Colony Bankcorp signed an agreement and plan of merger with LBC Bancshares, parent company of Calumet Bank. Colony will acquire 100% of the common stock of LBC in a combined stock-and-cash transaction valued at approximately $34.1 million.
Headquartered in LaGrange, GA, Calumet Bank has two branches – one each in LaGrange and Columbus – as well as a loan production office in Atlanta. As of September 30, 2018, LBC had approximately $228 million in assets, $130 million in loans, $204 million in deposits and $19 million in tangible common equity.
The transaction is expected to be immediately accretive to Colony’s fully diluted earnings per share, excluding transaction costs.
Under the terms of the merger, each LBC shareholder will have the option to receive either $23.50 in cash or 1.3239 shares of Colony’s common stock in exchange for each share of LBC common stock, subject to customary proration and allocation procedures, such that 55% of LBC shares will receive the stock consideration and 45% will receive the cash consideration, and at least 50% of the merger consideration will be paid in Company stock.
Both boards of directors approved the plan. The closing of the transaction is expected to occur in the first half of 2019, subject to customary conditions, including regulatory and LBC shareholder approval.
“We are pleased to announce the acquisition of LBC and Calumet Bank. This acquisition will allow Colony to accelerate its growth by increasing our footprint to include the attractive Western Georgia markets of LaGrange and Columbus and additionally providing us access to the Atlanta market via Calumet’s loan production office there,” said Heath Fountain, Colony president and CEO. “Considering Calumet’s market strength and reputation, as well as the lack of overlap between our markets, we believe significant opportunities exist for continued growth in LaGrange, Columbus and Atlanta as we increase our combined company’s operational scale and bring additional resources to our new markets.”
LBC President and CEO Leonard “Lenny” H. Bateman, Jr. will join Colony when the acquisition is completed, with an initial focus on ensuring a smooth transition in customer relationships and overseeing regional growth strategies. Bateman’s new role will likely be expanded within Colony’s corporate structure in the future.
Hovde Group served as financial advisor, while Alston & Bird provided legal counsel to Colony. Banks Street Partners served as financial advisor to LBC with James-Bates-Brannan-Grover as its legal advisor.
Founded in 1975 and headquartered in Fitzgerald, GA, Colony operates 27 full-service branches throughout Central, Southern and Coastal Georgia, as well as a full-service website.
