National Bank Holdings Corporation, the parent company of NBH Bank, and privately owned Peoples, Inc., the bank holding company of Colorado-based Peoples National Bank and Kansas-based Peoples Bank, jointly announced today that they have entered into a definitive agreement for NBH to acquire Peoples, building NBH's scale in the home markets of the Colorado Front Range and the greater Kansas City region.
"The transaction with Peoples bolsters our presence in our home markets of the Colorado Front Range and the greater Kansas City region. More specifically, the acquisition provides a strong market position in the attractive Colorado Springs and Overland Park markets and expands our franchise into northern New Mexico. In addition, we believe Peoples brings us one of the strongest retail Mortgage Banking platforms based within a community bank. We expect this transaction will be strongly accretive and will accelerate NBH's trajectory toward our financial targets," said NBH CEO, Tim Laney.
The transaction adds approximately $865 million of assets, $483 million of loans held for investment and $719 million of deposits, as well as a complementary franchise-centric retail mortgage business, which originates over $1.0 billion of mortgage loans per year. Moreover, Peoples brings over 140 years of experience in serving its communities and the same dedication to common sense banking that has been at the core of NBH's success.
"We believe that our companies are stronger together and that we share a common vision for delivering great returns by building quality relationships with our clients," Mr. Laney added. "This merger will combine the best of both of our organizations and we look forward to welcoming Peoples' terrific team of bankers to our company."
Wint Winter Jr., Chairman and CEO of Peoples, added "We are very pleased to be joining NBH. Our family has built Peoples over the past 5 decades with a focus on caring for our customers, employees and the communities we serve. We found those same values at NBH and are proud to partner with the NBH family."
Under the terms of the agreement, Peoples shareholders will receive approximately $36.3 million of cash consideration and approximately 3.4 million shares of NBH common stock, subject to certain potential adjustments. The transaction, which is expected to close in the fourth quarter, has a value of $143 million in the aggregate, based on NBH's closing price of $31.55 on June 23, 2017. In addition, as part of the agreement, Peoples will divest or wind down its national mortgage business, operated out of its Kansas-based Peoples Bank by the end of 2017.
NBH expects the transaction to result in a high-teens accretion to earnings per share in the first full year of operations, less than a 5% dilution to tangible book value with an earn back period of less than 3 years, and an internal rate of return of approximately 20%.
The transaction has been unanimously approved by the Board of Directors of each company and is subject to normal regulatory approvals and other customary closing conditions. The required approval of Peoples' shareholders has been obtained.