EXHIBIT NO. 13

MCNAIR, MCLEMORE, MIDDLEBROOKS & CO., LLP

CERTIFIED PUBLIC ACCOUNTANTS

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

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

www.mmmcpa.com



|                                        |  |                              
|--------------------------------------- |  | -----------------------------
|RALPH S. McLEMORE, SR., CPA (1902-1981) |  |                              
|SIDNEY B. McNAIR, CPA (1913-1992)       |  |                              
|                                        | 
|SIDNEY E. MIDDLEBROOKS, CPA, PC         |  | RICHARD A. WHITTEN, JR., CPA 
|RAY C. PEARSON, CPA                     |  | ELIZABETH WARE HARDIN, CPA   
|J. RANDOLPH NICHOLS, CPA                |  | CAROLINE E. GRIFFIN, CPA     
|WILLIAM H. EPPS, JR., CPA               |  | RONNIE K. GILBERT, CPA       
|RAYMOND A. PIPPIN, JR., CPA             |  | RON C. DOUTHIT, CPA          
|JERRY A. WOLFE, CPA                     |  | CHARLES A. FLETCHER, CPA     
|W. E. BARFIELD, JR., CPA                |  | MARJORIE HUCKABEE CARTER, CPA
|HOWARD S. HOLLEMAN, CPA                 |  | BRYAN A. ISGETT, CPA         
|F. GAY McMICHAEL, CPA                   |  | DAVID PASCHAL MUSE, JR., CPA 

March 15, 2007

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Colony Bankcorp, Inc.

We have audited the accompanying consolidated balance sheets of Colony Bankcorp, Inc. and Subsidiaries as of December 31, 2006 and 2005 and the related
consolidated statements of income, comprehensive income, changes in stockholders equity and cash flows for each of the years in the three-year period ended December 31, 2006. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our
audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Colony Bankcorp, Inc. and Subsidiaries as of December 31, 2006 and 2005, and the results of its operations
and its cash flows for each of the years in the three-year period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Colony Bankcorp, Inc. and
Subsidiaries internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO), and our report dated March 15, 2007 expressed an unqualified opinion on managements assessment of internal control over financial reporting and an unqualified opinion on the effectiveness of internal control over financial
reporting.

LOGO

McNAIR, McLEMORE, MIDDLEBROOKS & CO., LLP



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MCNAIR, MCLEMORE,
MIDDLEBROOKS & CO., LLP

CERTIFIED PUBLIC ACCOUNTANTS

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

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

www.mmmcpa.com



|                                        |  |                              
|--------------------------------------- |  | -----------------------------
|RALPH S. McLEMORE, SR., CPA (1902-1981) |  |                              
|SIDNEY B. McNAIR, CPA (1913-1992)       |  |                              
|                                        | 
|SIDNEY E. MIDDLEBROOKS, CPA, PC         |  | RICHARD A. WHITTEN, JR., CPA 
|RAY C. PEARSON, CPA                     |  | ELIZABETH WARE HARDIN, CPA   
|J. RANDOLPH NICHOLS, CPA                |  | CAROLINE E. GRIFFIN, CPA     
|WILLIAM H. EPPS, JR., CPA               |  | RONNIE K. GILBERT, CPA       
|RAYMOND A. PIPPIN, JR., CPA             |  | RON C. DOUTHIT, CPA          
|JERRY A. WOLFE, CPA                     |  | CHARLES A. FLETCHER, CPA     
|W. E. BARFIELD, JR., CPA                |  | MARJORIE HUCKABEE CARTER, CPA
|HOWARD S. HOLLEMAN, CPA                 |  | BRYAN A. ISGETT, CPA         
|F. GAY McMICHAEL, CPA                   |  | DAVID PASCHAL MUSE, JR., CPA 

March 15, 2007

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Colony Bankcorp, Inc.

We have audited managements assessment, included in the accompanying managements report on internal controls, that Colony Bankcorp, Inc. and Subsidiaries
maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Colony Bankcorp, Inc.s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to
express an opinion on managements assessment and an opinion on the effectiveness of the Companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating managements assessment, testing and
evaluating the design and operating effectiveness of internal control and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

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.

In our opinion, managements assessment that Colony Bankcorp, Inc. and Subsidiaries maintained effective internal control over financial reporting as of
December 31, 2006 is fairly stated, in all material respects, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion,
Colony Bankcorp, Inc. and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of Colony Bankcorp, Inc. and Subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of income, comprehensive income, changes in
stockholders equity and cash flows for each of the three years in the period ended December 31, 2006 and our report dated March 15, 2007, expressed an unqualified opinion.

LOGO

McNAIR, McLEMORE, MIDDLEBROOKS & CO., LLP



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COLONY BANKCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31

ASSETS



|                                                                                                             |  |      |               |   |      |   |               |  
|------------------------------------------------------------------------------------------------------------ |  | ---- | ------------- | - | ---- | - | ------------- | -
|                                                                                                             |  | 2006 |               |   | 2005 |  
|Cash and Cash Equivalents                                                                                    |  |      |               |   |      |   |               |  
|Cash and Due from Banks                                                                                      |  | $    | 27,231,017    |   |      | $ | 21,605,731    |  
|Federal Funds Sold                                                                                           |  |      | 45,149,434    |   |      |   | 57,456,211    |  
|                                                                                                             |  |      |               |   |      |   |               |  
|                                                                                                             |  |      | 72,380,451    |   |      |   | 79,061,942    |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Interest-Bearing Deposits                                                                                    |  |      | 3,075,481     |   |      |   | 1,635,414     |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Investment Securities                                                                                        |  |      |               |   |      |   |               |  
|Available for Sale, at Fair Value                                                                            |  |      | 149,236,225   |   |      |   | 124,246,264   |  
|Held to Maturity, at Cost (Fair Value of $70,874 and $79,286 as of December 31, 2006 and 2005, Respectively) |  |      | 70,874        |   |      |   | 79,286        |  
|                                                                                                             |  |      |               |   |      |   |               |  
|                                                                                                             |  |      | 149,307,099   |   |      |   | 124,325,550   |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Federal Home Loan Bank Stock, at Cost                                                                        |  |      | 5,086,800     |   |      |   | 5,034,200     |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Loans                                                                                                        |  |      | 942,273,015   |   |      |   | 859,117,396   |  
|Allowance for Loan Losses                                                                                    |  |      | (11,989,359   | ) |      |   | (10,761,915   | )
|Unearned Interest and Fees                                                                                   |  |      | (501,143      | ) |      |   | (302,229      | )
|                                                                                                             |  |      |               |   |      |   |               |  
|                                                                                                             |  |      | 929,782,513   |   |      |   | 848,053,252   |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Premises and Equipment                                                                                       |  |      | 27,453,132    |   |      |   | 25,675,832    |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Other Real Estate                                                                                            |  |      | 970,320       |   |      |   | 2,170,145     |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Goodwill                                                                                                     |  |      | 2,412,338     |   |      |   | 2,412,338     |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Other Intangible Assets                                                                                      |  |      | 438,714       |   |      |   | 519,915       |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Other Assets                                                                                                 |  |      | 22,597,010    |   |      |   | 19,449,748    |  
|                                                                                                             |  |      |               |   |      |   |               |  
|Total Assets                                                                                                 |  | $    | 1,213,503,858 |   |      | $ | 1,108,338,336 |  
|                                                                                                             |  |      |               |   |      |   |               |  

The accompanying notes are an integral part of these balance sheets.



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COLONY BANKCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31

LIABILITIES AND STOCKHOLDERS EQUITY



|                                                                                                                                                       |  |      |               |   |      |   |               |  
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------------- | - | ---- | - | ------------- | -
|                                                                                                                                                       |  | 2006 |               |   | 2005 |  
|Deposits                                                                                                                                               |  |      |               |   |      |   |               |  
|Noninterest-Bearing                                                                                                                                    |  | $    | 77,335,680    |   |      | $ | 78,778,141    |  
|Interest-Bearing                                                                                                                                       |  |      | 965,110,219   |   |      |   | 865,586,513   |  
|                                                                                                                                                       |  |      |               |   |      |   |               |  
|                                                                                                                                                       |  |      | 1,042,445,899 |   |      |   | 944,364,654   |  
|                                                                                                                                                       |  |      |               |   |      |   |               |  
|Borrowed Money                                                                                                                                         |  |      |               |   |      |   |               |  
|Federal Funds Purchased                                                                                                                                |  |      | 1,070,000     |   |      |   |              |  
|Subordinated Debentures                                                                                                                                |  |      | 24,229,000    |   |      |   | 19,074,000    |  
|Other Borrowed Money                                                                                                                                   |  |      | 61,500,000    |   |      |   | 70,226,205    |  
|                                                                                                                                                       |  |      |               |   |      |   |               |  
|                                                                                                                                                       |  |      | 86,799,000    |   |      |   | 89,300,205    |  
|                                                                                                                                                       |  |      |               |   |      |   |               |  
|Other Liabilities                                                                                                                                      |  |      | 7,647,798     |   |      |   | 6,545,485     |  
|                                                                                                                                                       |  |      |               |   |      |   |               |  
|Commitments and Contingencies                                                                                                                          |  |      |               |   |      |   |               |  
|                                                                                                                                                       |  |     
|Stockholders Equity                                                                                                                                   |  |      |               |   |      |   |               |  
|Common Stock, Par Value $1 a Share; Authorized 20,000,000 Shares, Issued 7,189,937 and 7,181,320 Shares as of December 31, 2006 and 2005,
Respectively |  |      | 7,189,937     |   |      |   | 7,181,320     |  
|Paid-In Capital                                                                                                                                        |  |      | 24,257,392    |   |      |   | 23,999,775    |  
|Retained Earnings                                                                                                                                      |  |      | 46,416,571    |   |      |   | 38,601,441    |  
|Restricted Stock  Unearned Compensation                                                                                                               |  |      | (277,918      | ) |      |   | (301,883      | )
|Accumulated Other Comprehensive Loss, Net of Tax                                                                                                       |  |      | (974,821      | ) |      |   | (1,352,661    | )
|                                                                                                                                                       |  |      |               |   |      |   |               |  
|                                                                                                                                                       |  |      | 76,611,161    |   |      |   | 68,127,992    |  
|                                                                                                                                                       |  |      |               |   |      |   |               |  
|Total Liabilities and Stockholders Equity                                                                                                             |  | $    | 1,213,503,858 |   |      | $ | 1,108,338,336 |  
|                                                                                                                                                       |  |      |               |   |      |   |               |  

The accompanying notes are an integral part of these balance sheets.



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COLONY BANKCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31



