8-K: Colony Bankcorp Completes TC Bancshares Merger

Colony Bankcorp, Inc. successfully completed its merger with TC Bancshares, Inc., creating a combined entity with approximately $3.7 billion in assets.

Summary

• Colony Bankcorp, Inc. (Colony) completed its merger with TC Bancshares, Inc. (TCBC) on December 1, 2025, with Colony as the surviving entity.
• TCBC shareholders received either $21.25 in cash or 1.25 shares of Colony common stock per share, subject to proration (approximately 20% cash, 80% stock).
• Colony issued approximately 3,839,748 shares of its common stock and paid approximately $15,428,244 in cash to former TCBC shareholders.
• TCBC stock options were cancelled and converted into cash payments based on the Per Share Cash Consideration minus the exercise price.
• The combined organization now has approximately $3.7 billion in total assets, $3.0 billion in total deposits, and $2.4 billion in total loans.
• Unaudited pro forma combined net income for the year ended December 31, 2024, is estimated at $21,772 thousand, and for the nine months ended September 30, 2025, at $21,707 thousand.
• Pro forma adjustments include recording TCBC's assets and liabilities at estimated fair value, goodwill of $3,871 thousand, and a core deposit intangible of $11.5 million.
• One-time merger-related charges are estimated at approximately $3.4 million after-tax for Colony and $5.1 million net of tax for TCBC, not reflected in pro forma income statements.

Sentiment

Score: 6

Explanation: While the merger completion is a positive strategic move for growth and market expansion, the immediate pro forma financial results show a decrease in net income compared to the sum of the standalone entities, indicating short-term financial dilution or integration costs impacting profitability. Management's commentary is positive, but the financial adjustments present a more cautious outlook on immediate earnings.

Positives

• The merger strengthens Colony's position as a leading community bank in the Southeast, increasing total assets to approximately $3.7 billion, total deposits to $3.0 billion, and total loans to $2.4 billion.
• Management anticipates the acquisition will provide the combined company with the ability to better serve existing customers, reach new customers, and reduce operating expenses.
• The cultural alignment between the organizations is strong, positioning the combined entity well for market expansion and service deepening across Georgia and Florida.

Negatives

• The unaudited pro forma combined net income for the year ended December 31, 2024, of $21,772 thousand is lower than the sum of historical net incomes for Colony ($23,868 thousand) and TCBC ($595 thousand), which totals $24,463 thousand.
• The unaudited pro forma combined net income for the nine months ended September 30, 2025, of $21,707 thousand is slightly lower than the sum of historical net incomes for Colony ($20,410 thousand) and TCBC ($1,413 thousand), which totals $21,823 thousand.
• Significant one-time merger-related charges are expected, estimated at approximately $3.4 million after-tax for Colony and $5.1 million net of tax for TCBC, which will impact near-term earnings.

Risks

• Current and future economic conditions, including inflation, interest rate fluctuations, changes in the economy or global supply chain, and high unemployment rates.
• Changes or lack of changes in government interest rate policies and their impact on business, net interest margin, and mortgage operations.
• Increased competition for deposits.
• Changes in the quality or composition of loan or investment portfolios, including adverse developments in borrower industries or repayment ability.
• Any deterioration in commercial real estate market fundamentals.
• The risk that cost savings and revenue synergies from the merger are less than or different from expectations.
• Disruption from the merger with customer, supplier, or employee relationships.
• The possibility that costs, fees, expenses, and charges related to the merger may be greater than anticipated.
• Risks related to the integration of the combined businesses, including delays, higher costs, or increased difficulty.
• Diversion of management time on merger-related issues.
• The ability of Colony to effectively manage the larger and more complex operations of the combined company.
• The risk of expansion into new geographic or product markets.
• Reputational risk and the reaction of customers to the merger.
• The risk of potential litigation or regulatory action related to the merger.
• Colony's ability to identify, consummate, and achieve synergies from other potential future acquisitions.
• Colony's ability to manage any unexpected outflows of uninsured deposits and avoid selling investment securities or other assets at an unfavorable time or at a loss.
• Changes in state and federal legislation, regulations, or policies applicable to banks and other financial service providers.
• The effectiveness of controls and procedures to detect, prevent, mitigate, and manage fraud or misconduct, including cybersecurity attacks.
• Dependence on information technology systems of third-party service providers and the risk of system failures or breaches.
• The impact, extent, and timing of technological changes.
• Concentrations of credit or deposit exposure.
• The impact of natural disasters, pandemics, acts of war or terrorism, or other catastrophic events.
• Events giving rise to international or regional political instability and their broader impacts on financial markets.

Future Outlook

Management expects the merger to provide the combined company with the ability to better serve customers, reach new customers, and reduce operating expenses. The conversion of all core systems, signage, and branding to Colony Bank is anticipated to occur in early 2026, with detailed conversion information to be provided to customers in advance.

Management Comments

• "We are pleased to welcome the TC Federal team and their customers to Colony."
• "We have worked closely with Greg Eiford and his team over the past several months, and we have seen firsthand their commitment to customers, team members, and community banking."
• "The cultural alignment between our organizations is strong, and together we are well positioned to expand our presence and deepen our service across key Georgia and Florida markets."

Industry Context

This merger significantly enhances Colony Bankcorp's scale, solidifying its position as a leading community bank in the Southeast. The expansion into key Georgia and Florida markets through the acquisition of TC Bancshares aligns with a broader trend of consolidation within the community banking sector, driven by the pursuit of economies of scale, increased market share, and enhanced competitive capabilities against larger regional and national banks.

Comparison to Industry Standards

• NA The filing does not provide specific comparable companies, projects, or results for direct industry standard comparison.

Legal Proceedings

• The forward-looking statements section mentions a general "risk of potential litigation or regulatory action related to the Merger" as a factor that could cause actual results to differ materially, but no specific ongoing legal proceedings are disclosed.

Stakeholder Impact

• Shareholders of Colony Bankcorp will experience dilution due to the issuance of approximately 3.84 million new shares, but gain from increased scale and market presence.
• Former TCBC shareholders received a mix of cash and Colony common stock, becoming shareholders in the larger combined entity.
• Customers of TC Federal Bank will continue to be served through existing channels until core systems and branding are converted to Colony Bank in early 2026, with detailed information provided in advance.
• Employees of TC Federal Bank are welcomed to the Colony team, with management noting strong cultural alignment, though potential redundancies and integration challenges are inherent in mergers.

Next Steps

• Conversion of all core systems, signage, and branding of TC Federal Bank to Colony Bank, expected to occur in early 2026.
• Customers of TC Federal Bank will receive detailed conversion information in advance of any changes.

Key Dates

Recommendation

The completion of the merger provides strategic benefits through increased scale and market presence in the Southeast, which is a long-term positive. However, the immediate pro forma financial results indicate a reduction in net income and EPS compared to the sum of the standalone entities, suggesting potential short-term dilution or significant integration costs. While management expresses confidence in future cost savings and revenue synergies, these are not yet reflected in the pro forma statements and carry execution risk. Given the immediate financial impact and the inherent risks of integration, a 'hold' recommendation is appropriate until there is clearer evidence of successful integration and the realization of anticipated synergies and cost savings.

Keywords

Colony Bankcorp, TC Bancshares, Merger, Acquisition, Community Banking, Financial Services, SEC Filing, 8-K, Pro Forma Financials, Bank Merger, Georgia Banking, Florida Banking, CBAN, TCBC