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Peoples Bancorp (PEBO) to Acquire Premier Financial Bancorp

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Peoples Bancorp Inc. (PEBO - Free Report) has inked a deal to acquire Premier Financial Bancorp, Inc., which will further solidify its position across several states. The all-stock deal, expected to close in the third quarter of 2021, is subject to regulatory approval, consent of shareholders of both companies and customary closing conditions.

Chuck Sulerzyski, president and chief executive officer of Peoples Bancorp said, “We are excited about our partnership with Premier and the addition of significant scale to enhance our ability to drive future growth and improved profitability. Premier's strong core franchise provides a natural extension of our existing markets, as well as entry into attractive markets within Virginia, Maryland and Washington, D.C."

Per Bob Walker, president and chief executive officer of Premier Financial, "We are excited to have the opportunity to join forces with one of the strongest banks in the region. Our customers, employees and shareholders will benefit from Peoples' history of profitable growth and expertise in successfully executing acquisitions. We are also excited about Peoples' expansive suite of products, which 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. "

Deal Details

Based on People Bancorp's 20-day volume weighted average closing price of $33.95 per share as of Mar 26, the transaction is valued at $292.3 million. Per the terms of the deal, shareholders of Premier Financial will get 0.58 of share of Peoples Bancorp’s common stock for each share of Premier Financial. Also, the transaction is expected to qualify as a tax-free reorganization for Premier Financial’s shareholders.

As of Dec 31, 2020, Premier Financial had loans and deposits of $1.2 billion and $1.6 billion, respectively. After the conclusion of the deal, Premier Financial will merge with and into Peoples Bancorp, while Premier Bank and Citizens Deposit Bank & Trust, Inc. will subsequently merge with and into Peoples' wholly-owned subsidiary, Peoples Bank.

Synergies & Other Financial Benefits

Peoples Bancorp projects the acquisition to be immediately accretive to its estimated earnings (excluding the one-time transaction costs). Further, it will lead to a tangible book value earn back of 2.6 years and an internal rate of return in excess of 20%.

Additionally, Premier Financial's offices will become branches of Peoples Bank. The combined entity will have $6.7 billion in total assets, $4.6 billion in total loans and $5.5 billion in total deposits. Further, the merged entity will have presence across 136 locations in Ohio, West Virginia, Kentucky, Maryland, Virginia and Washington, D.C.

Conclusion

Over the years, Peoples Bancorp has grown strategically through acquisitions. In 2019, the company’s acquisition of First Prestonsburg Bancshares Inc. boosted the financials substantially. Some of the other deals that expanded the company's footprints include ASB Financial Corp in 2018, NB&T Financial Group in 2015, North Akron Savings Bank, Chrisman Insurance Inc, Midwest Bancshares, Inc. and Ohio Heritage Bancorp, Inc., in 2014, Ohio Commerce Bank in 2013 and Sistersville Bancorp, Inc. in 2012.

Over the past six months, shares of Peoples Bancorp have rallied 70.1%, outperforming the industry’s gain of 66.8%.

Currently, Peoples Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks Undertaking Similar Moves

Shareholders of Huntington Bancshares Incorporated (HBAN - Free Report) have approved the all-stock acquisition deal with TCF Financial Corporation (TCF - Free Report) . The deal, expected to close in the second quarter this year, is subject to regulatory consents.

Seacoast Banking Corporation of Florida (SBCF - Free Report) has announced a deal to acquire Legacy Bank of Florida. The all-stock transaction, likely to close in the third quarter of 2021, is subject to regulatory approval, consent of Legacy Bank shareholders and customary closing conditions.

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