On July 23, 2025, Fitzgerald, GA-based Colony Bankcorp, Inc. (NYSE:CBAN) ("Colony"), parent company of Colony Bank, and Thomasville, GA-based TC Bancshares (OTCQX:TCBC) ("TC Bancshares"), parent company of TC Federal Bank, jointly announced that they had entered into a definitive agreement pursuant to which TC Bancshares, Inc. would merge with and into Colony Bankcorp, Inc., and TC Federal Bank would merge with and into Colony Bank. The transaction, valued at $86.1 million (P/TBV: 1.1x), is 80% stock and 20% cash consideration and is expected to close in 4Q25 pending regulatory approval. Under the agreement, Greg Eiford, TC Bancshares' President and CEO, would be joining CBAN as an Executive VP and Chief Community Banking Officer.

In our view, the proposed acquisition is in line with Colony's overall growth strategy of expansion into contiguous markets through both acquisitive and organic means. The transaction allows CBAN to expand its footprint in Georgia, notably, in Thomasville and the Savannah MSA, in addition to Tallahasse and Jacksonville, Florida, while providing solid opportunities for commercial growth and expansion of its fee-based business lines and continuing focus on its commitment to community banking. The acquisition is expected to add approximately $571 million in assets to CBAN's balance sheet at close, with proforma $3.8 billion in total assets, $2.4 billion in loans, and $3.1 billion in deposits, as well as adding 4 branch locations. The combined company's pro forma financial projections include strong profitability metrics following the close of the transaction, in part, due to expected cost savings of approximately 33% of TCBC's operating base. In addition to the cost savings, earnings should receive a temporary boost from accretion income, with CBAN reporting an estimated $13.3 million in interest rate marks on the loan portfolio.

Regarding credit quality, both institutions have reflected solid asset quality performance over time, including nominal credit loss history, which is underpinned by disciplined underwriting and conservative management teams that have extensive knowledge of operating markets. The proforma loan portfolio is not expected to change materially as both institutions have complementary loan mixes, with investor CRE remaining the largest component at ~32% of total loans (including multifamily), followed by C&I (including owner-occupied CRE) at ~25%, and residential mortgage at 22%. CBAN conducted a review of the loan portfolio (67% of loans) and expects to record a total gross pre-tax credit mark of $4 million (1%) along with a Day 2 CECL adjustment of $2 million in relation to the transaction.

With respect to deposit mix, TCBC maintains a deposit base concentrated in interest-bearing deposits resulting in somewhat elevated deposit costs of 2.45%. That said, NIB deposits are solid at 15% of total deposits as of 2Q25. Furthermore, Colony has managed solid capital metrics with a CET1 ratio of 12.3% at 2Q25, and management anticipates this ratio to improve to 12.5% at closing. Overall, we believe that the proposed acquisition complements CBAN's growth strategy, and while there is an inherent level of integration risk involved with any bank M&A transaction, such risk is somewhat mitigated by management's previous M&A integration experience.

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KBRA Comments on Colony Bankcorp, Inc.'s Proposed Acquisition of TC Bancshares, Inc.