Peoples Bancorp of Marietta, Ohio will buy Citizens Bank of Kentucky for roughly $76.6 million cash and stock, the banks said last week.
Citizens – based in Paintsville, in eastern Kentucky – will merge into Peoples’ wholly owned subsidiary, Peoples Bank, under the agreement, which is expected to close during the second half of 2026.
Buying Citizens would add 12 branches and $686 million in total assets to Peoples’ 144 locations and $9.6 billion in assets.
To remain under a $10 billion threshold that includes regulatory changes, however, Peoples will sell Citizens’ entire securities portfolio, as well as roughly $300 million of Peoples’ securities, when the transaction closes, according to its first-quarter earnings presentation.
Peoples expects proceeds from the sale will be used to pay down some of the bank’s overnight and wholesale borrowings, worth roughly $560 million.
“The magnitude of the restructuring ensures that Peoples’ organic growth prospects for the remainder of 2026 are not impeded, and expected timing of organic crossing of $10 billion in assets remains unchanged,” according to the earnings presentation.
With its acquisition of Citizens, Peoples plans to offer more locations, products and services to customers, according to Peoples CEO Tyler Wilcox.
“We are pleased to expand our footprint in Kentucky through the acquisition of an exceptional franchise in Citizens Bank of Kentucky. Their locations are within areas that mean a lot to us,” Wilcox said in a prepared statement. “Citizens’ low-cost deposits and high level of balance sheet liquidity allow us to not only strengthen the Peoples' deposit base but to also maintain the flexibility to remain under $10 billion in assets.”
Restructuring allows Peoples to put off the increase in regulation that comes with passing the $10 billion-asset threshold, including Consumer Financial Protection Bureau oversight and a cap on interchange fees.
Banks take a variety of approaches to crossing the threshold, said Byline Bank CEO Alberto Paracchini in a recent interview with Banking Dive. Byline is approaching the threshold.
But Peoples “remains ready to cross the $10 billion asset threshold following years of steady, continuous preparation,” according to the earnings presentation, as it has “proactively invested in the systems, infrastructure, talent and governance needed to seamlessly transition to a $10 billion bank.”
The Peoples-Citizens merger agreement has been unanimously approved by the boards of directors of both companies. Under the agreement, Citizens’ shareholders will receive 2.10 shares of Peoples common stock plus $8 in cash for each share of Citizens' common stock.
Based on Peoples' 20-day volume-weighted average price per share of $33.52 on April 20, the aggregate deal value is about $76.6 million, or $78.39 per share, the banks said.
The deal remains subject to the satisfaction of closing conditions, including regulatory approvals and the approval of the shareholders of Citizens.