|                                                    |  |      |            |      |   |            |  |   |           
|--------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ----------
|                                                    |  | 2006 |            | 2005 |   | 2004      
|Interest Income                                     |  |      |            |      |   |            |  |   |           
|Loans, Including Fees                               |  | $    | 75,086,845 |      | $ | 58,308,810 |  | $ | 47,503,663
|Federal Funds Sold                                  |  |      | 2,034,823  |      |   | 1,266,120  |  |   | 418,957   
|Deposits with Other Banks                           |  |      | 133,321    |      |   | 86,121     |  |   | 74,888    
|Investment Securities                               |  |      |            |      |   |            |  |   |           
|U. S. Government Agencies                           |  |      | 5,198,384  |      |   | 3,412,711  |  |   | 3,287,948 
|State, County and Municipal                         |  |      | 381,085    |      |   | 240,864    |  |   | 283,857   
|Corporate Obligations                               |  |      | 162,377    |      |   | 138,559    |  |   | 224,366   
|Other Investments                                   |  |      | 3,808      |      |   | 3,223      |  |   | 27,617    
|Dividends on Other Investments                      |  |      | 278,974    |      |   | 177,335    |  |   | 108,748   
|                                                    |  |      |            |      |   |            |  |   |           
|                                                    |  |      | 83,279,617 |      |   | 63,633,743 |  |   | 51,930,044
|                                                    |  |      |            |      |   |            |  |   |           
|Interest Expense                                    |  |      |            |      |   |            |  |   |           
|Deposits                                            |  |      | 36,610,386 |      |   | 22,590,018 |  |   | 15,174,581
|Federal Funds Purchased                             |  |      | 28,853     |      |   | 16,259     |  |   | 4,927     
|Borrowed Money                                      |  |      | 4,752,642  |      |   | 3,873,730  |  |   | 3,203,767 
|                                                    |  |      |            |      |   |            |  |   |           
|                                                    |  |      | 41,391,881 |      |   | 26,480,007 |  |   | 18,383,275
|                                                    |  |      |            |      |   |            |  |   |           
|Net Interest Income                                 |  |      | 41,887,736 |      |   | 37,153,736 |  |   | 33,546,769
|                                                    |  |      |           
|Provision for Loan Losses                           |  |      | 3,987,000  |      |   | 3,443,750  |  |   | 3,469,000 
|                                                    |  |      |            |      |   |            |  |   |           
|Net Interest Income After Provision for Loan Losses |  |      | 37,900,736 |      |   | 33,709,986 |  |   | 30,077,769
|                                                    |  |      |            |      |   |            |  |   |           
|Noninterest Income                                  |  |      |            |      |   |            |  |   |           
|Service Charges on Deposits                         |  |      | 4,580,181  |      |   | 4,127,889  |  |   | 4,232,798 
|Other Service Charges, Commissions and Fees         |  |      | 831,472    |      |   | 708,276    |  |   | 547,513   
|Mortgage Fee Income                                 |  |      | 767,803    |      |   | 493,458    |  |   | 984,343   
|Other                                               |  |      | 1,170,725  |      |   | 822,337    |  |   | 659,007   
|                                                    |  |      |            |      |   |            |  |   |           
|                                                    |  |      | 7,350,181  |      |   | 6,151,960  |  |   | 6,423,661 
|                                                    |  |      |            |      |   |            |  |   |           
|Noninterest Expenses                                |  |      |            |      |   |            |  |   |           
|Salaries and Employee Benefits                      |  |      | 16,870,488 |      |   | 14,127,949 |  |   | 12,594,057
|Occupancy and Equipment                             |  |      | 4,034,909  |      |   | 3,777,759  |  |   | 3,530,745 
|Directors Fees                                     |  |      | 638,721    |      |   | 616,534    |  |   | 543,992   
|Legal and Professional Fees                         |  |      | 1,070,605  |      |   | 764,896    |  |   | 706,940   
|Other Real Estate and Repossession Expense          |  |      | 162,384    |      |   | 126,630    |  |   | 206,718   
|Securities Losses                                   |  |      |           |      |   |           |  |   | 30,958    
|Loss on Sale of Other Real Estate                   |  |      | 20,263     |      |   | 185,379    |  |   | 549,636   
|Other                                               |  |      | 7,084,189  |      |   | 6,476,263  |  |   | 6,107,596 
|                                                    |  |      |            |      |   |            |  |   |           
|                                                    |  |      | 29,881,559 |      |   | 26,075,410 |  |   | 24,270,642
|                                                    |  |      |            |      |   |            |  |   |           
|Income Before Income Taxes                          |  |      | 15,369,358 |      |   | 13,786,536 |  |   | 12,230,788
|                                                    |  |      |           
|Income Taxes                                        |  |      | 5,217,363  |      |   | 4,809,320  |  |   | 4,161,494 
|                                                    |  |      |            |      |   |            |  |   |           
|Net Income                                          |  | $    | 10,151,995 |      | $ | 8,977,216  |  | $ | 8,069,294 
|                                                    |  |      |            |      |   |            |  |   |           
|Net Income Per Share of Common Stock                |  |      |            |      |   |            |  |   |           
|Basic                                               |  | $    | 1.41       |      | $ | 1.25       |  | $ | 1.13      
|                                                    |  |      |            |      |   |            |  |   |           
|Diluted                                             |  | $    | 1.41       |      | $ | 1.25       |  | $ | 1.13      
|                                                    |  |      |            |      |   |            |  |   |           
|Cash Dividends Declared Per Share of Common Stock   |  | $    | 0.325      |      | $ | 0.285      |  | $ | 0.252     
|                                                    |  |      |            |      |   |            |  |   |           
|Weighted Average Shares Outstanding                 |  |      | 7,176,894  |      |   | 7,168,406  |  |   | 7,131,028 
|                                                    |  |      |            |      |   |            |  |   |           

The accompanying notes are an integral part of these statements.



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COLONY BANKCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER
31



|                                                     |  |      |            |      |   |           |      |  |   |           |  
|---------------------------------------------------- |  | ---- | ---------- | ---- | - | --------- | ---- |  | - | --------- | -
|                                                     |  | 2006 |            | 2005 |   |           | 2004 | 
|Net Income                                           |  | $    | 10,151,995 |      | $ | 8,977,216 |      |  | $ | 8,069,294 |  
|                                                     |  |      |            |      |   |           |      |  |   |           |  
|Other Comprehensive Income, Net of Tax               |  |      |            |      |   |           |      |  |   |           |  
|Gains (Losses) on Securities Arising During the Year |  |      | 377,840    |      |   | (755,824  | )    |  |   | (638,921  | )
|Reclassification Adjustment                          |  |      |           |      |   |          |      |  |   | 20,432    |  
|                                                     |  |      |            |      |   |           |      |  |   |           |  
|Unrealized Gains (Losses) on Securities              |  |      | 377,840    |      |   | (755,824  | )    |  |   | (618,489  | )
|                                                     |  |      |            |      |   |           |      |  |   |           |  
|Comprehensive Income                                 |  | $    | 10,529,835 |      | $ | 8,221,392 |      |  | $ | 7,450,805 |  
|                                                     |  |      |            |      |   |           |      |  |   |           |  

The accompanying notes are an integral part of these statements.



- 6 -



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COLONY BANKCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

FOR THE YEARS
ENDED DECEMBER 31, 2006, 2005 AND 2004



|                                                                                 |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   |            |   |  |   |            |  
|-------------------------------------------------------------------------------- |  | ------------- | - |  | ----------- | --------- | - | --------------- | - | ---------- | ---------------- |  | - | ---------------------------------------- | - |  | ------------------------------------- | -------- | - | ----- | - | ---------- | - |  | - | ---------- | -
|                                                                                 |  | Shares Issued |   |  | CommonStock |           |   | Paid-In Capital |   |            | RetainedEarnings |  |   | Restricted Stock - Unearned Compensation |   |  | Accumulated Other ComprehensiveIncome |          |   | Total |  
|Balance, December 31, 2003                                                       |  | 5,727,968     |   |  | $           | 5,727,968 |   |                 | $ | 23,498,550 |                  |  | $ | 26,857,379                               |   |  | $                                     | (129,874 | ) |       | $ | 21,652     |   |  | $ | 55,975,675 |  
|Issuance of Restricted Stock                                                     |  | 12,250        |   |  |             | 12,250    |   |                 |   | 235,200    |                  |  |   |                                          |   |  |                                       | (247,450 | ) |       |   |            |   |  |   |           |  
|Forfeiture of Restricted Stock                                                   |  | (1,875        | ) |  |             | (1,875    | ) |                 |   | (20,550    | )                |  |   |                                          |   |  |                                       | 22,425   |   |       |   |            |   |  |   |           |  
|Amortization of Unearned Compensation                                            |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       | 144,066  |   |       |   |            |   |  |   | 144,066    |  
|Unrealized Loss on Securities Available for Sale, Net of Tax Benefit of $414,263 |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   | (618,489   | ) |  |   | (618,489   | )
|Dividends Paid                                                                   |  |               |   |  |             |           |   |                 |   |            |                  |  |   | (1,807,583                               | ) |  |                                       |          |   |       |   |            |   |  |   | (1,807,583 | )
|                                                                                 |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   |            |   |  |   |            |  
|Net Income                                                                       |  |               |   |  |             |           |   |                 |   |            |                  |  |   | 8,069,294                                |   |  |                                       |          |   |       |   |            |   |  |   | 8,069,294  |  
|                                                                                 |  |               |   |  |             |           |  
|Balance, December 31, 2004                                                       |  | 5,738,343     |   |  |             | 5,738,343 |   |                 |   | 23,713,200 |                  |  |   | 33,119,090                               |   |  |                                       | (210,833 | ) |       |   | (596,837   | ) |  |   | 61,762,963 |  
|5 for 4 Stock Split Effected as a Stock Dividend                                 |  | 1,436,579     |   |  |             | 1,436,579 |   |                 |   |            |                  |  |   | (1,436,579                               | ) |  |                                       |          |   |       |   |            |   |  |   |           |  
|Issuance of Restricted Stock                                                     |  | 11,200        |   |  |             | 11,200    |   |                 |   | 369,600    |                  |  |   |                                          |   |  |                                       | (380,800 | ) |       |   |            |   |  |   |           |  
|Forfeiture of Restricted Stock                                                   |  | (4,802        | ) |  |             | (4,802    | ) |                 |   | (83,025    | )                |  |   |                                          |   |  |                                       | 87,827   |   |       |   |            |   |  |   |           |  
|Amortization of Unearned Compensation                                            |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       | 201,923  |   |       |   |            |   |  |   | 201,923    |  
|Unrealized Loss on Securities Available for Sale, Net of Tax Benefit of $389,364 |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   | (755,824   | ) |  |   | (755,824   | )
|Dividends Paid                                                                   |  |               |   |  |             |           |   |                 |   |            |                  |  |   | (2,058,286                               | ) |  |                                       |          |   |       |   |            |   |  |   | (2,058,286 | )
|Net Income                                                                       |  |               |   |  |             |           |   |                 |   |            |                  |  |   | 8,977,216                                |   |  |                                       |          |   |       |   |            |   |  |   | 8,977,216  |  
|                                                                                 |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   |            |   |  |   |            |  
|                                                                                 |  |               |   |  |             |           |  
|Balance, December 31, 2005                                                       |  | 7,181,320     |   |  |             | 7,181,320 |   |                 |   | 23,999,775 |                  |  |   | 38,601,441                               |   |  |                                       | (301,883 | ) |       |   | (1,352,661 | ) |  |   | 68,127,992 |  
|Issuance of Restricted Stock                                                     |  | 12,790        |   |  |             | 12,790    |   |                 |   | 303,123    |                  |  |   |                                          |   |  |                                       | (315,913 | ) |       |   |            |   |  |   |           |  
|Forfeiture of Restricted Stock                                                   |  | (4,173        | ) |  |             | (4,173    | ) |                 |   | (106,663   | )                |  |   |                                          |   |  |                                       | 110,836  |   |       |   |            |   |  |   |           |  
|Tax Benefit of Restricted Stock                                                  |  |               |   |  |             |           |   |                 |   | 61,157     |                  |  |   |                                          |   |  |                                       |          |   |       |   |            |   |  |   | 61,157     |  
|Amortization of Unearned Compensation                                            |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       | 229,042  |   |       |   |            |   |  |   | 229,042    |  
|Unrealized Gain on Securities Available for Sale, Net of Tax of $194,645         |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   | 377,840    |   |  |   | 377,840    |  
|Dividends Paid                                                                   |  |               |   |  |             |           |   |                 |   |            |                  |  |   | (2,336,865                               | ) |  |                                       |          |   |       |   |            |   |  |   | (2,336,865 | )
|Net Income                                                                       |  |               |   |  |             |           |   |                 |   |            |                  |  |   | 10,151,995                               |   |  |                                       |          |   |       |   |            |   |  |   | 10,151,995 |  
|                                                                                 |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   |            |   |  |   |            |  
|Balance, December 31, 2006                                                       |  | 7,189,937     |   |  | $           | 7,189,937 |   |                 | $ | 24,257,392 |                  |  | $ | 46,416,571                               |   |  | $                                     | (277,918 | ) |       | $ | (974,821   | ) |  | $ | 76,611,161 |  
|                                                                                 |  |               |   |  |             |           |   |                 |   |            |                  |  |   |                                          |   |  |                                       |          |   |       |   |            |   |  |   |            |  

The accompanying notes are an integral part of these statements.



