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.