Cornerstone Capital Bancorp, Inc. received the regulatory approval it needed from the Federal Reserve to proceed with its acquisition of Peoples Bancorp, Inc., on Jan. 30.
The definitive agreement between the two institutions, signed in October 2025, will make the bank holding company for Cornerstone Capital Bank one of the largest in Texas among those with less than $10 million in total assets.
The combined institution would have approximately $3.1 billion in assets. The transaction would mark Cornerstone’s first bank acquisition since its transformative merger with Roscoe Bank in 2022, the company said in a press release.
Prior to approving the transaction, the Fed conducted an examination, in line with provisions of the Bank Holding Company Act and other applicable rules and regulations, to determine if it would have any anticompetitive effects on the banking market, as well as various financial, managerial and supervisory considerations.
The examination also entailed a “lending test” and a “community development test” designed to evaluate the performance of intermediate small banks in helping to meet the credit needs of the communities the bank serves.
The lending test includes an evaluation of an institution’s data reported under the Home Mortgage Disclosure Act. The community development test evaluates an institution’s community development loans and qualified investments, the extent to which the institution provides community development services and the institution’s responsiveness through such activities to community development lending, investment, and service needs.
Cornerstone’s stated objective with the transaction was to create a stronger franchise with meaningful strategic and financial benefits, including: an expanded presence in the fast-growing Texas market; improved statewide deposit market share; a 68-basis-point reduction in deposit costs; decreased funding costs for Cornerstone’s mortgage and servicing divisions; additional expansion capacity for its lending portfolio; and the ability to deliver more value-added services to clients.
Cornerstone indicated that it does not intend to close any of Peoples Bank’s branches in connection with the proposal. The deal is expected to close the first quarter of this year.