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COLONY BANKCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31



|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|-------------------------------------------------------------------------------------------------- |  | ---- | ------------ | - | ---- | - | ------------ | ---- |  | - | ------------ | -
|                                                                                                   |  | 2006 |              |   | 2005 |   |              | 2004 | 
|Cash Flows from Operating Activities                                                               |  |      |              |   |      |   |              |      |  |   |              |  
|Net Income                                                                                         |  | $    | 10,151,995   |   |      | $ | 8,977,216    |      |  | $ | 8,069,294    |  
|Adjustments to Reconcile Net Income to Net                                                         |  |      |              |   |      |   |              |      |  |   |              |  
|Cash Provided from Operating Activities                                                            |  |      |              |   |      |   |              |      |  |   |              |  
|Depreciation                                                                                       |  |      | 1,933,290    |   |      |   | 1,903,242    |      |  |   | 1,754,053    |  
|Amortization and Accretion                                                                         |  |      | 720,446      |   |      |   | 1,307,710    |      |  |   | 1,122,970    |  
|Provision for Loan Losses                                                                          |  |      | 3,987,000    |   |      |   | 3,443,750    |      |  |   | 3,469,000    |  
|Deferred Income Taxes                                                                              |  |      | 112,518      |   |      |   | (546,891     | )    |  |   | (464,530     | )
|Securities Losses                                                                                  |  |      |             |   |      |   |             |      |  |   | 30,958       |  
|(Gain) Loss on Sale of Equipment                                                                   |  |      | 7,507        |   |      |   | (1,886       | )    |  |   | 13,110       |  
|(Gain) Loss on Sale of Other Real Estate and Repossessions                                         |  |      | (14,239      | ) |      |   | 34,339       |      |  |   | 535,973      |  
|Unrealized Loss on Other Real Estate                                                               |  |      | 32,773       |   |      |   | 150,000      |      |  |   | 1,000        |  
|Increase in Cash Surrender Value of Life Insurance                                                 |  |      | (185,850     | ) |      |   | (203,367     | )    |  |   | (225,825     | )
|Change In                                                                                          |  |      |              |   |      |   |              |      |  |   |              |  
|Loans Held for Sale                                                                                |  |      |             |   |      |   | 1,190,937    |      |  |   | 486,371      |  
|Interest Receivable                                                                                |  |      | (2,913,483   | ) |      |   | (1,566,643   | )    |  |   | (953,389     | )
|Prepaid Expenses                                                                                   |  |      | 87,542       |   |      |   | (122,165     | )    |  |   | 256,062      |  
|Interest Payable                                                                                   |  |      | 1,040,748    |   |      |   | 932,717      |      |  |   | 89,222       |  
|Accrued Expenses and Accounts Payable                                                              |  |      | 344,075      |   |      |   | 470,293      |      |  |   | 222,531      |  
|Other                                                                                              |  |      | (301,677     | ) |      |   | (94,880      | )    |  |   | 1,169,713    |  
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|                                                                                                   |  |      | 15,002,645   |   |      |   | 15,874,372   |      |  |   | 15,576,513   |  
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|Cash Flows from Investing Activities                                                               |  |      |              |   |      |   |              |      |  |   |              |  
|Interest-Bearing Deposits in Other Banks                                                           |  |      | (1,440,066   | ) |      |   | 1,593,274    |      |  |   | 8,386,014    |  
|Purchase of Investment Securities                                                                  |  |      |              |   |      |   |              |      |  |   |              |  
|Available for Sale                                                                                 |  |      | (48,498,815  | ) |      |   | (49,527,780  | )    |  |   | (39,055,855  | )
|Proceeds from Sale of Investment Securities                                                        |  |      |              |   |      |   |              |      |  |   |              |  
|Available for Sale                                                                                 |  |      |             |   |      |   |             |      |  |   | 10,476,743   |  
|Proceeds from Maturities, Calls and Paydowns of Investment Securities                              |  |      |              |   |      |   |              |      |  |   |              |  
|Available for Sale                                                                                 |  |      | 23,868,423   |   |      |   | 35,864,083   |      |  |   | 24,634,839   |  
|Held to Maturity                                                                                   |  |      | 18,035       |   |      |   | 11,417       |      |  |   | 17,580       |  
|Proceeds from Sale of Premises and Equipment                                                       |  |      | 4,691        |   |      |   | 11,750       |      |  |   |             |  
|Net Loans to Customers, Net of Loans Received in Business Acquisition                              |  |      | (88,764,174  | ) |      |   | (85,879,622  | )    |  |   | (111,762,526 | )
|Purchase of Premises and Equipment, Net of Property and Equipment Received in Business Acquisition |  |      | (3,722,786   | ) |      |   | (5,765,092   | )    |  |   | (4,331,847   | )
|Other Real Estate and Repossessions                                                                |  |      | 4,136,207    |   |      |   | 1,633,964    |      |  |   | 2,985,888    |  
|Cash Received in Business Acquisition, Net                                                         |  |      |             |   |      |   |             |      |  |   | 14,356,597   |  
|Federal Home Loan Bank Stock                                                                       |  |      | (52,600      | ) |      |   | (555,100     | )    |  |   | (1,479,100   | )
|Investment in Statutory Trusts                                                                     |  |      | (155,000     | ) |      |   |             |      |  |   | (140,000     | )
|Other Investments                                                                                  |  |      | (400,000     | ) |      |   |             |      |  |   |             |  
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|                                                                                                   |  |      | (115,006,085 | ) |      |   | (102,613,106 | )    |  |   | (95,911,667  | )
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|Cash Flows from Financing Activities                                                               |  |      |              |   |      |   |              |      |  |   |              |  
|Interest-Bearing Customer Deposits                                                                 |  |      | 99,529,936   |   |      |   | 83,461,129   |      |  |   | 78,773,399   |  
|Noninterest-Bearing Customer Deposits                                                              |  |      | (1,442,462   | ) |      |   | 10,609,094   |      |  |   | 3,628,447    |  
|Proceeds from Other Borrowed Money                                                                 |  |      | 41,500,000   |   |      |   | 19,500,000   |      |  |   | 7,500,000    |  
|Principal Payments on Other Borrowed Money                                                         |  |      | (50,226,206  | ) |      |   | (10,723,429  | )    |  |   | (7,234,122   | )
|Dividends Paid                                                                                     |  |      | (2,264,319   | ) |      |   | (1,993,100   | )    |  |   | (1,749,447   | )
|Proceeds from Issuance of Subordinated Debentures                                                  |  |      | 5,155,000    |   |      |   |             |      |  |   | 4,640,000    |  
|Federal Funds Purchased                                                                            |  |      | 1,070,000    |   |      |   |             |      |  |   |             |  
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|                                                                                                   |  |      | 93,321,949   |   |      |   | 100,853,694  |      |  |   | 85,558,277   |  
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|Net Increase (Decrease) in Cash and Cash Equivalents                                               |  |      | (6,681,491   | ) |      |   | 14,114,960   |      |  |   | 5,223,123    |  
|Cash and Cash Equivalents, Beginning                                                               |  |      | 79,061,942   |   |      |   | 64,946,982   |      |  |   | 59,723,859   |  
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  
|Cash and Cash Equivalents, Ending                                                                  |  | $    | 72,380,451   |   |      | $ | 79,061,942   |      |  | $ | 64,946,982   |  
|                                                                                                   |  |      |              |   |      |   |              |      |  |   |              |  

The accompanying notes are an integral part of these statements.



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COLONY BANKCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Principles of Consolidation

Colony Bankcorp, Inc.
(the Company) is a multi-bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of Colony Bankcorp, Inc. and its wholly-owned subsidiaries, Colony Bank of Fitzgerald, Fitzgerald, Georgia;
Colony Bank Ashburn (which includes its wholly-owned subsidiary, Georgia First Mortgage Company), Ashburn, Georgia; Colony Bank Worth, Sylvester, Georgia; Colony Bank of Dodge County, Eastman, Georgia; Colony Bank Wilcox, Rochelle, Georgia; Colony
Bank Southeast, Broxton, Georgia; Colony Bank Quitman, FSB, Quitman, Georgia (the Banks); and Colony Management Services, Inc., 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 Banks provide a full range of retail and commercial banking services for consumers and small to medium size
businesses located primarily in south and central Georgia. Lending and investing activities are funded primarily by deposits gathered through its retail branch 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, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans and the valuation of goodwill and other intangible
assets.

Reclassifications

In certain instances,
amounts reported in prior years consolidated financial statements have been reclassified to conform to statement presentations selected for 2006. Such reclassifications had no effect on previously reported stockholders equity or net
income.

Concentrations of Credit Risk

Lending is
concentrated in commercial and real estate loans to local borrowers. The Company has a high concentration of real estate loans; however, these loans are well collateralized and, in managements opinion, do not pose an adverse credit risk. In
addition, the balance of the loan portfolio is sufficiently diversified to avoid significant concentration of credit risk. Although the Company has a diversified loan portfolio, a substantial portion of borrowers ability to honor their
contracts is dependent upon the viability of the real estate economic sector.



- 9 -



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(1) Summary of Significant Accounting Policies (Continued)

Concentrations of Credit Risk (Continued)

The success of Colony is
dependent, to a certain extent, upon the economic conditions in the geographic markets it serves. No assurance can be given that the current economic conditions will continue. Adverse changes in the economic conditions in these geographic markets
would likely have a material adverse effect on the Companys results of operations and financial condition. The operating results of Colony depend primarily on its net interest income. Accordingly, operations are subject to risks and
uncertainties surrounding the exposure to changes in the interest rate environment.

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

Investment Securities

Investment securities are recorded under
Statement of Financial Accounting Standards (SFAS) No. 115, whereby the Banks classify their 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. 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 other 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, a component of stockholders
equity. Declines in the fair value of held to maturity and available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other than temporary impairment losses,
management considers (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. Gains and losses from sales of securities available for sale are computed using the specific identification method. This caption 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.

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 SFAS No. 115; accordingly, the provisions of SFAS No. 115 are not applicable to this
investment. The FHLB stock is reported in the consolidated financial statements at cost. Dividend income is recognized when earned.



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(1) Summary of Significant Accounting Policies (Continued)

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.

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, general and unallocated components. The specific component relates to loans that are classified as either doubtful, substandard or special mention. For such loans that are also classified as impaired, an allowance is
established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical loss
experience adjusted for qualitative factors. An unallocated component is maintained to cover uncertainties that could affect managements estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision
inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.



- 11 -



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(1) Summary of Significant Accounting Policies (Continued)

Allowance for Loan Losses (Continued)

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 loans 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.

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.

Goodwill and Intangible Assets

Goodwill represents the excess of the
cost over the fair value of the net assets purchased in a business combination. Impairment testing of goodwill is performed annually or more frequently if events or circumstances indicate possible impairment. No impairment was identified as a result
of the testing performed during 2006 or 2005.

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. Amortization periods are reviewed annually in connection with the annual impairment testing of goodwill.



- 12 -



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(1) Summary of Significant Accounting Policies (Continued)

Transfers of Financial Assets

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

Statement of Cash Flows

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

Income Taxes

The provision for income taxes is based
upon income for financial statement purposes, adjusted for nontaxable income and nondeductible expenses. Deferred income taxes have been provided when different accounting methods have been used in determining income for income tax purposes and for
financial reporting purposes. Deferred tax assets and liabilities are recognized based on future tax consequences attributable to differences arising from the financial statement carrying values of assets and liabilities and their tax bases. The
differences relate primarily to depreciable assets (use of different depreciation methods for financial statement and income tax purposes) and allowance for loan losses (use of the allowance method for financial statement purposes and the direct
write-off method for tax purposes). In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the period of the enactment of those changes, with effects included in the income tax provision. The Company and its
subsidiaries file a consolidated federal income tax return. Each subsidiary pays its proportional share of federal income taxes to the Company based on its taxable income.

Other Real Estate

Other real estate generally represents real estate acquired through foreclosure and is initially
recorded at the lower of cost or estimated market value at the date of acquisition. Losses from the acquisition of property in full or partial satisfaction of debt are recorded as loan losses. Subsequent declines in value, routine holding costs and
gains or losses upon disposition are included in other losses.

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on securities
available for sale, represent equity changes from economic events of the period other than transactions with owners and are not reported in the consolidated statements of income but as a separate component of the equity section of the consolidated
balance sheets. Such items are considered components of other comprehensive income. SFAS No.130, Reporting Comprehensive Income, requires the presentation in the financial statements of net income and all items of other comprehensive income
as total comprehensive income.



- 13 -



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(1) Summary of Significant Accounting Policies (Continued)

Off-Balance Sheet Credit Related Financial Instruments

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

Changes in Accounting Principles and Effects of New Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 155, Accounting for Certain Hybrid Financial Instrumentsan amendment of FASB Statements No. 133 and 140. This statement provides
entities with relief from having to separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with the requirements of SFAS 133. Entities can make an
irrevocable election to measure such hybrid financial instruments at fair value in its entirety, with subsequent changes in fair value recognized in earnings. This election can be made on an instrument-by-instrument basis. The effective date of this
standard is for all financial instruments acquired, issued or subject to a remeasurement event occurring after the beginning of an entitys first fiscal year that begins after September 15, 2006. Management does not expect this standard to
have an effect on the Companys financial position, results of operations or disclosures.

