KBRA Comments on Colony Bancorp, Inc.'s Proposed Merger with First Reliance Bancshares, Inc.

About this update from Colony Bankcorp, Inc.

NEW YORK, June 26, 2026--(BUSINESS WIRE)--On June 24, 2026, Fitzgerald, GA-based Colony Bancorp, Inc. (NYSE: CBAN) ("Colony"), parent company of Colony Bank, and Florence, SC-based First Reliance Bancshares, Inc. (OTCQX: FSRL) ("First Reliance"), parent company of First Reliance Bank, jointly announced that they had entered into a definitive merger agreement pursuant to which First Reliance Bancshares, Inc. would merger with and into Colony Bancorp, Inc., and First Reliance Bank would merger with and into Colony Bank. The transaction, valued at $163 million (P/TBV: 1.6x), consists of 80% stock and 20% cash consideration and is expected to close in 4Q26, subject to regulatory and shareholder approval. In our view, the proposed merger is consistent with Colony's strategy of expanding into attractive contiguous markets through both acquisitive and organic means. The transaction establishes Colony's banking franchise in South Carolina through First Reliance's well-established community banking platform, providing an established presence across several of the state's largest metropolitan markets while extending the company's existing Southeast footprint in Georgia, Alabama, and Florida. Upon closing, the combined entity is expected to have ~$5.0 billion in assets, $3.2 billion in loans, and $4.0 billion in deposits. We view the limited geographic overlap as a positive, allowing Colony to establish a banking franchise in South Carolina through an experienced management team and an established community banking platform rather than building a presence organically. Under the agreement, Rick Saunders, Chief Executive Officer of First Reliance, will join Colony as Executive Vice Chairman and a member of the Board of Directors, while several additional members of First Reliance's senior management team will assume key leadership positions within the combined organization, including oversight of South Carolina operations. In our view, retaining local leadership should facilitate a smooth integration by preserving customer relationships, local market expertise, and First Reliance's relationship-focused community banking model while enabling Colony to leverage its broader product offerings and specialty business lines across the South Carolina franchise. The transaction is also expected to enhance Colony's operating profile through ~35% cost saves relative to First Rel...

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