Peoples Bancorp, parent company of Peoples Bank, and First Prestonsburg Bancshares, parent company of First Commonwealth Bank of Prestonsburg, signed a definitive agreement and plan of merger. Under the terms of the agreement, First Prestonsburg and First Commonwealth will merge with and into Peoples 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, KY 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.
“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,” said Chuck Sulerzyski, president and CEO of Peoples. “We look forward to welcoming First Prestonsburg shareholders and First Commonwealth’s employees and customers to become part of our team.”
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 . In addition, immediately prior to closing, First Prestonsburg will pay a special aggregate cash distribution of $11.275 million to its shareholders. Based upon the 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 and the law firm of Dinsmore & Shohl. First Prestonsburg was advised by ProBank Austin and the law firm of Stoll Keenon Ogden.
Peoples is a diversified financial services holding company with $4 billion in total assets and 82 locations, including 72 full-service bank branches and 78 ATMs in Ohio, West Virginia and Kentucky.