In March 2006, the FASB issued SFAS No. 156,
Accounting for Servicing of Financial Assets. This statement, which is an amendment to SFAS No. 140, will simplify the accounting for servicing assets and liabilities, such as those common with mortgage securitization activities.
Specifically, SFAS No. 156 addresses the recognition and measurement of separately recognized servicing assets and liabilities and provides an approach to simplify efforts to obtain hedge-like (offset) accounting. SFAS No. 156 also
clarifies when an obligation to service financial assets should be separately recognized as a servicing initially measured at fair value, if practicable, and permits an entity with a separately recognized servicing asset or servicing liability to
choose either the amortization or fair value methods for subsequent measurement. The provisions of SFAS No. 156 are effective as of the beginning of the first fiscal year that begins after September 15, 2006. Management does not expect
this standard to have a material effect on the Companys financial position, results of operations or disclosures.

In June 2006, the FASB issued
Interpretation No. 48, Accounting for Uncertainty in Income Taxes. This pronouncement, which will be effective for the Company in 2007, clarifies accounting for income tax positions that are either: (1) complex and, therefore,
subject to varied interpretation or (2) controversial. Management is currently evaluating this pronouncement; however, management does not expect this pronouncement to have a significant effect on the Companys financial position, results
of operations or disclosures.

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements. SFAS No. 157 enhances
existing guidance for measuring assets and liabilities using fair value. Before the issuance of SFAS No. 157, guidance for applying fair value was incorporated in several accounting pronouncements. SFAS No. 157 provides a single definition
of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS No. 157 also emphasizes that fair value is a market-based measurement, not an
entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under SFAS No. 157, fair value measurements are disclosed by level within that hierarchy. While SFAS No. 157
does not add any new fair value measurements, it does change current practice. Changes to practice include: (1) a requirement for an entity to include its own credit standing in the measurement of its liabilities; (2) a modification of the
transaction price presumption; (3) a prohibition on the use of block discounts when valuing large blocks of securities for broker-dealers and investment companies; and (4) a requirement to adjust the value of restricted stock for the
effect of the restriction even if the restriction lapses within one year. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The
Company does not expect the adoption of this standard to have a material effect on the financial position, results of operations or disclosures.



- 14 -



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(1) Summary of Significant Accounting Policies (Continued)

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

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Post Retirement Plansan Amendment of FASB Statements No. 87, 88, 106 and 123(R)
(FASB 158). This statement requires companies to recognize a net liability or asset to report the funded status of their defined benefit pension and other post retirement plans on the balance sheet. SFAS 158 requires additional new
disclosures to be made in companies financial statements. SFAS 158 is effective for publicly-held companies for fiscal years ending after December 15, 2006, except for the measurement date provisions, which are effective for fiscal
years ending after December 15, 2008. The Company does not expect this standard to have an effect on the financial position, results of operations or disclosures.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment to FASB Statement No. 115. This statement permits
entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting
provisions. This statement requires a business entity to report unrealized gains and losses on items for which the fair value option has been elected in earnings at
each subsequent reporting date. An entity may decide whether to elect the fair value option for each eligible item on its election date, subject to certain requirements described in the statement. This statement shall be
effective as of the beginning of each reporting entitys first fiscal year that begins after November 15, 2007. The Company is currently assessing the impact of SFAS No. 159 on its financial position, results of operations and
disclosures.

(2) Cash and Balances Due from Banks

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



|                                              |  |      |            |      |   |           
|--------------------------------------------- |  | ---- | ---------- | ---- | - | ----------
|                                              |  | 2006 |            | 2005
|Cash on Hand and Cash Items                   |  | $    | 8,307,648  |      | $ | 8,970,595 
|Noninterest-Bearing Deposits with Other Banks |  |      | 18,923,369 |      |   | 12,635,136
|                                              |  |      |            |      |   |           
|                                              |  | $    | 27,231,017 |      | $ | 21,605,731
|                                              |  |      |            |      |   |           

As of December 31, 2006, the Banks had required deposits of approximately $3,375,000 with the Federal
Reserve.



- 15 -



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(3) Investment Securities

Investment securities as of December 31, 2006 are summarized as follows:



|                              |  |                |             |                      |   |                         |  |   |            |   |  |   |            
|----------------------------- |  | -------------- | ----------- | -------------------- | - | ----------------------- |  | - | ---------- | - |  | - | -----------
|                              |  | Amortized Cost |             | GrossUnrealizedGains |   | Gross Unrealized Losses |  |   | Fair Value
|Securities Available for Sale |  |                |             |                      |   |                         |  |   |            |   |  |   |            
|U.S. Government Agencies      |  |                |             |                      |   |                         |  |   |            |   |  |   |            
|Mortgage Backed               |  | $              | 80,053,405  |                      | $ | 106,426                 |  | $ | (1,124,365 | ) |  | $ | 79,035,466 
|Other                         |  |                | 54,870,102  |                      |   | 65,487                  |  |   | (569,214   | ) |  |   | 54,366,375 
|State, County and Municipal   |  |                | 11,839,893  |                      |   | 36,337                  |  |   | (135,965   | ) |  |   | 11,740,265 
|Corporate Obligations         |  |                | 3,786,691   |                      |   |                        |  |   | (41,556    | ) |  |   | 3,745,135  
|Marketable Equity Securities  |  |                | 163,135     |                      |   | 192,442                 |  |   | (6,593     | ) |  |   | 348,984    
|                              |  |                |             |                      |   |                         |  |   |            |   |  |   |            
|                              |  | $              | 150,713,226 |                      | $ | 400,692                 |  | $ | (1,877,693 | ) |  | $ | 149,236,225
|                              |  |                |             |                      |   |                         |  |   |            |   |  |   |            
|Securities Held to Maturity   |  |                |             |                      |   |                         |  |   |            |   |  |   |            
|State, County and Municipal   |  | $              | 70,874      |                      | $ |                        |  | $ |           |   |  | $ | 70,874     
|                              |  |                |             |                      |   |                         |  |   |            |   |  |   |            

The amortized cost and fair value of investment securities as of December 31, 2006, by contractual maturity,
are shown hereafter. Expected maturities will differ from contractual maturities because issuers have the right to call or prepay obligations with or without call or prepayment penalties.



|                                       |  |                    |             |                  |   |               |  |           |        |  |   |       
|-------------------------------------- |  | ------------------ | ----------- | ---------------- | - | ------------- |  | --------- | ------ |  | - | ------
|                                       |  | Securities        
|                                       |  | Available for Sale |             | Held to Maturity
|                                       |  | Amortized Cost     |             | Fair Value       |   | AmortizedCost |  | FairValue
|Due in One Year or Less                |  | $                  | 14,586,126  |                  | $ | 14,486,182    |  |           |        |  |   |       
|Due After One Year Through Five Years  |  |                    | 48,019,408  |                  |   | 47,482,412    |  |           |        |  |   |       
|Due After Five Years Through Ten Years |  |                    | 7,119,777   |                  |   | 7,133,181     |  | $         | 70,874 |  | $ | 70,874
|Due After Ten Years                    |  |                    | 771,375     |                  |   | 750,000       |  |           |        |  |   |       
|                                       |  |                    |             |                  |   |               |  |           |        |  |   |       
|                                       |  |                    | 70,496,686  |                  |   | 69,851,775    |  |           | 70,874 |  |   | 70,874
|                                       |  |                    |             |                 
|Marketable Equity Securities           |  |                    | 163,135     |                  |   | 348,984       |  |           |        |  |   |       
|Mortgage Backed Securities             |  |                    | 80,053,405  |                  |   | 79,035,466    |  |           |        |  |   |       
|                                       |  |                    |             |                  |   |               |  |           |        |  |   |       
|                                       |  | $                  | 150,713,226 |                  | $ | 149,236,225   |  | $         | 70,874 |  | $ | 70,874
|                                       |  |                    |             |                  |   |               |  |           |        |  |   |       



- 16 -



---

(3) Investment Securities (Continued)

Investment securities as of December 31, 2005 are summarized as follows:



|                              |  |                |             |                       |   |                         |  |   |            |   |  |   |            
|----------------------------- |  | -------------- | ----------- | --------------------- | - | ----------------------- |  | - | ---------- | - |  | - | -----------
|                              |  | Amortized Cost |             | Gross UnrealizedGains |   | Gross Unrealized Losses |  |   | Fair Value
|Securities Available for Sale |  |                |             |                       |   |                         |  |   |            |   |  |   |            
|U.S. Government Agencies      |  |                |             |                       |   |                         |  |   |            |   |  |   |            
|Mortgage Backed               |  | $              | 74,811,272  |                       | $ | 21,787                  |  | $ | (1,546,513 | ) |  | $ | 73,286,546 
|Other                         |  |                | 39,073,380  |                       |   | 22,852                  |  |   | (650,722   | ) |  |   | 38,445,510 
|State, County and Municipal   |  |                | 9,186,466   |                       |   | 51,761                  |  |   | (47,410    | ) |  |   | 9,190,817  
|Corporate Obligations         |  |                | 3,061,499   |                       |   |                        |  |   | (38,378    | ) |  |   | 3,023,121  
|Marketable Equity Securities  |  |                | 163,135     |                       |   | 150,725                 |  |   | (13,590    | ) |  |   | 300,270    
|                              |  |                |             |                       |   |                         |  |   |            |   |  |   |            
|                              |  | $              | 126,295,752 |                       | $ | 247,125                 |  | $ | (2,296,613 | ) |  | $ | 124,246,264
|                              |  |                |             |                       |   |                         |  |   |            |   |  |   |            
|Securities Held to Maturity   |  |                |             |                       |   |                         |  |   |            |   |  |   |            
|State, County and Municipal   |  | $              | 79,286      |                       | $ |                        |  | $ |           |   |  | $ | 79,286     
|                              |  |                |             |                       |   |                         |  |   |            |   |  |   |            

There were no proceeds from the sale of investments available for sale during 2006 and 2005. In 2004, proceeds
from sales of investments available for sale totaled $10,476,743 resulting in gross realized gains of $194,329 and gross realized losses of $225,287.

Investment securities having a carrying value approximating $86,141,000 and $63,487,000 as of December 31, 2006 and 2005, respectively, were pledged to secure public deposits and for other purposes.

Information pertaining to securities with gross unrealized losses at December 31, 2006 and 2005, 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          |            | GrossUnrealizedLosses |                      |          | Fair Value |       | GrossUnrealizedLosses |            |  | Fair Value |            | GrossUnrealizedLosses | 
|December 31, 2006            |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  
|U.S. Government Agencies     |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  
|Mortgage Backed              |  | $                   | 11,989,365 |                       | $                    | (54,716  | )          |       | $                     | 52,139,791 |  | $          | (1,069,649 | )                     |  | $ | 64,129,156  |  | $ | (1,124,365 | )
|Other                        |  |                     | 5,461,550  |                       |                      | (24,616  | )          |       |                       | 31,033,305 |  |            | (544,598   | )                     |  |   | 36,494,855  |  |   | (569,214   | )
|State, County and Municipal  |  |                     | 2,708,622  |                       |                      | (69,220  | )          |       |                       | 5,396,659  |  |            | (66,745    | )                     |  |   | 8,105,281   |  |   | (135,965   | )
|Corporate Obligations        |  |                     | 1,750,000  |                       |                      | (24,379  | )          |       |                       | 995,135    |  |            | (17,177    | )                     |  |   | 2,745,135   |  |   | (41,556    | )
|Marketable Equity Securities |  |                     |           |                       |                      |         |            |       |                       | 53,454     |  |            | (6,593     | )                     |  |   | 53,454      |  |   | (6,593     | )
|                             |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  
|                             |  | $                   | 21,909,537 |                       | $                    | (172,931 | )          |       | $                     | 89,618,344 |  | $          | (1,704,762 | )                     |  | $ | 111,527,881 |  | $ | (1,877,693 | )
|                             |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  
|December 31, 2005            |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  
|U.S. Government Agencies     |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  
|Mortgage Backed              |  | $                   | 28,900,181 |                       | $                    | (409,623 | )          |       | $                     | 37,481,884 |  | $          | (1,136,890 | )                     |  | $ | 66,382,065  |  | $ | (1,546,513 | )
|Other                        |  |                     | 20,677,300 |                       |                      | (337,198 | )          |       |                       | 11,304,910 |  |            | (313,524   | )                     |  |   | 31,982,210  |  |   | (650,722   | )
|State, County and Municipal  |  |                     | 4,041,213  |                       |                      | (33,530  | )          |       |                       | 406,120    |  |            | (13,880    | )                     |  |   | 4,447,333   |  |   | (47,410    | )
|Corporate Obligations        |  |                     | 1,002,405  |                       |                      | (20,460  | )          |       |                       | 1,015,700  |  |            | (17,918    | )                     |  |   | 2,018,105   |  |   | (38,378    | )
|Marketable Equity Securities |  |                     | 46,457     |                       |                      | (13,590  | )          |       |                       |           |  |            |           |                       |  |   | 46,457      |  |   | (13,590    | )
|                             |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  
|                             |  | $                   | 54,667,556 |                       | $                    | (814,401 | )          |       | $                     | 50,208,614 |  | $          | (1,482,212 | )                     |  | $ | 104,876,170 |  | $ | (2,296,613 | )
|                             |  |                     |            |                       |                      |          |            |       |                       |            |  |            |            |                       |  |   |             |  |   |            |  



- 17 -



---

(3) Investment Securities (Continued)

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

At December 31, 2006, the debt securities with unrealized losses have
depreciated 1.66 percent from the Companys amortized cost basis. These securities are guaranteed by either U.S. Government or other governments. These unrealized losses relate principally to current interest rates for similar types of
securities. 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. 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.

