Nov. 1 — Peoples Bancorp Inc. of Marietta, Ohio, parent company of Peoples Bank, and First Prestonsburg Bancshares Inc., the parent company of Kentucky’s First Commonwealth Bank of Prestonsburg Inc., announced today a definitive agreement under which First Prestonsburg will merge with and into Peoples, and First Commonwealth will subsequently merge into Peoples Bank, in a transaction valued at approximately $45.4 million.
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 Sept. 30, First Prestonsburg had 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,” said Chuck Sulerzyski, president and CEO of Peoples. “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.”
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 the closing, First Prestonsburg will pay a special aggregate cash distribution of $11.275 million to its shareholders. Based on the 20-day volume-weighted average closing price of Peoples common stock through Oct. 26, 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, which equates to 161 percent of First Prestonburg’s book value. The transaction is expected to be immediately accretive to Peoples’ estimated earnings before one-time costs, with a tangible book value earnback 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.