banks

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Cash and Cash Equivalents Disclosure [Text Block]

(

2

)

Cash

and

Balances

Due

from

Banks

Components

of cash and balances due from banks are as follows as of

December 31:

	20 1 7		20 16
Cash on Hand and Cash Items	$	9,746,132	$	8,509,530
Noninterest-Bearing Deposits with Other Banks		13,399,004		20,312,574
	$	23,145,136	$	28,822,104

The

Company is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank based on a percentage of deposits. Reserve balances totaled approximately

$1,515,000

and

$1,417,000

at

December 31, 2017

and

2016,

respectively.

XML

Note 3 - Investment Securities

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

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

(

3

)

Investment

Securities

Investment

securities as of

December 31, 2017

are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	354,931,318	$	258,049	$	(8,465,948	)	$	346,723,419
State, County and Municipal		4,493,085		22,835		(23,094	)		4,492,826
Corporate		2,047,517		12,483		-			2,060,000
Asset-Backed		992,641		-		(21,982	)		970,659
	$	362,464,561	$	293,367	$	(8,511,024	)	$	354,246,904

The

amortized cost and fair value of investment securities as of

December 31, 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	$	301,299	$	301,605
Due After One Year Through Five Years		4,668,954		4,658,344
Due After Five Years Through Ten Years		877,788		894,743
Due After Ten Years		1,685,202		1,668,793
	$	7,533,243	$	7,523,485
Mortgage-Backed Securities		354,931,318		346,723,419
	$	362,464,561	$	354,246,904

Investment

securities as of

December 31, 2016

are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	326,694,417	$	75,743	$	(7,672,786	)	$	319,097,374
State, County and Municipal		4,572,756		18,350		(30,610	)		4,560,496
	$	331,267,173	$	94,093	$	(7,703,396	)	$	323,657,870

Proceeds

from sales of investments available for sale were

$0

in

2017,

$25,209,851

in

2016

and

$28,273,634

in

2015.

Gross realized gains totaled

$0

in

2017,

$391,976

in

2016

and

$207,896

in

2015.

Gross realized losses totaled

$0

in

2017,

$6,753

in

2016

and

$196,316

in

2015.

Investment

securities having a carrying value totaling

$175,484,021

and

$144,853,885

as of

December 31, 2017

and

2016,

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

Information

pertaining to securities with gross unrealized losses at

December 31, 2017

and

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
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2017
U.S. Government Agencies
Mortgage-Backed	$	120,139,340	$	(1,655,223	)	$	190,196,101	$	(6,810,725	)	$	310,335,441	$	(8,465,948	)
State, County and Municipal		2,598,344		(23,094	)		-		-			2,598,344		(23,094	)
Asset – Backed		970,659		(21,982	)		-		-			970,659		(21,982	)
	$	123,708,343	$	(1,700,299	)	$	190,196,101	$	(6,810,725	)	$	313,904,444	$	(8,511,024	)
December 31, 201 6
U.S. Government Agencies
Mortgage-Backed	$	174,200,881	$	(3,459,564	)	$	107,481,698	$	(4,213,222	)	$	281,682,579	$	(7,672,786	)
State, County and Municipal		3,487,647		(30,610	)		-		-			3,487,647		(30,610	)
	$	177,688,528	$	(3,490,174	)	$	107,481,698	$	(4,213,222	)	$	285,170,226	$	(7,703,396	)

Management

evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (

1

) the length of time and the extent to which the fair value has been less than cost, (

2

) the financial condition and near-term prospects of the issuer and (

3

) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At

December 31, 2017,

130

securities have unrealized losses which have depreciated

2.64

percent from the Company’s amortized cost basis. These securities are guaranteed by either the U.S. Government, other governments or U.S. corporations. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial condition. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available-for-sale,

no

declines are deemed to be other than temporary. However, the Company did own

one

asset-backed security at

December 31, 2017

which was completely written off during prior years. This investment is comprised of

one

issuance of a trust preferred security and has

no

book value.

XML

Note 4 - Loans

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

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

(

4

)

Loans

The

following table presents the composition of loans, segregated by class of loans, as of

December 31:

	20 1 7		20 16
Commercial and Agricultural
Commercial	$	48,122,263	$	47,024,878
Agricultural		16,442,581		17,079,579
Real Estate
Commercial Construction		45,213,960		30,358,362
Residential Construction		8,583,446		11,830,447
Commercial		351,171,668		349,090,031
Residential		194,048,945		195,579,967
Farmland		67,767,655		66,877,197
Consumer and Other
Consumer		18,956,028		19,695,241
Other		14,977,309		16,747,861
Total Loans	$	765,283,855	$	754,283,563

Commercial

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

Credit

Q

uality

Indicators.

As part of the ongoing monitoring of the credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (

1

) the risk grade assigned to commercial and consumer loans, (

2

) the level of classified commercial loans, (

3

) net charge-offs, (

4

) nonperforming loans, and (

5

) the general economic conditions in the Company’s geographic markets.

The

Company uses a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of

1

to

8.

A description of the general characteristics of the grades is as follows:

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

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

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

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

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

The

following tables present the loan portfolio by credit quality indicator (risk grade) as of

December 31.

Those loans with a risk grade of

1,

2,

3

or

4

have been combined in the pass column for presentation purposes.

201 7	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	46,468,726	$	825,607	$	827,930	$	48,122,263
Agricultural		15,868,191		174,356		400,034		16,442,581
Real Estate
Commercial Construction		41,282,295		577,765		3,353,900		45,213,960
Residential Construction		8,583,446		-		-		8,583,446
Commercial		338,775,805		7,662,637		4,733,226		351,171,668
Residential		177,962,870		4,864,893		11,221,182		194,048,945
Farmland		66,334,906		444,095		988,654		67,767,655
Consumer and Other
Consumer		18,495,798		52,970		407,260		18,956,028
Other		14,968,677		8,632		-		14,977,309
Total Loans	$	728,740,714	$	14,610,955	$	21,932,186	$	765,283,855
201 6
Commercial and Agricultural
Commercial	$	44,249,874	$	1,861,757	$	913,247	$	47,024,878
Agricultural		16,585,646		192,445		301,488		17,079,579
Real Estate
Commercial Construction		28,425,373		1,349,447		583,542		30,358,362
Residential Construction		11,630,165		-		200,282		11,830,447
Commercial		327,561,169		9,403,077		12,125,785		349,090,031
Residential		178,618,510		5,658,526		11,302,931		195,579,967
Farmland		65,074,715		839,362		963,120		66,877,197
Consumer and Other
Consumer		19,071,739		225,959		397,543		19,695,241
Other		16,747,861		-		-		16,747,861
Total Loans	$	707,965,052	$	19,530,573	$	26,787,938	$	754,283,563

A

loan’s risk grade is assigned at the inception of the loan and is based on the financial strength of the borrower and the type of collateral. Loan risk grades are subject to reassessment at various times throughout the year as part of the Company’s ongoing loan review process. Loans with an assigned risk grade of

6

or below and an outstanding balance of

$250,000

or more are reassessed on a quarterly basis. During this reassessment process individual reserves

may

be identified and placed against certain loans which are

not

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

Loans

are considered past due if the required principal and interest payments have

not

been received as of the date such payments were due. Generally, loans are placed on nonaccrual status if principal or interest payments become

90

days past due or when, in management’s opinion, the borrower

may

be unable to meet payment obligations as they become due, as well as when required by regulatory provision. Loans

may

be placed on nonaccrual status regardless of whether such loans are considered past due.

The

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

December 31:

	Accruing Loans
201 7	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loan s		Total Loans
Commercial and Agricultural
Commercial	$	328,483	$	-	$	328,483	$	598,305	$	47,195,475	$	48,122,263
Agricultural		110,482		-		110,482		398,509		15,933,590		16,442,581
Real Estate
Commercial Construction		27,062		-		27,062		477,043		44,709,855		45,213,960
Residential Construction		119,443		-		119,443		-		8,464,003		8,583,446
Commercial		918,997		-		918,997		2,172,229		348,080,442		351,171,668
Residential		2,482,276		-		2,482,276		2,829,966		188,736,703		194,048,945
Farmland		318,329		-		318,329		838,577		66,610,749		67,767,655
Consumer and Other
Consumer		246,175				246,175		188,073		18,521,780		18,956,028
Other		7,158		-		7,158		-		14,970,151		14,977,309
Total Loans	$	4,558,405	$	-	$	4,558,405	$	7,502,702	$	753,222,748	$	765,283,855
201 6
Commercial and Agricultural
Commercial	$	419,969	$	-	$	419,969	$	634,955	$	45,969,954	$	47,024,878
Agricultural		33,046		-		33,046		208,522		16,838,011		17,079,579
Real Estate
Commercial Construction		54,001		-		54,001		190,494		30,113,867		30,358,362
Residential Construction		-		-		-		-		11,830,447		11,830,447
Commercial		491,468		-		491,468		6,360,176		342,238,387		349,090,031
Residential		3,178,833		-		3,178,833		3,944,337		188,456,797		195,579,967
Farmland		95,309		-		95,309		799,556		65,982,332		66,877,197
Consumer and Other
Consumer		196,242		122		196,364		212,026		19,286,851		19,695,241
Other		-		-		-		-		16,747,861		16,747,861
Total Loans	$	4,468,868	$	122	$	4,468,990	$	12,350,066	$	737,464,507	$	754,283,563

Had

nonaccrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income of approximately

$205,000,

$387,300

and

$418,400

for the years ended

December 31, 2017,

2016

and

2015,

respectively.

The following table details impaired loan data as of

December 31,

201

7:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	598,305	$	598,305	$	-	$	633,528	$	33,283	$	33,868
Agricultural		485,132		398,509		-		296,578		11,046		19,376
Commercial Construction		54,306		54,306		-		141,396		3,526		3,836
Residential Construction		-		-		-		79,295		-		-
Commercial Real Estate		12.637,057		12,637,057		-		12,808,414		559,601		549,825
Residential Real Estate		4,977,769		4,579,614		-		4,566,041		211,318		226,684
Farmland		840,110		838,577		-		790,967		54,367		58,085
Consumer		188,073		188,073		-		186,348		8,576		9,452
	$	19,780,752	$	19,294,441	$	-	$	19,502,567	$	881,717	$	901,126
With An Allowance Recorded
Commercial	$	-	$	-	$	-	$	-	$	-	$	-
Agricultural		-		-		-		-		-		-
Commercial Construction		493,067		493,067		65,635		241,063		22,626		32,922
Residential Construction		-		-		-		-		-		-
Commercial Real Estate		5,729,300		5,729,300		1,712,557		6,599,144		228,745		237,066
Residential Real Estate		108,859		108,859		27,123		482,228		4,261		7,446
Farmland		371,376		371,376		21,369		375,595		22,121		22,021
Consumer		-		-		-		-		-		-
	$	6,702,602	$	6,702,602	$	1,826,684	$	7,698,030	$	277,753	$	299,455
Total
Commercial	$	598,305	$	598,305	$	-	$	633,528	$	33,283	$	33,868
Agricultural		485,132		398,509		-		296,578		11,046		19,376
Commercial Construction		547,373		547,373		65,635		382,459		26,152		36,758
Residential Construction		-		-		-		79,295		-		-
Commercial Real Estate		18,366,357		18,366,357		1,712,557		19,407,558		788,346		786,891
Residential Real Estate		5,086,628		4,688,473		27,123		5,048,269		215,579		234,130
Farmland		1,211,486		1,209,953		21,369		1,166,562		76,488		80,106
Consumer		188,073		188,073		-		186,348		8,576		9,452
	$	26,483,354	$	25,997,043	$	1,826,684	$	27,200,597	$	1,159,470	$	1,200,581

The

following table details impaired loan data as of

December 31, 2016:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	634,955	$	634,955	$	-	$	539,099	$	24,563	$	27,142
Agricultural		229,182		208,522		-		210,372		8,794		12,412
Commercial Construction		190,494		190,494		-		697,893		6,630		7,127
Commercial Real Estate		14,357,601		14,276,688		-		14,274,719		567,349		560,354
Residential Real Estate		4,261,558		3,952,139		-		4,553,322		73,099		190,373
Farmland		920,666		799,556		-		1,016,395		21,526		26,012
Consumer		212,376		212,026		-		213,309		9,599		12,036
	$	20,806,832	$	20,274,380	$	-	$	21,505,109	$	711,560	$	835,456
With An Allowance Recorded
Commercial	$	-	$	-	$	-	$	30,270	$	-	$	-
Agricultural		-		-		-		-		-		-
Commercial Construction		72,296		72,296		21,135		74,098		1,532		1,416
Commercial Real Estate		8,557,582		8,467,135		3,021,943		8,339,666		238,684		235,749
Residential Real Estate		1,475,594		1,467,833		362,521		1,042,750		27,759		32,260
Farmland		379,851		379,851		29,173		384,056		21,098		21,310
Consumer		-		-		-		-		-		-
	$	10,485,323	$	10,387,115	$	3,434,772	$	9,870,840	$	289,073	$	290,735
Total
Commercial	$	634,955	$	634,955	$	-	$	569,369	$	24,563	$	27,142
Agricultural		229,182		208,522		-		210,372		8,794		12,412
Commercial Construction		262,790		262,790		21,135		771,991		8,162		8,543
Commercial Real Estate		22,915,183		22,743,823		3,021,943		22,614,385		806,033		796,103
Residential Real Estate		5,737,152		5,419,972		362,521		5,596,072		100,858		222,633
Farmland		1,300,517		1,179,407		29,173		1,400,451		42,624		47,322
Consumer		212,376		212,026		-		213,309		9,599		12,036
	$	31,292,155	$	30,661,495	$	3,434,772	$	31,375,949	$	1,000,633	$	1,126,191

The following table details impaired loan data as of

December 31,

201

5:

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	454,423	$	454,013	$	-	$	534,814	$	17,259		$	21,253
Agricultural		195,654		178,021		-		163,078		(9,957	)		10,334
Commercial Construction		6,887,522		1,896,938		-		2,867,061		25,788			27,007
Commercial Real Estate		15,569,340		15,122,486		-		15,430,252		529,376			530,699
Residential Real Estate		5,429,121		4,575,547		-		4,715,162		175,484			159,148
Farmland		1,104,887		1,103,353		-		1,339,863		583			2,076
Consumer		179,908		178,435		-		190,566		13,745			14,907
Other		-		-		-		48,438		-			-
	$	29,820,855	$	23,508,793	$	-	$	25,289,234	$	752,278		$	765,424
With An Allowance Recorded
Commercial	$	122,928	$	122,928	$	94,538	$	99,749	$	2,275		$	2,438
Agricultural		-		-		-		-		-			-
Commercial Construction		76,644		76,644		25,344		92,200		375			375
Commercial Real Estate		8,969,329		8,955,503		1,607,962		6,673,087		213,693			208,657
Residential Real Estate		1,083,127		1,075,367		308,188		1,088,380		16,380			15,873
Farmland		387,968		387,969		37,386		391,060		20,880			20,954
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
	$	10,639,996	$	10,618,411	$	2,073,418	$	8,344,476	$	253,603		$	248,297
Total
Commercial	$	577,351	$	576,941	$	94,538	$	634,563	$	19,534		$	23,691
Agricultural		195,654		178,021		-		163,078		(9,957	)		10,334
Commercial Construction		6,964,166		1,973,582		25,344		2,959,261		26,163			27,382
Commercial Real Estate		24,538,669		24,077,989		1,607,962		22,103,339		743,069			739,356
Residential Real Estate		6,512,248		5,650,914		308,188		5,803,542		191,864			175,021
Farmland		1,492,855		1,491,322		37,386		1,730,923		21,463			23,030
Consumer		179,908		178,435		-		190,566		13,745			14,907
Other		-		-		-		48,438		-			-
	$	40,460,851	$	34,127,204	$	2,073,418	$	33,633,710	$	1,005,881		$	1,013,721

Troubled

Debt Restructurings (TDRs) are troubled loans on which the original terms of the loan have been modified in favor of the borrower due to deterioration in the borrower’s financial condition. Each potential loan modification is reviewed individually and the terms of the loan are modified to meet the borrower’s specific circumstances at a point in time.

Not

all loan modifications are TDRs. Loan modifications are reviewed and approved by the Company’s senior lending staff, who then determine whether the loan meets the criteria for a TDR. Generally, the types of concessions granted to borrowers that are evaluated in determining whether a loan is classified as a TDR include:

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

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

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

As

discussed in Note

1,

Summary of Significant Accounting Policies, once a loan is identified as a TDR, it is accounted for as an impaired loan. The Company had

no

unfunded commitments to lend to a customer that has a troubled debt restructured loan as of

December 31, 2017.

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

12 months ended

December 31, 2017,

2016

and

2015.

It shows the pre- and post-modification recorded investment as well as the number of contracts and the recorded investment for those TDRs modified during the previous

12

months which subsequently defaulted during the period. Loans modified in a troubled debt restructuring are considered to be in default once the loan becomes

90

days past due. A TDR

may

cease being classified as impaired if the loan is subsequently modified at market terms, has performed according to the modified terms for at least

six

months, and has

not

had any prior principal forgiveness on a cumulative basis.

Troubled Debt Restructurings
201 7	# of Contracts		Pre-Modification		Post-Modification
Commercial Real Estate		-	$	-	$	-
Residential Real Estate		-		-		-
Total Loans		-	$	-	$	-
201 6
Commercial Real Estate		1	$	91,280	$	91,097
Residential Real Estate		1		354,784		354,784
Total Loans		2	$	446,064	$	445,881
2015
Commercial Real Estate		1	$	513,868	$	505,978
Residential Real Estate		2		1,106,345		1,035,590
Total Loans		3	$	1,620,213	$	1,541,568

Troubled

debt restructurings that subsequently defaulted as of

December 31

are as follows:

	201 7				201 6				201 5
	# of Contracts		Recorded Investment		# of Contracts		Recorded Investment		# of Contracts		Recorded Investment
Residentia l Real Estate		-	$	-		1	$	89,297		-	$	-
Total Loans		-	$	-		1	$	89,297		-	$	-

At

December 31, 2017,

all restructured loans were performing as agreed.

During

December 2016,

a restructured loan totaling

$89,297

failed to continue to perform as agreed and was charged off in

June 2016.

At

December 31, 2015,

all restructured loans were performing as agreed.

XML

Note 5 - Allowance for Loan Losses

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Allowance for Credit Losses [Text Block]

(

5

)

Allowance

for

Loan

Losses

Changes

in the allowance for loan losses for the years ended

December 31

are as follows:

	201 7			201 6			20 15
Balance, Beginning of Year	$	8,923,293		$	8,603,905		$	8,802,316
Provision for Loan Losses		390,000			1,062,000			865,500
Loans Charged Off		(2,915,753	)		(2,087,850	)		(2,083,347	)
Recoveries of Loans Previously Charged Off		1,109,968			1,345,238			1,019,436
Balance, End of Year	$	7,507,508		$	8,923,293		$	8,603,905

The

following tables detail activity in the allowance for loan losses, segregated by class of loan, for the years ended

December 31.

Allocation of a portion of the allowance to

one

category of loans does

not

preclude its availability to absorb losses in other loan categories and periodically

may

result in reallocation within the provision categories.

201 7	Beginning Balance		Charge- O ffs			Recoveries		Provision			Ending Balance
Commercial and Agricultur al
Commercial	$	456,197	$	(299,079	)	$	136,499	$	153,058		$	446,675
Agricultural		167,692		(159,500	)		3,963		173,749			185,904
Real Estate
Commercial Construction		322,725		(51,977	)		266,459		678,808			1,216,015
Residential Construction		13,491		-			-		(13,491	)		-
Commercial		5,750,998		(966,014	)		527,150		(1,438,175	)		3,873,959
Residential		1,396,099		(1,048,337	)		82,079		538,260			968,101
Farmland		722,331		(60,902	)		16,750		101,352			779,531
Consumer and Other
Consumer		80,265		(329,944	)		74,933		208,739			33,993
Other		13,495		-			2,135		(12,300	)		3,330
	$	8,923,293	$	(2,915,753	)	$	1,109,968	$	390,000		$	7,507,508
201 6
Commercial and Agricultur al
Commercial	$	855,364	$	(304,918	)	$	66,738	$	(160,987	)	$	456,197
Agricultural		203,091		(19,258	)		4,150		(20,291	)		167,692
Real Estate
Commercial Construction		690,766		(25,318	)		814,586		(1,157,309	)		322,725
Residential Construction		19,890		-			-		(6,399	)		13,491
Commercial		3,850,527		(992,067	)		206,154		2,686,384			5,750,998
Residential		1,990,355		(361,630	)		49,660		(282,286	)		1,396,099
Farmland		911,692		(119,576	)		145,000		(214,785	)		722,331
Consumer and Other
Consumer		63,377		(265,083	)		52,629		229,342			80,265
Other		18,843		-			6,321		(11,669	)		13,495
	$	8,603,905	$	(2,087,850	)	$	1,345,238	$	1,062,000		$	8,923,293

201 5	Beginning Balance		Charge -O ffs			Recoveries		Provision			Ending Balance
Commercial and Agricultur al
Commercial	$	497,561	$	(454,971	)	$	52,111	$	760,663		$	855,364
Agricultural		304,172		(5,000	)		3,600		(99,681	)		203,091
Real Estate
Commercial Construction		1,222,695		(97,698	)		485,834		(920,065	)		690,766
Residential Construction		138,092		-			-		(118,202	)		19,890
Commercial		3,664,777		(275,297	)		270,003		191,044			3,850,527
Residential		2,425,327		(929,668	)		109,626		385,070			1,990,355
Farmland		103,800		(40,000	)		20,000		827,892			911,692
Consumer and Other
Consumer		66,914		(255,062	)		61,976		189,549			63,377
Other		378,978		(25,651	)		16,286		(350,770	)		18,843
	$	8,802,316	$	(2,083,347	)	$	1,019,436	$	865,500		$	8,603,905

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. During the

first

quarter of

2016

Company management implemented a change to its allowance for loan loss methodology by expanding the historical loss period from a rolling

8

quarters to

16

quarters. Management believes the longer historical loss period better reflects the current and expected loss behavior of the loan portfolio within the current credit cycle. The transition to a rolling

16

quarter loss period was completed in the

first

quarter of

2017.