At December 31, 2006, one marketable equity security had an unrealized loss with depreciation of 11.0 percent from the Companys cost basis. This unrealized
loss has existed for over twelve months; however, no credit issues have been identified that cause management to believe the decline in market value is other than temporary. In analyzing the issuers financial condition, management considers
industry analysts reports, financial performance and projected target prices of investment analysts within a one-year time frame.

(4) Loans

The composition of loans as of December 31 are:



|                                       |  |      |             |      |   |            
|-------------------------------------- |  | ---- | ----------- | ---- | - | -----------
|                                       |  | 2006 |             | 2005
|Commercial, Financial and Agricultural |  | $    | 61,887,534  |      | $ | 48,849,320 
|Real Estate-Construction               |  |      | 193,951,793 |      |   | 152,943,631
|Real Estate-Farmland                   |  |      | 40,936,126  |      |   | 37,151,806 
|Real Estate-Other                      |  |      | 549,600,833 |      |   | 529,598,781
|Installment Loans to Individuals       |  |      | 76,929,633  |      |   | 73,473,423 
|All Other Loans                        |  |      | 18,967,096  |      |   | 17,100,435 
|                                       |  |      |             |      |   |            
|                                       |  | $    | 942,273,015 |      | $ | 859,117,396
|                                       |  |      |             |      |   |            

Nonaccrual loans are loans for which principal and interest are doubtful of collection in accordance with original
loan terms and for which accruals of interest have been discontinued due to payment delinquency. Nonaccrual loans totaled $8,068,685 and $8,579,086 as of December 31, 2006 and 2005, respectively, and total recorded investment in loans past due
90 days or more and still accruing interest approximated $9,346 and $14,000, respectively. Foregone interest on nonaccrual loans approximated $533,000 in 2006, $426,000 in 2005 and $403,000 in 2004.



- 18 -



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(4) Loans (Continued)

The following table details impaired loan data as of December 31 for the years ended as indicated:



|                                        |  |      |            |   |      |   |            |  
|--------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                        |  | 2006 |            |   | 2005 |  
|Total Investment in Impaired Loans      |  | $    | 5,736,240  |   |      | $ | 5,555,257  |  
|Less Allowance for Impaired Loan Losses |  |      | (1,664,792 | ) |      |   | (1,844,346 | )
|                                        |  |      |            |   |      |   |            |  
|Net Investment, December 31             |  | $    | 4,071,448  |   |      | $ | 3,710,911  |  
|                                        |  |      |            |   |      |   |            |  
|Average Investment during the Year      |  | $    | 6,801,922  |   |      | $ | 7,242,063  |  
|                                        |  |      |            |   |      |   |            |  
|Income Recognized during the Year       |  | $    | 423,652    |   |      | $ | 190,724    |  
|                                        |  |      |            |   |      |   |            |  
|Income Collected during the Year        |  | $    | 374,571    |   |      | $ | 211,371    |  
|                                        |  |      |            |   |      |   |            |  

(5) Allowance for Loan Losses

Transactions in the allowance for loan losses are summarized below for the years ended December 31:



|                                        |  |      |            |   |      |   |            |      |  |   |            |  
|--------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                        |  | 2006 |            |   | 2005 |   |            | 2004 | 
|Balance, Beginning                      |  | $    | 10,761,915 |   |      | $ | 10,012,179 |      |  | $ | 8,515,840  |  
|                                        |  |      |           
|Provision Charged to Operating Expenses |  |      | 3,987,000  |   |      |   | 3,443,750  |      |  |   | 3,469,000  |  
|Loans Charged Off                       |  |      | (3,373,273 | ) |      |   | (3,046,192 | )    |  |   | (2,135,478 | )
|Loan Recoveries                         |  |      | 613,717    |   |      |   | 352,178    |      |  |   | 162,817    |  
|                                        |  |      |            |   |      |   |            |      |  |   |            |  
|Balance, Ending                         |  | $    | 11,989,359 |   |      | $ | 10,761,915 |      |  | $ | 10,012,179 |  
|                                        |  |      |            |   |      |   |            |      |  |   |            |  

(6) Premises and Equipment

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



|                                  |  |      |             |   |      |   |             |  
|--------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                  |  | 2006 |             |   | 2005 |  
|Land                              |  | $    | 7,413,927   |   |      | $ | 6,094,209   |  
|Building                          |  |      | 20,885,790  |   |      |   | 18,687,218  |  
|Furniture, Fixtures and Equipment |  |      | 12,059,702  |   |      |   | 11,547,121  |  
|Leasehold Improvements            |  |      | 994,282     |   |      |   | 965,382     |  
|Construction in Progress          |  |      | 114,429     |   |      |   | 1,075,983   |  
|                                  |  |      |             |   |      |   |             |  
|                                  |  |      | 41,468,130  |   |      |   | 38,369,913  |  
|Accumulated Depreciation          |  |      | (14,014,998 | ) |      |   | (12,694,081 | )
|                                  |  |      |             |   |      |   |             |  
|                                  |  | $    | 27,453,132  |   |      | $ | 25,675,832  |  
|                                  |  |      |             |   |      |   |             |  



- 19 -



---

(6) Premises and Equipment (Continued)

Depreciation charged to operations totaled $1,933,290 in 2006, $1,903,242 in 2005 and $1,754,053 in 2004.

Certain Company
facilities and equipment are leased under various operating leases. Rental expense approximated $329,000 for 2006, $334,000 for 2005 and $315,000 for 2004.

Future minimum rental payments as of December 31, 2006 are as follows:



|                        |  |         
|----------------------- |  | --------
|Year Ending December 31 |  | Amount  
|2007                    |  | $122,296
|2008                    |  | 113,376 
|2009                    |  | 93,376  
|2010                    |  | 89,376  
|2011 and Thereafter     |  | 226,506 
|                        |  |         
|                        |  | $644,930
|                        |  |         

(7) Goodwill and Intangible Assets

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



|                   |  |      |           |      |   |          
|------------------ |  | ---- | --------- | ---- | - | ---------
|                   |  | 2006 |           | 2005
|Goodwill           |  |      |           |      |   |          
|Balance, Beginning |  | $    | 2,412,338 |      | $ | 2,412,338
|Goodwill Acquired  |  |      |          |      |   |         
|                   |  |      |           |      |   |          
|Balance, Ending    |  | $    | 2,412,338 |      | $ | 2,412,338
|                   |  |      |           |      |   |          



|                           |  |                        |           |                         |   |          |                            |  |   |         |  
|-------------------------- |  | ---------------------- | --------- | ----------------------- | - | -------- | -------------------------- |  | - | ------- | -
|                           |  | Core DepositIntangible |           | AccumulatedAmortization |   |          | Net Core DepositIntangible | 
|Core Deposit Intangible    |  |                        |           |                         |   |          |                            |  |   |         |  
|Balance, December 31, 2005 |  | $                      | 1,056,693 |                         | $ | (536,778 | )                          |  | $ | 519,915 |  
|Amortization Expense       |  |                        |          |                         |   | (81,201  | )                          |  |   | (81,201 | )
|                           |  |                        |           |                         |   |          |                            |  |   |         |  
|Balance, December 31, 2006 |  | $                      | 1,056,693 |                         | $ | (617,979 | )                          |  | $ | 438,714 |  
|                           |  |                        |           |                         |   |          |                            |  |   |         |  



- 20 -



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(7) Goodwill and Intangible Assets (Continued)

Amortization expense related to the core deposit intangible was $81,201, $114,645 and $144,985 for the years ended December 31, 2006, 2005 and 2004, respectively.

The following table reflects the expected amortization schedule for the core deposit intangible at December 31, 2006:



|                    |  |   |        
|------------------- |  | - | -------
|2007                |  | $ | 36,461 
|2008                |  |   | 35,749 
|2009                |  |   | 35,749 
|2010                |  |   | 35,749 
|2011 and Thereafter |  |   | 295,006
|                    |  |   |        
|                    |  | $ | 438,714
|                    |  |   |        

(8) Income Taxes

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



|                                   |  |      |           |      |   |           |      |  |   |           |  
|---------------------------------- |  | ---- | --------- | ---- | - | --------- | ---- |  | - | --------- | -
|                                   |  | 2006 |           | 2005 |   |           | 2004 | 
|Current Federal Expense            |  | $    | 4,994,008 |      | $ | 5,041,180 |      |  | $ | 4,344,013 |  
|Deferred Federal (Benefit) Expense |  |      | 112,518   |      |   | (546,891  | )    |  |   | (464,530  | )
|                                   |  |      |           |      |   |           |      |  |   |           |  
|Federal Income Tax Expense         |  |      | 5,106,526 |      |   | 4,494,289 |      |  |   | 3,879,483 |  
|Current State Income Tax Expense   |  |      | 110,837   |      |   | 315,031   |      |  |   | 282,011   |  
|                                   |  |      |           |      |   |           |      |  |   |           |  
|                                   |  | $    | 5,217,363 |      | $ | 4,809,320 |      |  | $ | 4,161,494 |  
|                                   |  |      |           |      |   |           |      |  |   |           |  

The federal income tax expense of $5,106,526 in 2006, $4,494,289 in 2005 and $3,879,483 in 2004 is less than the
income taxes computed by applying the federal statutory rates to income before income taxes. The reasons for the differences are as follows:



|                                     |  |      |           |   |      |   |           |      |  |   |           |  
|------------------------------------ |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                     |  | 2006 |           |   | 2005 |   |           | 2004 | 
|Statutory Federal Income Taxes       |  | $    | 5,290,356 |   |      | $ | 4,725,288 |      |  | $ | 4,158,468 |  
|Tax-Exempt Interest                  |  |      | (188,408  | ) |      |   | (163,184  | )    |  |   | (166,382  | )
|Interest Expense Disallowance        |  |      | 28,211    |   |      |   | 17,136    |      |  |   | 16,483    |  
|Premiums on Officers Life Insurance |  |      | (50,419   | ) |      |   | (56,374   | )    |  |   | (41,060   | )
|Meal and Entertainment Disallowance  |  |      | 16,644    |   |      |   | 10,756    |      |  |   | 9,287     |  
|State Income Taxes                   |  |      | (46,441   | ) |      |   | (94,719   | )    |  |   | (91,006   | )
|Other                                |  |      | 56,583    |   |      |   | 55,386    |      |  |   | (6,307    | )
|                                     |  |      |           |   |      |   |           |      |  |   |           |  
|Actual Federal Income Taxes          |  | $    | 5,106,526 |   |      | $ | 4,494,289 |      |  | $ | 3,879,483 |  
|                                     |  |      |           |   |      |   |           |      |  |   |           |  



- 21 -



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(8) Income Taxes (Continued)

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



|                                                    |  |      |            |   |      |   |           |  
|--------------------------------------------------- |  | ---- | ---------- | - | ---- | - | --------- | -
|                                                    |  | 2006 |            |   | 2005 |  
|Deferred Tax Assets                                 |  |      |            |   |      |   |           |  
|Allowance for Loan Losses                           |  | $    | 4,076,487  |   |      | $ | 3,659,158 |  
|Deferred Compensation                               |  |      | 376,297    |   |      |   | 378,347   |  
|Other Real Estate                                   |  |      | 45,143     |   |      |   | 51,000    |  
|Other                                               |  |      | 498,571    |   |      |   | 354,908   |  
|                                                    |  |      |            |   |      |   |           |  
|                                                    |  |      | 4,996,498  |   |      |   | 4,443,413 |  
|                                                    |  |      |            |   |      |   |           |  
|Deferred Tax Liabilities                            |  |      |            |   |      |   |           |  
|Premises and Equipment                              |  |      | (1,020,752 | ) |      |   | (468,386  | )
|Other                                               |  |      | (325,224   | ) |      |   | (211,987  | )
|                                                    |  |      |            |   |      |   |           |  
|                                                    |  |      | (1,345,976 | ) |      |   | (680,373  | )
|                                                    |  |      |            |   |      |   |           |  
|Deferred Tax Assets on Unrealized Securities Losses |  |      | 502,180    |   |      |   | 696,825   |  
|                                                    |  |      |            |   |      |   |           |  
|Net Deferred Tax Assets                             |  | $    | 4,152,702  |   |      | $ | 4,459,865 |  
|                                                    |  |      |            |   |      |   |           |  

(9) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $838,935 and $593,997 as of December 31, 2006 and 2005, respectively.

