National Bank Holdings in Greenwood Village, Colo., has agreed to buy Peoples Inc. in Lawrence, Kan.
The $4.7 billion-asset National Bank said in a press release Monday that it will pay $143 million in cash and stock for the $865 million-asset parent of Peoples National Bank in Colorado and Peoples Bank in Kansas. The deal is expected to close in the fourth quarter.
Peoples has $483 million in loans and $719 million in deposits. Peoples, which originates more than $1 billion in mortgages annually, agreed to divest or close its national mortgage business by the end of this year.
“The transaction … bolsters our presence in our home markets of the Colorado Front Range and the greater Kansas City region,” Tim Laney, National Bank’s CEO, said in the release. “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.”
National Bank said it expects the transaction to result in “high-teens accretion” to earnings per share in the first full year of operations. It should take less than three years to earn back the less than 5% dilution to National Bank’s tangible book value.
National Bank plans to cut about 12% of Peoples’ annual noninterest expense. The company said it expects to incur about $13 million in merger-related expenses.
Keefe, Bruyette & Woods and Wachtell, Lipton, Rosen & Katz advised National Bank. The Capital Corporation and Lathrop Gage advised Peoples.