As of

December 31, 2017,

this change in the historical loss period resulted in a decrease to the allowance for loan losses of

$114,144.

The loss history period used at

December 31, 2016

and

2015

was based on the loss rate from the

eight

quarters ended

September 30, 2016

and

2015,

respectively.

Effective with the quarter ended

June 30, 2015,

the calculation of the amount needed in the Allowance for Loan Losses changed. Management determined that the segmentation method for the ASC

450

-

20

portion of the loan portfolio should be changed to bank call report categories. Prior to this change, the ASC

450

-

20

segmentation categorized loans by various non-owner occupied commercial real estate loan types and risk grades for the remainder of the ASC

450

-

20

portion of the portfolio.

On the date of change,

June 30, 2015,

the change in methodology resulted in an increase to the calculated allowance for loan loss reserve of

$1,621,424.

Management feels these changes better align the calculation of the allowance for loan losses with the direction of the loan portfolio.

  These changes did

not

result in a significant change to the recorded allowance for loan loss balance.

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.

Since

not

all loans in the substandard category are considered impaired, this quarterly review process

may

result in the identification of specific reserves on nonimpaired loans. Management considers those loans graded substandard, but

not

classified as impaired, to be higher risk loans and, therefore, makes specific allocations to the allowance for those loans if warranted. The total of such loans is

$9,470,621

and

$10,786,699

as of

December 31, 2017

and

2016,

respectively. Specific allowance allocations were made for these loans totaling

$1,510,868

and

$632,706

as of

December 31, 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.

At

December 31, 2017,

there were

149

impaired loans totaling

$4,335,524

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

December 31, 2016

and

2015,

impaired loans totaling

$4,204,156

and

$3,744,733,

respectively, 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.

	Ending Allowance Balanc e						Ending Loan Balanc e
201 7	Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l		Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l
Commercial and Agricultura l
Commercia l	$	-	$	446,675	$	446,675	$	77,599	$	48,044,664	$	48,122,263
Agricultura l		-		185,904		185,904		5,121		16,437,460		16,442,581
Real Estat e
Commercial Constructio n		65,635		1,150,380		1,216,015		493,067		44,720,893		45,213,960
Residential Constructio n		-		-		-		-		8,583,446		8,583,446
Commercia l		1,712,557		2,161,402		3,873,959		18,010,035		333,161,633		351,171,668
Residential		27,123		940,978		968,101		2,040,125		192,008,820		194,048,945
Farmlan d		21,369		758,162		779,531		1,035,572		66,732,083		67,767,655
Consumer and Othe r
Consume r		-		33,993		33,993		-		18,956,028		18,956,028
Othe r		-		3,330		3,330		-		14,977,309		14,977,309
Total End of Year Balanc e	$	1,826,684	$	5,680,824	$	7,507,508	$	21,661,519	$	743,622,336	$	765,283,855

	Ending Allowance Balanc e						Ending Loan Balanc e
201 6	Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l		Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l
Commercial and Agricultura l
Commercia l	$	-	$	456,197	$	456,197	$	6,671	$	47,018,207	$	47,024,878
Agricultura l		-		167,692		167,692		-		17,079,579		17,079,579
Real Estat e
Commercial Constructio n		21,135		301,590		322,725		72,296		30,286,066		30,358,362
Residential Construction		-		13,491		13,491		-		11,830,447		11,830,447
Commercia l		3,021,943		2,729,055		5,750,998		22,422,451		326,667,580		349,090,031
Residentia l		362,522		1,033,577		1,396,099		2,911,874		192,668,093		195,579,967
Farmlan d		29,172		693,159		722,331		1,044,047		65,833,150		66,877,197
Consumer and Othe r
Consume r		-		80,265		80,265		-		19,695,241		19,695,241
Othe r		-		13,495		13,495		-		16,747,861		16,747,861
Total End of Year Balanc e	$	3,434,772	$	5,488,521	$	8,923,293	$	26,457,339	$	727,826,224	$	754,283,563
201 5
Commercial and Agricultura l
Commercia l	$	94,538	$	760,826	$	855,364	$	122,928	$	47,658,761	$	47,781,689
Agricultura l		-		203,091		203,091		8,445		19,185,052		19,193,497
Real Estat e
Commercial Constructio n		25,344		665,422		690,766		1,622,560		38,484,073		40,106,633
Residential Constructio n		-		19,890		19,890		-		9,413,263		9,413,263
Commercia l		1,607,962		2,242,565		3,850,527		23,628,213		322,633,820		346,262,033
Residentia l		308,188		1,682,167		1,990,355		3,597,386		193,405,033		197,002,419
Farmlan d		37,386		874,306		911,692		1,402,939		60,376,920		61,779,859
Consumer and Othe r
Consume r		-		63,377		63,377		-		20,605,465		20,605,465
Othe r		-		18,843		18,843		-		16,490,737		16,490,737
Total End of Year Balanc e	$	2,073,418	$	6,530,487	$	8,603,905	$	30,382,471	$	728,253,124	$	758,635,595

XML

Note 6 - Premises and Equipment

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

(

6

)

Premises

and

Equipment

Premises

and equipment are comprised of the following as of

December 31:

	20 1 7			20 16
Land	$	9,668,722		$	9,668,722
Building		26,893,354			25,239,165
Furniture, Fixtures and Equipment		13,090,366			12,461,043
Leasehold Improvements		655,166			653,939
Construction in Progress		68,253			1,530,359
		50,375,861			49,553,228
Accumulated Depreciation		(22,736,431	)		(21,583,968	)
	$	27,639,430		$	27,969,260

Depreciation

charged to operations totaled

$1,647,813

in

2017,

$1,574,249

in

2016

and

$1,657,229

in

2015.

Certain

Company facilities and equipment are leased under various operating leases. Rental expense approximated

$427,000

for

2017,

$437,000

for

2016

and

$560,000

for

2015.

Future

minimum rental payments as of

December 31, 2017

are as follows:

Year Ending December 31	Amount
2018	$	43,320
2019		42,000
2020		42,000
2021		42,000
20 22 and Thereafter		38,500
	$	207,820

XML

Note 7 - Other Real Estate Owned

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Real Estate Owned [Text Block]

(

7

)

Other

Real

Estate

Owned

The

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

December 31, 2017,

2016

and

2015

was

$4,256,469,

$6,439,226

and

$8,839,103,

respectively. All of the Company’s other real estate owned represents properties acquired through foreclosure or deed in lieu of foreclosure. The following table details the change in OREO during

2017,

2016

and

2015

as of

December 31:

	201 7			201 6			201 5
Balance, Beginning of Year	$	6,439,226		$	8,839,103		$	10,401,832
Additions		1,724,936			5,664,554			7,536,165
Sales of OREO		(3,786,567	)		(7,416,293	)		(8,054,675	)
Loss on Sale		212,641			(146,402	)		(591,071	)
Provision for Losses		(333,767	)		(501,736	)		(453,148	)
Balance, End of Year	$	4,256,469		$	6,439,226		$	8,839,103

At

December 31,

201

7,

the Company held

$479,352

of residential real estate property as foreclosed property. Also at

December 31, 2017,

$183,588

of consumer mortgage loans collateralized by residential real estate property was in the process of foreclosure according to local requirements of the applicable jurisdictions.

XML

Note 8 - Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

(

8

)

Other

Intangible

Assets

The

following is an analysis of the core deposit intangible activity for the years ended

December 31:

	Core Deposit Intangible		Accumulated Amortization			Net Core Deposit Intangible
Core Deposit Intangible
Balance, December 31, 2015	$	1,056,693	$	(940,429	)	$	116,264
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2016	$	1,056,693	$	(976,178	)	$	80,515
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 201 7	$	1,056,693	$	(1,011,927	)	$	44,766

Amortization

expense related to the core deposit intangible was

$35,749,

$35,749

and

$35,748

for the years ended

December 31, 2017,

2016

and

2015.

Amortizations expense will continue at an annual rate of approximately

$35,749

through the

first

quarter of

2019,

at which point the core deposit will be fully amortized.

XML

Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(

9

)

Income

Taxes

The Tax Cuts and Jobs Act (the "

TCJ Act"), enacted on

December 22, 2017,

reduced the U.S. federal corporate tax rate to

21

percent.

As a result of the enactment of the TCJ Act we have remeasured our deferred tax assets and liabilities based upon the new U.S. statutory federal income tax rate of

21%,

which is the tax rate at which these assets and liabilities are expected to reverse in the future. Notwithstanding the foregoing, we are still analyzing certain aspects of the new law and refining our calculations, which could affect the measurement of these assets and liabilities or give rise to new deferred tax amounts. Nonetheless, we recognized additional income tax expense of

$2,040,946

in the

fourth

quarter of

2017

related to the remeasurement of our deferred tax assets and liabilities.

The

components of income tax expense for the years ended

December 31

are as follows:

	20 1 7		20 16		20 15
Current Federal Expense	$	3,943,495	$	3,629,213	$	3,162,367
Deferred Federal Expense		793,012		222,120		625,436
Deferred Tax Expense from Tax Rate Changes		2,040,946		-		-
Federal Income Tax Expense		6,777,453		3,851,333		3,787,803
Current State Income Tax Expense		-		-		-
Federal and State Income Tax Expense	$	6,777,453	$	3,851,333	$	3,787,803

The

federal income tax expense of

$6,777,453

in

2017,

$3,851,333

in

2016

and

$3,787,803

in

2015

is different than the income taxes computed by applying the federal statutory rates to income before income taxes. The reasons for the differences are as follows:

	20 1 7			20 16			20 15
Statutory Federal Income Taxes	$	4,954,199		$	4,283,394		$	4,134,570
Tax-Exempt Interest		(102,345	)		(109,759	)		(83,903	)
Income from Cash Value Life Insurance, net of premiums		(198,730	)		(182,532	)		(232,988	)
Meal and Entertainment Disallowance		14,354			16,813			21,600
Other		69,029			(156,583	)		(51,476	)
Tax Expense from Tax Rate Changes		2,040,946			-			-
Actual Federal Income Taxes	$	6,777,453		$	3,851,333		$	3,787,803

Deferred

taxes, which are included in Other Assets, in the accompanying consolidated balance sheets as of

December 31

include the following:

	20 1 7			20 16
Deferred Tax Assets
Allowance for Loan Losses	$	1,576,577		$	3,033,920
Other Real Estate		304,813			688,162
Deferred Compensation		161,000			280,704
Investments		210,000			340,000
Goodwill		76,058			167,666
Other		237,591			379,304
	$	2,566,039			4,889,756
Deferred Tax Liabilities
Premises and Equipment		(995,190	)		(1,553,460	)
Other		(2,585	)		(4,185	)
		(997,775	)		(1,557,645	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		1,725,708			2,587,163
Net Deferred Tax Assets	$	3,293,972		$	5,919,274

XML

Note 10 - Deposits

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

(

1

0

)

Deposits

The

aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled

$475,161

and

$413,563

as of

December 31, 2017

and

2016,

respectively.

Components

of interest-bearing deposits as of

December 31

are as follows:

	20 1 7		20 16
Interest-Bearing Demand	$	458,717,332	$	448,003,985
Savings		78,172,441		70,066,140
Time, $250,000 and Over		38,919,469		32,168,191
Other Time		301,248,235		335,059,579
	$	877,057,477	$	885,297,895

At

December 31,

2017

and

2016,

the Company had brokered deposits of

$46,328,995

and

$49,303,139,

respectively. All of these brokered deposits represent Certificate of Deposit Account Registry Service (CDARS) reciprocal deposits. The CDARS deposits are ones in which customers placed core deposits into the CDARS program for FDIC insurance coverage and the Company receives reciprocal brokered deposits in a like amount. The aggregate amount of jumbo certificates of deposit, each with a minimum denomination of

$250,000

was

$38,919,469

and

$32,168,191

as of

December 31, 2017

and

December 31, 2016,

respectively.

As

of

December 31, 2017,

the scheduled maturities of certificates of deposit are as follows:

Year	Amount
201 8	$	255,574,623
201 9		41,210,289
20 20		22,116,817
20 21		11,206,127
20 22 and Thereafter		10,059,848
	$	340,167,704

XML

Note 11 - Other Borrowed Money

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

(

1

1

)

Other

Borrowed

Money

Other

borrowed money at

December 31

is summarized as follows:

	20 1 7		20 16
Federal Home Loan Bank Advances	$	46,000,000	$	46,000,000
Other Borrowings		1,500,000		-
	$	47,500,000	$	46,000,000

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

December 31, 2017,

the book value of those loans pledged is

$109,771,074.

At

December 31, 2017,

the Company had remaining credit availability from the FHLB of

$252,395,250.

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

$5,000,000

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

5.25

percent.

The Company paid down

$3,500,000

during

November 2017.

The remaining amount was paid off during

January 2018.

As of

December 31, 2017,

the balance of

$1,500,000

is included in Other Borrowings.

The aggregate stated maturities of other borrowed money at

December 31,

201

7

are as follows:

Year	Amount
2018	$	4,000,000
2019		5,000,000
2020		2,500,000
2021		-
2022		27,000,000
2023 and Thereafter		9,000,000
	$	47,500,000

At

December 31,

201

7,

$13,000,000

of FHLB advances are subject to fixed rates of interest, while the remaining

$33,000,000

is subject to floating interest rates which will convert to fixed rates of interests in the next few years.

The

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

$43,500,000,

of which there were

none

outstanding at

December 31, 2017.

T

he Company has the ability to borrow funds from the Federal Reserve Bank (FRB) of Atlanta utilizing the discount window. The discount window is an instrument of monetary policy that allows eligible institutions to borrow money from the FRB on a short-term basis to meet temporary liquidity shortages caused by internal or external disruptions. At

December 31, 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 12 - Subordinated Debentures (Trust Preferred Securities)

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Subordinated Borrowings Disclosure [Text Block]

(

1

2

)

Subordinated

Debentures

(Trust

Preferred

Securities)

								Total
				3 - M onth		Added		Interest			5 - Year
Description	Date	Amount		Libor Rate		Points		Rate		Maturity	Call Option
	(In Thousands)
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,640		1.60042		2.68		4.28042	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155		1.69465		1.50		3.19465	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279		1.69465		1.65		3.34465	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155		1.37796		1.40		2.77796	9/14/2037	9/14/2012

The

Trust Preferred Securities are recorded as subordinated debentures on the consolidated balance sheets, and subject to certain limitations, qualify as Tier

1

Capital for regulatory capital purposes. The proceeds from these offerings were used to fund certain acquisitions, pay off holding company debt and inject capital into the Bank subsidiary. The Trust Preferred Securities pay interest quarterly.

XML

Note 13 - Preferred Stock

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Preferred Stock And Warrants [Text Block]

(

13

) Preferred Stock

At

December 31, 2016,

9,360

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

March 31, 2017

the Company redeemed these

9,360

shares of Preferred Stock at the stated rate of

$1,000

per share. Previously, the Company redeemed

8,661

shares in

2016

and

9,979

shares in

2015,

all at the stated rate of

$1,000

per share. As a result, there is

no

outstanding Preferred Stock as of

December 31, 2017.

While outstanding, the Preferred Stock qualified as Tier I Capital and was nonvoting, other th

an class voting rights on certain matters that could adversely affect the Preferred Stock. The Preferred Stock paid cumulative cash dividends on a quarterly basis at a rate of

9

percent per annum for the years

2017,

2016

and

2015.

The Company issued a warrant (the Warrant) to private investors for the purchase of up to

500,000

shares of the Company

’s outstanding common stock. The Warrant originated in

2009

through transactions with the United States Department of the Treasury in conjunction with the issuance of the Preferred Stock. The Warrant

may

be exercised on or before

January 9, 2019

at an exercise price of

$8.40

per share.

No

voting rights

may

be exercised with respect to the shares of the Warrant until the Warrant has been exercised.

XML

Note 14 - Employee Benefit Plan

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

(

1

4

) Employee Benefit Plan

The Company offers a defined contribution

401

(k) Profit Sharing Plan (the Plan) which covers substantially all employees who meet certai

n age and service requirements. The Plan allows employees to make voluntary pre-tax salary deferrals to the Plan. The Company, at its discretion,

may

elect to make an annual contribution to the Plan equal to a percentage of each participating employee’s salary. Such discretionary contributions must be approved by the Company’s board of directors. Employees are fully vested in the Company contributions after

six

years of service. In

2017,

2016

and

2015,

the Company made total contributions of

$686,580,

$408,303

and

$385,453

to the Plan, respectively.

XML

Note 15 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(

1

5

)

Commitments

and

Contingencies

Credit-Related

Financial

Instruments.

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

The

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

At

December 31, 2017

and

2016,

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

	Contract Amount
	20 1 7		20 16
Commitments to Extend Credit	$	96,374,000	$	71,359,000
Standby Letters of Credit		1,536,000		1,551,000

Commitments

to extend credit are agreements to lend to a customer as long as there is

no

violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and

may

require payment of a fee. The commitments for equity lines of credit

may

expire without being drawn upon. Therefore, the total commitment amounts do

not

necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.

Unfunded

commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit are uncollateralized and usually do

not

contain a specified maturity date and

may

not

be drawn upon to the total extent to which the Company is committed.

Standby

and performance letters of credit are conditional lending commitments issued by the Company to guarantee the performance of a customer to a

third

party. Those letters of credit are primarily issued to support public and private borrowing arrangements. Essentially all letters of credit issued have expiration dates within

one

year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

Legal

Contingencies.

In the ordinary course of business, there are various legal proceedings pending against Colony and its subsidiary. The aggregate liabilities, if any, arising from such proceedings would

not,

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

XML

Note 16 - Deferred Compensation Plan

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Deferred Compensation Plan [Text Block]

(

1

6

)

Deferred

Compensation

Plan

Colony

Bank, the wholly-owned subsidiary, has deferred compensation plans covering certain former directors and certain officers choosing to participate through individual deferred compensation contracts. In accordance with terms of the contracts, the Bank is committed to pay the participant’s deferred compensation over a specified number of years, beginning at age

65.

In the event of a participant’s death before age

65,

payments are made to the participant’s named beneficiary over a specified number of years, beginning on the

first

day of the month following the death of the participant.

Liabilities

accrued under the plans totaled

$766,667

and

$825,599

as of

December 31, 2017

and

2016,

respectively. Benefit payments under the contracts were

$110,080

in

2017

and

$135,885

in

2016.

Provisions

charged to operations totaled

$55,572

in

2017,

$57,125

in

2016

and

$196,869

in

2015.

The Company has purchased life insurance policies on the plans

’ participants and uses the cash flow from these policies to partially fund the plan. Fee income recognized with these plans totaled

$233,064

in

2017,

$165,128

in

2016

and

$174,675

in

2015.

In addition death benefits recognized as income totaled

$137,058

in

2015.

XML

Note 17 - Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

(

1

7

)

Supplemental

Cash

Flow

Information

Cash

payments for the following were made during the years ended

December 31:

	201 7		201 6		201 5
Interest Expense	$	6,851,541	$	6,529,615	$	6,536,994
Income Taxes	$	4,000,000	$	3,365,000	$	4,738,000

Noncash

financing and investing activities for the years ended

December 31

are as follows:

	201 7			201 6			201 5
Acquisitions of Real Estate Through Loan Foreclosures	$	1,724,936		$	5,664,554		$	7,536,165
Change in Unrealized Gain (Loss) on AFS Investment Securities	$	(608,355	)	$	(890,590	)	$	622,155

XML

Note 18 - Related Party Transactions

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

(

1

8

)

Related

Party

Transactions

The

following table reflects the activity and aggregate balance of direct and indirect loans to directors, executive officers or principal holders of equity securities of the Company. All such loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and do

not

involve more than a normal risk of collectibility. A summary of activity of related party loans is shown below:

	20 1 7			20 16
Balance, Beginning	$	1,025,543		$	1,816,609
New Loans		1,050,393			2,379,026
Repayments		(1,106,606	)		(3,170,092	)
Transactions Due to Changes in Directors		(224,693	)		-
Balance, Ending	$	744,637		$	1,025,543

XML

Note 19 - Fair Value of Financial Instruments and Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(

19

)

Fair

Value

of

Financial

Instruments

and

Fair

Value

Measurements

Generally

accepted accounting standards in the U.S. require disclosure of fair value information about financial instruments, whether or

not

recognized on the face of the balance sheet, for which it is practicable to estimate that value. The assumptions used in the estimation of the fair value of Colony Bankcorp, Inc. and Subsidiary’s financial instruments are detailed hereafter. Where quoted prices are

not

available, fair values are based on estimates using discounted cash flows and other valuation techniques. The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.

