Evaluating Shareholder Value in the Proposed Sale of TC Bancshares, Inc.

The proposed acquisition of TC Bancshares, Inc. (OTC: TCBC) by Colony Bankcorp, Inc. (NYSE: CBAN) has sparked significant debate over whether the deal adequately compensates shareholders. Priced at $86.1 million—1.1x tangible book value—the transaction offers TC Bancshares shareholders a choice between $21.25 in cash or 1.25 shares of Colony's stock, with 20% of shares expected to convert to cash and 80% to equity TC BANCSHARES INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of TC Bancshares, Inc. - TCBC^[1]. While Colony Bankcorp touts the deal as a strategic expansion into Georgia and Florida markets, the valuation has drawn scrutiny from legal and regulatory experts, raising questions about fairness and alignment with industry benchmarks.

A Price Below Industry Benchmarks

The 1.1x P/TBV ratio for TC Bancshares lags behind the 2025 industry average of 1.2x–1.5x, as seen in recent deals like Cadence Bank's acquisition of FCB Financial Corp. at 192.5% of tangible book value Bank M&A 2025 Deal Tracker: 11 deals announced in January^[2]. This discrepancy suggests the Colony offer may undervalue TC Bancshares, particularly given its $571 million in assets and the projected $13.3 million in interest rate marks Colony expects to capture KBRA Comments on Colony Bankcorp, Inc.'s Proposed Acquisition …^[3]. For context, smaller banks with similar asset sizes, such as Hanmi Financial Corp. (1.10x) and Capitol Federal Financial (0.89x), have commanded higher valuations in 2025 Dealmaker sees more urge to merge among smaller banks^[4].

The law firm of Kahn Swick & Foti, LLC, led by former Louisiana Attorney General Charles C. Foti, Jr., is investigating whether the consideration reflects “fair value” for shareholders. The firm has a history of challenging mergers where procedural flaws or undervaluation are suspected, often citing breaches of fiduciary duties Mergers & Acquisitions – Kahn Swick & Foti, LLC^[5]. In this case, the firm is examining whether Colony's mixed cash-and-stock structure—80% equity—exposes TC Bancshares shareholders to unnecessary risk, especially if Colony's stock underperforms post-merger TC BANCSHARES INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of TC Bancshares, Inc. - TCBC^[1].

Regulatory and Strategic Risks

Regulatory bodies are also scrutinizing the deal for antitrust concerns. The combined entity, with $3.8 billion in assets, would dominate key markets in Georgia and Florida, potentially reducing competition Colony Bank | Colony Bankcorp, Inc. and TC Bancshares, Inc.^[6]. While Colony Bankcorp emphasizes cost savings (33% of TC Bancshares' operating base) and earnings accretion, regulators may demand assurances about deposit concentration and community banking commitments KBRA Comments on Colony Bankcorp, Inc.'s Proposed Acquisition …^[3]. Additionally, the merger's success hinges on integrating TC Bancshares' loan portfolio, which carries an estimated $4 million in credit marks TC BANCSHARES INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of TC Bancshares, Inc. - TCBC^[1].

The acquisition process itself has raised eyebrows. The definitive merger agreement includes a “no-shop” clause, prohibiting TC Bancshares from pursuing alternative bids unless Colony matches superior offers Colony Bankcorp, Inc. and TC Bancshares, Inc. Announce Signing of Definitive Merger Agreement to Create a Stronger Franchise in Key Georgia and Florida Markets^[7]. While such clauses are common, they limit shareholder options and may justify the legal challenge's focus on procedural fairness. Shareholders must approve the deal by year-end, but delays in regulatory approvals could prolong uncertainty Colony Bankcorp, Inc. and TC Bancshares, Inc. Announce Signing of Definitive Merger Agreement to Create a Stronger Franchise in Key Georgia and Florida Markets^[7].

Conclusion: A Tenuous Balance of Risk and Reward

For TC Bancshares shareholders, the decision hinges on whether the 1.1x P/TBV offer aligns with the company's intrinsic value and long-term growth potential. While Colony's strategic rationale—expanding its Southeast footprint and achieving operational efficiencies—is compelling, the valuation appears to trail industry standards. The ongoing legal inquiry and regulatory hurdles further cloud the deal's prospects, particularly if the investigation uncovers procedural shortcomings or if regulators demand concessions to address competition concerns.

Investors should monitor developments closely. If the 1.1x valuation holds, the merger may represent a missed opportunity for TC Bancshares shareholders. However, if Colony's projected cost savings and earnings accretion materialize, the deal could still deliver value—albeit at a discount to market norms. In either case, the transaction underscores the delicate balance between strategic consolidation and shareholder protection in the evolving bank M&A landscape.