Colony Bankcorp, Inc. (NasdaqGM:CBAN) entered into an agreement to acquire SouthCrest Financial Group, Inc. (OTCPK:SCSG) for $83.2 million on April 22, 2021. Pursuant to the Merger Agreement, each outstanding share of SCSG capital stock, including both common stock and preferred stock, issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive, at the election of each SCSG shareholder, either (i) $10.45 in cash or (ii) 0.7318 of a share of the Colony common stock, subject to customary proration and allocation procedures such that approximately 27.5% of SouthCrest shares will be converted to cash consideration and the remaining 72.5% of SouthCrest shares will be converted to Colony common stock. Based on Colony's closing stock price of $15.00 per share as of April 21, 2021, the value of the per share merger consideration is estimated to be $10.83. The aggregate consideration is valued at approximately $84.0 million, based on 7,516,464 SouthCrest shares outstanding, 252,500 SouthCrest options and 173,500 SouthCrest phantom shares. Immediately following the merger, SouthCrest Financial's unit, SouthCrest Bank, N.A. will merge with and into Colony Bank, Colony Bankcorp's unit. The merger agreement provides that no more than 3,987,898 shares of Colony common stock shall be issued in the merger. SCSG will pay the Colony a termination fee equal to $3.2 million.

At the effective time of the Merger, the Colony will expand the size of its board by two and appoint two current directors of SCSG to serve on the board of directors of the Colony. Brian D. Schmitt (SCSG President, Chief Executive Officer and Director) and Harold W. Wyatt, III (SCSG Chairman) expected to join the board of directors of CBAN. Key SCSG senior management expected to join CBAN in senior roles. Consummation of the Merger is subject to various customary conditions, including (i) approval of the Merger Agreement and the Merger by shareholders of SCSG and the Colony; (ii) the receipt of certain regulatory approvals; (iii) No injunctions or other legal restraints preventing the consummation of the Merger; (iv) the U.S. Securities and Exchange Commission (“SEC”) having declared effective the Colony's registration statement covering the issuance of shares of the Colony common stock in the Merger; (v) the receipt by each party of a tax opinion to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended; (vi) the accuracy of representations and warranties of the parties and compliance by the parties with their respective covenants and obligations under the Merger Agreement (subject to customary materiality qualifiers); and (vii) the absence of a material adverse effect with respect to the either the Colony or SCSG. The transaction is also subject to the absence of 7.5% or more of the outstanding shares of SouthCrest's stock exercising their dissenters' rights. Colony's shareholders in connection with the special meeting of its shareholders scheduled to be held on July 14, 2021. The Merger Agreement has been unanimously approved by the boards of directors of the Colony and SCSG. Board of SCSG recommends the shareholders to vote for the transaction. As of July 14, 2021, Colony Bankcorp's shareholders voted on a proposal to approve the Agreement.

The transaction is expected to close late third quarter or early fourth quarter of 2021. As of June 8, 2021, as early as the third quarter of 2021. The transaction is expected to be meaningfully accretive to Colony's fully diluted earnings per share in year one, excluding transaction costs. Hovde Group, LLC acted as financial advisor and to issue a fairness opinion to Colony's board of directors in connection with the proposed transaction. Hovde received from Colony a fairness opinion fee in the amount of $150,000 upon the delivery of the fairness opinion to Colony and will receive a payment in the amount of $600,000 upon consummation of the merger, resulting in a total completion fee of $750,000. Jonathan S. Hightower and Kevin E. Strachan of Fenimore, Kay, Harrison & Ford, LLP acted as legal advisors to Colony Bankcorp, Inc. Janney Montgomery Scott acted as financial advisor and Mark C. Kanaly and William W. Hooper of Alston & Bird, LLP acted as legal advisors to SouthCrest Financial Group, Inc. American Stock Transfer & Trust Company, LLC acted as an exchange agent for Colony. Janney Montgomery Scott LLC provided fairness opinion to SouthCrest. Wipfli provided auditor's report on financials of SouthCrest.