Key insights
- Peoples Bancorp (PEBO) will acquire Capital Bancorp (CBNK) in an all-stock deal valued at approximately $728.1 million. PEBO shares fell 6% on the announcement, while CBNK shares surged 11%. The combined entity is expected to have $14 billion in assets and over 150 banking locations. The transaction is anticipated to be accretive to earnings and is expected to close in the first half of 2027.
Investing.com -- Peoples Bancorp Inc (NASDAQ: PEBO) shares fell 6% Wednesday after announcing it will acquire Capital Bancorp (NASDAQ: CBNK) in an all-stock transaction valued at approximately $728.1 million. Capital Bancorp stock surged 11% on the news.
Under the terms of the merger agreement, Capital shareholders will receive 1.11 shares of Peoples common stock for each share of Capital common stock. Based on Peoples' 20-day volume-weighted average closing price of $39.41 per share as of September 29, the transaction values Capital at $43.75 per share. Former Capital shareholders are expected to collectively own approximately 32% of Peoples following completion of the merger.
The combined company is expected to have approximately $14 billion in total assets, $10 billion in total loans and $11 billion in total deposits, with over 150 banking locations across eight states and Washington, D.C. Capital had $3.9 billion in total assets, $3.1 billion in gross loans and $3.4 billion in total deposits as of June 30.
The transaction is expected to be immediately accretive to Peoples' estimated earnings in 2027 before one-time costs, with a tangible book value earnback period of under three years and a pro forma return on average tangible common equity of approximately 20%.
The combination brings together Peoples' community banking, trust and investment services, insurance and specialty financing with Capital's commercial banking franchise in the Washington, D.C. and Baltimore markets, as well as its nationwide businesses in digital consumer credit, government-guaranteed lending and servicing, and residential mortgage banking.
Three members of Capital's Board of Directors are expected to join the Peoples Board at or promptly following closing. The acquisition is expected to close during the first half of 2027, subject to customary closing conditions, including regulatory approvals and shareholder approvals from both companies.
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