Peoples Bancorp has agreed to acquire Capital Bancorp in an all-stock transaction valued at approximately $728.1 million, creating a financial institution expected to have roughly $14 billion in assets, $10 billion in loans, and $11 billion in deposits.
Capital Bancorp will merge into Peoples, followed by Capital Bank merging into Peoples Bank. The combined organization is expected to operate more than 150 banking locations across eight states and Washington, D.C., in addition to maintaining nationwide specialty financial services businesses.
Under the agreement, Capital shareholders will receive 1.11 shares of Peoples common stock for each Capital share. Based on Peoples’ 20-day volume-weighted average closing price of $39.41 as of September 29, the transaction represents approximately $43.75 per Capital share.
Former Capital shareholders are expected to own approximately 32% of the combined company following completion of the merger. The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Capital had approximately $3.9 billion in assets, $3.1 billion in gross loans, and $3.4 billion in deposits as of June 30, 2026. Its businesses include Commercial Banking, OpenSky, Windsor Advantage, and Capital Bank Home Loans.
The deal expands Peoples’ presence in the Washington, D.C. and Baltimore markets while adding nationwide businesses spanning digital consumer credit, government-guaranteed lending and servicing, and residential mortgage banking. Peoples also operates community banking, trust and investment services, insurance, and specialty financing businesses.
The transaction is expected to be immediately accretive to Peoples’ estimated 2027 earnings before one-time costs, with a tangible book value earnback period of less than three years. The combined company is targeting a pro forma return on average tangible common equity of approximately 20%.
Three Capital directors are expected to join the Peoples board at or shortly after closing. The transaction is expected to close during the first half of 2027, subject to shareholder approvals, regulatory clearances, and customary conditions.
Raymond James is serving as financial adviser to Peoples, while Stephens is advising Capital.
KEY QUOTES:
“As Peoples approached $10 billion in assets, we were deliberate and patient in pursuing the right strategic opportunity. We were looking for a transaction and a partner that strengthens our franchise well beyond scale alone, and Capital does exactly that. Its commercial banking franchise deepens our presence in the attractive Washington, D.C. and Baltimore markets, while OpenSky, Windsor Advantage and Capital Bank Home Loans add complementary nationwide businesses that further diversify our revenue and expand our growth opportunities.”
Tyler Wilcox, President and Chief Executive Officer of Peoples Bancorp
“Peoples is an excellent strategic partner for Capital because it understands and values the diversified model we built. Our combination pairs Capital’s relationship-driven commercial bank and nationwide specialty businesses with Peoples’ larger balance sheet, broader product capabilities and operating infrastructure.”
Edward F. Barry, Chief Executive Officer of Capital Bancorp