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



|                        |  |      |             |      |   |            
|----------------------- |  | ---- | ----------- | ---- | - | -----------
|                        |  | 2006 |             | 2005
|Interest-Bearing Demand |  | $    | 185,768,785 |      | $ | 187,735,342
|Savings                 |  |      | 33,305,542  |      |   | 35,245,132 
|Time, $100,000 and Over |  |      | 366,041,185 |      |   | 283,583,136
|Other Time              |  |      | 379,994,707 |      |   | 359,022,903
|                        |  |      |             |      |   |            
|                        |  | $    | 965,110,219 |      | $ | 865,586,513
|                        |  |      |             |      |   |            

At December 31, 2006 and 2005, the Company had brokered deposits of $72,682,000 and $45,729,000,
respectively. The aggregate amount of short-term jumbo certificates of deposit, each with a minimum denomination of $100,000, was approximately $328,788,000 and $234,307,000 as of December 31, 2006 and 2005, respectively.



- 22 -



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(9) Deposits (Continued)

As of December 31, 2006, the scheduled maturities of certificates of deposit are as follows:



|                    |  |             
|------------------- |  | ------------
|Year                |  | Amount      
|2007                |  | $663,217,378
|2008                |  | 44,385,132  
|2009                |  | 10,138,807  
|2010                |  | 19,004,563  
|2011 and Thereafter |  | 9,290,012   
|                    |  |             
|                    |  | $746,035,892
|                    |  |             

(10) Other Borrowed Money

Other borrowed money at December 31 is summarized as follows:



|                                |  |      |            |      |   |           
|------------------------------- |  | ---- | ---------- | ---- | - | ----------
|                                |  | 2006 |            | 2005
|Federal Home Loan Bank Advances |  | $    | 61,500,000 |      | $ | 67,500,000
|The Bankers Bank Note Payable  |  |      |           |      |   | 2,500,000 
|The Bankers Bank Note Payable  |  |      |           |      |   | 226,205   
|                                |  |      |            |      |   |           
|                                |  | $    | 61,500,000 |      | $ | 70,226,205
|                                |  |      |            |      |   |           

Advances from the Federal Home Loan Bank (FHLB) have maturities ranging from 2007 to 2019 and interest rates
ranging from 2.74 percent to 5.93 percent. Under the Blanket Agreement for Advances and Security Agreement with the FHLB, residential first mortgage loans, commercial loans and cash balances held by the FHLB are pledged as collateral for the FHLB
advances outstanding. At December 31, 2006, the Company had available line of credit commitments totaling $99,472,631, of which $37,972,631 was available.

The Bankers Bank note payable originated on May 27, 2005 for $1,500,000. On December 20, 2005, the original $1,500,000 was renewed into a new note with an additional $1,000,000 advanced at an interest rate of The Wall Street
Prime minus 0.75 percent. Interest payments are due quarterly with the entire unpaid balance due May 27, 2006. The loan is collateralized by a negative pledge of Colony Bank Wilcox stock. The loan was paid off in April 2006.

The Bankers Bank note payable was renewed on January 7, 2003 for $1,112,735 at a rate of The Wall Street Prime minus .50 percent. Payments are due monthly
with the entire unpaid balance due January 7, 2007. The debt is secured by all furniture, fixtures, machinery, equipment and software of Colony Management Services, Inc. Colony Bankcorp, Inc. guarantees the debt. The loan was paid off in August
2006.



- 23 -



---

(10) Other Borrowed Money (Continued)

The aggregate stated maturities of other borrowed money at December 31, 2006 are as follows:



|                    |  |        |           
|------------------- |  | ------ | ----------
|Year                |  | Amount
|2007                |  | $      | 16,000,000
|2008                |  |        | 9,500,000 
|2009                |  |        |          
|2010                |  |        | 1,000,000 
|2011 and Thereafter |  |        | 35,000,000
|                    |  |        |           
|                    |  | $      | 61,500,000
|                    |  |        |           

The Company also has available federal funds lines of credit with various financial institutions totaling
$39,300,000, of which there was $1,070,000 outstanding amount at December 31, 2006.

(11) Subordinated Debentures (Trust Preferred Securities)

During the first quarter of 2002, the Company formed a subsidiary whose sole purpose was to issue $9,000,000 in Trust Preferred Securities through a
pool sponsored by FTN Financial Capital Markets. The Trust Preferred Securities have a maturity of 30 years and are redeemable after 5 years with certain exceptions. At December 31, 2006, the floating-rate securities had an 8.97 percent
interest rate, which will reset quarterly at the three-month LIBOR rate plus 3.60 percent.

During the fourth quarter of 2002, the Company formed a second
subsidiary whose sole purpose was to issue $5,000,000 in Trust Preferred Securities through a pool sponsored by FTN Financial Capital Markets. The Trust Preferred Securities have a maturity of 30 years and are redeemable after 5 years with certain
exceptions. At December 31, 2006, the floating-rate securities had an 8.62 percent interest rate, which will reset quarterly at the three-month LIBOR rate plus 3.25 percent.

During the second quarter of 2004, the Company formed a third subsidiary whose sole purpose was to issue $4,500,000 in Trust Preferred Securities through a pool sponsored by FTN Financial Capital Markets. The Trust
Preferred Securities have a maturity of 30 years and are redeemable after 5 years with certain exceptions. At December 31, 2006, the floating rate securities had an 8.04 percent interest rate, which will reset quarterly at the three-month LIBOR
rate plus 2.68 percent.

During the second quarter of 2006, the Company formed a fourth subsidiary whose sole purpose was to issue $5,000,000 in Trust
Preferred Securities in a private placement by SunTrust Bank Capital Markets. The Trust Preferred Securities have a maturity of 30 years and are redeemable after 5 years with certain exceptions. At December 31, 2006, the following rate
securities had a 6.86 percent interest rate, which will reset quarterly at the three-month LIBOR rate plus 1.50 percent.

The Trust Preferred Securities
are recorded as a liability on the consolidated balance sheets, but, subject to certain limitations, qualify as Tier 1 capital for regulatory capital purposes. The proceeds from the offering were used to fund the cash portion of the Quitman
acquisition, pay off holding company debt, and inject capital into bank subsidiaries.

The total aggregate principal amount of trust preferred certificates
outstanding at December 31, 2006 was $23,500,000. The total aggregate principal amount of subordinated debentures outstanding at December 31, 2006 was $24,229,000.



- 24 -



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(12) Restricted StockUnearned Compensation

In 1999, the board of directors of Colony Bankcorp, Inc. adopted a restricted stock grant plan which awards certain executive officers common shares of the Company. The maximum number of shares (split-adjusted) which
may be subject to restricted stock awards is 64,701. During 2000-2006, 72,928 split-adjusted shares were issued under this plan and since the plans inception, 11,102 shares have been forfeited; thus, remaining shares which may be subject to
restricted stock awards are 2,875 at December 31, 2006. The shares are recorded at fair market value (on the date granted) as a separate component of stockholders equity. The cost of these shares is being amortized against earnings using
the straight-line method over three years (the restriction period).

In April 2004, the stockholders of Colony Bankcorp, Inc. adopted a restricted stock
grant plan which awards certain executive officers common shares of the Company. The maximum number of shares which may be subject to restricted stock awards (split-adjusted) is 143,500. During 2006, 6,855 split-adjusted shares were issued under
this plan and since the plans inception, 1,298 shares have been forfeited; thus remaining shares which may be subject to restricted stock awards are 137,943 at December 31, 2006. The shares are recorded at fair market value (on the date
granted) as a separate component of stockholders equity. The cost of these shares is being amortized against earnings using the straight-line method over three years (the restriction period).

(13) Profit Sharing Plan

The Company has a profit sharing plan that
covers substantially all employees who meet certain age and service requirements. It is the Companys policy to make contributions to the plan as approved annually by the board of directors. The total provision for contributions to the plan was
$662,730 for 2006, $558,138 for 2005 and $479,108 for 2004.

(14) 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, 2006 and 2005, the following financial instruments were outstanding whose contract amounts represent credit risk:



|                              |  |                 |             |      |   |            
|----------------------------- |  | --------------- | ----------- | ---- | - | -----------
|                              |  | Contract Amount
|                              |  | 2006            |             | 2005
|Commitments to Extend Credit  |  | $               | 105,165,000 |      | $ | 112,056,000
|Standby Letters of Credit     |  |                 | 3,279,000   |      |   | 2,572,000  
|Performance Letters of Credit |  |                 |            |      |   | 472,000    



- 25 -



---

(14) Commitments and Contingencies (Continued)

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 subsidiaries. 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.

(15) Deferred Compensation Plan

Two of the Bank subsidiaries have deferred compensation plans covering directors choosing to participate through individual deferred compensation
contracts. In accordance with terms of the contracts, the Banks are committed to pay the directors deferred compensation over a specified number of years, beginning at age 65. In the event of a directors death before age 65, payments are made
to the directors named beneficiary over a specified number of years, beginning on the first day of the month following the death of the director.

Liabilities accrued under the plans totaled $1,107,653 and $1,113,685 as of December 31, 2006 and 2005, respectively. Benefit payments under the contracts were $171,029 in 2006 and $167,126 in 2005. Provisions charged to operations
totaled $164,997 in 2006, $359,787 in 2005 and $219,064 in 2004.

Fee income recognized with deferred compensation plans totaled $148,290 in 2006, $328,942
in 2005 and $120,766 in 2004.



- 26 -



---

(16) Interest Income and Expense

Interest income of $311,828, $257,639 and $329,211 from state, county and municipal bonds was exempt from regular income taxes in 2006, 2005 and 2004, respectively.

Interest on deposits includes interest expense on time certificates of $100,000 or more totaling $16,189,086 $8,180,847 and $4,633,304 for the years ended
December 31, 2006, 2005 and 2004, respectively.

(17) Supplemental Cash Flow Information

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



|                 |  |      |            |      |   |            |  |   |           
|---------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ----------
|                 |  | 2006 |            | 2005 |   | 2004      
|Interest Expense |  | $    | 40,351,134 |      | $ | 25,547,290 |  | $ | 18,294,053
|                 |  |      |            |      |   |            |  |   |           
|Income Taxes     |  | $    | 5,371,395  |      | $ | 5,353,702  |  | $ | 4,777,702 
|                 |  |      |            |      |   |            |  |   |           

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



|                                                      |  |      |           |   |      |   |           |  |   |             |  
|----------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- |  | - | ----------- | -
|                                                      |  | 2006 |           |   | 2005 |   | 2004      | 
|Acquisitions of Real Estate Through Loan Foreclosures |  | $    | 2,815,716 |   |      | $ | 2,793,978 |  | $ | 1,835,125   |  
|                                                      |  |      |           |   |      |   |           |  |   |             |  
|Acquisitions, Net of Cash Acquired                    |  |      |           |   |      |   |           |  |   |             |  
|Cash Paid (Received), Net                             |  | $    |          |   |      | $ |          |  | $ | (14,356,597 | )
|Liabilities Assumed                                   |  |      |          |   |      |   |          |  |   | 35,859,268  |  
|                                                      |  |      |           |   |      |   |           |  |   |             |  
|Fair Value of Net Assets Acquired                     |  | $    |          |   |      | $ |          |  | $ | 21,502,671  |  
|                                                      |  |      |           |   |      |   |           |  |   |             |  
|Unrealized (Gain) Loss on Investment Securities       |  | $    | (572,485  | ) |      | $ | 1,145,190 |  | $ | 1,032,750   |  
|                                                      |  |      |           |   |      |   |           |  |   |             |  



- 27 -



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(18) Related Party Transactions

The aggregate balance of direct and indirect loans to directors, executive officers or principal holders of equity securities of the Company was $18,142,109 as of December 31, 2006 and $15,103,982 as of
December 31, 2005. 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:



|                                         |  |      |             |   |      |   |             |  
|---------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                         |  | 2006 |             |   | 2005 |  
|Balance, Beginning                       |  | $    | 15,103,982  |   |      | $ | 15,047,046  |  
|New Loans                                |  |      | 18,540,907  |   |      |   | 14,239,044  |  
|Repayments                               |  |      | (15,528,723 | ) |      |   | (14,182,108 | )
|Transactions Due to Changes in Directors |  |      | 25,943      |   |      |   |            |  
|                                         |  |      |             |   |      |   |             |  
|Balance, Ending                          |  | $    | 18,142,109  |   |      | $ | 15,103,982  |  
|                                         |  |      |             |   |      |   |             |  

Deposits from related parties held by the Company at December 31, 2006 and 2005 totaled approximately
$13,091,000 and $13,978,000, respectively.

