Colony Bankcorp in Fitzgerald, Ga., has agreed to buy First Reliance Bancshares in Florence, S.C.
The $3.9 billion-asset Colony said in a press release that it will pay $163 million in stock for the $1.1 billion-asset First Reliance. The deal, which is expected to close in the fourth quarter, priced First Reliance at 162% of its tangible book value.
“This partnership represents a truly transformational milestone for both Colony and First Reliance,” Heath Fountain, Colony’s CEO, said in the release. “By uniting our teams, we are creating a premier Southeast banking franchise that is uniquely positioned to capture market share in some of the most dynamic economies in the country.”
Rick Saunders, First Reliance’s CEO, will join Colony as executive vice chairman. Justin Strickland, First Reliance’s president, will become Colony’s market president in South Carolina. First Reliance director Rick Redden will join Colony’s board.
The transaction is expected to be 20% accretive to Colony’s 2027 earnings per share, excluding merger-related expenses. It should take three to four years to earn back an estimated 12% dilution to tangible book value.
Colony plans to cut 35% of First Reliance’s annual noninterest expense. It expects to incur $16 million of merger-related expenses.
Keefe, Bruyette & Woods and Alston & Bird advised Colony. Hovde Group and Ward and Smith advised First Reliance.