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 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. Subordinated 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.

The

carrying amount and estimated fair values of the Company’s financial instruments as of

December 31

are as follows:

	Carrying		Estimated		Level
201 7	Amount		Fair Value		1		2		3
	(in Thousands)
Assets
Cash and Short-Term Investments	$	57,813	$	57,813	$	57,813	$	-	$	-
Investment Securities Available for Sale		354,247		354,247		-		346,950		7,297
Federal Home Loan Bank Stock		3,043		3,043		3,043		-		-
Loans, Net		757,281		757,163		-		752,287		4,876
Bank-Owned Life Insurance		17,089		17,089		17,089		-		-
Liabilities
Deposits		1,067,985		1,068,392		727,818		340,574		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		47,500		47,626		-		47,626		-
201 6
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

L

oans

-Impaired loans are those loans which the Company has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent

third

-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as level

3

fair values, based upon the lowest level of input that is significant to the fair value measurements.

Other

Real

Estate

- Other real estate owned assets are adjusted to fair value less estimated selling costs upon transfer of the loans to other real estate owned. Typically, an external,

third

-party appraisal is performed on the collateral upon transfer into the other real estate owned account to determine the asset’s fair value. Subsequent adjustments to the collateral’s value

may

be based upon either updated

third

-party appraisals or management’s knowledge of the collateral and the current real estate market conditions.   Appraised amounts used in determining the asset’s fair value, whether internally or externally prepared, are discounted

10

percent to account for selling and marketing costs. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a level

3

classification of the inputs for determining fair value. Because of the high degree of judgment required in estimating the fair value of other real estate owned assets and because of the relationship between fair value and general economic conditions, we consider the fair value of other real estate owned assets to be highly sensitive to changes in market conditions.

Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis -

The following table presents the recorded amount of the Company’s assets measured at fair value on a recurring and nonrecurring basis as of

December 31, 2017

and

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

December 31, 2017

and

2016.

Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
201 7
Recurring
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	346,723,419	$	-	$	341,701,288	$	5,022,131
State, County and Municipal		4,492,826		-		4,277,460		215,366
Corporate		2,060,000		-		-		2,060,000
Asset-Backed		970,659		-		970,659		-
	$	354,246,904	$	-	$	346,949,407	$	7,297,497
Nonrecurring
Impaired Loans	$	4,875,918	$	-	$	-	$	4,875,918
Other Real Estate	$	2,014,904	$	-	$	-	$	2,014,904
2016
Recurring
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	319,097,374	$	-	$	319,097,374	$	-
State, County and Municipal		4,560,496		-		3,984,112		576,384
	$	323,657,870	$	-	$	323,081,486	$	576,384
Nonrecurring
Impaired Loans	$	6,952,343	$	-	$	-	$	6,952,343
Other Real Estate	$	2,505,188	$	-	$	-	$	2,505,188

Liabilities

The

Company did

not

identify any liabilities that are required to be presented at fair value.

Fair

Value

Measurements

Using

Significant

Unobservable

Inputs

(Level

3

)

The

following tables present quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level

3

of the fair value hierarchy measured on a nonrecurring basis at

December 31, 2017

and

2016.

These tables are comprised primarily of collateral dependent impaired loans and other real estate owned:

	December 31, 201 7		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Real Estate
C ommercial Construction	$	427,433	Sales Comparison	Adjustment for Differences		(16.00)%	-	1,975.00%
				Between the Comparable Sales			979.50%
				Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
Residential Real Estate		81,736	Sales Comparison	Adjustment for Differences		(43.30)%	-	83.30%
				Between the Comparable Sales			20.00%
				Management Adjustments for Age		0.00%	-	25.00%
				of Appraisals and/or Current			12.50%
				Market Conditions
Commercial Real Estate		4,016,742	Income Approach	Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
				Capitalization Rate			10.75%
Farmland		350,007	Sales Comparison	Adjustment for Differences		(71.00)%	-	88.70%
				Between the Comparable Sales			8.85%
				Management Adjustments for Age		10.00%	-	75.00%
				of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		2,014,904	Sales Comparison	Adjustment for Differences		(22.74)%	-	15.00%
				Between the Comparable Sales			(3.87)%
				Management Adjustments for Age		5.44%	-	87.24%
				of Appraisals and/or Current			24.44%
				Market Conditions
			Income Approach	Capitalization Rate			10.00%

	December 31, 201 6		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Real Estate
C ommercial Construction	$	51,161	Sales Comparison	Adjustment for Differences		(5.00)%	-	99.00%
				Between the Comparable Sales			47.00%
				Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
Residential Real Estate		1,105,312	Sales Comparison	Adjustment for Differences		(22.00)%	-	0.00%
				Between the Comparable Sales			(11.00)%
				Management Adjustments for Age		0.00%	-	40.00%
				of Appraisals and/or Current			20.00%
				Market Conditions
Commercial Real Estate		5,445,192	Sales Comparison	Adjustment for Differences		(14.08)%	-	24.62%
				Between the Comparable Sales			5.27%
				Management Adjustments for Age		0.00%	-	100.00%
				of Appraisals and/or Current			50.00%
				Market Conditions
			Income Approach	Capitalization Rate			10.67%
Farmland		350,678	Sales Comparison	Adjustment for Differences		(27.00)%	-	15.00%
				Between the Comparable Sales			(6.00)%
				Management Adjustments for Age		10.00%	-	75.00%
				of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		2,505,188	Sales Comparison	Adjustment for Differences		(50.80)%	-	316.00%
				Between the Comparable Sales			132.60%
				Management Adjustments for Age		6.25%	-	76.92%
				of Appraisals and/or Current			36.31%
				Market Conditions
			Income Approach	Discount Rate			12.50%

The

following table presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level

3

) for the years ended

December 31, 2017,

2016

and

2015:

	Available for Sale Securities
	201 7			201 6			201 5
Balance, Beginning	$	576,384		$	930,311		$	948,390
Transfers into Level 3								-
Transfers out of Level 3								-
Securities Purchased During the Year		7,069,649						-
Securities Matured During the Year		(360,000	)		(330,000	)		-
Loss on OTTI Impairment Included in Noninterest Income								-
Unrealized Gains(Losses) Included in Other Comprehensive Income		11,464			(23,927	)		(18,079	)
Balance, Ending	$	7,297,497		$	576,384		$	930,311

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 level

1

and level

2

or level

3

for the years ended

December 31, 2017,

2016

or

2015.

The

following table presents quantitative information about recurring level

3

fair value measurements as of

December 31, 2017

and

2016:

December 31, 201 7	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
State, County and Municipal	$	215,366	Discounted Cash Flow	Discount Rate or Yield		N/A*
U. S. Government Agencies Mortgage - Backed		5,022,131	Fundamental Analysis	Discount Rate or Yield		N/A*
Corporate		2,060,000	Option Pricing	Discount Rate or Yield		N/A*
December 31, 201 6
State, County and Municipal	$	576,384	Discounted Cash Flow	Discount Rate or Yield		N/A*

*

The Company relies on a

third

-party pricing service to value its 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 20 - Regulatory Capital Matters

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

(

2

0

)

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

Quantitative

measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets. As of

December 31, 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

December 31, 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

conditions or events 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 w

as phased in beginning

January 1, 2016

at

0.625%

of risk-weighted assets, with subsequent increases of

0.625%

each year until reaching its final level of

2.5%

on

January 1, 2019.

The following table summarizes regulatory capital information as of

December 31,

201

7

and

December 31, 2016

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

December 31, 2017

and

2016

were calculated in accordance with the Basel III rules.

The

following table summarizes regulatory capital information as of

December 31, 2017

and

2016

on a consolidated basis and for its wholly-owned subsidiary, as defined:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(In Thousands)
As of December 31, 2017
Total Capital to Risk-Weighted Assets
Consolidated	$	127,786		15.56	%	$	65,718		8.00	%		N/A		N/A
Colony Bank		127,470		15.54			65,628		8.00		$	82,036		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		120,279		14.64			49,289		6.00			N/A		N/A
Colony Bank		119,963		14.62			49,221		6.00			65,628		8.00
C ommon Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		96,779		11.78			36,967		4.50			N/A		N/A
Colony Bank		119,963		14.62			36,916		4.50			53,323		6.50
Tier I Capital to Average Assets
Consolidated		120,279		9.89			48,635		4.00			N/A		N/A
Colony Bank		119,963		9.88			48,566		4.00			60,708		5.00
As of December 31, 201 6
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 I 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 I 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

In

2017,

the Bank obtained approval of its regulators and paid a $

8,725,000

dividend to the Company. The dividend was utilized to redeem

9,360

shares of Preferred Stock. In

2016,

the Bank obtained approval of its regulators and paid a

$9,100,000

dividend to the Company. The dividend was utilized to redeem

8,661

shares of Preferred Stock. In

2015,

the Bank obtained approval of its regulators and paid a

$10,000,000

dividend to the Company. The dividend was utilized to redeem

9,979

shares of Preferred Stock.

XML

Note 21 - Financial Information of Colony Bankcorp, Inc. (Parent Only)

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

(

2

1

)

Financial

Information

of

Colony

Bankcorp,

Inc.

(Parent

Only)

The

parent company’s balance sheets as of

December 31, 2017

and

2016

and the related statements of operations and comprehensive income (loss) and cash flows for each of the years in the

three

-year period then ended are as follows:

COLONY

BANKCORP,

INC.

(PARENT

ONLY)

BALANCE

SHEETS

DECEMBER

31

	20 1 7			20 16
ASSETS
Cash	$	910,239		$	2,307,008
Premises and Equipment, Net		1,099,626			1,074,884
Investment in Subsidiary, at Equity		114,235,955			114,478,277
Other		24,458			20,990
Total Assets	$	116,270,278		$	117,881,159
LIABILITIES AND STOCKHOLDERS ’ EQUITY
Liabilities
Other Borrowed Money	$	1,500,000		$	-
Dividends Payable		-			105,300
Other		218,615			159,126
	$	1,718,615		$	264,426
Subordinated Debt		24,229,000			24,229,000
Stockholders ’ Equity
Preferred Stock, Stated Value $1,000; 10,000,000 Shares Authorized, 0 and 9,360 Shares Issued and Outstanding as of December 31, 201 7 and 2016		-			9,360,000
Common Stock, Par Value $1; 20,000,000 Shares Authorized, 8,439,258 Shares Issued and Outstanding as of December 31, 2017 and 2016		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		59,230,260			51,465,521
Accumulated Other Comprehensive Loss, Net of Tax		(6,491,949	)		(5,022,140	)
		90,322,663			93,387,733
Total Liabilities and Stockholders ’ Equity	$	116,270,278		$	117,881,159

COLONY

BANKCORP,

INC.

(PARENT

ONLY)

STATEMENTS

OF

OPERATIONS

FOR

THE

YEARS

ENDED

DECEMBER

31

	20 1 7		20 16		20 15
Income
Dividends from Subsidiary	$	8,746,882	$	9,118,104	$	10,015,147
Management Fees		601,080		601,080		581,334
Other		97,103		103,612		112,876
	$	9,445,065	$	9,822,796	$	10,709,357
Expenses
Interest		900,113		601,567		503,286
Salaries and Employee Benefits		917,259		840,130		811,150
Other		604,166		554,434		666,872
		2,421,538		1,996,131		1,981,308
Income Before Taxes and Equity in Undistributed Earnings of Subsidiary		7,023,527		7,826,665		8,728,049
Income Tax Benefits		568,258		457,934		444,764
Income Before Equity in Undistributed Earnings of Subsidiary		7,591,785		8,284,599		9,172,813
Dividends Received in Excess of Earnings of Subsidiary		-		-		(800,116	)
Equity in Undistributed Earnings of Subsidiary		159,193		388,611		-
Net Income		7,750,978		8,673,210		8,372,697
Preferred Stock Dividends		210,600		1,493,310		2,375,010
Net Income Available to Common Stockholders	$	7,540,378	$	7,179,900	$	5,997,687

COLONY

BANKCORP,

INC.

AND

SUBSIDIARY

CONSOLIDATED

STATEMENTS

OF

COMPREHENSIVE

INCOME

FOR

THE

YEARS

ENDED

DECEMBER

31

	201 7			201 6			201 5
Net Incom e	$	7,750,978		$	8,673,210		$	8,372,697
Other Comprehensive Income (Loss )
Gains (Losses) on Securities Arising During the Year		(608,355	)		(505,367	)		610,689
Tax Effec t		206,841			171,825			(207,634	)
Realized (Gains) Losses on Sale of AFS Securities		-			(385,223	)		11,466
Tax Effec t		-			130,976			(3,898	)
Change in Unrealized Gains (Losses) on SecuritiesAvailable for Sale, Net of ReclassificationAdjustment and Tax Effects		(401,514	)		(587,789	)		410,623
Comprehensive Incom e	$	7,349,464		$	8,085,421		$	8,783,320

COLONY BANKCORP, INC. (PARENT ONLY

)

STATEMENTS OF CASH FLOW

S

FOR THE YEARS ENDED

DECEMBER 3

1

	201 7			201 6			201 5
Cash Flows from Operating Activitie s
Net Incom e	$	7,750,978		$	8,673,210		$	8,372,697
Adjustments to Reconcile Net Income t o Net Cash Provided by Operating Activitie s
Depreciation and Amortizatio n		70,183			66,476			73,999
Equity in Undistribute d Earnings of Subsidiar y		(159,193	)		(388,611	)		-
Dividends Received in Excess o f Earnings of Subsidiar y		-			-			800,116
Change in Interest Payabl e		17,887			5,367			23,072
Othe r		38,135			108,288			1,555,482
		7,717,990			8,464,730			10,825,366
Cash Flows from Investing Activitie s
Purchases of Premises and Equipmen t		(94,925	)		(6,836	)		(8,884	)
Cash Flows from Financing Activitie s
Proceeds from Other Borrowed Money		5,000,000			-			-
Principal Payments on Other Borrowed Mone y		(3,500,000	)		-			-
Dividends Paid on Common Stoc k		(843,934	)		-			-
Dividends Paid on Preferred Stoc k		(315,900	)		(1,590,746	)		(2,487,274	)
Redemption of Preferred Stock		(9,360,000	)		(8,661,000	)		(9,979,000	)
		(9,019,834	)		(10,251,746	)		(12,466,274	)
Increase (Decrease) in Cash		(1,396,769	)		(1,793,852	)		(1,649,792	)
Cash, Beginnin g		2,307,008			4,100,860			5,750,652
Cash, Ending	$	910,239		$	2,307,008		$	4,100,860

XML

Note 22 - Earnings Per Share

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

(

2

2

)

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 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 years ended

December 31,

2017,

2016

and

2015

:

	201 7		201 6		201 5
Numerator
Net Income Available to Common Stockholders	$	7,540,378	$	7,179,900	$	5,997,687
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,439,258
Dilutive Effect of Potential Common Stock
Stock Warrants		194,323		74,037		19,203
Weighted-Average Number of Shares Outstanding for D iluted Earnings Per Common Share		8,633,581		8,513,295		8,458,461
Earnings Per Share - Basic	$	0.89	$	0.85	$	0.71
Earnings Per Share - Diluted	$	0.87	$	0.84	$	0.71

XML

Note 23 - Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

(

23

)

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) for unrealized gains and losses securities available for sale for the

years ended

December 31, 2017,

2016

and

2015

are as follows:

	201 7			201 6			201 5
Beginning Balanc e	$	(5,022,140	)	$	(4,434,351	)	$	(4,844,974	)
Other Comprehensive Incom e Before Reclassificatio n		(401,514	)		(333,542	)		403,055
Amounts Reclassified from Accumulate d Other Comprehensive Incom e		-			(254,247	)		7,568
TCJ Ac t		(1,068,295	)		-			-
Net Current Period Other Comprehensive Income		(1,469,809	)		(587,789	)		410,623
Ending Balanc e	$	(6,491,949	)	$	(5,022,140	)	$	(4,434,351	)

XML

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles

of

Consolidation

Colony

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

Nature of Operations [Policy Text Block]

Nature

of

Operations

The

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

Use of Estimates, Policy [Policy Text Block]

Use

of

Estimates

In

preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date and revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans.

Reclassification, Policy [Policy Text Block]

Reclassifications

In

certain instances, amounts reported in prior years’ consolidated financial statements and note disclosures have been reclassified to conform to statement presentations selected for

2017.

Such reclassifications had

no

effect on previously reported stockholders’ equity or net income.

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

Concentrations

of

Credit

Risk

Concentrations

of credit risk can exist in relation to individual borrowers or groups of borrowers, certain types of collateral, certain types of industries or certain geographic regions. The Company has a concentration in real estate loans as well as a geographic concentration that could pose an adverse credit risk, particularly with the current economic downturn in the real estate market. At

December 31, 2017,

approximately

87.1

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

The

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

At

times, the Company

may

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

Investment, 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) 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.

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 collectibility of principal or interest on any loan or generally when loans are

90

days or more past due, the accrual of applicable interest is discontinued and the loan is designated as nonaccrual, unless the loan is well secured and in the process of collection. Interest payments received on nonaccrual loans are either applied against principal or reported as income, according to management’s judgment as to the collectibility of principal. Loans are returned to an accrual status when factors indicating doubtful collectibility on a timely basis

no

longer exist.

Loans 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 nonaccrual loan that has been modified in a TDR remains on nonaccrual status for a period of

six

months to demonstrate that the borrower is able to meet the terms of the modified loan. However, performance prior to the modification, or significant events that coincide with the modification, are included in assessing whether the borrower can meet the new terms and

may

result in the loan being returned to accrual status at the time of loan modification or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains on nonaccrual status. Once a loan is modified in a troubled debt restructuring, it is accounted for as an impaired loan, regardless of its accrual status, until the loan is paid in full, sold or charged off.

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

A

llowance

for

Loan

Losses

The

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

The

allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that

may

affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revisions as more information becomes available.

The

allowance consists of specific, historical and general components. The specific component relates to loans that are classified as either doubtful, substandard or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan 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 Bank examiners are charged off.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are

not

classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

A significant portion of the Company

’s impaired loans are deemed to be collateral dependent. Management therefore measures impairment on these loans based on the fair value of the collateral. Collateral values are determined based on appraisals performed by qualified licensed appraisers hired by the Company or by senior members of the Company’s credit administration staff. The decision whether to obtain an external

third

-party appraisal usually depends on the type of property being evaluated. External appraisals are usually obtained on more complex, income producing properties such as hotels, shopping centers and businesses. Less complex properties such as residential lots, farm land and single family houses

may

be evaluated internally by senior credit administration staff. When the Company does obtain appraisals from external

third

-parties, the values utilized in the impairment calculation are “as is” or current market values. The appraisals, whether prepared internally or externally,

may

utilize a single valuation approach or a combination of approaches including the comparable sales, income and cost approach. Appraised amounts used in the impairment calculation are typically discounted

10

percent to account for selling and marketing costs, if the repayment of the loan is to come from the sale of the collateral. Although appraisals

may

not

be obtained each year on all impaired loans, the collateral values used in the impairment calculations are evaluated quarterly by management. Based on management’s knowledge of the collateral and the current real estate market conditions, appraised values

may

be further discounted to reflect facts and circumstances known to management since the initial appraisal was performed.

Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a

level

3

classification of the inputs for determining fair value. Because of the high degree of judgment required in estimating the fair value of collateral underlying impaired loans and because of the relationship between fair value and general economic conditions, we consider the fair value of impaired loans to be highly sensitive to changes in market conditions.

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]

Other

Intangible

Assets

Intangible

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

Transfers 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, federal funds sold and securities purchased under agreement to resell. Cash flows from demand deposits, interest-bearing checking accounts, savings accounts, loans and certificates of deposit are reported net.

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 basis. The differences relate primarily to depreciable assets (use of different depreciation methods for financial statement and income tax purposes) and allowance for loan losses (use of the allowance method for financial statement purposes and the direct write-off method for tax purposes). In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with effects included in the income tax provision. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized. The Company and its subsidiary file a consolidated federal income tax return. The subsidiary pays its proportional share of federal income taxes to the Company based on its taxable income.

The Company

’s federal and state income tax returns for tax years

2017,

2016,

2015

and

2014

are subject to examination by the Internal Revenue Service (IRS) and the Georgia Department of Revenue, generally for

three

years after filing.

Positions

taken in the Company’s tax returns

may

be subject to challenge by the taxing authorities upon examination. Uncertain tax positions are initially recognized in the consolidated financial statements when it is more likely than

not

the position will be sustained upon examination by the tax authorities. Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than

50

percent likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts. The Company provides for interest and, in some cases, penalties on tax positions that

may

be challenged by the taxing authorities. Interest expense is recognized beginning in the

first

period that such interest would begin accruing. Penalties are recognized in the period that the Company claims the position in the tax return. Interest and penalties on income tax uncertainties are classified within income tax expense in the consolidated statements of operations.

