Peoples of Ohio Widens Ky Beachhead With Deal for $66M-Asset Company

An Ohio banking company is moving farther into Kentucky with a plan to buy a bank holding company, and an analyst says more deals in the Bluegrass State could follow.

Peoples Bancorp, Marietta, has agreed to buy $66 million-asset Gateway Bancorp in Catlettsburg.

Peoples, a $655 million-asset company, already has an office in Kentucky. The Gateway deal would add two Kentucky branches, bringing Peoples' total to 21. "The minute this one closes, you will probably see something else coming down the pike," said Douglas Walouke, a financial services analyst at the Ohio Co., Columbus.

Officials of Peoples and Gateway could not be reached for comment.

The acquisition, which is expected to close within six months pending shareholder and regulatory approvals, fits well with Peoples' overall plan to expand in southeastern Ohio and northern Kentucky, Mr. Walouke said. That's why, he said, he expects Peoples to make similar acquisitions in coming months.

Under terms of the deal, Peoples agreed to buy all outstanding shares of Gateway stock at $18.75 per share-a total cost of $20.2 million. Investors may get cash, Peoples Bancorp common stock, or both in exchange for their Gateway shares.

Peoples would likely improve its automated teller machine infrastructure in northern Kentucky and introduce its products at former Gateway branches once the acquisition becomes final, Mr. Walouke said.