Kroll Bond Rating Agency (KBRA) commented on Colony Bankcorp, Inc.'s proposed acquisition of TC Bancshares, Inc., stating that the transaction aligns with Colony's growth strategy of expanding into contiguous markets. The acquisition is expected to enhance Colony's footprint in Georgia, including Thomasville and the Savannah MSA, as well as Tallahassee and Jacksonville, Florida.
The acquisition is projected to add approximately $571 million in assets to Colony's balance sheet at closing, resulting in a proforma total of $3.8 billion in assets, $2.4 billion in loans, and $3.1 billion in deposits, along with four new branch locations. The combined company's pro forma financial projections include strong profitability metrics, partly due to expected cost savings of approximately 33% of TC Bancshares' operating base.
KBRA noted that both institutions have demonstrated solid asset quality performance, supported by disciplined underwriting. Colony expects to record a total gross pre-tax credit mark of $4 million (1%) and a Day 2 CECL adjustment of $2 million related to the transaction. The CET1 ratio is anticipated to improve to 12.5% at closing, indicating strong capital metrics post-merger.
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