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 foreclosed property 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

$17,088,693

and

$15,419,269

as of

December 31, 2017

and

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. 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 on the consolidated balance sheets 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

became effective for us on

January 

1,

2018

and is

not

expected to have a significant impact on our 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.

ASU

2018

-

02,

 Income Statement – Reporting Comprehensive Income (Topic

220

)

.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

This ASU allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (TCJ Act). ASU

2018

-

02

is effective for all entities for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years, with early adoption permitted. The Company elected to early adopt the provisions of ASU

2018

-

02

in the

fourth

quarter of

2017

and, as a result, reclassified

$1,068,295

from AOCI to retained earnings as of

December 31, 2017.

XML

Note 1 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 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 - Cash and Balances Due From Banks (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Cash, Cash Equivalents and Investments [Table Text Block]

	20 1 7		20 16
Cash on Hand and Cash Items	$	9,746,132	$	8,509,530
Noninterest-Bearing Deposits with Other Banks		13,399,004		20,312,574
	$	23,145,136	$	28,822,104

XML

Note 3 - Investment Securities (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Marketable Securities [Table Text Block]

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	354,931,318	$	258,049	$	(8,465,948	)	$	346,723,419
State, County and Municipal		4,493,085		22,835		(23,094	)		4,492,826
Corporate		2,047,517		12,483		-			2,060,000
Asset-Backed		992,641		-		(21,982	)		970,659
	$	362,464,561	$	293,367	$	(8,511,024	)	$	354,246,904

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	326,694,417	$	75,743	$	(7,672,786	)	$	319,097,374
State, County and Municipal		4,572,756		18,350		(30,610	)		4,560,496
	$	331,267,173	$	94,093	$	(7,703,396	)	$	323,657,870

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities Available for Sale
	Amortized Cost		Fair Value
Due in One Year or Less	$	301,299	$	301,605
Due After One Year Through Five Years		4,668,954		4,658,344
Due After Five Years Through Ten Years		877,788		894,743
Due After Ten Years		1,685,202		1,668,793
	$	7,533,243	$	7,523,485
Mortgage-Backed Securities		354,931,318		346,723,419
	$	362,464,561	$	354,246,904

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
December 31, 2017
U.S. Government Agencies
Mortgage-Backed	$	120,139,340	$	(1,655,223	)	$	190,196,101	$	(6,810,725	)	$	310,335,441	$	(8,465,948	)
State, County and Municipal		2,598,344		(23,094	)		-		-			2,598,344		(23,094	)
Asset – Backed		970,659		(21,982	)		-		-			970,659		(21,982	)
	$	123,708,343	$	(1,700,299	)	$	190,196,101	$	(6,810,725	)	$	313,904,444	$	(8,511,024	)
December 31, 201 6
U.S. Government Agencies
Mortgage-Backed	$	174,200,881	$	(3,459,564	)	$	107,481,698	$	(4,213,222	)	$	281,682,579	$	(7,672,786	)
State, County and Municipal		3,487,647		(30,610	)		-		-			3,487,647		(30,610	)
	$	177,688,528	$	(3,490,174	)	$	107,481,698	$	(4,213,222	)	$	285,170,226	$	(7,703,396	)

XML

Note 4 - Loans (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

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

	20 1 7		20 16
Commercial and Agricultural
Commercial	$	48,122,263	$	47,024,878
Agricultural		16,442,581		17,079,579
Real Estate
Commercial Construction		45,213,960		30,358,362
Residential Construction		8,583,446		11,830,447
Commercial		351,171,668		349,090,031
Residential		194,048,945		195,579,967
Farmland		67,767,655		66,877,197
Consumer and Other
Consumer		18,956,028		19,695,241
Other		14,977,309		16,747,861
Total Loans	$	765,283,855	$	754,283,563

Financing Receivable Credit Quality Indicators [Table Text Block]

201 7	Pass		Special Mention		Substandard		Total Loans
Commercial and Agricultural
Commercial	$	46,468,726	$	825,607	$	827,930	$	48,122,263
Agricultural		15,868,191		174,356		400,034		16,442,581
Real Estate
Commercial Construction		41,282,295		577,765		3,353,900		45,213,960
Residential Construction		8,583,446		-		-		8,583,446
Commercial		338,775,805		7,662,637		4,733,226		351,171,668
Residential		177,962,870		4,864,893		11,221,182		194,048,945
Farmland		66,334,906		444,095		988,654		67,767,655
Consumer and Other
Consumer		18,495,798		52,970		407,260		18,956,028
Other		14,968,677		8,632		-		14,977,309
Total Loans	$	728,740,714	$	14,610,955	$	21,932,186	$	765,283,855
201 6
Commercial and Agricultural
Commercial	$	44,249,874	$	1,861,757	$	913,247	$	47,024,878
Agricultural		16,585,646		192,445		301,488		17,079,579
Real Estate
Commercial Construction		28,425,373		1,349,447		583,542		30,358,362
Residential Construction		11,630,165		-		200,282		11,830,447
Commercial		327,561,169		9,403,077		12,125,785		349,090,031
Residential		178,618,510		5,658,526		11,302,931		195,579,967
Farmland		65,074,715		839,362		963,120		66,877,197
Consumer and Other
Consumer		19,071,739		225,959		397,543		19,695,241
Other		16,747,861		-		-		16,747,861
Total Loans	$	707,965,052	$	19,530,573	$	26,787,938	$	754,283,563

Past Due Financing Receivables [Table Text Block]

	Accruing Loans
201 7	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loan s		Total Loans
Commercial and Agricultural
Commercial	$	328,483	$	-	$	328,483	$	598,305	$	47,195,475	$	48,122,263
Agricultural		110,482		-		110,482		398,509		15,933,590		16,442,581
Real Estate
Commercial Construction		27,062		-		27,062		477,043		44,709,855		45,213,960
Residential Construction		119,443		-		119,443		-		8,464,003		8,583,446
Commercial		918,997		-		918,997		2,172,229		348,080,442		351,171,668
Residential		2,482,276		-		2,482,276		2,829,966		188,736,703		194,048,945
Farmland		318,329		-		318,329		838,577		66,610,749		67,767,655
Consumer and Other
Consumer		246,175				246,175		188,073		18,521,780		18,956,028
Other		7,158		-		7,158		-		14,970,151		14,977,309
Total Loans	$	4,558,405	$	-	$	4,558,405	$	7,502,702	$	753,222,748	$	765,283,855
201 6
Commercial and Agricultural
Commercial	$	419,969	$	-	$	419,969	$	634,955	$	45,969,954	$	47,024,878
Agricultural		33,046		-		33,046		208,522		16,838,011		17,079,579
Real Estate
Commercial Construction		54,001		-		54,001		190,494		30,113,867		30,358,362
Residential Construction		-		-		-		-		11,830,447		11,830,447
Commercial		491,468		-		491,468		6,360,176		342,238,387		349,090,031
Residential		3,178,833		-		3,178,833		3,944,337		188,456,797		195,579,967
Farmland		95,309		-		95,309		799,556		65,982,332		66,877,197
Consumer and Other
Consumer		196,242		122		196,364		212,026		19,286,851		19,695,241
Other		-		-		-		-		16,747,861		16,747,861
Total Loans	$	4,468,868	$	122	$	4,468,990	$	12,350,066	$	737,464,507	$	754,283,563

Impaired Financing Receivables [Table Text Block]

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	598,305	$	598,305	$	-	$	633,528	$	33,283	$	33,868
Agricultural		485,132		398,509		-		296,578		11,046		19,376
Commercial Construction		54,306		54,306		-		141,396		3,526		3,836
Residential Construction		-		-		-		79,295		-		-
Commercial Real Estate		12.637,057		12,637,057		-		12,808,414		559,601		549,825
Residential Real Estate		4,977,769		4,579,614		-		4,566,041		211,318		226,684
Farmland		840,110		838,577		-		790,967		54,367		58,085
Consumer		188,073		188,073		-		186,348		8,576		9,452
	$	19,780,752	$	19,294,441	$	-	$	19,502,567	$	881,717	$	901,126
With An Allowance Recorded
Commercial	$	-	$	-	$	-	$	-	$	-	$	-
Agricultural		-		-		-		-		-		-
Commercial Construction		493,067		493,067		65,635		241,063		22,626		32,922
Residential Construction		-		-		-		-		-		-
Commercial Real Estate		5,729,300		5,729,300		1,712,557		6,599,144		228,745		237,066
Residential Real Estate		108,859		108,859		27,123		482,228		4,261		7,446
Farmland		371,376		371,376		21,369		375,595		22,121		22,021
Consumer		-		-		-		-		-		-
	$	6,702,602	$	6,702,602	$	1,826,684	$	7,698,030	$	277,753	$	299,455
Total
Commercial	$	598,305	$	598,305	$	-	$	633,528	$	33,283	$	33,868
Agricultural		485,132		398,509		-		296,578		11,046		19,376
Commercial Construction		547,373		547,373		65,635		382,459		26,152		36,758
Residential Construction		-		-		-		79,295		-		-
Commercial Real Estate		18,366,357		18,366,357		1,712,557		19,407,558		788,346		786,891
Residential Real Estate		5,086,628		4,688,473		27,123		5,048,269		215,579		234,130
Farmland		1,211,486		1,209,953		21,369		1,166,562		76,488		80,106
Consumer		188,073		188,073		-		186,348		8,576		9,452
	$	26,483,354	$	25,997,043	$	1,826,684	$	27,200,597	$	1,159,470	$	1,200,581

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Collected
With No Related Allowance Recorded
Commercial	$	634,955	$	634,955	$	-	$	539,099	$	24,563	$	27,142
Agricultural		229,182		208,522		-		210,372		8,794		12,412
Commercial Construction		190,494		190,494		-		697,893		6,630		7,127
Commercial Real Estate		14,357,601		14,276,688		-		14,274,719		567,349		560,354
Residential Real Estate		4,261,558		3,952,139		-		4,553,322		73,099		190,373
Farmland		920,666		799,556		-		1,016,395		21,526		26,012
Consumer		212,376		212,026		-		213,309		9,599		12,036
	$	20,806,832	$	20,274,380	$	-	$	21,505,109	$	711,560	$	835,456
With An Allowance Recorded
Commercial	$	-	$	-	$	-	$	30,270	$	-	$	-
Agricultural		-		-		-		-		-		-
Commercial Construction		72,296		72,296		21,135		74,098		1,532		1,416
Commercial Real Estate		8,557,582		8,467,135		3,021,943		8,339,666		238,684		235,749
Residential Real Estate		1,475,594		1,467,833		362,521		1,042,750		27,759		32,260
Farmland		379,851		379,851		29,173		384,056		21,098		21,310
Consumer		-		-		-		-		-		-
	$	10,485,323	$	10,387,115	$	3,434,772	$	9,870,840	$	289,073	$	290,735
Total
Commercial	$	634,955	$	634,955	$	-	$	569,369	$	24,563	$	27,142
Agricultural		229,182		208,522		-		210,372		8,794		12,412
Commercial Construction		262,790		262,790		21,135		771,991		8,162		8,543
Commercial Real Estate		22,915,183		22,743,823		3,021,943		22,614,385		806,033		796,103
Residential Real Estate		5,737,152		5,419,972		362,521		5,596,072		100,858		222,633
Farmland		1,300,517		1,179,407		29,173		1,400,451		42,624		47,322
Consumer		212,376		212,026		-		213,309		9,599		12,036
	$	31,292,155	$	30,661,495	$	3,434,772	$	31,375,949	$	1,000,633	$	1,126,191

	Unpaid Contractual Principal Balance		Impaired Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized			Interest Income Collected
With No Related Allowance Recorded
Commercial	$	454,423	$	454,013	$	-	$	534,814	$	17,259		$	21,253
Agricultural		195,654		178,021		-		163,078		(9,957	)		10,334
Commercial Construction		6,887,522		1,896,938		-		2,867,061		25,788			27,007
Commercial Real Estate		15,569,340		15,122,486		-		15,430,252		529,376			530,699
Residential Real Estate		5,429,121		4,575,547		-		4,715,162		175,484			159,148
Farmland		1,104,887		1,103,353		-		1,339,863		583			2,076
Consumer		179,908		178,435		-		190,566		13,745			14,907
Other		-		-		-		48,438		-			-
	$	29,820,855	$	23,508,793	$	-	$	25,289,234	$	752,278		$	765,424
With An Allowance Recorded
Commercial	$	122,928	$	122,928	$	94,538	$	99,749	$	2,275		$	2,438
Agricultural		-		-		-		-		-			-
Commercial Construction		76,644		76,644		25,344		92,200		375			375
Commercial Real Estate		8,969,329		8,955,503		1,607,962		6,673,087		213,693			208,657
Residential Real Estate		1,083,127		1,075,367		308,188		1,088,380		16,380			15,873
Farmland		387,968		387,969		37,386		391,060		20,880			20,954
Consumer		-		-		-		-		-			-
Other		-		-		-		-		-			-
	$	10,639,996	$	10,618,411	$	2,073,418	$	8,344,476	$	253,603		$	248,297
Total
Commercial	$	577,351	$	576,941	$	94,538	$	634,563	$	19,534		$	23,691
Agricultural		195,654		178,021		-		163,078		(9,957	)		10,334
Commercial Construction		6,964,166		1,973,582		25,344		2,959,261		26,163			27,382
Commercial Real Estate		24,538,669		24,077,989		1,607,962		22,103,339		743,069			739,356
Residential Real Estate		6,512,248		5,650,914		308,188		5,803,542		191,864			175,021
Farmland		1,492,855		1,491,322		37,386		1,730,923		21,463			23,030
Consumer		179,908		178,435		-		190,566		13,745			14,907
Other		-		-		-		48,438		-			-
	$	40,460,851	$	34,127,204	$	2,073,418	$	33,633,710	$	1,005,881		$	1,013,721

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

Troubled Debt Restructurings
201 7	# of Contracts		Pre-Modification		Post-Modification
Commercial Real Estate		-	$	-	$	-
Residential Real Estate		-		-		-
Total Loans		-	$	-	$	-
201 6
Commercial Real Estate		1	$	91,280	$	91,097
Residential Real Estate		1		354,784		354,784
Total Loans		2	$	446,064	$	445,881
2015
Commercial Real Estate		1	$	513,868	$	505,978
Residential Real Estate		2		1,106,345		1,035,590
Total Loans		3	$	1,620,213	$	1,541,568

Troubled Debt Restructurings That Subsequently Default [Table Text Block]

	201 7				201 6				201 5
	# of Contracts		Recorded Investment		# of Contracts		Recorded Investment		# of Contracts		Recorded Investment
Residentia l Real Estate		-	$	-		1	$	89,297		-	$	-
Total Loans		-	$	-		1	$	89,297		-	$	-

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Note 5 - Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Changes in the Allowance for Loan Losses [Table Text Block]

	201 7			201 6			20 15
Balance, Beginning of Year	$	8,923,293		$	8,603,905		$	8,802,316
Provision for Loan Losses		390,000			1,062,000			865,500
Loans Charged Off		(2,915,753	)		(2,087,850	)		(2,083,347	)
Recoveries of Loans Previously Charged Off		1,109,968			1,345,238			1,019,436
Balance, End of Year	$	7,507,508		$	8,923,293		$	8,603,905

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

201 7	Beginning Balance		Charge- O ffs			Recoveries		Provision			Ending Balance
Commercial and Agricultur al
Commercial	$	456,197	$	(299,079	)	$	136,499	$	153,058		$	446,675
Agricultural		167,692		(159,500	)		3,963		173,749			185,904
Real Estate
Commercial Construction		322,725		(51,977	)		266,459		678,808			1,216,015
Residential Construction		13,491		-			-		(13,491	)		-
Commercial		5,750,998		(966,014	)		527,150		(1,438,175	)		3,873,959
Residential		1,396,099		(1,048,337	)		82,079		538,260			968,101
Farmland		722,331		(60,902	)		16,750		101,352			779,531
Consumer and Other
Consumer		80,265		(329,944	)		74,933		208,739			33,993
Other		13,495		-			2,135		(12,300	)		3,330
	$	8,923,293	$	(2,915,753	)	$	1,109,968	$	390,000		$	7,507,508
201 6
Commercial and Agricultur al
Commercial	$	855,364	$	(304,918	)	$	66,738	$	(160,987	)	$	456,197
Agricultural		203,091		(19,258	)		4,150		(20,291	)		167,692
Real Estate
Commercial Construction		690,766		(25,318	)		814,586		(1,157,309	)		322,725
Residential Construction		19,890		-			-		(6,399	)		13,491
Commercial		3,850,527		(992,067	)		206,154		2,686,384			5,750,998
Residential		1,990,355		(361,630	)		49,660		(282,286	)		1,396,099
Farmland		911,692		(119,576	)		145,000		(214,785	)		722,331
Consumer and Other
Consumer		63,377		(265,083	)		52,629		229,342			80,265
Other		18,843		-			6,321		(11,669	)		13,495
	$	8,603,905	$	(2,087,850	)	$	1,345,238	$	1,062,000		$	8,923,293

201 5	Beginning Balance		Charge -O ffs			Recoveries		Provision			Ending Balance
Commercial and Agricultur al
Commercial	$	497,561	$	(454,971	)	$	52,111	$	760,663		$	855,364
Agricultural		304,172		(5,000	)		3,600		(99,681	)		203,091
Real Estate
Commercial Construction		1,222,695		(97,698	)		485,834		(920,065	)		690,766
Residential Construction		138,092		-			-		(118,202	)		19,890
Commercial		3,664,777		(275,297	)		270,003		191,044			3,850,527
Residential		2,425,327		(929,668	)		109,626		385,070			1,990,355
Farmland		103,800		(40,000	)		20,000		827,892			911,692
Consumer and Other
Consumer		66,914		(255,062	)		61,976		189,549			63,377
Other		378,978		(25,651	)		16,286		(350,770	)		18,843
	$	8,802,316	$	(2,083,347	)	$	1,019,436	$	865,500		$	8,603,905

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

	Ending Allowance Balanc e						Ending Loan Balanc e
201 7	Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l		Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l
Commercial and Agricultura l
Commercia l	$	-	$	446,675	$	446,675	$	77,599	$	48,044,664	$	48,122,263
Agricultura l		-		185,904		185,904		5,121		16,437,460		16,442,581
Real Estat e
Commercial Constructio n		65,635		1,150,380		1,216,015		493,067		44,720,893		45,213,960
Residential Constructio n		-		-		-		-		8,583,446		8,583,446
Commercia l		1,712,557		2,161,402		3,873,959		18,010,035		333,161,633		351,171,668
Residential		27,123		940,978		968,101		2,040,125		192,008,820		194,048,945
Farmlan d		21,369		758,162		779,531		1,035,572		66,732,083		67,767,655
Consumer and Othe r
Consume r		-		33,993		33,993		-		18,956,028		18,956,028
Othe r		-		3,330		3,330		-		14,977,309		14,977,309
Total End of Year Balanc e	$	1,826,684	$	5,680,824	$	7,507,508	$	21,661,519	$	743,622,336	$	765,283,855

	Ending Allowance Balanc e						Ending Loan Balanc e
201 6	Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l		Individually Evaluated for Impairmen t		Collectively Evaluated for Impairmen t		Tota l
Commercial and Agricultura l
Commercia l	$	-	$	456,197	$	456,197	$	6,671	$	47,018,207	$	47,024,878
Agricultura l		-		167,692		167,692		-		17,079,579		17,079,579
Real Estat e
Commercial Constructio n		21,135		301,590		322,725		72,296		30,286,066		30,358,362
Residential Construction		-		13,491		13,491		-		11,830,447		11,830,447
Commercia l		3,021,943		2,729,055		5,750,998		22,422,451		326,667,580		349,090,031
Residentia l		362,522		1,033,577		1,396,099		2,911,874		192,668,093		195,579,967
Farmlan d		29,172		693,159		722,331		1,044,047		65,833,150		66,877,197
Consumer and Othe r
Consume r		-		80,265		80,265		-		19,695,241		19,695,241
Othe r		-		13,495		13,495		-		16,747,861		16,747,861
Total End of Year Balanc e	$	3,434,772	$	5,488,521	$	8,923,293	$	26,457,339	$	727,826,224	$	754,283,563
201 5
Commercial and Agricultura l
Commercia l	$	94,538	$	760,826	$	855,364	$	122,928	$	47,658,761	$	47,781,689
Agricultura l		-		203,091		203,091		8,445		19,185,052		19,193,497
Real Estat e
Commercial Constructio n		25,344		665,422		690,766		1,622,560		38,484,073		40,106,633
Residential Constructio n		-		19,890		19,890		-		9,413,263		9,413,263
Commercia l		1,607,962		2,242,565		3,850,527		23,628,213		322,633,820		346,262,033
Residentia l		308,188		1,682,167		1,990,355		3,597,386		193,405,033		197,002,419
Farmlan d		37,386		874,306		911,692		1,402,939		60,376,920		61,779,859
Consumer and Othe r
Consume r		-		63,377		63,377		-		20,605,465		20,605,465
Othe r		-		18,843		18,843		-		16,490,737		16,490,737
Total End of Year Balanc e	$	2,073,418	$	6,530,487	$	8,603,905	$	30,382,471	$	728,253,124	$	758,635,595

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Note 6 - Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Property, Plant and Equipment [Table Text Block]

