Colony Bankcorp, Inc., the holding company for Colony Bank, a Georgia state-chartered bank, today announced the signing of an Agreement and Plan of Merger with LBC Bancshares, Inc., parent company of Calumet Bank, a Georgia state-chartered bank, under which Colony has agreed to acquire 100% of the common stock of LBC in a combined stock-and-cash transaction valued at approximately $34.1 million.

LBC, headquartered in LaGrange, Georgia, is the parent company for Calumet Bank, which 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. Upon completion of the transaction, Colony is expected to have approximately $1.4 billion in assets, $930 million in loans, and $1.2 billion in deposits. The transaction is expected to be immediately accretive to Colony's fully diluted earnings per share, excluding transaction costs.

Under the terms of the Agreement and Plan of 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. The aggregate consideration is valued at approximately $34.1 million, based on 1,447,554 LBC common shares outstanding, 101,842 LBC in-the money options, 32,806 LBC in-the-money warrants and Colony's stock price of $16.10 per share as of December 17, 2018.

The Agreement and Plan of Merger has been approved by the Boards of Directors of Colony and LBC. The closing of the transaction, which is expected to occur in the first half of 2019, is subject to customary conditions, including regulatory approval and approval by the shareholders of LBC.

Commenting on the announcement, Heath Fountain, President and Chief Executive Officer, said, "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. 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."

"Outside of the appealing financial and growth rationale for this transaction, we also are pleased to note other positive intangibles, like a strong cultural and operational fit between our organizations, as well as likeminded core philosophies on community banking," Fountain continued. "These factors should result in a smooth integration, which should be seamless for Calumet's customers. We look forward to earning their confidence and continued loyalty as we work to deliver custom solutions that help them achieve their financial goals." Fountain added that Leonard "Lenny" H. Bateman, Jr., LBC Bancshares President and Chief Executive Officer, 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. Fountain expects that role to be expanded within the Company's corporate structure in the future.

Bateman commented, "As our company considered its growth path and strategic alternatives, our Board was quickly impressed by Colony and its team. Colony will provide greater capital resources and operational scale that will allow us to grow as part of a larger community bank that shares our views about, and commitment to, the customers and communities we serve. By joining forces with Colony, we help create a stronger regional bank with more than $1.4 billion in total assets and the tools and resources to enhance long-term value for our shareholders."

Hovde Group, LLC served as financial advisor and Alston & Bird LLP provided legal counsel to Colony. Banks Street Partners, LLC served as financial advisor to LBC and James-Bates-Brannan-Grover served as its legal advisor.