Peoples Bancorp (PEBO) M&A announcement summary

Deal rationale and strategic fit

• The merger creates a diversified financial services franchise with expanded scale, capabilities, and presence in the D.C., Maryland, and Virginia markets, as well as nationwide specialty businesses.

• Capital's specialty businesses (OpenSky, Windsor Advantage, Capital Home Loans, government-guaranteed lending) add new capabilities, earnings streams, and broaden the revenue mix.

• The deal accelerates the long-term strategy of building a unique, diversified company and enhances earnings diversification and margin profile.

• Combines complementary business philosophies and cultures, strengthening commitment to clients, employees, and shareholders.

• Positions the combined entity for significant growth in the Greater D.C./Maryland/Virginia market and nationwide.

Financial terms and conditions

• All-stock transaction valued at approximately $728.1 million, with a fixed exchange ratio of 1.11 shares for each Capital share, and a deal value per share of $43.75.

• Peoples shareholders will own about 67.8% and Capital shareholders about 32.2% of the combined company; three Capital directors will join the board.

• The deal is intended to qualify as a tax-free reorganization for federal income tax purposes.

• Deal value/TBV: 191%; deal value/LTM earnings: 12.9x; market premium: 22.7%.

• Expected to close in the first half of 2027, subject to approvals.

Synergies and expected cost savings

• Cost savings modeled at 30% of Capital's non-interest expense, with 70% realized in 2027 and full run-rate in 2028.

• Fully-phased 2027E EPS accretion of 19% and efficiency ratio improvement to ~55%.

• Savings expected from corporate, technology, and vendor overlaps; minimal branch overlap.

• No revenue synergies included in projections, though opportunities exist.

• The merger is expected to create a broader and more diversified revenue mix, with additional avenues for growth.