	20 1 7			20 16
Land	$	9,668,722		$	9,668,722
Building		26,893,354			25,239,165
Furniture, Fixtures and Equipment		13,090,366			12,461,043
Leasehold Improvements		655,166			653,939
Construction in Progress		68,253			1,530,359
		50,375,861			49,553,228
Accumulated Depreciation		(22,736,431	)		(21,583,968	)
	$	27,639,430		$	27,969,260

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Year Ending December 31	Amount
2018	$	43,320
2019		42,000
2020		42,000
2021		42,000
20 22 and Thereafter		38,500
	$	207,820

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Note 7 - Other Real Estate Owned (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Other Real Estate, Roll Forward [Table Text Block]

	201 7			201 6			201 5
Balance, Beginning of Year	$	6,439,226		$	8,839,103		$	10,401,832
Additions		1,724,936			5,664,554			7,536,165
Sales of OREO		(3,786,567	)		(7,416,293	)		(8,054,675	)
Loss on Sale		212,641			(146,402	)		(591,071	)
Provision for Losses		(333,767	)		(501,736	)		(453,148	)
Balance, End of Year	$	4,256,469		$	6,439,226		$	8,839,103

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Note 8 - Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Schedule of Intangible Assets and Goodwill [Table Text Block]

	Core Deposit Intangible		Accumulated Amortization			Net Core Deposit Intangible
Core Deposit Intangible
Balance, December 31, 2015	$	1,056,693	$	(940,429	)	$	116,264
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 2016	$	1,056,693	$	(976,178	)	$	80,515
Amortization Expense		-		(35,749	)		(35,749	)
Balance, December 31, 201 7	$	1,056,693	$	(1,011,927	)	$	44,766

XML

Note 9 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	20 1 7		20 16		20 15
Current Federal Expense	$	3,943,495	$	3,629,213	$	3,162,367
Deferred Federal Expense		793,012		222,120		625,436
Deferred Tax Expense from Tax Rate Changes		2,040,946		-		-
Federal Income Tax Expense		6,777,453		3,851,333		3,787,803
Current State Income Tax Expense		-		-		-
Federal and State Income Tax Expense	$	6,777,453	$	3,851,333	$	3,787,803

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	20 1 7			20 16			20 15
Statutory Federal Income Taxes	$	4,954,199		$	4,283,394		$	4,134,570
Tax-Exempt Interest		(102,345	)		(109,759	)		(83,903	)
Income from Cash Value Life Insurance, net of premiums		(198,730	)		(182,532	)		(232,988	)
Meal and Entertainment Disallowance		14,354			16,813			21,600
Other		69,029			(156,583	)		(51,476	)
Tax Expense from Tax Rate Changes		2,040,946			-			-
Actual Federal Income Taxes	$	6,777,453		$	3,851,333		$	3,787,803

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	20 1 7			20 16
Deferred Tax Assets
Allowance for Loan Losses	$	1,576,577		$	3,033,920
Other Real Estate		304,813			688,162
Deferred Compensation		161,000			280,704
Investments		210,000			340,000
Goodwill		76,058			167,666
Other		237,591			379,304
	$	2,566,039			4,889,756
Deferred Tax Liabilities
Premises and Equipment		(995,190	)		(1,553,460	)
Other		(2,585	)		(4,185	)
		(997,775	)		(1,557,645	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		1,725,708			2,587,163
Net Deferred Tax Assets	$	3,293,972		$	5,919,274

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Note 10 - Deposits (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Deposit Liabilities, Type [Table Text Block]

	20 1 7		20 16
Interest-Bearing Demand	$	458,717,332	$	448,003,985
Savings		78,172,441		70,066,140
Time, $250,000 and Over		38,919,469		32,168,191
Other Time		301,248,235		335,059,579
	$	877,057,477	$	885,297,895

Scheduled Maturities Of Certificates Of Deposits [Table Text Block]

Year	Amount
201 8	$	255,574,623
201 9		41,210,289
20 20		22,116,817
20 21		11,206,127
20 22 and Thereafter		10,059,848
	$	340,167,704

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Note 11 - Other Borrowed Money (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

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

	20 1 7		20 16
Federal Home Loan Bank Advances	$	46,000,000	$	46,000,000
Other Borrowings		1,500,000		-
	$	47,500,000	$	46,000,000

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

Year	Amount
2018	$	4,000,000
2019		5,000,000
2020		2,500,000
2021		-
2022		27,000,000
2023 and Thereafter		9,000,000
	$	47,500,000

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Note 12 - Subordinated Debentures (Trust Preferred Securities) (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Schedule of Subordinated Borrowing [Table Text Block]

								Total
				3 - M onth		Added		Interest			5 - Year
Description	Date	Amount		Libor Rate		Points		Rate		Maturity	Call Option
	(In Thousands)
Colony Bankcorp Statutory Trust III	6/17/2004	$	4,640		1.60042		2.68		4.28042	6/14/2034	6/17/2009
Colony Bankcorp Capital Trust I	4/13/2006		5,155		1.69465		1.50		3.19465	4/13/2036	4/13/2011
Colony Bankcorp Capital Trust II	3/12/2007		9,279		1.69465		1.65		3.34465	3/12/2037	3/12/2012
Colony Bankcorp Capital Trust III	9/14/2007		5,155		1.37796		1.40		2.77796	9/14/2037	9/14/2012

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Note 15 - Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Summary Of Financial Instrument Outstanding [Table Text Block]

	Contract Amount
	20 1 7		20 16
Commitments to Extend Credit	$	96,374,000	$	71,359,000
Standby Letters of Credit		1,536,000		1,551,000

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Note 17 - Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	201 7		201 6		201 5
Interest Expense	$	6,851,541	$	6,529,615	$	6,536,994
Income Taxes	$	4,000,000	$	3,365,000	$	4,738,000

Schedule of Other Significant Noncash Transactions [Table Text Block]

	201 7			201 6			201 5
Acquisitions of Real Estate Through Loan Foreclosures	$	1,724,936		$	5,664,554		$	7,536,165
Change in Unrealized Gain (Loss) on AFS Investment Securities	$	(608,355	)	$	(890,590	)	$	622,155

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Note 18 - Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Schedule of Related Party Transactions [Table Text Block]

	20 1 7			20 16
Balance, Beginning	$	1,025,543		$	1,816,609
New Loans		1,050,393			2,379,026
Repayments		(1,106,606	)		(3,170,092	)
Transactions Due to Changes in Directors		(224,693	)		-
Balance, Ending	$	744,637		$	1,025,543

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Note 19 - Fair Value of Financial Instruments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

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

	Carrying		Estimated		Level
201 7	Amount		Fair Value		1		2		3
	(in Thousands)
Assets
Cash and Short-Term Investments	$	57,813	$	57,813	$	57,813	$	-	$	-
Investment Securities Available for Sale		354,247		354,247		-		346,950		7,297
Federal Home Loan Bank Stock		3,043		3,043		3,043		-		-
Loans, Net		757,281		757,163		-		752,287		4,876
Bank-Owned Life Insurance		17,089		17,089		17,089		-		-
Liabilities
Deposits		1,067,985		1,068,392		727,818		340,574		-
Subordinated Debentures		24,229		24,229		-		24,229		-
Other Borrowed Money		47,500		47,626		-		47,626		-
201 6
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
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
201 7
Recurring
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	346,723,419	$	-	$	341,701,288	$	5,022,131
State, County and Municipal		4,492,826		-		4,277,460		215,366
Corporate		2,060,000		-		-		2,060,000
Asset-Backed		970,659		-		970,659		-
	$	354,246,904	$	-	$	346,949,407	$	7,297,497
Nonrecurring
Impaired Loans	$	4,875,918	$	-	$	-	$	4,875,918
Other Real Estate	$	2,014,904	$	-	$	-	$	2,014,904
2016
Recurring
Securities Available for Sale
U.S. Government Agencies
Mortgage-Backed	$	319,097,374	$	-	$	319,097,374	$	-
State, County and Municipal		4,560,496		-		3,984,112		576,384
	$	323,657,870	$	-	$	323,081,486	$	576,384
Nonrecurring
Impaired Loans	$	6,952,343	$	-	$	-	$	6,952,343
Other Real Estate	$	2,505,188	$	-	$	-	$	2,505,188

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

	December 31, 201 7		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Real Estate
C ommercial Construction	$	427,433	Sales Comparison	Adjustment for Differences		(16.00)%	-	1,975.00%
				Between the Comparable Sales			979.50%
				Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
Residential Real Estate		81,736	Sales Comparison	Adjustment for Differences		(43.30)%	-	83.30%
				Between the Comparable Sales			20.00%
				Management Adjustments for Age		0.00%	-	25.00%
				of Appraisals and/or Current			12.50%
				Market Conditions
Commercial Real Estate		4,016,742	Income Approach	Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
				Capitalization Rate			10.75%
Farmland		350,007	Sales Comparison	Adjustment for Differences		(71.00)%	-	88.70%
				Between the Comparable Sales			8.85%
				Management Adjustments for Age		10.00%	-	75.00%
				of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		2,014,904	Sales Comparison	Adjustment for Differences		(22.74)%	-	15.00%
				Between the Comparable Sales			(3.87)%
				Management Adjustments for Age		5.44%	-	87.24%
				of Appraisals and/or Current			24.44%
				Market Conditions
			Income Approach	Capitalization Rate			10.00%

	December 31, 201 6		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Real Estate
C ommercial Construction	$	51,161	Sales Comparison	Adjustment for Differences		(5.00)%	-	99.00%
				Between the Comparable Sales			47.00%
				Management Adjustments for Age		0.00%	-	10.00%
				of Appraisals and/or Current			5.00%
				Market Conditions
Residential Real Estate		1,105,312	Sales Comparison	Adjustment for Differences		(22.00)%	-	0.00%
				Between the Comparable Sales			(11.00)%
				Management Adjustments for Age		0.00%	-	40.00%
				of Appraisals and/or Current			20.00%
				Market Conditions
Commercial Real Estate		5,445,192	Sales Comparison	Adjustment for Differences		(14.08)%	-	24.62%
				Between the Comparable Sales			5.27%
				Management Adjustments for Age		0.00%	-	100.00%
				of Appraisals and/or Current			50.00%
				Market Conditions
			Income Approach	Capitalization Rate			10.67%
Farmland		350,678	Sales Comparison	Adjustment for Differences		(27.00)%	-	15.00%
				Between the Comparable Sales			(6.00)%
				Management Adjustments for Age		10.00%	-	75.00%
				of Appraisals and/or Current			42.50%
				Market Conditions
Other Real Estate Owned		2,505,188	Sales Comparison	Adjustment for Differences		(50.80)%	-	316.00%
				Between the Comparable Sales			132.60%
				Management Adjustments for Age		6.25%	-	76.92%
				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
	201 7			201 6			201 5
Balance, Beginning	$	576,384		$	930,311		$	948,390
Transfers into Level 3								-
Transfers out of Level 3								-
Securities Purchased During the Year		7,069,649						-
Securities Matured During the Year		(360,000	)		(330,000	)		-
Loss on OTTI Impairment Included in Noninterest Income								-
Unrealized Gains(Losses) Included in Other Comprehensive Income		11,464			(23,927	)		(18,079	)
Balance, Ending	$	7,297,497		$	576,384		$	930,311

Fair Value, Inputs, Level 3 [Member]

Notes Tables

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

December 31, 201 7	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
State, County and Municipal	$	215,366	Discounted Cash Flow	Discount Rate or Yield		N/A*
U. S. Government Agencies Mortgage - Backed		5,022,131	Fundamental Analysis	Discount Rate or Yield		N/A*
Corporate		2,060,000	Option Pricing	Discount Rate or Yield		N/A*
December 31, 201 6
State, County and Municipal	$	576,384	Discounted Cash Flow	Discount Rate or Yield		N/A*

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Note 20 - Regulatory Capital Matters (Tables)

12 Months Ended

Dec. 31, 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
	(In Thousands)
As of December 31, 2017
Total Capital to Risk-Weighted Assets
Consolidated	$	127,786		15.56	%	$	65,718		8.00	%		N/A		N/A
Colony Bank		127,470		15.54			65,628		8.00		$	82,036		10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated		120,279		14.64			49,289		6.00			N/A		N/A
Colony Bank		119,963		14.62			49,221		6.00			65,628		8.00
C ommon Equity Tier 1 Capital to Risk-Weighted Assets
Consolidated		96,779		11.78			36,967		4.50			N/A		N/A
Colony Bank		119,963		14.62			36,916		4.50			53,323		6.50
Tier I Capital to Average Assets
Consolidated		120,279		9.89			48,635		4.00			N/A		N/A
Colony Bank		119,963		9.88			48,566		4.00			60,708		5.00
As of December 31, 201 6
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 I 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 I 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

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Note 21 - Financial Information of Colony Bankcorp, Inc. (Parent Only) (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

Condensed Balance Sheet [Table Text Block]

	20 1 7			20 16
ASSETS
Cash	$	910,239		$	2,307,008
Premises and Equipment, Net		1,099,626			1,074,884
Investment in Subsidiary, at Equity		114,235,955			114,478,277
Other		24,458			20,990
Total Assets	$	116,270,278		$	117,881,159
LIABILITIES AND STOCKHOLDERS ’ EQUITY
Liabilities
Other Borrowed Money	$	1,500,000		$	-
Dividends Payable		-			105,300
Other		218,615			159,126
	$	1,718,615		$	264,426
Subordinated Debt		24,229,000			24,229,000
Stockholders ’ Equity
Preferred Stock, Stated Value $1,000; 10,000,000 Shares Authorized, 0 and 9,360 Shares Issued and Outstanding as of December 31, 201 7 and 2016		-			9,360,000
Common Stock, Par Value $1; 20,000,000 Shares Authorized, 8,439,258 Shares Issued and Outstanding as of December 31, 2017 and 2016		8,439,258			8,439,258
Paid-In Capital		29,145,094			29,145,094
Retained Earnings		59,230,260			51,465,521
Accumulated Other Comprehensive Loss, Net of Tax		(6,491,949	)		(5,022,140	)
		90,322,663			93,387,733
Total Liabilities and Stockholders ’ Equity	$	116,270,278		$	117,881,159

Condensed Income Statement [Table Text Block]

	20 1 7		20 16		20 15
Income
Dividends from Subsidiary	$	8,746,882	$	9,118,104	$	10,015,147
Management Fees		601,080		601,080		581,334
Other		97,103		103,612		112,876
	$	9,445,065	$	9,822,796	$	10,709,357
Expenses
Interest		900,113		601,567		503,286
Salaries and Employee Benefits		917,259		840,130		811,150
Other		604,166		554,434		666,872
		2,421,538		1,996,131		1,981,308
Income Before Taxes and Equity in Undistributed Earnings of Subsidiary		7,023,527		7,826,665		8,728,049
Income Tax Benefits		568,258		457,934		444,764
Income Before Equity in Undistributed Earnings of Subsidiary		7,591,785		8,284,599		9,172,813
Dividends Received in Excess of Earnings of Subsidiary		-		-		(800,116	)
Equity in Undistributed Earnings of Subsidiary		159,193		388,611		-
Net Income		7,750,978		8,673,210		8,372,697
Preferred Stock Dividends		210,600		1,493,310		2,375,010
Net Income Available to Common Stockholders	$	7,540,378	$	7,179,900	$	5,997,687

Condensed Statement of Comprehensive Income [Table Text Block]

	201 7			201 6			201 5
Net Incom e	$	7,750,978		$	8,673,210		$	8,372,697
Other Comprehensive Income (Loss )
Gains (Losses) on Securities Arising During the Year		(608,355	)		(505,367	)		610,689
Tax Effec t		206,841			171,825			(207,634	)
Realized (Gains) Losses on Sale of AFS Securities		-			(385,223	)		11,466
Tax Effec t		-			130,976			(3,898	)
Change in Unrealized Gains (Losses) on SecuritiesAvailable for Sale, Net of ReclassificationAdjustment and Tax Effects		(401,514	)		(587,789	)		410,623
Comprehensive Incom e	$	7,349,464		$	8,085,421		$	8,783,320

Condensed Cash Flow Statement [Table Text Block]

	201 7			201 6			201 5
Cash Flows from Operating Activitie s
Net Incom e	$	7,750,978		$	8,673,210		$	8,372,697
Adjustments to Reconcile Net Income t o Net Cash Provided by Operating Activitie s
Depreciation and Amortizatio n		70,183			66,476			73,999
Equity in Undistribute d Earnings of Subsidiar y		(159,193	)		(388,611	)		-
Dividends Received in Excess o f Earnings of Subsidiar y		-			-			800,116
Change in Interest Payabl e		17,887			5,367			23,072
Othe r		38,135			108,288			1,555,482
		7,717,990			8,464,730			10,825,366
Cash Flows from Investing Activitie s
Purchases of Premises and Equipmen t		(94,925	)		(6,836	)		(8,884	)
Cash Flows from Financing Activitie s
Proceeds from Other Borrowed Money		5,000,000			-			-
Principal Payments on Other Borrowed Mone y		(3,500,000	)		-			-
Dividends Paid on Common Stoc k		(843,934	)		-			-
Dividends Paid on Preferred Stoc k		(315,900	)		(1,590,746	)		(2,487,274	)
Redemption of Preferred Stock		(9,360,000	)		(8,661,000	)		(9,979,000	)
		(9,019,834	)		(10,251,746	)		(12,466,274	)
Increase (Decrease) in Cash		(1,396,769	)		(1,793,852	)		(1,649,792	)
Cash, Beginnin g		2,307,008			4,100,860			5,750,652
Cash, Ending	$	910,239		$	2,307,008		$	4,100,860

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Note 22 - Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

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

	201 7		201 6		201 5
Numerator
Net Income Available to Common Stockholders	$	7,540,378	$	7,179,900	$	5,997,687
Denominator
Weighted Average Number of Common Shares Outstanding for Basic Earnings Per Common Share		8,439,258		8,439,258		8,439,258
Dilutive Effect of Potential Common Stock
Stock Warrants		194,323		74,037		19,203
Weighted-Average Number of Shares Outstanding for D iluted Earnings Per Common Share		8,633,581		8,513,295		8,458,461
Earnings Per Share - Basic	$	0.89	$	0.85	$	0.71
Earnings Per Share - Diluted	$	0.87	$	0.84	$	0.71

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Note 23 - Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2017

Notes Tables

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

	201 7			201 6			201 5
Beginning Balanc e	$	(5,022,140	)	$	(4,434,351	)	$	(4,844,974	)
Other Comprehensive Incom e Before Reclassificatio n		(401,514	)		(333,542	)		403,055
Amounts Reclassified from Accumulate d Other Comprehensive Incom e		-			(254,247	)		7,568
TCJ Ac t		(1,068,295	)		-			-
Net Current Period Other Comprehensive Income		(1,469,809	)		(587,789	)		410,623
Ending Balanc e	$	(6,491,949	)	$	(5,022,140	)	$	(4,434,351	)

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Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Percentage of Loan Portfolio Concentrated in Loans Secured by Real Estate.		87.10%
Discounted Percentage to Account for Selling and Marketing Costs	10.00%	10.00%
Probability of Uncertain Tax Positions of Being Realized upon Settlement, Minimum	50.00%	50.00%
Cash Surrender Value of Life Insurance	$ 17,088,693	$ 17,088,693	$ 15,419,269
Reclassification from AOCI to Retained Earnings Due to Stranded Tax Effects from the TCJ Act [Member]
Current Period Reclassification Adjustment	$ 1,068,295

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Note 1 - Summary of Significant Accounting Policies - Estimated Useful Lives and Methods of Depreciation (Details)	12 Months Ended
	Dec. 31, 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

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Note 2 - Cash and Balances Due From Banks (Details Textual) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Cash Reserve Deposit Required and Made	$ 1,515,000	$ 1,417,000

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Note 2 - Cash and Balances Due from Banks - Cash and Balances Due From Banks (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Cash on Hand and Cash Items	$ 9,746,132	$ 8,509,530
Noninterest-Bearing Deposits with Other Banks	13,399,004	20,312,574
	$ 23,145,136	$ 28,822,104

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Note 3 - Investment Securities (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Proceeds from Sale of Available-for-sale Securities	$ 0	$ 25,209,851	$ 28,273,634
Available-for-sale Securities, Gross Realized Gains	0	391,976	207,896
Available-for-sale Securities, Gross Realized Losses	0	6,753	$ 196,316
Security Owned and Pledged as Collateral, Fair Value	$ 175,484,021	$ 144,853,885
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	130
Depreciated Debt Securities With Unrealized Losses	2.64%
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities	$ 0
Number of Asset Backed Securities Owned	1
Number of Issuances of Trust Preferred Securities	1

