The companies issued a joint statement on June 24 announcing their signing of a definitive merger agreement. First Reliance Bancshares is the holding company for First Reliance Bank, which has nine branches in South Carolina, according to its website. Colony, with its headquarters in Fitzgerald, GA, is the holding company for Colony Bank, which has locations in Georgia and Alabama.
First Reliance shareholders may choose to receive either $19.75 in cash or 0.94 shares of Colony common stock for each share of First Reliance common stock, the statement said. About 20% of First Reliance common stock will be converted to cash consideration, while 80% will be converted to Colony common stock.
The boards of both companies unanimously approved the transaction, which is expected to close in Q4, subject to regulatory and shareholder approval, and other customary closing conditions, according to the statement.
The combined company will have about $5 billion in total assets, $4 billion in total deposits and $3.2 billion in loans. The transaction is expected to be immediately accretive to Colony’s earnings per share, excluding one-time merger-related expenses.
First Reliance SC locations will continue operating under the First Reliance brand after the acquisition.
Colony CEO Heath Fountain said in the statement, “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 founder and CEO, said in the statement, “This partnership allows us to preserve our cherished culture while gaining the operational scale required to compete at the highest level. Our customers will enjoy access to broader banking capabilities and enhanced technology, while our employees will benefit from being part of a larger, dynamic organization with expanded career opportunities.”
Among First Reliance officers to assume new roles in Colony:
Saunders will join Colony as executive vice chairman, board member and a member of the executive team.
President Justin Strickland will become Colony’s president for South Carolina.
CFO Robert Haile will become chief investment officer and treasurer.
Chief Credit Officer Brook Moore will become Colony’s credit officer for South Carolina.
Mortgage division President Chuck Stuart will become co-president of Colony Mortgage.
First Reliance Director Rick Redden will join the Colony board, while First Reliance Chairman Dale Lusk will “maintain an active advisory role with formal board observation rights,” the statement said.