Colony Bankcorp Bets $163M on South Carolina Expansion

Colony Bankcorp is paying $163 million for First Reliance Bancshares, a deal that pushes the Georgia bank into South Carolina and raises the real question: can a community-bank buyer win scale without losing the local relationships it’s buying?

The stock-and-cash transaction, according to American Banker, would give Fitzgerald, Georgia-based Colony a direct foothold in a state its executives describe as growing faster than its existing markets. The deal is expected to close in the fourth quarter of 2026, pending approvals from regulators and shareholders.

How much South Carolina does Colony Bankcorp get from First Reliance?

Colony gets a $1.1 billion-asset bank rooted in Florence, South Carolina, with operations in five of the Palmetto State’s largest metro areas, including Charleston, Columbia and Greenville.

That matters because Colony already has offices in Georgia, Florida and Alabama, but not South Carolina. First Reliance gives it a running start in the state instead of forcing it to build a branch network one market at a time.

The combined institution is expected to have approximately $5 billion of assets. That keeps the deal in regional-bank territory, but it changes Colony’s map.

Colony CEO Heath Fountain framed the transaction as a scale play with a local-banking pitch.

"By bringing Colony and First Reliance together, we are filling that void and establishing an institution that is large enough to handle major lending needs but local enough to remain focused on our customer relationships."

Investors did not cheer the announcement. Colony’s share price fell 5.6% on Thursday, American Banker reported.

Why is Colony Bankcorp chasing the First Reliance market now?

Colony’s stated bet is that First Reliance’s markets offer better growth than its current footprint.

Fountain told analysts that South Carolina has seen significant growth over the last several years and is positioned to continue that trend. Colony is projecting faster population growth and larger household income growth in First Reliance’s markets than in Colony’s existing geographies.

American Banker also reported that South Carolina had faster population growth in 2025 than every other U.S. state. That gives Colony’s move a clear strategic logic: buy into existing customer relationships in a high-growth neighboring state, then use a larger balance sheet to pursue bigger lending relationships.

First Reliance CEO Rick Saunders, who founded the company in 1999, said the deal should let the combined bank do more with existing customers.

"For our customers in South Carolina, this means continuity. Joining forces, we are bringing scale and enhanced operational efficiency into our existing branch footprint."

Saunders told an analyst that the larger combined balance sheet should help the company establish larger lending relationships with existing First Reliance commercial customers.

"My team's already putting a list of names together," Saunders said. "So yes, we willmcertainly take advantage of that."

XOOMAR analysis: the core rationale is density and access. Colony is not buying a distant franchise. It’s buying a neighboring platform in metro markets where management sees stronger demographic and income growth than in its current base.

For readers tracking adjacent financial-services strategy, XOOMAR’s coverage of U.S. Bank Carves Out Healthcare Payments Power Role and Cuomo Pushes ICE OKX Deal Into Wall Street's Crypto Fight sits in the same broader zone of financial firms using targeted moves to reposition around growth areas, though neither story is directly tied to Colony.

Who runs the South Carolina business after the deal closes?

Colony is keeping several First Reliance executives inside the combined company, a sign it wants the South Carolina franchise to retain its local operating knowledge.

Saunders will join Colony as executive vice chairman, a board member and a member of the bank’s executive team. First Reliance President Justin Strickland will become Colony’s president for South Carolina. First Reliance CFO Robert Haile will become Colony’s chief investment officer and treasurer.

That leadership plan matters because Colony is also keeping the First Reliance brand in South Carolina. The company said First Reliance locations in the state will continue to operate under their existing brand.

The banks also pitched their mortgage businesses as complementary. They said adding First Reliance’s mortgage unit will increase Colony’s residential lending profitability.

Colony expects the transaction to add 20% to earnings per share in 2027 and projects an earn-back period of less than five years.

Those numbers explain the buyer’s case. The share-price drop explains the skepticism. Investors often want proof that projected earnings gains will survive integration costs, customer retention risks and the operational work of combining banks. The supplied source does not detail which of those concerns drove Thursday’s selloff, so the market reaction should be read narrowly: the stock fell after the deal was announced.

What has to happen before Colony Bankcorp can close the First Reliance deal?

The next gate is approval. The Colony Bankcorp First Reliance deal is expected to close in the fourth quarter of 2026, but only if regulators and shareholders sign off.

Colony has recent acquisition experience. It completed its purchase of Thomasville, Georgia-based TC Bancshares in December 2025. That earlier deal followed a definitive agreement announced in 2025, when Colony agreed to acquire TC Bancshares in a transaction valued at approximately $86.1 million, according to Panabee’s summary of the deal.

The Southeast bank M&A backdrop is slower this year, based on the source material. A Seaport Research Partners report cited by American Banker found that, as of earlier this month, eight bank deals had been announced in the Southeast in 2026, compared with 36 for all of 2025.

That makes Colony’s move more visible. If approved, the First Reliance purchase would mark a clear South Carolina expansion for Colony and would give the combined bank more scale for commercial lending, mortgage activity and customer coverage in the state.

The practical watch item now is execution, not announcement-day ambition. Colony has given investors the headline math, approximately $5 billion in combined assets, 20% expected EPS accretion in 2027 and an earn-back period of less than five years. The question that won’t be answered for months is whether the bank can keep First Reliance’s local value while making the larger balance sheet pay.

Disclaimer: This XOOMAR analysis is for informational and educational purposes only. It is not financial, investment, legal, tax, or professional advice. It does not provide buy, sell, hold, price-target, portfolio, or personalized recommendations. Verify information independently and consult qualified professionals before making decisions.

The Bottom Line

• The $163 million deal gives Colony Bankcorp an immediate entry into South Carolina.
• First Reliance adds operations in major metro areas including Charleston, Columbia and Greenville.
• The merger tests whether Colony can gain scale while preserving local banking relationships.