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Note 3 - Investment Securities - Schedule of Investment Securities (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Available for sale securities, amortized cost	$ 362,464,561	$ 331,267,173
Available for sale securities, gross unrealized gains	293,367	94,093
Available for sale securities, gross unrealized losses	(8,511,024)	(7,703,396)
Available for sale securities, fair value	354,246,904	323,657,870
US Government Agencies Debt Securities [Member]
Available for sale securities, amortized cost	354,931,318	326,694,417
Available for sale securities, gross unrealized gains	258,049	75,743
Available for sale securities, gross unrealized losses	(8,465,948)	(7,672,786)
Available for sale securities, fair value	346,723,419	319,097,374
US States and Political Subdivisions Debt Securities [Member]
Available for sale securities, amortized cost	4,493,085	4,572,756
Available for sale securities, gross unrealized gains	22,835	18,350
Available for sale securities, gross unrealized losses	(23,094)	(30,610)
Available for sale securities, fair value	4,492,826	$ 4,560,496
Corporate Debt Securities [Member]
Available for sale securities, amortized cost	2,047,517
Available for sale securities, gross unrealized gains	12,483
Available for sale securities, gross unrealized losses
Available for sale securities, fair value	2,060,000
Asset-backed Securities [Member]
Available for sale securities, amortized cost	992,641
Available for sale securities, gross unrealized gains
Available for sale securities, gross unrealized losses	(21,982)
Available for sale securities, fair value	$ 970,659

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Note 3 - Investment Securities - Amortized Cost and Fair Value of Investment Securities by Contractual Maturity (Details)	Dec. 31, 2017 USD ($)
Due In One Year or Less, amortized cost	$ 301,299
Due In One Year or Less, fair value	301,605
Due After One Year Through Five Years, amortized cost	4,668,954
Due After One Year Through Five Years, fair value	4,658,344
Due After Five Years Through Ten Years, amortized cost	877,788
Due After Five Years Through Ten Years, fair value	894,743
Due After Ten Years, amortized cost	1,685,202
Due After Ten Years, fair value	1,668,793
Amortized cost with single maturity date	7,533,243
Fair value with single maturity date	7,523,485
Mortgage-Backed Securities, amortized cost	354,931,318
Mortgage-Backed Securities, fair value	346,723,419
Amortized cost	362,464,561
Fair value	$ 354,246,904

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Note 3 - Investment Securities - Continuous Unrealized Loss Position (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Continuous unrealized loss, less than 12 months, fair value	$ 123,708,343	$ 177,688,528
Continuous unrealized loss, less than 12 months, gross unrealized losses	(1,700,299)	(3,490,174)
Continuous unrealized loss, greater than 12 months, fair value	190,196,101	107,481,698
Continuous unrealized loss, greater than 12 months, gross unrealized losses	(6,810,725)	(4,213,222)
Continuous unrealized loss, fair value	313,904,444	285,170,226
Continuous unrealized loss, gross unrealized losses	(8,511,024)	(7,703,396)
US Government Agencies Debt Securities [Member]
Continuous unrealized loss, less than 12 months, fair value	120,139,340	174,200,881
Continuous unrealized loss, less than 12 months, gross unrealized losses	(1,655,223)	(3,459,564)
Continuous unrealized loss, greater than 12 months, fair value	190,196,101	107,481,698
Continuous unrealized loss, greater than 12 months, gross unrealized losses	(6,810,725)	(4,213,222)
Continuous unrealized loss, fair value	310,335,441	281,682,579
Continuous unrealized loss, gross unrealized losses	(8,465,948)	(7,672,786)
US States and Political Subdivisions Debt Securities [Member]
Continuous unrealized loss, less than 12 months, fair value	2,598,344	3,487,647
Continuous unrealized loss, less than 12 months, gross unrealized losses	(23,094)	(30,610)
Continuous unrealized loss, greater than 12 months, fair value
Continuous unrealized loss, greater than 12 months, gross unrealized losses
Continuous unrealized loss, fair value	2,598,344	3,487,647
Continuous unrealized loss, gross unrealized losses	(23,094)	$ (30,610)
Asset-backed Securities [Member]
Continuous unrealized loss, less than 12 months, fair value	970,659
Continuous unrealized loss, less than 12 months, gross unrealized losses	(21,982)
Continuous unrealized loss, greater than 12 months, fair value
Continuous unrealized loss, greater than 12 months, gross unrealized losses
Continuous unrealized loss, fair value	970,659
Continuous unrealized loss, gross unrealized losses	$ (21,982)

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Note 4 - Loans (Details Textual) - USD ($)	1 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loan Balance For Reviewing High Risk Loans Minimum		$ 250,000
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans		205,000	$ 387,300	$ 418,400
Loans and Leases Receivable, Impaired, Commitment to Lend		$ 0
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	$ 89,297

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Note 4 - Loans - Segregated by Class of Loans (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loans	$ 765,283,855	$ 754,283,563	$ 758,635,595
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Loans	48,122,263	47,024,878	47,781,689
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Loans	16,442,581	17,079,579	19,193,497
Real Estate Portfolio Segment [Member] | Commercial [Member]
Loans	351,171,668	349,090,031	346,262,033
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Loans	45,213,960	30,358,362	40,106,633
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Loans	8,583,446	11,830,447	9,413,263
Real Estate Portfolio Segment [Member] | Residential [Member]
Loans	194,048,945	195,579,967	197,002,419
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans	67,767,655	66,877,197	61,779,859
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Loans	18,956,028	19,695,241	20,605,465
Consumer and Other Portfolio Segment [Member] | Other [Member]
Loans	$ 14,977,309	$ 16,747,861	$ 16,490,737

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Note 4 - Loans - Loan Portfolio by Credit Quality Indicator (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Loans	$ 765,283,855	$ 754,283,563	$ 758,635,595
Pass [Member]
Loans	728,740,714	707,965,052
Special Mention [Member]
Loans	14,610,955	19,530,573
Substandard [Member]
Loans	21,932,186	26,787,938
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Loans	48,122,263	47,024,878	47,781,689
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Pass [Member]
Loans	46,468,726	44,249,874
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Special Mention [Member]
Loans	825,607	1,861,757
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Substandard [Member]
Loans	827,930	913,247
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Loans	16,442,581	17,079,579	19,193,497
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Pass [Member]
Loans	15,868,191	16,585,646
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Special Mention [Member]
Loans	174,356	192,445
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Substandard [Member]
Loans	400,034	301,488
Real Estate Portfolio Segment [Member] | Commercial [Member]
Loans	351,171,668	349,090,031	346,262,033
Real Estate Portfolio Segment [Member] | Commercial [Member] | Pass [Member]
Loans	338,775,805	327,561,169
Real Estate Portfolio Segment [Member] | Commercial [Member] | Special Mention [Member]
Loans	7,662,637	9,403,077
Real Estate Portfolio Segment [Member] | Commercial [Member] | Substandard [Member]
Loans	4,733,226	12,125,785
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Loans	45,213,960	30,358,362	40,106,633
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Pass [Member]
Loans	41,282,295	28,425,373
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Special Mention [Member]
Loans	577,765	1,349,447
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Substandard [Member]
Loans	3,353,900	583,542
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Loans	8,583,446	11,830,447	9,413,263
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Pass [Member]
Loans	8,583,446	11,630,165
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Special Mention [Member]
Loans	0
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Substandard [Member]
Loans		200,282
Real Estate Portfolio Segment [Member] | Residential [Member]
Loans	194,048,945	195,579,967	197,002,419
Real Estate Portfolio Segment [Member] | Residential [Member] | Pass [Member]
Loans	177,962,870	178,618,510
Real Estate Portfolio Segment [Member] | Residential [Member] | Special Mention [Member]
Loans	4,864,893	5,658,526
Real Estate Portfolio Segment [Member] | Residential [Member] | Substandard [Member]
Loans	11,221,182	11,302,931
Real Estate Portfolio Segment [Member] | Farmland [Member]
Loans	67,767,655	66,877,197	61,779,859
Real Estate Portfolio Segment [Member] | Farmland [Member] | Pass [Member]
Loans	66,334,906	65,074,715
Real Estate Portfolio Segment [Member] | Farmland [Member] | Special Mention [Member]
Loans	444,095	839,362
Real Estate Portfolio Segment [Member] | Farmland [Member] | Substandard [Member]
Loans	988,654	963,120
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Loans	18,956,028	19,695,241	20,605,465
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Pass [Member]
Loans	18,495,798	19,071,739
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Special Mention [Member]
Loans	52,970	225,959
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Substandard [Member]
Loans	407,260	397,543
Consumer and Other Portfolio Segment [Member] | Other [Member]
Loans	14,977,309	16,747,861	$ 16,490,737
Consumer and Other Portfolio Segment [Member] | Other [Member] | Pass [Member]
Loans	14,968,677	16,747,861
Consumer and Other Portfolio Segment [Member] | Other [Member] | Special Mention [Member]
Loans	8,632
Consumer and Other Portfolio Segment [Member] | Other [Member] | Substandard [Member]
Loans

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Note 4 - Loans - Age Analysis of Past Due Loans and Nonaccrual Loans (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accruing loans past due	$ 4,558,405	$ 4,468,990
Nonaccrual loans	7,502,702	12,350,066
Current loans	753,222,748	737,464,507
Loans	765,283,855	754,283,563	$ 758,635,595
Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	4,558,405	4,468,868
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due		122
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Accruing loans past due	328,483	419,969
Nonaccrual loans	598,305	634,955
Current loans	47,195,475	45,969,954
Loans	48,122,263	47,024,878	47,781,689
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	328,483	419,969
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	110,482	33,046
Nonaccrual loans	398,509	208,522
Current loans	15,933,590	16,838,011
Loans	16,442,581	17,079,579	19,193,497
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	110,482	33,046
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	918,997	491,468
Nonaccrual loans	2,172,229	6,360,176
Current loans	348,080,442	342,238,387
Loans	351,171,668	349,090,031	346,262,033
Real Estate Portfolio Segment [Member] | Commercial [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	918,997	491,468
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	27,062	54,001
Nonaccrual loans	477,043	190,494
Current loans	44,709,855	30,113,867
Loans	45,213,960	30,358,362	40,106,633
Real Estate Portfolio Segment [Member] | Commercial Construction [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	27,062	54,001
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	119,443
Nonaccrual loans
Current loans	8,464,003	11,830,447
Loans	8,583,446	11,830,447	9,413,263
Real Estate Portfolio Segment [Member] | Residential Construction [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	119,443
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	2,482,276	3,178,833
Nonaccrual loans	2,829,966	3,944,337
Current loans	188,736,703	188,456,797
Loans	194,048,945	195,579,967	197,002,419
Real Estate Portfolio Segment [Member] | Residential [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	2,482,276	3,178,833
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	318,329	95,309
Nonaccrual loans	838,577	799,556
Current loans	66,610,749	65,982,332
Loans	67,767,655	66,877,197	61,779,859
Real Estate Portfolio Segment [Member] | Farmland [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	318,329	95,309
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	246,175	196,364
Nonaccrual loans	188,073	212,026
Current loans	18,521,780	19,286,851
Loans	18,956,028	19,695,241	20,605,465
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	246,175	196,242
Consumer and Other Portfolio Segment [Member] | Consumer [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due		122
Consumer and Other Portfolio Segment [Member] | Other [Member]
Accruing loans past due	7,158
Nonaccrual loans
Current loans	14,970,151	16,747,861
Loans	14,977,309	16,747,861	$ 16,490,737
Consumer and Other Portfolio Segment [Member] | Other [Member] | Financing Receivables, 30-89 Days Past Due [Member]
Accruing loans past due	7,158
Consumer and Other Portfolio Segment [Member] | Other [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accruing loans past due

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Note 4 - Loans - Impaired Loan Data (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Unpaid contractual principal balance with no related allowance	$ 19,780,752	$ 20,806,832	$ 29,820,855
Impaired balance with no related allowance	19,294,441	20,274,380	23,508,793
Average recorded investment with no related allowance	19,502,567	21,505,109	25,289,234
Interest income recognized with no related allowance	881,717	711,560	752,278
Interest income collected with no related allowance	901,126	835,456	765,424
Unpaid contractual principal balance with an allowance	6,702,602	10,485,323	10,639,996
Impaired balance with an allowance	6,702,602	10,387,115	10,618,411
Related allowance	1,826,684	3,434,772	2,073,418
Average recorded investment with an allowance	7,698,030	9,870,840	8,344,476
Interest income recognized with an allowance	277,753	289,073	253,603
Interest income collected with an allowance	299,455	290,735	248,297
Unpaid contractual principal balance	26,483,354	31,292,155	40,460,851
Impaired balance	25,997,043	30,661,495	34,127,204
Average recorded investment	27,200,597	31,375,949	33,633,710
Interest income recognized	1,159,470	1,000,633	1,005,881
Interest income collected	1,200,581	1,126,191	1,013,721
Commercial and Agricultural Portfolio Segment [Member] | Commercial [Member]
Unpaid contractual principal balance with no related allowance	598,305	634,955	454,423
Impaired balance with no related allowance	598,305	634,955	454,013
Average recorded investment with no related allowance	633,528	539,099	534,814
Interest income recognized with no related allowance	33,283	24,563	17,259
Interest income collected with no related allowance	33,868	27,142	21,253
Unpaid contractual principal balance with an allowance	0	0	122,928
Impaired balance with an allowance	0	0	122,928
Related allowance	0	0	94,538
Average recorded investment with an allowance	0	30,270	99,749
Interest income recognized with an allowance	0	0	2,275
Interest income collected with an allowance	0	0	2,438
Unpaid contractual principal balance	598,305	634,955	577,351
Impaired balance	598,305	634,955	576,941
Average recorded investment	633,528	569,369	634,563
Interest income recognized	33,283	24,563	19,534
Interest income collected	33,868	27,142	23,691
Commercial and Agricultural Portfolio Segment [Member] | Agricultural [Member]
Unpaid contractual principal balance with no related allowance	485,132	229,182	195,654
Impaired balance with no related allowance	398,509	208,522	178,021
Average recorded investment with no related allowance	296,578	210,372	163,078
Interest income recognized with no related allowance	11,046	8,794	(9,957)
Interest income collected with no related allowance	19,376	12,412	10,334
Unpaid contractual principal balance with an allowance	0	0	0
Impaired balance with an allowance	0	0	0
Related allowance	0	0	0
Average recorded investment with an allowance	0	0	0
Interest income recognized with an allowance	0	0	0
Interest income collected with an allowance	0	0	0
Unpaid contractual principal balance	485,132	229,182	195,654
Impaired balance	398,509	208,522	178,021
Average recorded investment	296,578	210,372	163,078
Interest income recognized	11,046	8,794	(9,957)
Interest income collected	19,376	12,412	10,334
Real Estate Portfolio Segment [Member] | Commercial [Member]
Unpaid contractual principal balance with no related allowance	12.637057	14,357,601	15,569,340
Impaired balance with no related allowance	12,637,057	14,276,688	15,122,486
Average recorded investment with no related allowance	12,808,414	14,274,719	15,430,252
Interest income recognized with no related allowance	559,601	567,349	529,376
Interest income collected with no related allowance	549,825	560,354	530,699
Unpaid contractual principal balance with an allowance	5,729,300	8,557,582	8,969,329
Impaired balance with an allowance	5,729,300	8,467,135	8,955,503
Related allowance	1,712,557	3,021,943	1,607,962
Average recorded investment with an allowance	6,599,144	8,339,666	6,673,087
Interest income recognized with an allowance	228,745	238,684	213,693
Interest income collected with an allowance	237,066	235,749	208,657
Unpaid contractual principal balance	18,366,357	22,915,183	24,538,669
Impaired balance	18,366,357	22,743,823	24,077,989
Average recorded investment	19,407,558	22,614,385	22,103,339
Interest income recognized	788,346	806,033	743,069
Interest income collected	786,891	796,103	739,356
Real Estate Portfolio Segment [Member] | Commercial Construction [Member]
Unpaid contractual principal balance with no related allowance	54,306	190,494	6,887,522
Impaired balance with no related allowance	54,306	190,494	1,896,938
Average recorded investment with no related allowance	141,396	697,893	2,867,061
Interest income recognized with no related allowance	3,526	6,630	25,788
Interest income collected with no related allowance	3,836	7,127	27,007
Unpaid contractual principal balance with an allowance	493,067	72,296	76,644
Impaired balance with an allowance	493,067	72,296	76,644
Related allowance	65,635	21,135	25,344
Average recorded investment with an allowance	241,063	74,098	92,200
Interest income recognized with an allowance	22,626	1,532	375
Interest income collected with an allowance	32,922	1,416	375
Unpaid contractual principal balance	547,373	262,790	6,964,166
Impaired balance	547,373	262,790	1,973,582
Average recorded investment	382,459	771,991	2,959,261
Interest income recognized	26,152	8,162	26,163
Interest income collected	36,758	8,543	27,382
Real Estate Portfolio Segment [Member] | Residential Construction [Member]
Unpaid contractual principal balance with no related allowance
Impaired balance with no related allowance
Average recorded investment with no related allowance	79,295
Interest income recognized with no related allowance
Interest income collected with no related allowance
Unpaid contractual principal balance with an allowance	0
Impaired balance with an allowance	0
Related allowance	0
Average recorded investment with an allowance	0
Interest income recognized with an allowance	0
Interest income collected with an allowance	0
Unpaid contractual principal balance
Impaired balance
Average recorded investment	79,295
Interest income recognized
Interest income collected
Real Estate Portfolio Segment [Member] | Residential [Member]
Unpaid contractual principal balance with no related allowance	4,977,769	4,261,558	5,429,121
Impaired balance with no related allowance	4,579,614	3,952,139	4,575,547
Average recorded investment with no related allowance	4,566,041	4,553,322	4,715,162
Interest income recognized with no related allowance	211,318	73,099	175,484
Interest income collected with no related allowance	226,684	190,373	159,148
Unpaid contractual principal balance with an allowance	108,859	1,475,594	1,083,127
Impaired balance with an allowance	108,859	1,467,833	1,075,367
Related allowance	27,123	362,521	308,188
Average recorded investment with an allowance	482,228	1,042,750	1,088,380
Interest income recognized with an allowance	4,261	27,759	16,380
Interest income collected with an allowance	7,446	32,260	15,873
Unpaid contractual principal balance	5,086,628	5,737,152	6,512,248
Impaired balance	4,688,473	5,419,972	5,650,914
Average recorded investment	5,048,269	5,596,072	5,803,542
Interest income recognized	215,579	100,858	191,864
Interest income collected	234,130	222,633	175,021
Real Estate Portfolio Segment [Member] | Farmland [Member]
Unpaid contractual principal balance with no related allowance	840,110	920,666	1,104,887
Impaired balance with no related allowance	838,577	799,556	1,103,353
Average recorded investment with no related allowance	790,967	1,016,395	1,339,863
Interest income recognized with no related allowance	54,367	21,526	583
Interest income collected with no related allowance	58,085	26,012	2,076
Unpaid contractual principal balance with an allowance	371,376	379,851	387,968
Impaired balance with an allowance	371,376	379,851	387,969
Related allowance	21,369	29,173	37,386
Average recorded investment with an allowance	375,595	384,056	391,060
Interest income recognized with an allowance	22,121	21,098	20,880
Interest income collected with an allowance	22,021	21,310	20,954
Unpaid contractual principal balance	1,211,486	1,300,517	1,492,855
Impaired balance	1,209,953	1,179,407	1,491,322
Average recorded investment	1,166,562	1,400,451	1,730,923
Interest income recognized	76,488	42,624	21,463
Interest income collected	80,106	47,322	23,030
Consumer and Other Portfolio Segment [Member] | Consumer [Member]
Unpaid contractual principal balance with no related allowance	188,073	212,376	179,908
Impaired balance with no related allowance	188,073	212,026	178,435
Average recorded investment with no related allowance	186,348	213,309	190,566
Interest income recognized with no related allowance	8,576	9,599	13,745
Interest income collected with no related allowance	9,452	12,036	14,907
Unpaid contractual principal balance with an allowance	0	0	0
Impaired balance with an allowance	0	0	0
Related allowance	0	0	0
Average recorded investment with an allowance	0	0	0
Interest income recognized with an allowance	0	0	0
Interest income collected with an allowance	0	0	0
Unpaid contractual principal balance	188,073	212,376	179,908
Impaired balance	188,073	212,026	178,435
Average recorded investment	186,348	213,309	190,566
Interest income recognized	8,576	9,599	13,745
Interest income collected	$ 9,452	$ 12,036	14,907
Consumer and Other Portfolio Segment [Member] | Other [Member]
Unpaid contractual principal balance with no related allowance			0
Impaired balance with no related allowance			0
Average recorded investment with no related allowance			48,438
Interest income recognized with no related allowance			0
Interest income collected with no related allowance			0
Unpaid contractual principal balance with an allowance			0
Impaired balance with an allowance			0
Related allowance			0
Average recorded investment with an allowance			0
Interest income recognized with an allowance			0
Interest income collected with an allowance			0
Unpaid contractual principal balance			0
Impaired balance			0
Average recorded investment			48,438
Interest income recognized			0
Interest income collected			$ 0

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Note 4 - Loans - Modified in a Troubled Debt Restructuring (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Number of contracts		2	3
Pre-modification		$ 446,064	$ 1,620,213
Post-modification		$ 445,881	$ 1,541,568
Real Estate Portfolio Segment [Member] | Commercial [Member]
Number of contracts		1	1
Pre-modification		$ 91,280	$ 513,868
Post-modification		$ 91,097	$ 505,978
Real Estate Portfolio Segment [Member] | Residential [Member]
Number of contracts		1	2
Pre-modification		$ 354,784	$ 1,106,345
Post-modification		$ 354,784	$ 1,035,590

