KBRA Assigns BBB Senior Unsecured Debt Rating to PeoplesBancorp, MHC

NEW YORK--()--Kroll Bond Rating Agency (KBRA) assigns a senior unsecured debt rating of BBB, subordinated debt rating of BBB-, and short-term debt rating of K3 to PeoplesBancorp, MHC (“Peoples” or “the Company”), a mutual holding company based in Holyoke, Massachusetts. KBRA also assigns deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2 for the subsidiary bank, PeoplesBank (“the Bank”). The Outlook for all long-term ratings is Stable.

The assigned ratings are supported by Peoples’ peer leading asset quality, stemming from the Company’s sound loan underwriting and monitoring practices, limiting credit losses to very manageable levels, including throughout the financial crisis. Additionally, Peoples employs a management team with extensive knowledge of the market the Bank operates in, has a well-defined strategic plan, with controlled growth, and sound overall management practices. These strengths are counterbalanced by the Company’s relatively elevated operating expense base brought about by its historically retail driven operating model. Furthermore, the pending acquisition of First Suffield Financial, Inc., is expected to have a marked negative impact on Peoples’ capital position. However, the Company has made significant inroads towards improving operational efficiencies, with further enhancements expected following the close of the acquisition. Moreover, management is focused on rebuilding capital subsequent to the completion of the pending transaction. Of additional consideration is that Peoples is a private institution, and in KBRA’s view, although Peoples has reduced access to ready-capital as seen with many publicly traded institutions, management is empowered to focus on disciplined growth, placing less stress on capital and limiting risk to its loan portfolio.

The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology published on February 19, 2016.

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About KBRA and KBRA Europe

KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical:
Jason Szelc, 301-969-3174
Director
jszelc@kbra.com
or
Joe Scott, 646-731-2438
Managing Director
jscott@kbra.com
or
Van Hesser, 646-731-2305
Senior Managing Director
vhesser@kbra.com

Contacts

Analytical:
Jason Szelc, 301-969-3174
Director
jszelc@kbra.com
or
Joe Scott, 646-731-2438
Managing Director
jscott@kbra.com
or
Van Hesser, 646-731-2305
Senior Managing Director
vhesser@kbra.com