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Colony Bankcorp acquiring LBC Bancshares in $34.1M cash-and-stock deal

Fitzgerald, Ga.-based Colony Bankcorp Inc. is acquiring all of LaGrange, Ga.-based LBC Bancshares Inc.'s common stock in a cash-and-stock deal valued at approximately $34.1 million.

For each share held, LBC shareholders will have the option to receive either $23.50 in cash or 1.3239 Colony shares, such that 55% of LBC shares will receive the stock consideration and the remaining 45% will receive the cash consideration. At least 50% of the merger consideration will be paid in Colony stock.

The deal is expected to close in the first half of 2019.

As of Sept. 30, Colony had $1.19 billion in assets, according to S&P Global Market Intelligence data. LBC had about $228 million in assets, $130 million in loans, $204 million in deposits and $19 million in tangible common equity, according to a news release.

Upon closing, the combined company will have about $1.4 billion in assets, $930 million in loans and $1.2 billion in deposits.

The deal is expected to be accretive to Colony's fully diluted EPS, excluding transaction costs.

SNL calculates the deal value to be 184.2% of book and tangible book and 24.4x earnings, on an aggregate basis. Additionally, the deal value is 14.96% of assets, 16.67% of deposits and has a tangible book premium-to-core deposits ratio of 9.30%.

SNL valuations for bank and thrift targets in the Southeast region between Dec. 17, 2017, and Dec. 17, 2018, averaged 156.88% of book, 169.59% of tangible book and had a median of 26.47x last-12-months earnings, on an aggregate basis.

Colony will enter Troup County, Ga., with one branch to be ranked third with a 11.22% share of around $1.15 billion in total market deposits. It will also expand in Muscogee County, Ga., with one branch to be ranked seventh with a 1.29% share of approximately $7.60 billion in total market deposits.

Colony President and CEO Heath Fountain also said the deal will expand Colony's footprint in the Western Georgia markets of LaGrange and Columbus, as well as provide access to the Atlanta market.

LBC President and CEO Leonard Bateman Jr. is expected to join Colony upon the deal's completion. He will initially focus on ensuring a smooth transition in customer relationship and in overseeing growth strategies, and his role will be expanded in the future.

Hovde Group LLC served as Colony's financial adviser, while Alston & Bird LLP served as its legal adviser. Banks Street Partners LLC served as financial adviser to LBC, while James Bates Brannan Grover served as its legal adviser.

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