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Note 4 - Loans - Loans Modified in a Troubled Debt Restructuring (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Number of Contracts		1
Recorded Investment		$ 89,297
Real Estate Portfolio Segment [Member] | Residential [Member]
Number of Contracts		1
Recorded Investment		$ 89,297

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Note 5 - Allowance for Loan Losses (Details Textual)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2015 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Allowance for Loan Losses, Loss History Period, Number of Quarters	16	16	8
Allowance for Credit Losses, Change in Method of Calculating Impairment				$ 114,144		$ 1,621,424
Loan Balance For Reviewing High Risk Loans Minimum				250,000
Loans and Leases Receivable, Gross			$ 758,635,595	765,283,855	$ 754,283,563
Loans and Leases Receivable, Allowance			8,603,905	$ 7,507,508	8,923,293		$ 8,802,316
Impaired Financing Receivable, Number of Loans Below Review Threshold				149
Impaired Financing Receivable Recorded Investment Below Review Threshold			$ 3,744,733	$ 4,335,524	4,204,156
Substandard [Member]
Loans and Leases Receivable, Gross				21,932,186	26,787,938
Loans Not Classified as Impaired [Member] | Substandard [Member]
Loans and Leases Receivable, Gross				9,470,621	10,786,699
Loans and Leases Receivable, Allowance				$ 1,510,868	$ 632,706

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Note 5 - Allowance for Loan Losses - Changes in the Allowance for Loan Losses (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Balance, Beginning of Year	$ 8,923,293	$ 8,603,905	$ 8,802,316
Provision for Loan Losses	390,000	1,062,000	865,500
Loans Charged Off	(2,915,753)	(2,087,850)	(2,083,347)
Recoveries of Loans Previously Charged Off	1,109,968	1,345,238	1,019,436
Balance, End of Year	$ 7,507,508	$ 8,923,293	$ 8,603,905

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Note 5 - Allowance for Loan Losses - Segregated by Class of Loan (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance for loan losses, beginning balance	$ 8,923,293	$ 8,603,905	$ 8,802,316
Allowance for loan losses, charge-offs	(2,915,753)	(2,087,850)	(2,083,347)
Allowance for loan losses, recoveries	1,109,968	1,345,238	1,019,436
Provision for Loan Losses	390,000	1,062,000	865,500
Allowance for loan losses, ending balance	7,507,508	8,923,293	8,603,905
Allowance for loan losses, provision	390,000	1,062,000	865,500
Commercial [Member] | Commercial and Agricultural Portfolio Segment [Member]
Allowance for loan losses, beginning balance	456,197	855,364	497,561
Allowance for loan losses, charge-offs	(299,079)	(304,918)	(454,971)
Allowance for loan losses, recoveries	136,499	66,738	52,111
Provision for Loan Losses	153,058	(160,987)	760,663
Allowance for loan losses, ending balance	446,675	456,197	855,364
Allowance for loan losses, provision	153,058	(160,987)	760,663
Commercial [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance	5,750,998	3,850,527	3,664,777
Allowance for loan losses, charge-offs	(966,014)	(992,067)	(275,297)
Allowance for loan losses, recoveries	527,150	206,154	270,003
Provision for Loan Losses	(1,438,175)	2,686,384	191,044
Allowance for loan losses, ending balance	3,873,959	5,750,998	3,850,527
Allowance for loan losses, provision	(1,438,175)	2,686,384	191,044
Agricultural [Member] | Commercial and Agricultural Portfolio Segment [Member]
Allowance for loan losses, beginning balance	167,692	203,091	304,172
Allowance for loan losses, charge-offs	(159,500)	(19,258)	(5,000)
Allowance for loan losses, recoveries	3,963	4,150	3,600
Provision for Loan Losses	173,749	(20,291)	(99,681)
Allowance for loan losses, ending balance	185,904	167,692	203,091
Allowance for loan losses, provision	173,749	(20,291)	(99,681)
Commercial Construction [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance	322,725	690,766	1,222,695
Allowance for loan losses, charge-offs	(51,977)	(25,318)	(97,698)
Allowance for loan losses, recoveries	266,459	814,586	485,834
Provision for Loan Losses	678,808	(1,157,309)	(920,065)
Allowance for loan losses, ending balance	1,216,015	322,725	690,766
Allowance for loan losses, provision	678,808	(1,157,309)	(920,065)
Residential Construction [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance	13,491	19,890	138,092
Allowance for loan losses, charge-offs
Allowance for loan losses, recoveries
Provision for Loan Losses	(13,491)	(6,399)	(118,202)
Allowance for loan losses, ending balance		13,491	19,890
Allowance for loan losses, provision	(13,491)	(6,399)	(118,202)
Residential [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance	1,396,099	1,990,355	2,425,327
Allowance for loan losses, charge-offs	(1,048,337)	(361,630)	(929,668)
Allowance for loan losses, recoveries	82,079	49,660	109,626
Provision for Loan Losses	538,260	(282,286)	385,070
Allowance for loan losses, ending balance	968,101	1,396,099	1,990,355
Allowance for loan losses, provision	538,260	(282,286)	385,070
Farmland [Member] | Real Estate Portfolio Segment [Member]
Allowance for loan losses, beginning balance	722,331	911,692	103,800
Allowance for loan losses, charge-offs	(60,902)	(119,576)	(40,000)
Allowance for loan losses, recoveries	16,750	145,000	20,000
Provision for Loan Losses	101,352	(214,785)	827,892
Allowance for loan losses, ending balance	779,531	722,331	911,692
Allowance for loan losses, provision	101,352	(214,785)	827,892
Consumer [Member] | Consumer and Other Portfolio Segment [Member]
Allowance for loan losses, beginning balance	80,265	63,377	66,914
Allowance for loan losses, charge-offs	(329,944)	(265,083)	(255,062)
Allowance for loan losses, recoveries	74,933	52,629	61,976
Provision for Loan Losses	208,739	229,342	189,549
Allowance for loan losses, ending balance	33,993	80,265	63,377
Allowance for loan losses, provision	208,739	229,342	189,549
Other [Member] | Consumer and Other Portfolio Segment [Member]
Allowance for loan losses, beginning balance	13,495	18,843	378,978
Allowance for loan losses, charge-offs			(25,651)
Allowance for loan losses, recoveries	2,135	6,321	16,286
Provision for Loan Losses	(12,300)	(11,669)	(350,770)
Allowance for loan losses, ending balance	3,330	13,495	18,843
Allowance for loan losses, provision	$ (12,300)	$ (11,669)	$ (350,770)

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Note 5 - Allowance for Loan Losses - Segregated by Impairment Methodology (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Ending allowance balance, individually evaluated for impairment	$ 1,826,684	$ 3,434,772	$ 2,073,418
Ending allowance balance, collectively evaluated for impairment	5,680,824	5,488,521	6,530,487
Ending allowance balance	7,507,508	8,923,293	8,603,905	$ 8,802,316
Ending loan balance, individually evaluated for impairment	21,661,519	26,457,339	30,382,471
Ending loan balance, collectively evaluated for impairment	743,622,336	727,826,224	728,253,124
Ending loan balance	765,283,855	754,283,563	758,635,595
Commercial [Member] | Commercial and Agricultural Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment			94,538
Ending allowance balance, collectively evaluated for impairment	446,675	456,197	760,826
Ending allowance balance	446,675	456,197	855,364	497,561
Ending loan balance, individually evaluated for impairment	77,599	6,671	122,928
Ending loan balance, collectively evaluated for impairment	48,044,664	47,018,207	47,658,761
Ending loan balance	48,122,263	47,024,878	47,781,689
Commercial [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	1,712,557	3,021,943	1,607,962
Ending allowance balance, collectively evaluated for impairment	2,161,402	2,729,055	2,242,565
Ending allowance balance	3,873,959	5,750,998	3,850,527	3,664,777
Ending loan balance, individually evaluated for impairment	18,010,035	22,422,451	23,628,213
Ending loan balance, collectively evaluated for impairment	333,161,633	326,667,580	322,633,820
Ending loan balance	351,171,668	349,090,031	346,262,033
Agricultural [Member] | Commercial and Agricultural Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment	185,904	167,692	203,091
Ending allowance balance	185,904	167,692	203,091	304,172
Ending loan balance, individually evaluated for impairment	5,121		8,445
Ending loan balance, collectively evaluated for impairment	16,437,460	17,079,579	19,185,052
Ending loan balance	16,442,581	17,079,579	19,193,497
Commercial Construction [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	65,635	21,135	25,344
Ending allowance balance, collectively evaluated for impairment	1,150,380	301,590	665,422
Ending allowance balance	1,216,015	322,725	690,766	1,222,695
Ending loan balance, individually evaluated for impairment	493,067	72,296	1,622,560
Ending loan balance, collectively evaluated for impairment	44,720,893	30,286,066	38,484,073
Ending loan balance	45,213,960	30,358,362	40,106,633
Residential Construction [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment		13,491	19,890
Ending allowance balance		13,491	19,890	138,092
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	8,583,446	11,830,447	9,413,263
Ending loan balance	8,583,446	11,830,447	9,413,263
Residential [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	27,123	362,522	308,188
Ending allowance balance, collectively evaluated for impairment	940,978	1,033,577	1,682,167
Ending allowance balance	968,101	1,396,099	1,990,355	2,425,327
Ending loan balance, individually evaluated for impairment	2,040,125	2,911,874	3,597,386
Ending loan balance, collectively evaluated for impairment	192,008,820	192,668,093	193,405,033
Ending loan balance	194,048,945	195,579,967	197,002,419
Farmland [Member] | Real Estate Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment	21,369	29,172	37,386
Ending allowance balance, collectively evaluated for impairment	758,162	693,159	874,306
Ending allowance balance	779,531	722,331	911,692	103,800
Ending loan balance, individually evaluated for impairment	1,035,572	1,044,047	1,402,939
Ending loan balance, collectively evaluated for impairment	66,732,083	65,833,150	60,376,920
Ending loan balance	67,767,655	66,877,197	61,779,859
Consumer [Member] | Consumer and Other Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment	33,993	80,265	63,377
Ending allowance balance	33,993	80,265	63,377	66,914
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	18,956,028	19,695,241	20,605,465
Ending loan balance	18,956,028	19,695,241	20,605,465
Other [Member] | Consumer and Other Portfolio Segment [Member]
Ending allowance balance, individually evaluated for impairment
Ending allowance balance, collectively evaluated for impairment	3,330	13,495	18,843
Ending allowance balance	3,330	13,495	18,843	$ 378,978
Ending loan balance, individually evaluated for impairment
Ending loan balance, collectively evaluated for impairment	14,977,309	16,747,861	16,490,737
Ending loan balance	$ 14,977,309	$ 16,747,861	$ 16,490,737

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Note 6 - Premises and Equipment (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Depreciation	$ 1,647,813	$ 1,574,249	$ 1,657,229
Operating Leases, Rent Expense, Net	$ 427,000	$ 437,000	$ 560,000

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Note 6 - Premises and Equipment - Premises and Equipment (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Premise and Equipment, Gross	$ 50,375,861	$ 49,553,228
Accumulated Depreciation	(22,736,431)	(21,583,968)
	27,639,430	27,969,260
Land [Member]
Premise and Equipment, Gross	9,668,722	9,668,722
Building [Member]
Premise and Equipment, Gross	26,893,354	25,239,165
Furniture and Fixtures [Member]
Premise and Equipment, Gross	13,090,366	12,461,043
Leasehold Improvements [Member]
Premise and Equipment, Gross	655,166	653,939
Construction in Progress [Member]
Premise and Equipment, Gross	$ 68,253	$ 1,530,359

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Note 6 - Premises and Equipment - Future Minimum Rental Payments (Details)	Dec. 31, 2017 USD ($)
2018	$ 43,320
2019	42,000
2020	42,000
2021	42,000
2022 and Thereafter	38,500
	$ 207,820

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Note 7 - Other Real Estate Owned (Details Textual) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Other Real Estate	$ 4,256,469	$ 6,439,226	$ 8,839,103	$ 10,401,832
Other Real Estate, Foreclosed Assets, and Repossessed Assets	479,352
Mortgage Loans in Process of Foreclosure, Amount	$ 183,588

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Note 7 - Other Real Estate Owned - Change in OREO (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Balance, Beginning of Year	$ 6,439,226	$ 8,839,103	$ 10,401,832
Additions	1,724,936	5,664,554	7,536,165
Sales of OREO	(3,786,567)	(7,416,293)	(8,054,675)
Loss on Sale	212,641	(146,402)	(591,071)
Provision for Losses	(333,767)	(501,736)	(453,148)
Balance, End of Year	$ 4,256,469	$ 6,439,226	$ 8,839,103

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Note 8 - Other Intangible Assets (Details Textual) - Core Deposits [Member] - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Amortization of Intangible Assets	$ 35,749	$ 35,749	$ 35,748
Annual Rate of Amortization Expense	$ 35,749

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Note 8 - Other Intangible Assets - Analysis of the Core Deposit Intangible Activity (Details) - Core Deposits [Member] - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Acquired Intangible Assets, Gross, Balance	$ 1,056,693	$ 1,056,693	$ 1,056,693
Acquired Intangible Assets, Accumulated Amortization	(1,011,927)	(976,178)	(940,429)
Acquired Intangible Assets, Net	44,766	80,515	116,264
Amortization Expense	$ (35,749)	$ (35,749)	$ (35,748)

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Note 9 - Income Taxes (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability	$ 2,040,946		$ 2,040,946
Federal Income Tax Expense (Benefit), Continuing Operations			$ 6,777,453	$ 3,851,333	$ 3,787,803
Scenario, Forecast [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%

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Note 9 - Income Taxes - Components of Income Tax (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current Federal Expense		$ 3,943,495	$ 3,629,213	$ 3,162,367
Deferred Federal Expense		793,012	222,120	625,436
Deferred Tax Expense from Tax Rate Changes	$ 2,040,946	2,040,946
Federal Income Tax Expense		6,777,453	3,851,333	3,787,803
Current State Income Tax Expense
Federal and State Income Tax Expense		$ 6,777,453	$ 3,851,333	$ 3,787,803

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Note 9 - Income Taxes - Difference Between Financial Statement Tax Expense and Amount Computed by Applying Statutory Federal Tax Rate to Income Before Income Taxes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statutory Federal Income Taxes	$ 4,954,199	$ 4,283,394	$ 4,134,570
Tax-Exempt Interest	(102,345)	(109,759)	(83,903)
Income from Cash Value Life Insurance, net of premiums	(198,730)	(182,532)	(232,988)
Meal and Entertainment Disallowance	14,354	16,813	21,600
Other	69,029	(156,583)	(51,476)
Tax Expense from Tax Rate Changes	2,040,946
Federal Income Tax Expense	$ 6,777,453	$ 3,851,333	$ 3,787,803

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Note 9 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Deferred Tax Assets
Allowance for Loan Losses	$ 1,576,577	$ 3,033,920
Other Real Estate	304,813	688,162
Deferred Compensation	161,000	280,704
Investments	210,000	340,000
Goodwill	76,058	167,666
Other	237,591	379,304
	2,566,039	4,889,756
Deferred Tax Liabilities
Premises and Equipment	(995,190)	(1,553,460)
Other	(2,585)	(4,185)
	(997,775)	(1,557,645)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)	1,725,708	2,587,163
Net Deferred Tax Assets	$ 3,293,972	$ 5,919,274

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Note 10 - Deposits (Details Textual) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Deposit Liabilities Reclassified as Loans Receivable	$ 475,161	$ 413,563
Interest-bearing Domestic Deposit, Brokered	46,328,995	49,303,139
Time Deposits, at or Above FDIC Insurance Limit	$ 38,919,469	$ 32,168,191

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Note 10 - Deposits - Components of Interest-bearing Deposits (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Interest-Bearing Demand	$ 458,717,332	$ 448,003,985
Savings	78,172,441	70,066,140
Time, $250,000 and Over	38,919,469	32,168,191
Other Time	301,248,235	335,059,579
	$ 877,057,477	$ 885,297,895

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Note 10 - Deposits - Scheduled Maturities of Certificates of Deposit (Details)	Dec. 31, 2017 USD ($)
2018	$ 255,574,623
2019	41,210,289
2020	22,116,817
2021	11,206,127
2022 and Thereafter	10,059,848
	$ 340,167,704

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Note 11 - Other Borrowed Money (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Nov. 30, 2017	Mar. 31, 2017	Dec. 31, 2017
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			$ 109,771,074
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds			252,395,250
Federal Home Loan Bank, Advances, Maturities Summary, Fixed Rate			13,000,000
Federal Home Loan Bank, Advances, Maturities Summary, Floating Rate			33,000,000
Line of Credit Facility, Current Borrowing Capacity			43,500,000
Long-term Line of Credit			0
Notes Payable to Banks [Member]
Short-term Debt		$ 5,000,000
Debt Instrument, Term		1 year
Repayments of Short-term Debt	$ 3,500,000
Notes Payable to Banks [Member] | Other Borrowings [Member]
Short-term Debt			1,500,000
Notes Payable to Banks [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate		0.75%
Debt Instrument, Interest Rate, Stated Percentage		5.25%
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%

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Note 11 - Other Borrowed Money - Summary of Other Borrowed Money (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Federal Home Loan Bank Advances	$ 46,000,000	$ 46,000,000
Other Borrowings	1,500,000
	$ 47,500,000	$ 46,000,000

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Note 11 - Other Borrowed Money - Aggregate Stated Maturities (Details) - Other Borrowings [Member]	Dec. 31, 2017 USD ($)
2018	$ 4,000,000
2019	5,000,000
2020	2,500,000
2021
2022	27,000,000
2023 and Thereafter	9,000,000
	$ 47,500,000

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Note 12 - Subordinated Debentures (Trusted Preferred Securities) - Schedule of Subordinated Debentures (Details) - Trust Preferred Securities Subject to Mandatory Redemption [Member]	12 Months Ended
	Dec. 31, 2017 USD ($)
Colony Bankcorp Statutory Trust III [Member]
Issuance date	Jun. 17, 2004
Debt amount	$ 4,640
Total interest rate	4.28042%
Maturity date	Jun. 14, 2034
5 year call option	Jun. 17, 2009
Colony Bankcorp Statutory Trust III [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.60042%
Added points	2.68%
Colony Bankcorp Capital Trust I [Member]
Issuance date	Apr. 13, 2006
Debt amount	$ 5,155
Total interest rate	3.19465%
Maturity date	Apr. 13, 2036
5 year call option	Apr. 13, 2011
Colony Bankcorp Capital Trust I [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.69465%
Added points	1.50%
Colony Bankcorp Capital Trust II [Member]
Issuance date	Mar. 12, 2007
Debt amount	$ 9,279
Total interest rate	3.34465%
Maturity date	Mar. 12, 2037
5 year call option	Mar. 12, 2012
Colony Bankcorp Capital Trust II [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.69465%
Added points	1.65%
Colony Bankcorp Capital Trust III [Member]
Issuance date	Sep. 14, 2007
Debt amount	$ 5,155
Total interest rate	2.77796%
Maturity date	Sep. 14, 2037
5 year call option	Sep. 14, 2012
Colony Bankcorp Capital Trust III [Member] | London Interbank Offered Rate (LIBOR) [Member]
3 month LIBOR rate	1.37796%
Added points	1.40%

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Note 13 - Preferred Stock (Details Textual) - $ / shares		12 Months Ended
	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Preferred Stock, Shares Outstanding		0	9,360
Preferred Stock, Dividend Rate, Percentage		9.00%	9.00%	9.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		500,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 8.40
Series A Preferred Stock [Member]
Preferred Stock, Shares Outstanding		0	9,360
Stock Redeemed or Called During Period, Shares	9,360	9,360	8,661	9,979
Preferred Stock, Redemption Price Per Share	$ 1,000		$ 1,000	$ 1,000

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Note 14 - Employee Benefit Plan (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee Service Period	6 years
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 686,580	$ 408,303	$ 385,453

XML

Note 15 - Commitments and Contingencies (Details Textual)	12 Months Ended
	Dec. 31, 2017
Expiration Period Of Letter Of Credit Issued	1 year

XML

Note 15 - Commitments and Contingencies - Financial Instruments Outstanding Whose Contract Amount Represents Credit Risk (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Standby Letters of Credit	$ 1,536,000	$ 1,551,000
Loan Origination Commitments [Member]
Commitments to Extend Credit	$ 96,374,000	$ 71,359,000

XML

Note 16 - Deferred Compensation Plan (Details Textual)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Minimum Age Requirement for Deferred Compensation	65
Deferred Compensation Liability, Current and Noncurrent	$ 766,667	$ 825,599
Defined Benefit Plan, Benefit Obligation, Benefits Paid	110,080	135,885
Pension and Other Postretirement Benefits Cost (Reversal of Cost)	55,572	57,125	$ 196,869
Fee Income Recognized With Deferred Compensation Plans	$ 233,064	$ 165,128	174,675
Bank Owned Life Insurance Income			$ 137,058

XML

Note 17 - Supplemental Cash Flow Information - Cash Payments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Interest Expense	$ 6,851,541	$ 6,529,615	$ 6,536,994
Income Taxes	$ 4,000,000	$ 3,365,000	$ 4,738,000

