Colony Bankcorp (CBAN) M&A announcement summary

Deal rationale and strategic fit

• Merger creates a premier Southeast community bank with aligned cultures, expanded presence in Alabama, Florida, Georgia, and South Carolina, and a focus on relationship-driven banking.

• Expands into South Carolina's four largest markets and key growth corridors, enhancing geographic reach and market share.

• Combines complementary business lines, customer bases, and advanced digital tools, improving funding, operating profiles, and product offerings.

• Creates the largest bank under $10B headquartered in SC or GA, providing scale to compete regionally and nationally.

• Leadership from both organizations will remain, ensuring continuity and leveraging combined expertise.

Financial terms and conditions

• Total transaction value is $163 million, with 80% stock and 20% cash consideration; First Reliance shareholders can elect $19.75 in cash or 0.94 Colony shares per share, subject to proration.

• Implied post-merger ownership split is 77%/23%.

• Combined company will have ~$5 billion in assets, ~$3 billion in loans, and ~$4 billion in deposits.

• Price/tangible book value per share: 162%; price/2027E earnings: 11.7x; price/2027E earnings plus cost saves: 6.8x.

• Transaction expected to be immediately accretive to earnings per share, excluding one-time expenses.

Synergies and expected cost savings

• Anticipated cost savings of approximately 35% of FSRL's projected 2028 non-interest expense, phased in 60% by 2027 and 100% thereafter.

• Revenue synergies identified but not included in pro forma modeling; expected to further increase earnings.

• ~20% EPS accretion expected in 2027 with fully realized cost savings.

• Opportunities to leverage technology partnerships and vendor relationships for additional efficiencies.

• Significant savings expected from personnel, vendor, and technology integration.