Colony Bankcorp completed its acquisition of First Reliance Bancshares on Nov. 1, combining the two companies and their banks. Colony Bankcorp remains the parent company, and its Georgia-based Colony Bank is the surviving bank.
Former First Reliance shareholders received a choice of cash or Colony shares, subject to limits on how much of the deal could be paid in stock. Colony also took on certain First Reliance debt obligations.
Key details
- Shareholder consideration: Each eligible First Reliance common and preferred share was exchanged for either $19.75 in cash or 0.94 Colony Bankcorp shares. Cash was paid instead of fractional shares.
- Limit on stock consideration: No more than 80% of First Reliance shares could be converted into Colony stock. Elections were subject to allocation procedures, so not every holder’s preference was necessarily fulfilled in full.
- Total consideration: Colony expects to issue about 6.19 million shares and pay about $32.66 million in cash to former First Reliance shareholders and equity-award holders. The cash total includes payments related to stock options and fractional shares.
- Employee equity awards: First Reliance restricted shares vested at closing and converted into the same cash-or-stock choice available to shareholders. Most restricted stock units also vested and were settled on that basis. Certain other units were converted into Colony restricted stock units at the 0.94 exchange ratio and retain substantially similar vesting terms.
- Stock options: First Reliance options were cancelled. Options with exercise prices below $19.75 received cash based on the difference between that price and the option’s exercise price; options priced at or above $19.75 were cancelled without payment.
- Colony shares: Colony shares already outstanding before the transaction were unaffected.
- Debt assumed: Colony assumed First Reliance’s 3.375% fixed-to-floating-rate subordinated notes due Oct. 1, 2031, with principal of up to $10 million, as well as the related obligations tied to junior subordinated debentures underlying First Reliance Capital Trust I’s trust preferred securities.
- Note interest and terms: From Oct. 1, 2026, the notes carry a floating rate of three-month Term SOFR plus 2.45 percentage points, payable quarterly. They are unsecured and subordinated, and Colony may redeem them under their terms, subject to any required regulatory approval.
The transaction places First Reliance’s banking operations under Colony Bank while leaving Colony Bankcorp’s existing shares outstanding. Colony also now bears First Reliance’s assumed subordinated debt obligations.