XML

Note 17 - Supplemental Cash Flow Information - Non-cash Financing and Investing Activities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Acquisitions of Real Estate Through Loan Foreclosures	$ 1,724,936	$ 5,664,554	$ 7,536,165
Change in Unrealized Gain (Loss) on AFS Investment Securities	$ (608,355)	$ (890,590)	$ 622,155

XML

Note 18 - Related Party Transactions - Activity of Related Party Loan (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Balance, Beginning	$ 1,025,543	$ 1,816,609
New Loans	1,050,393	2,379,026
Repayments	(1,106,606)	(3,170,092)
Transactions Due to Changes in Directors	(224,693)
Balance, Ending	$ 744,637	$ 1,025,543

XML

Note 19 - Fair Value of Financial Instruments and Fair Value Measurements (Details Textual)	Dec. 31, 2017
Discounted Rate To Account For Selling And Marketing Costs	10.00%

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Note 19 - Fair Value of Financial Instruments and Fair Value Measurements - Financial Instruments (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Investment Securities Available for Sale	$ 354,246,904	$ 323,657,870
Reported Value Measurement [Member]
Cash and Short-Term Investments	57,813,000	75,167,000
Investment Securities Available for Sale	354,247,000	323,658,000
Federal Home Loan Bank Stock	3,043,000	3,010,000
Loans, Net	757,281,000	744,999,000
Bank-Owned Life Insurance	17,089,000	15,419,000
Deposits	1,067,985,000	1,044,357,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	47,500,000	46,000,000
Estimate of Fair Value Measurement [Member]
Cash and Short-Term Investments	57,813,000	75,167,000
Investment Securities Available for Sale	354,247,000	323,658,000
Federal Home Loan Bank Stock	3,043,000	3,010,000
Loans, Net	757,163,000	745,240,000
Bank-Owned Life Insurance	17,089,000	15,419,000
Deposits	1,068,392,000	1,045,726,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	47,626,000	46,232,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and Short-Term Investments	57,813,000	75,167,000
Investment Securities Available for Sale
Federal Home Loan Bank Stock	3,043,000	3,010,000
Loans, Net
Bank-Owned Life Insurance	17,089,000	15,419,000
Deposits	727,818,000	677,129,000
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	346,950,000	323,082,000
Federal Home Loan Bank Stock
Loans, Net	752,287,000	738,288,000
Bank-Owned Life Insurance
Deposits	340,574,000	368,597,000
Subordinated Debentures	24,229,000	24,229,000
Other Borrowed Money	47,626,000	46,232,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and Short-Term Investments
Investment Securities Available for Sale	7,297,000	576,000
Federal Home Loan Bank Stock
Loans, Net	4,876,000	6,952,000
Bank-Owned Life Insurance
Deposits
Subordinated Debentures
Other Borrowed Money

XML

Note 19 - Fair Value of Financial Instruments and Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Available for sale securities, fair value	$ 354,246,904	$ 323,657,870
Fair Value, Measurements, Recurring [Member]
Available for sale securities, fair value	354,246,904	323,657,870
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities, fair value	346,949,407	323,081,486
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities, fair value	7,297,497	576,384
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities, fair value
Fair Value, Measurements, Nonrecurring [Member]
Impaired Loans	4,875,918	6,952,343
Other Real Estate	2,014,904	2,505,188
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired Loans
Other Real Estate
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired Loans	4,875,918	6,952,343
Other Real Estate	2,014,904	2,505,188
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired Loans
Other Real Estate
US Government Agencies Debt Securities [Member]
Available for sale securities, fair value	346,723,419	319,097,374
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities, fair value	346,723,419	319,097,374
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities, fair value	341,701,288	319,097,374
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities, fair value	5,022,131
US Government Agencies Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities, fair value
US States and Political Subdivisions Debt Securities [Member]
Available for sale securities, fair value	4,492,826	4,560,496
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities, fair value	4,492,826	4,560,496
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities, fair value	4,277,460	3,984,112
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities, fair value	215,366	576,384
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities, fair value
Corporate Debt Securities [Member]
Available for sale securities, fair value	2,060,000
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities, fair value	2,060,000
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities, fair value
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Available for sale securities, fair value	2,060,000
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Available for sale securities, fair value
Asset-backed Securities [Member]
Available for sale securities, fair value	970,659
Asset-backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Available for sale securities, fair value	970,659
Asset-backed Securities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Available for sale securities, fair value	$ 970,659

XML

Note 19 - Fair Value of Financial Instruments and Fair Value Measurements - Quantitative Information for Financial Instruments Measured at Fair Value (Details) - Real Estate Portfolio Segment [Member] - Fair Value, Inputs, Level 3 [Member] - Fair Value, Measurements, Nonrecurring [Member] - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Commercial Construction [Member] | Market Approach Valuation Technique [Member]
Assets measured at fair value	$ 427,433	$ 51,161
Commercial Construction [Member] | Market Approach Valuation Technique [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(16.00%)	(5.00%)
Fair value inputs, management adjustments	0.00%	0.00%
Commercial Construction [Member] | Market Approach Valuation Technique [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	1975.00%	99.00%
Fair value inputs, management adjustments	10.00%	10.00%
Commercial Construction [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	979.50%	47.00%
Fair value inputs, management adjustments	5.00%	5.00%
Residential [Member] | Market Approach Valuation Technique [Member]
Assets measured at fair value	$ 81,736	$ 1,105,312
Residential [Member] | Market Approach Valuation Technique [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(43.30%)	(22.00%)
Fair value inputs, management adjustments	0.00%	0.00%
Residential [Member] | Market Approach Valuation Technique [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	83.30%	0.00%
Fair value inputs, management adjustments	25.00%	40.00%
Residential [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	20.00%	(11.00%)
Fair value inputs, management adjustments	12.50%	20.00%
Commercial [Member] | Market Approach Valuation Technique [Member]
Assets measured at fair value		$ 5,445,192
Commercial [Member] | Market Approach Valuation Technique [Member] | Minimum [Member]
Fair value inputs, comparability adjustments		(14.08%)
Fair value inputs, management adjustments		0.00%
Commercial [Member] | Market Approach Valuation Technique [Member] | Maximum [Member]
Fair value inputs, comparability adjustments		24.62%
Fair value inputs, management adjustments		100.00%
Commercial [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments		5.27%
Fair value inputs, management adjustments		50.00%
Commercial [Member] | Income Approach Valuation Technique [Member]
Assets measured at fair value	$ 4,016,742
Commercial [Member] | Income Approach Valuation Technique [Member] | Minimum [Member]
Fair value inputs, management adjustments	0.00%
Commercial [Member] | Income Approach Valuation Technique [Member] | Maximum [Member]
Fair value inputs, management adjustments	10.00%
Commercial [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, management adjustments	5.00%
Fair value inputs, capitalization rate	10.75%	10.67%
Farmland [Member] | Market Approach Valuation Technique [Member]
Assets measured at fair value	$ 350,007	$ 350,678
Farmland [Member] | Market Approach Valuation Technique [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(71.00%)	(27.00%)
Fair value inputs, management adjustments	10.00%	10.00%
Farmland [Member] | Market Approach Valuation Technique [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	88.70%	15.00%
Fair value inputs, management adjustments	75.00%	75.00%
Farmland [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	8.85%	(6.00%)
Fair value inputs, management adjustments	42.50%	42.50%
Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member]
Assets measured at fair value	$ 2,014,904	$ 2,505,188
Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member] | Minimum [Member]
Fair value inputs, comparability adjustments	(22.74%)	(50.80%)
Fair value inputs, management adjustments	5.44%	6.25%
Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member] | Maximum [Member]
Fair value inputs, comparability adjustments	15.00%	316.00%
Fair value inputs, management adjustments	87.24%	76.92%
Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, comparability adjustments	(3.87%)	132.60%
Fair value inputs, management adjustments	24.44%	36.31%
Other Real Estate Owned [Member] | Income Approach Valuation Technique [Member] | Weighted Average [Member]
Fair value inputs, capitalization rate	10.00%
Fair value inputs, discount rate		12.50%

XML

Note 19 - Fair Value of Financial Instruments and Fair Value Measurements - Fair Value Measurement Using Significant Unobservable Inputs (Details) - Available-for-sale Securities [Member] - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Balance, available for sale securities	$ 576,384	$ 930,311	$ 948,390
Transfers into Level 3
Transfers out of Level 3
Securities Purchased During the Year	7,069,649
Securities Matured During the Year	(360,000)	(330,000)
Loss on OTTI Impairment Included in Noninterest Income
Unrealized Gains(Losses) Included in Other Comprehensive Income	11,464	(23,927)	(18,079)
Balance, available for sale securities	$ 7,297,497	$ 576,384	$ 930,311

XML

Note 19 - Fair Value of Financial Instruments and Fair Value Measurements - Quantitative Information About Recurring Level 3 Fair Value Measurement (Details) - USD ($)		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016
US States and Political Subdivisions Debt Securities [Member]
Fair Value		$ 215,366	$ 576,384
Range Weighted Average	[1]
US Government Agencies Debt Securities [Member]
Fair Value		$ 5,022,131
Range Weighted Average	[1]
Corporate Debt Securities [Member]
Fair Value		$ 2,060,000
Range Weighted Average	[1]

[1] The Company relies on a third-party pricing service to value its 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 20 - Regulatory Capital Matters (Details Textual) - USD ($)		12 Months Ended
	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Jan. 01, 2016
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets Rule 1					0.625%
Increase in Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets					0.625%
Tier 1 Capital Conservation Buffer of Risk Weighted Assets					2.50%
Cash Dividends Paid to Parent Company by Consolidated Subsidiaries		$ 8,725,000	$ 9,100,000	$ 10,000,000
Series A Preferred Stock [Member]
Stock Redeemed or Called During Period, Shares	9,360	9,360	8,661	9,979

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Note 20 - Regulatory Capital Matters - Summary of Regulatory Capital Information (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Capital	$ 127,786	$ 130,785
Capital to Risk-Weighted Assets	15.56%	16.64%
Capital Required for Capital Adequacy	$ 65,718	$ 62,880
Capital Required for Capital Adequacy to Risk-Weighted Assets	8.00%	8.00%
Tier I Risk Based Capital	$ 120,279	$ 121,862
Tier I Risk Based Capital to Risk-Weighted Assets	14.64%	15.50%
Tier I Risk Based Capital Required for Capital Adequacy	$ 49,289	$ 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	$ 96,779	$ 89,002
Common Equity Tier I Risk Based Capital to Risk-Weighted Assets	11.78%	11.32%
Common Equity Tier I Risk Based Capital Required for Capital Adequacy	$ 36,967	$ 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	$ 120,279	$ 121,862
Tier I Leverage Capital to Average Assets	9.89%	10.29%
Tier I Leverage Capital Required for Capital Adequacy	$ 48,635	$ 47,368
Tier I Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Colony Bank [Member]
Capital	$ 127,470	$ 127,646
Capital to Risk-Weighted Assets	15.54%	16.26%
Capital Required for Capital Adequacy	$ 65,628	$ 62,796
Capital Required for Capital Adequacy to Risk-Weighted Assets	8.00%	8.00%
Capital Required to be Well Capitalized	$ 82,036	$ 78,495
Capital Required to be Well Capitalized to Risk-Weighted Assets	10.00%	10.00%
Tier I Risk Based Capital	$ 119,963	$ 118,723
Tier I Risk Based Capital to Risk-Weighted Assets	14.62%	15.12%
Tier I Risk Based Capital Required for Capital Adequacy	$ 49,221	$ 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	$ 65,628	$ 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	$ 119,963	$ 118,723
Common Equity Tier I Risk Based Capital to Risk-Weighted Assets	14.62%	15.12%
Common Equity Tier I Risk Based Capital Required for Capital Adequacy	$ 36,916	$ 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	$ 53,323	$ 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	$ 119,963	$ 118,723
Tier I Leverage Capital to Average Assets	9.88%	10.04%
Tier I Leverage Capital Required for Capital Adequacy	$ 48,566	$ 47,290
Tier I Leverage Capital Required for Capital Adequacy to Average Assets	4.00%	4.00%
Tier I Leverage Capital Required to Be Well Capitalized	$ 60,708	$ 59,113
Tier I Leverage Capital Required to Be Well Capitalized to Average Assets	5.00%	5.00%

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Note 21 - Financial Information of Colony Bankcorp, Inc. (Parent Only) - Balance Sheets, Parent Only (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
ASSETS
Cash	$ 9,746,132	$ 8,509,530
Premises and Equipment	27,639,430	27,969,260
Other	28,431,150	29,118,555
Total Assets	1,232,755,317	1,210,441,617
Liabilities
Other Borrowed Money	47,500,000	46,000,000
Other	2,718,249	2,468,356
Subordinated Debentures	24,229,000	24,229,000
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; 10,000,000 Shares Authorized, 0 and 9,360 Shares Issued and Outstanding as of December 31, 2017 and 2016		9,360,000
Common Stock, Par Value $1; 20,000,000 Shares Authorized, 8,439,258 Shares Issued and Outstanding as of December 31, 2017 and 2016	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	59,230,260	51,465,521
Accumulated Other Comprehensive Loss, Net of Tax	(6,491,949)	(5,022,140)
	90,322,663	93,387,733	$ 95,456,622	$ 99,027,312
Total Liabilities and Stockholders’ Equity	1,232,755,317	1,210,441,617
Parent Company [Member]
ASSETS
Cash	910,239	2,307,008
Premises and Equipment	1,099,626	1,074,884
Investment in Subsidiary, at Equity	114,235,955	114,478,277
Other	24,458	20,990
Total Assets	116,270,278	117,881,159
Liabilities
Other Borrowed Money	1,500,000
Dividends Payable		105,300
Other	218,615	159,126
	1,718,615	264,426
Subordinated Debentures	24,229,000	24,229,000
Stockholders’ Equity
Preferred Stock, Stated Value $1,000; 10,000,000 Shares Authorized, 0 and 9,360 Shares Issued and Outstanding as of December 31, 2017 and 2016		9,360,000
Common Stock, Par Value $1; 20,000,000 Shares Authorized, 8,439,258 Shares Issued and Outstanding as of December 31, 2017 and 2016	8,439,258	8,439,258
Paid-In Capital	29,145,094	29,145,094
Retained Earnings	59,230,260	51,465,521
Accumulated Other Comprehensive Loss, Net of Tax	(6,491,949)	(5,022,140)
	90,322,663	93,387,733
Total Liabilities and Stockholders’ Equity	$ 116,270,278	$ 117,881,159

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Note 21 - Financial Information of Colony Bankcorp, Inc. (Parent Only) - Balance Sheets, Parent Only (Details) (Parentheticals) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Preferred stock, stated value (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	9,360
Preferred stock, shares outstanding (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
Common stock, shares outstanding (in shares)	8,439,258	8,439,258
Parent Company [Member]
Preferred stock, stated value (in dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	9,360
Preferred stock, shares outstanding (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
Common stock, shares outstanding (in shares)	8,439,258	8,439,258

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Note 21 - Financial Information of Colony Bankcorp, Inc. (Parent Only) - Statements of Operations, Parent Only (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Salaries and Employee Benefits	$ 19,222,594	$ 18,482,693	$ 17,589,631
Income Before Taxes and Equity in Undistributed Earnings of Subsidiary	14,528,431	12,524,543	12,160,500
Income Tax Benefits	(6,777,453)	(3,851,333)	(3,787,803)
Net Income	7,750,978	8,673,210	8,372,697
Preferred Stock Dividends	210,600	1,493,310	2,375,010
Net Income Available to Common Stockholders	7,540,378	7,179,900	5,997,687
Parent Company [Member]
Dividends from Subsidiary	8,746,882	9,118,104	10,015,147
Management Fees	601,080	601,080	581,334
Other	97,103	103,612	112,876
	9,445,065	9,822,796	10,709,357
Interest	900,113	601,567	503,286
Salaries and Employee Benefits	917,259	840,130	811,150
Other	604,166	554,434	666,872
	2,421,538	1,996,131	1,981,308
Income Before Taxes and Equity in Undistributed Earnings of Subsidiary	7,023,527	7,826,665	8,728,049
Income Tax Benefits	568,258	457,934	444,764
Income Before Equity in Undistributed Earnings of Subsidiary	7,591,785	8,284,599	9,172,813
Dividends Received in Excess of Earnings of Subsidiary			(800,116)
Equity in Undistributed Earnings of Subsidiary	159,193	388,611
Net Income	7,750,978	8,673,210	8,372,697
Preferred Stock Dividends	210,600	1,493,310	2,375,010
Net Income Available to Common Stockholders	$ 7,540,378	$ 7,179,900	$ 5,997,687

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Note 21 - Financial Information of Colony Bankcorp, Inc. (Parent Only) - Consolidated Statements of Comprehensive Income, Parent Company (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net Income	$ 7,750,978	$ 8,673,210	$ 8,372,697
Gains (Losses) on Securities Arising During the Year	(608,355)	(505,367)	610,689
Tax Effect	(206,841)	(171,825)	207,634
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	(401,514)	(587,789)	410,623
Comprehensive Income	7,349,464	8,085,421	8,783,320
Parent Company [Member]
Net Income	7,750,978	8,673,210	8,372,697
Gains (Losses) on Securities Arising During the Year	(608,355)	(505,367)	610,689
Tax Effect	206,841	171,825	(207,634)
Realized (Gains) Losses on Sale of AFS Securities		(385,223)	11,466
Tax Effect		130,976	(3,898)
Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	(401,514)	(587,789)	410,623
Comprehensive Income	$ 7,349,464	$ 8,085,421	$ 8,783,320

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Note 21 - Financial Information of Colony Bankcorp, Inc. (Parent Only) - Statements of Cash Flows, Parent Company (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash Flows from Operating Activities
Net Income	$ 7,750,978	$ 8,673,210	$ 8,372,697
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Interest Payable	21,188	(46,284)	32,253
	12,545,135	13,388,491	14,067,287
Cash Flows from Investing Activities
Purchase of Premises and Equipment	(1,344,898)	(3,259,859)	(3,189,969)
Cash Flows from Financing Activities
Proceeds from Other Borrowed Money	10,015,500	10,000,000	27,000,000
Principal Payments on Other Borrowed Money	(8,515,500)	(4,000,000)	(27,000,000)
Dividends Paid on Common Stock	(843,934)
Dividends Paid on Preferred Stock	(315,900)	(1,590,746)	(2,487,274)
Redemption of Preferred Stock	(9,360,000)	(8,661,000)	(9,979,000)
	14,609,043	28,550,546	19,784,488
Increase (Decrease) in Cash	(5,676,968)	6,565,458	(22,348,286)
Parent Company [Member]
Cash Flows from Operating Activities
Net Income	7,750,978	8,673,210	8,372,697
Adjustments to Reconcile Net Income to Net Cash Provided from Operating Activities
Depreciation and Amortization	70,183	66,476	73,999
Equity in Undistributed Earnings of Subsidiary	(159,193)	(388,611)
Dividends Received in Excess of Earnings of Subsidiary			800,116
Interest Payable	17,887	5,367	23,072
Other	38,135	108,288	1,555,482
	7,717,990	8,464,730	10,825,366
Cash Flows from Investing Activities
Purchase of Premises and Equipment	(94,925)	(6,836)	(8,884)
Cash Flows from Financing Activities
Proceeds from Other Borrowed Money	5,000,000
Principal Payments on Other Borrowed Money	(3,500,000)
Dividends Paid on Common Stock	(843,934)
Dividends Paid on Preferred Stock	(315,900)	(1,590,746)	(2,487,274)
Redemption of Preferred Stock	(9,360,000)	(8,661,000)	(9,979,000)
	(9,019,834)	(10,251,746)	(12,466,274)
Increase (Decrease) in Cash	(1,396,769)	(1,793,852)	(1,649,792)
Cash, Beginning	2,307,008	4,100,860	5,750,652
Cash, Ending	$ 910,239	$ 2,307,008	$ 4,100,860

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Note 22 - Earnings Per Share - Summary of Earnings Per Share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator
Net Income Available to Common Stockholders	$ 7,540,378	$ 7,179,900	$ 5,997,687
Denominator
Weighted Average Shares Outstanding, Basic (in shares)	8,439,258	8,439,258	8,439,258
Stock Warrants (in shares)	194,323	74,037	19,203
Weighted-Average Number of Shares Outstanding for Diluted Earnings Per Common Share (in shares)	8,633,581	8,513,295	8,458,461
Earnings Per Share - Basic (in dollars per share)	$ 0.89	$ 0.85	$ 0.71
Earnings Per Share - Diluted (in dollars per share)	$ 0.87	$ 0.84	$ 0.71

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Note 23 - Accumulated Other Comprehensive Income (Loss) - Changes for Unrealized Gains and Losses Securities Available for Sale (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Balance	$ 93,387,733	$ 95,456,622	$ 99,027,312
Balance	90,322,663	93,387,733	95,456,622
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Balance	(5,022,140)	(4,434,351)	(4,844,974)
Other Comprehensive Income Before Reclassification	(401,514)	(333,542)	403,055
Amounts Reclassified from Accumulated Other Comprehensive Income		(254,247)	7,568
TCJ Act	(1,068,295)
Change in Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effects	(1,469,809)	(587,789)	410,623
Balance	$ (6,491,949)	$ (5,022,140)	$ (4,434,351)