First Reliance Spent 27 Years Building a Bank. Then It Sold at the Top.

First Reliance Bancshares just posted the best numbers of its life. Net income up 113% year over year, $1.1 billion in assets, nine branches across eight South Carolina cities. So on June 24, founder Rick Saunders agreed to sell it.

Colony Bankcorp, the $3.7 billion Georgia bank out of Fitzgerald, is buying First Reliance in a cash-and-stock deal worth about $163 million. The combined company will run roughly $5 billion in assets, $4 billion in deposits, and $3.2 billion in loans across four states: Alabama, Florida, Georgia, and South Carolina. Both boards approved it unanimously. It is expected to close in the fourth quarter.

Here is the part worth sitting with. Most community banks sell because they are stuck. First Reliance sold because it was flying.

The terms

First Reliance shareholders get to choose: $19.75 in cash or 0.94 shares of Colony stock for each share they own. After proration, the mix lands near 20% cash and 80% stock. First Reliance Bank folds into Colony Bank. Colony says the deal is immediately accretive to earnings per share once you set aside one-time merger costs, which is the line every acquirer uses and the one every acquirer has to actually deliver.

Saunders does not ride off. He becomes Executive Vice Chairman and joins Colony's board. His bench comes with him. Justin Strickland stays on as President for South Carolina, CFO Robert Haile becomes Colony's Chief Investment Officer and Treasurer, and mortgage chief Chuck Stuart will co-run Colony Mortgage. Director Rick Redden takes a Colony board seat.

That is not how a distressed sale looks. That is a bank handing over the keys while keeping a hand on the wheel.

Why sell when you're winning

The honest answer is that $1 billion is an awkward size. Big enough to need real compliance, technology, and lending infrastructure. Too small to spread the cost of all three across enough loans. First Reliance grew into a market, the Carolinas, where competitors get faster and better funded every quarter. Staying independent meant building a modern digital and lending stack alone, on a billion-dollar base, against banks spending far more.

Selling at a high-water mark is the smart version of this trade. You negotiate from strength. Your stock fetches a better exchange ratio. Your people land in senior roles instead of getting reorganized out. Saunders said it plainly on LinkedIn: the point is to "protect and expand" what First Reliance built, not walk away from it. "The names on our buildings won't change," he wrote. "The bankers you work with will be the same."

Colony's acquisition machine

This is the context that makes the deal make sense. Colony does not dabble in M&A. It runs a program.

Start in 2019, when Colony absorbed LBC Bancshares and merged Calumet Bank into the franchise. Then came 2021 and the big one: SouthCrest Financial Group, about $84 million, which added more than $700 million in assets and nine branches and made Colony the fourth largest bank in Georgia at $2.4 billion. A year later it picked up TC Bancshares and its Thomasville thrift for roughly $86 million. Add the insurance agencies, Barnes in 2021 and Ellerbee in 2025, feeding the fee-income business that has become Colony's second engine.

First Reliance is the biggest bite yet. At $163 million, it runs close to double Colony's previous largest bank deal. And the structure is nearly a photocopy of the SouthCrest playbook: a cash-or-stock election (SouthCrest holders chose $10.45 or 0.7318 shares, First Reliance holders choose $19.75 or 0.94), heavy on stock, light on cash, built to keep the acquired bank's owners invested in the result.

Colony CEO Heath Fountain framed the ambition without much hedging. The combined company, he said, is "a premier Southeast banking franchise that is uniquely positioned to capture market share." For a bank that started as a peanut-belt agricultural lender in 1975, a four-state, $5 billion footprint is a long way from Fitzgerald.

What "nothing changes" actually means

Every merger release promises continuity. Same bankers, same relationships, same name on the door. Some of that is true. Some of it is the kind of thing you say to keep deposits from walking.

What actually changes is the plumbing. First Reliance customers will eventually move onto Colony's core systems, its online banking, its loan platforms. Core conversions are where community-bank mergers get tested, because that is the moment a customer feels the gap between a promise and an operating reality. Get it smooth and the "nothing changes" line holds. Get it wrong and a 27-year relationship reconsiders itself over a login screen.

It is also where the strategic logic lives or dies. The pitch to First Reliance customers is more products and better digital tools. Delivering that means Colony's onboarding, verification, and lending experiences have to be meaningfully better than what a billion-dollar bank could build alone. Scale is the promise. Execution is the invoice.

The integration test

A $5 billion bank has options a $1 billion bank does not. More capital to lend, more room to invest in technology, more ability to absorb the rising fixed cost of compliance and fraud and data. That is the real prize, for both sides.

But scale does not automatically fix the parts borrowers actually feel. A bigger bank can still make someone wait days for income verification, still chase documents by email, still lose a fast-moving borrower to a lender that closes in a week. The Southeast is consolidating precisely because the cost of being slow keeps climbing, and bigger banks are not immune to slow. They just have more places to hide it.

The merger gives Colony and First Reliance the balance sheet. Whether borrowers in Florence and Fitzgerald feel the difference comes down to the boring, decisive work of making verification and onboarding fast across a four-state footprint. That is the part no press release can promise. It is the part that has to be built.