Why Peoples Bancorp Stock Tanked Today
Key Points
This will be paid entirely in stock.
This raises the specter of shareholder dilution.
- 10 stocks we like better than Peoples Bancorp ›
Peoples Bancorp (NASDAQ: PEBO) is expanding through an acquisition, and the company's investors weren't happy about it. They expressed their displeasure by trading out of the regional bank's shares on Wednesday, and the stock closed that trading session down by almost 6%.
A Capital deal
Before market open on Wednesday, Ohio-based Peoples and Capital Bancorp announced they had agreed to combine their businesses. Peoples will acquire its peer in an all-stock deal under which Capital investors are to receive 1.11 Peoples shares for each Capital share they own. The transaction is valued at just over $728 million.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
The two companies said that the resulting entity will have around $14 billion in total assets and $10 billion in outstanding loans, and $11 billion in customer deposits. In terms of footprint, the combined company will boast more than 150 brick-and-mortar banks located in eight states, plus the District of Columbia.
Peoples said that the acquisition should be immediately accretive to its 2027 earnings before one-time costs. The deal is expected to close in the first half of that year and is subject to approval from both Peoples and Capital shareholders, as well as the relevant regulatory authorities.
18 million reasons for concern
Capital has just under 16.3 million shares outstanding, so at that 1.11-to-1 ratio, Peoples will issue more than 18 million new shares of its common stock to fund the acquisition. This is more than 50% of its current share count, and the looming dilution was a key reason investors reacted negatively to the news.
Peoples is on the hook, then, to prove that this acquisition can be transformational. That feels like a tall order for a not-large regional bank, so I'd be cautious about its stock now.
Should you buy stock in Peoples Bancorp right now?
Before you buy stock in Peoples Bancorp, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Peoples Bancorp wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $379,123!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,396,103!*
Now, it’s worth noting Stock Advisor’s total average return is 933% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 30, 2026.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
