US-based Peoples Bancorp, the parent company of Peoples Bank, has agreed to merge with First Prestonsburg Bancshares, the parent company of First Commonwealth Bank of Prestonsburg.
Under the terms of the Merger Agreement, First Prestonsburg will merge with and into Peoples (the “Merger”), and First Commonwealth will subsequently merge with and into Peoples Bank, in a transaction valued at approximately $45.4 million.
Founded in 1904, First Commonwealth operates eight full service branches in and around the Prestonsburg and Pikeville markets in eastern Kentucky, and is scheduled to open a ninth full service branch in Georgetown, Kentucky by the end of this year.
As of September 30, 2018, First Prestonsburg had, on a consolidated basis, approximately $310 million in total assets, which included approximately $139 million in total loans, and approximately $244 million in total deposits.
Peoples president and CEO Chuck Sulerzyski said: “We are excited to expand our presence in eastern Kentucky through the acquisition of First Prestonsburg, a high quality institution with an extremely strong core deposit base. We believe it will complement our insurance operation in Pikeville and provide us with an opportunity to leverage existing client relationships.
“We look forward to providing our full suite of financial products and services to the region. We are equally excited that Greg Wilson, First Commonwealth’s President, will be joining Peoples Bank as our Kentucky Market President to lead our commercial banking efforts in the markets served by First Prestonsburg as well as in other portions of the state.
“We look forward to welcoming First Prestonsburg shareholders and First Commonwealth’s employees and customers to become part of our team.”
First Commonwealth president & CEO Greg Wilson said: “We are excited to have the opportunity to join forces with the Peoples Bank team. Peoples will provide us the ability to deliver new products and services, including insurance and investment products, to our valued customers in the communities we serve.
“The alliance with Peoples will also give the opportunity to expand in our current market and geographically in Kentucky. Peoples’ community banking model and culture and commitment to high quality customer service makes them a great fit for us.”
Upon consummation of the Merger, shareholders of First Prestonsburg will receive 12.512 shares of Peoples common stock for each share of First Prestonsburg common stock (the “Stock Consideration”).
In addition, immediately prior to the closing of the Merger, First Prestonsburg will pay a special aggregate cash distribution of $11.275 million to its shareholders (the “Special Dividend”).
Based upon the twenty (20) day volume-weighted average closing price of Peoples common stock through October 26, 2018, the Stock Consideration plus the Special Dividend has a combined transaction value of $45.4 million to the holders of First Prestonsburg’s common stock.
The transaction is expected to be immediately accretive to Peoples’ estimated earnings before one-time costs, with a tangible book value earn back of approximately two years, and an internal rate of return which exceeds internal thresholds.
The acquisition is expected to close during the second quarter of 2019 and is subject to First Prestonsburg shareholder approval, regulatory approval and other conditions set forth in the merger agreement.
Peoples was advised by Raymond James & Associates, Inc. and the law firm of Dinsmore & Shohl LLP. First Prestonsburg was advised by ProBank Austin and the law firm of Stoll Keenon Ogden PLLC.
Source: Company Press Release