(19) Fair Value of Financial Instruments

SFAS No. 107, Disclosures about Fair Value of Financial Instruments, requires 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 Subsidiaries financial instruments are detailed hereafter. Where quoted prices are not available, fair
values are based on estimates using discounted cash flows and other valuation techniques. The use of discounted cash flows can be significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The
following disclosures should not be considered a surrogate of the liquidation value of the Company, but rather a good-faith estimate of the increase or decrease in value of financial instruments held by the Company since purchase, origination or
issuance.

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

Investment Securities - Fair values for investment securities are based on quoted
market prices.

Federal Home Loan Bank Stock - The fair value of Federal Home Loan Bank stock approximates carrying value.

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.

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. 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.



- 28 -



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(19) Fair Value of Financial Instruments (Continued)

Federal Funds Purchased The carrying value of federal funds purchased approximates fair value.

Subordinated Debentures Fair value approximates carrying value due to the variable interest rates of the subordinated debentures.

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.

Standby Letters of Credit and Commitments to Extend Credit  Because standby letters of credit and commitments to extend credit are made using variable rates, the contract value is a reasonable estimate of fair value.

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



|                                         |  |                |           |                      |   |                |  |                      |         |  |   |        
|---------------------------------------- |  | -------------- | --------- | -------------------- | - | -------------- |  | -------------------- | ------- |  | - | -------
|                                         |  | 2006           |           | 2005                
|                                         |  | CarryingAmount |           | Estimated Fair Value |   | CarryingAmount |  | Estimated Fair Value
|                                         |  | (in Thousands)
|Assets                                   |  |                |           |                      |   |                |  |                      |         |  |   |        
|Cash and Short-Term Investments          |  | $              | 75,456    |                      | $ | 75,456         |  | $                    | 80,697  |  | $ | 80,697 
|Investment Securities Available for Sale |  |                | 149,236   |                      |   | 149,236        |  |                      | 124,246 |  |   | 124,246
|Investment Securities Held to Maturity   |  |                | 71        |                      |   | 71             |  |                      | 79      |  |   | 79     
|Federal Home Loan Bank Stock             |  |                | 5,087     |                      |   | 5,087          |  |                      | 5,034   |  |   | 5,034  
|Loans                                    |  |                | 942,273   |                      |   | 930,716        |  |                      | 859,117 |  |   | 849,888
|                                         |  |                |           |                     
|Liabilities                              |  |                |           |                      |   |                |  |                      |         |  |   |        
|Deposits                                 |  |                | 1,042,446 |                      |   | 1,040,991      |  |                      | 944,365 |  |   | 942,606
|Federal Funds Purchased                  |  |                | 1,070     |                      |   | 1,070          |  |                      |        |  |   |       
|Subordinated Debentures                  |  |                | 24,229    |                      |   | 24,229         |  |                      | 19,074  |  |   | 19,074 
|Other Borrowed Money                     |  |                | 61,500    |                      |   | 58,345         |  |                      | 70,226  |  |   | 66,310 
|                                         |  |                |           |                     
|Unrecognized Financial Instruments       |  |                |           |                      |   |                |  |                      |         |  |   |        
|Standby Letters of Credit                |  |                |          |                      |   | 3,279          |  |                      |        |  |   | 2,572  
|Performance Letters of Credit            |  |                |          |                      |   |               |  |                      |        |  |   | 472    
|Commitments to Extend Credit             |  |                |          |                      |   | 105,165        |  |                      |        |  |   | 112,056

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.



- 29 -



---

(19) Fair Value of Financial Instruments (Continued)

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not
considered financial instruments. Significant assets and liabilities that are not considered financial instruments include deferred income taxes and premises and equipment. In addition, the tax ramifications related to the realization of the
unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

(20) Regulatory
Capital Matters

The amount of dividends payable to the parent company from the subsidiary banks is limited by various banking regulatory agencies. Upon
approval by regulatory authorities, the Banks 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. The amounts and ratios as defined in regulations are presented hereafter. Management believes, as of
December 31, 2006, 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.



- 30 -



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(20) Regulatory Capital Matters (Continued)

The following table summarizes regulatory capital information as of December 31, 2006 and 2005 on a consolidated basis and for each significant subsidiary, as defined.



|                                       |  |                |         |       |                               |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|-------------------------------------- |  | -------------- | ------- | ----- | ----------------------------- | - | ------ | ---------------------------------------------------------------- | ------ |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                                       |  | Actual         |         |       | For Capital Adequacy Purposes |   |        | To Be Well Capitalized Under Prompt
Corrective Action Provisions |       
|                                       |  | Amount         |         | Ratio |                               |   | Amount |                                                                  | Ratio  |  |      | Amount |  | Ratio |       
|As of December 31, 2006                |  | (In Thousands) |        
|Total Capital to Risk-Weighted Assets  |  |                |         |       |                               |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|Consolidated                           |  | $              | 110,304 |       | 11.50                         | % |        | $                                                                | 76,710 |  | 8.00 | %      |  | $     | 95,887 |  | 10.00 | %
|Fitzgerald                             |  |                | 18,697  |       | 11.33                         |   |        |                                                                  | 13,206 |  | 8.00 |        |  |       | 16,508 |  | 10.00 |  
|Ashburn                                |  |                | 28,908  |       | 10.77                         |   |        |                                                                  | 21,464 |  | 8.00 |        |  |       | 26,830 |  | 10.00 |  
|Worth                                  |  |                | 14,618  |       | 11.02                         |   |        |                                                                  | 10,610 |  | 8.00 |        |  |       | 13,262 |  | 10.00 |  
|Southeast                              |  |                | 20,091  |       | 10.76                         |   |        |                                                                  | 14,934 |  | 8.00 |        |  |       | 18,667 |  | 10.00 |  
|Quitman                                |  |                | 12,183  |       | 11.65                         |   |        |                                                                  | 8,367  |  | 8.00 |        |  |       | 10,458 |  | 10.00 |  
|Tier I Capital to Risk-Weighted Assets |  |                |         |       |                               |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|Consolidated                           |  |                | 98,235  |       | 10.24                         |   |        |                                                                  | 38,355 |  | 4.00 |        |  |       | 57,532 |  | 6.00  |  
|Fitzgerald                             |  |                | 16,567  |       | 10.04                         |   |        |                                                                  | 6,603  |  | 4.00 |        |  |       | 9,905  |  | 6.00  |  
|Ashburn                                |  |                | 25,551  |       | 9.52                          |   |        |                                                                  | 10,732 |  | 4.00 |        |  |       | 16,098 |  | 6.00  |  
|Worth                                  |  |                | 12,958  |       | 9.77                          |   |        |                                                                  | 5,305  |  | 4.00 |        |  |       | 7,957  |  | 6.00  |  
|Southeast                              |  |                | 17,981  |       | 9.63                          |   |        |                                                                  | 7,467  |  | 4.00 |        |  |       | 11,200 |  | 6.00  |  
|Quitman                                |  |                | 10,985  |       | 10.50                         |   |        |                                                                  | 4,183  |  | 4.00 |        |  |       | 6,275  |  | 6.00  |  
|Tier I Capital to Average Assets       |  |                |         |       |                               |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|Consolidated                           |  |                | 98,235  |       | 8.17                          |   |        |                                                                  | 48,087 |  | 4.00 |        |  |       | 60,109 |  | 5.00  |  
|Fitzgerald                             |  |                | 16,567  |       | 8.07                          |   |        |                                                                  | 8,207  |  | 4.00 |        |  |       | 10,259 |  | 5.00  |  
|Ashburn                                |  |                | 25,551  |       | 7.68                          |   |        |                                                                  | 13,306 |  | 4.00 |        |  |       | 16,632 |  | 5.00  |  
|Worth                                  |  |                | 12,958  |       | 7.44                          |   |        |                                                                  | 6,969  |  | 4.00 |        |  |       | 8,711  |  | 5.00  |  
|Southeast                              |  |                | 17,981  |       | 8.52                          |   |        |                                                                  | 8,445  |  | 4.00 |        |  |       | 10,556 |  | 5.00  |  
|Quitman                                |  |                | 10,985  |       | 7.78                          |   |        |                                                                  | 5,647  |  | 4.00 |        |  |       | 7,059  |  | 5.00  |  



- 31 -



---

(20) Regulatory Capital Matters (Continued)



|                                       |  |                |        |       |                              |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|-------------------------------------- |  | -------------- | ------ | ----- | ---------------------------- | - | ------ | ---------------------------------------------------------------- | ------ |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                                       |  | Actual         |        |       | For Capital AdequacyPurposes |   |        | To Be Well Capitalized Under Prompt
Corrective Action Provisions |       
|                                       |  | Amount         |        | Ratio |                              |   | Amount |                                                                  | Ratio  |  |      | Amount |  | Ratio |       
|As of December 31, 2005                |  | (in Thousands) |       
|Total Capital to Risk-Weighted Assets  |  |                |        |       |                              |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|Consolidated                           |  | $              | 95,873 |       | 11.02                        | % |        | $                                                                | 69,600 |  | 8.00 | %      |  | $     | 87,000 |  | 10.00 | %
|Fitzgerald                             |  |                | 16,801 |       | 11.34                        |   |        |                                                                  | 11,849 |  | 8.00 |        |  |       | 14,811 |  | 10.00 |  
|Ashburn                                |  |                | 28,183 |       | 11.07                        |   |        |                                                                  | 20,363 |  | 8.00 |        |  |       | 25,454 |  | 10.00 |  
|Worth                                  |  |                | 13,718 |       | 10.48                        |   |        |                                                                  | 10,475 |  | 8.00 |        |  |       | 13,094 |  | 10.00 |  
|Southeast                              |  |                | 15,025 |       | 10.30                        |   |        |                                                                  | 11,665 |  | 8.00 |        |  |       | 14,581 |  | 10.00 |  
|Quitman                                |  |                | 11,237 |       | 12.15                        |   |        |                                                                  | 7,397  |  | 8.00 |        |  |       | 9,246  |  | 10.00 |  
|Tier I Capital to Risk-Weighted Assets |  |                |        |       |                              |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|Consolidated                           |  |                | 85,049 |       | 9.78                         |   |        |                                                                  | 34,800 |  | 4.00 |        |  |       | 52,200 |  | 6.00  |  
|Fitzgerald                             |  |                | 14,988 |       | 10.12                        |   |        |                                                                  | 5,924  |  | 4.00 |        |  |       | 8,887  |  | 6.00  |  
|Ashburn                                |  |                | 24,999 |       | 9.82                         |   |        |                                                                  | 10,181 |  | 4.00 |        |  |       | 15,272 |  | 6.00  |  
|Worth                                  |  |                | 12,079 |       | 9.22                         |   |        |                                                                  | 5,238  |  | 4.00 |        |  |       | 7,856  |  | 6.00  |  
|Southeast                              |  |                | 13,687 |       | 9.39                         |   |        |                                                                  | 5,833  |  | 4.00 |        |  |       | 8,749  |  | 6.00  |  
|Quitman                                |  |                | 10,164 |       | 10.99                        |   |        |                                                                  | 3,698  |  | 4.00 |        |  |       | 5,548  |  | 6.00  |  
|Tier I Capital to Average Assets       |  |                |        |       |                              |   |        |                                                                  |        |  |      |        |  |       |        |  |       |  
|Consolidated                           |  |                | 85,049 |       | 7.77                         |   |        |                                                                  | 43,768 |  | 4.00 |        |  |       | 54,710 |  | 5.00  |  
|Fitzgerald                             |  |                | 14,988 |       | 8.03                         |   |        |                                                                  | 7,463  |  | 4.00 |        |  |       | 9,329  |  | 5.00  |  
|Ashburn                                |  |                | 24,999 |       | 7.60                         |   |        |                                                                  | 13,162 |  | 4.00 |        |  |       | 16,452 |  | 5.00  |  
|Worth                                  |  |                | 12,079 |       | 7.25                         |   |        |                                                                  | 6,668  |  | 4.00 |        |  |       | 8,335  |  | 5.00  |  
|Southeast                              |  |                | 13,687 |       | 8.36                         |   |        |                                                                  | 6,551  |  | 4.00 |        |  |       | 8,188  |  | 5.00  |  
|Quitman                                |  |                | 10,164 |       | 8.06                         |   |        |                                                                  | 5,044  |  | 4.00 |        |  |       | 6,305  |  | 5.00  |  



- 32 -



---

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

The parent companys balance sheets as of December 31, 2006 and 2005 and the related statements of income and comprehensive income 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



|                                                                                                                                                       |  |      |             |   |      |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ----------- | - | ---- | - | ---------- | -
|                                                                                                                                                       |  | 2006 |             |   | 2005 |  
|ASSETS                                                                                                                                                 |  |      |             |   |      |   |            |  
|Cash                                                                                                                                                   |  | $    | 2,223,581   |   |      | $ | 229,532    |  
|Premises and Equipment, Net                                                                                                                            |  |      | 1,273,215   |   |      |   | 1,284,350  |  
|Investment in Subsidiaries, at Equity                                                                                                                  |  |      | 97,270,695  |   |      |   | 88,376,235 |  
|Other                                                                                                                                                  |  |      | 998,759     |   |      |   | 788,257    |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|Total Assets                                                                                                                                           |  | $    | 101,766,250 |   |      | $ | 90,678,374 |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|                                                                                                                                                       |  |     
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                   |  |      |             |   |      |   |            |  
|Liabilities                                                                                                                                            |  |      |             |   |      |   |            |  
|Dividends Payable                                                                                                                                      |  | $    | 641,314     |   |      | $ | 538,599    |  
|Other                                                                                                                                                  |  |      | 284,775     |   |      |   | 437,783    |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|                                                                                                                                                       |  |      | 926,089     |   |      |   | 976,382    |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|Other Borrowed Money                                                                                                                                   |  |      |            |   |      |   | 2,500,000  |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|Subordinated Debt                                                                                                                                      |  |      | 24,229,000  |   |      |   | 19,074,000 |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|Stockholders Equity                                                                                                                                   |  |      |             |   |      |   |            |  
|Common Stock, Par Value $1 a Share; Authorized 20,000,000 Shares, Issued 7,189,937 and 7,181,320 Shares as of December 31, 2006 and 2005,
Respectively |  |      | 7,189,937   |   |      |   | 7,181,320  |  
|Paid-In Capital                                                                                                                                        |  |      | 24,257,392  |   |      |   | 23,999,775 |  
|Retained Earnings                                                                                                                                      |  |      | 46,416,571  |   |      |   | 38,601,441 |  
|Restricted Stock  Unearned Compensation                                                                                                               |  |      | (277,918    | ) |      |   | (301,883   | )
|Accumulated Other Comprehensive Loss, Net of Tax                                                                                                       |  |      | (974,821    | ) |      |   | (1,352,661 | )
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|                                                                                                                                                       |  |      | 76,611,161  |   |      |   | 68,127,992 |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  
|Total Liabilities and Stockholders Equity                                                                                                             |  | $    | 101,766,250 |   |      | $ | 90,678,374 |  
|                                                                                                                                                       |  |      |             |   |      |   |            |  



- 33 -



---

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

COLONY BANKCORP, INC. (PARENT ONLY)

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31



|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|------------------------------------------------------------------------ |  | ---- | ---------- | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                         |  | 2006 |            | 2005 |   |           | 2004 | 
|Income                                                                   |  |      |            |      |   |           |      |  |   |           |  
|Dividends from Subsidiaries                                              |  | $    | 6,800,000  |      | $ | 4,350,000 |      |  | $ | 2,350,000 |  
|Other                                                                    |  |      | 168,763    |      |   | 109,119   |      |  |   | 89,888    |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|                                                                         |  |      | 6,968,763  |      |   | 4,459,119 |      |  |   | 2,439,888 |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|Expenses                                                                 |  |      |            |      |   |           |      |  |   |           |  
|Interest                                                                 |  |      | 1,926,647  |      |   | 1,323,247 |      |  |   | 856,993   |  
|Amortization                                                             |  |      | 30,317     |      |   | 30,317    |      |  |   | 29,379    |  
|Salaries and Employee Benefits                                           |  |      | 1,013,523  |      |   | 1,053,636 |      |  |   | 807,142   |  
|Other                                                                    |  |      | 735,821    |      |   | 716,954   |      |  |   | 638,068   |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|                                                                         |  |      | 3,706,308  |      |   | 3,124,154 |      |  |   | 2,331,582 |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|Income Before Taxes and Equity in Undistributed Earnings of Subsidiaries |  |      | 3,262,455  |      |   | 1,334,965 |      |  |   | 108,306   |  
|Income Tax Benefits                                                      |  |      | 1,027,921  |      |   | 1,000,501 |      |  |   | 728,733   |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|Income Before Equity in Undistributed Earnings of Subsidiaries           |  |      | 4,290,376  |      |   | 2,335,466 |      |  |   | 837,039   |  
|Equity in Undistributed Earnings of Subsidiaries                         |  |      | 5,861,619  |      |   | 6,641,750 |      |  |   | 7,232,255 |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|Net Income                                                               |  |      | 10,151,995 |      |   | 8,977,216 |      |  |   | 8,069,294 |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|Other Comprehensive Income, Net of Tax                                   |  |      |            |      |   |           |      |  |   |           |  
|Gains (Losses) on Securities Arising During the Year                     |  |      | 377,840    |      |   | (755,824  | )    |  |   | (638,921  | )
|Reclassification Adjustment                                              |  |      |           |      |   |          |      |  |   | 20,432    |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|Unrealized Gains (Losses) on Securities                                  |  |      | 377,840    |      |   | (755,824  | )    |  |   | (618,489  | )
|                                                                         |  |      |            |      |   |           |      |  |   |           |  
|Comprehensive Income                                                     |  | $    | 10,529,835 |      | $ | 8,221,392 |      |  | $ | 7,450,805 |  
|                                                                         |  |      |            |      |   |           |      |  |   |           |  



- 34 -



---

(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



|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                 |  | 2006 |            |   | 2005 |   |            | 2004 | 
|Cash Flows from Operating Activities             |  |      |            |   |      |   |            |      |  |   |            |  
|Net Income                                       |  | $    | 10,151,995 |   |      | $ | 8,977,216  |      |  | $ | 8,069,294  |  
|Adjustments to Reconcile Net Income to Net Cash  |  |      |            |   |      |   |            |      |  |   |            |  
|Provided from Operating Activities               |  |      |            |   |      |   |            |      |  |   |            |  
|Depreciation and Amortization                    |  |      | 309,388    |   |      |   | 294,155    |      |  |   | 255,546    |  
|Equity in Undistributed Earnings of Subsidiaries |  |      | (5,861,619 | ) |      |   | (6,641,750 | )    |  |   | (7,232,255 | )
|Other                                            |  |      | (267,646   | ) |      |   | 123,856    |      |  |   | 122,362    |  
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|                                                 |  |      | 4,332,118  |   |      |   | 2,753,477  |      |  |   | 1,214,947  |  
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|Cash Flows from Investing Activities             |  |      |            |   |      |   |            |      |  |   |            |  
|Capital Infusion in Subsidiary                   |  |      | (2,500,000 | ) |      |   | (2,950,000 | )    |  |   | (2,800,000 | )
|Purchases of Premises and Equipment              |  |      | (73,749    | ) |      |   | (244,268   | )    |  |   | (16,930    | )
|Investment in Statutory Trusts                   |  |      | (155,000   | ) |      |   |           |      |  |   | (140,000   | )
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|                                                 |  |      | (2,728,749 | ) |      |   | (3,194,268 | )    |  |   | (2,956,930 | )
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|Cash Flows from Financing Activities             |  |      |            |   |      |   |            |      |  |   |            |  
|Dividends Paid                                   |  |      | (2,264,320 | ) |      |   | (1,993,100 | )    |  |   | (1,749,447 | )
|Principal Payments on Notes and Debentures       |  |      | (2,500,000 | ) |      |   | (1,500,000 | )    |  |   | (1,000,000 | )
|Proceeds from Notes and Debentures               |  |      | 5,155,000  |   |      |   | 4,000,000  |      |  |   | 4,640,000  |  
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|                                                 |  |      | 390,680    |   |      |   | 506,900    |      |  |   | 1,890,553  |  
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|Increase in Cash                                 |  |      | 1,994,049  |   |      |   | 66,109     |      |  |   | 148,570    |  
|                                                 |  |      |           
|Cash, Beginning                                  |  |      | 229,532    |   |      |   | 163,423    |      |  |   | 14,853     |  
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  
|Cash, Ending                                     |  | $    | 2,223,581  |   |      | $ | 229,532    |      |  | $ | 163,423    |  
|                                                 |  |      |            |   |      |   |            |      |  |   |            |  



- 35 -



---

(22) Earnings Per Share

SFAS No. 128 establishes standards for computing and presenting basic and diluted earnings per share. Basic earnings per share is calculated and presented based on income available to common stockholders divided by the weighted average
number of shares outstanding during the reporting periods. Diluted earnings per share reflects the potential dilution of restricted stock. The following presents earnings per share for the years ended December 31, 2006, 2005 and 2004 under the
requirements of Statement 128:



|                                                                                         |  |                  |            |                           |           |     |   |     
|---------------------------------------------------------------------------------------- |  | ---------------- | ---------- | ------------------------- | --------- | --- | - | ----
|December 31, 2006                                                                        |  | Income Numerator |            | Common Shares Denominator |           | EPS
|Basic EPS                                                                                |  |                  |            |                           |           |     |   |     
|Income Available to Common Stockholders                                                  |  | $                | 10,151,995 |                           | 7,176,894 |     | $ | 1.41
|                                                                                         |  |                  |            |                           |           |     |   |     
|Dilutive Effect of Potential Common Stock                                                |  |                  |            |                           |           |     |   |     
|Restricted Stock                                                                         |  |                  |            |                           | 843       |     |   |     
|                                                                                         |  |                  |            |                           |           |     |   |     
|Diluted EPS                                                                              |  |                  |            |                           |           |     |   |     
|Income Available to Common Stockholders After Assumed Conversions of Dilutive Securities |  | $                | 10,151,995 |                           | 7,177,737 |     | $ | 1.41
|                                                                                         |  |                  |            |                           |           |     |   |     
|                                                                                         |  |                  |           
|December 31, 2005                                                                        |  |                  |            |                           |           |     |   |     
|Basic EPS                                                                                |  |                  |            |                           |           |     |   |     
|Income Available to Common Stockholders                                                  |  | $                | 8,977,216  |                           | 7,168,406 |     | $ | 1.25
|                                                                                         |  |                  |            |                           |           |     |   |     
|Dilutive Effect of Potential Common Stock                                                |  |                  |            |                           |           |     |   |     
|Restricted Stock                                                                         |  |                  |            |                           | 2,694     |     |   |     
|                                                                                         |  |                  |            |                           |           |     |   |     
|Diluted EPS                                                                              |  |                  |            |                           |           |     |   |     
|Income Available to Common Stockholders After Assumed Conversions of Dilutive Securities |  | $                | 8,977,216  |                           | 7,171,100 |     | $ | 1.25
|                                                                                         |  |                  |            |                           |           |     |   |     
|                                                                                         |  |                  |           
|December 31, 2004                                                                        |  |                  |            |                           |           |     |   |     
|Basic EPS                                                                                |  |                  |            |                           |           |     |   |     
|Income Available to Common Stockholders                                                  |  | $                | 8,069,294  |                           | 7,131,028 |     | $ | 1.13
|                                                                                         |  |                  |            |                           |           |     |   |     
|Dilutive Effect of Potential Common Stock                                                |  |                  |            |                           |           |     |   |     
|Restricted Stock                                                                         |  |                  |            |                           | 26,605    |     |   |     
|                                                                                         |  |                  |            |                           |           |     |   |     
|Diluted EPS                                                                              |  |                  |            |                           |           |     |   |     
|Income Available to Common Stockholders After Assumed Conversions of Dilutive Securities |  | $                | 8,069,294  |                           | 7,157,633 |     | $ | 1.13
|                                                                                         |  |                  |            |                           |           |     |   |     



- 36 -