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 WORCESTER, Mass., Aug. 26 /PRNewswire/ -- Shawmut National Corporation (NYSE: SNC) today agreed to acquire Peoples Bancorp of Worcester Inc. (NASDQ: PEBW) for about $180 million in an exchange of common stock.
 Under the agreement, each share of Peoples Bancorp will be exchanged for shares of Shawmut National common stock having a value of $52. The actual exchange ratio will be based on the average value of Shawmut National shares in the 20 trading days prior to receipt of the last regulatory approval. The number of shares to be received by Peoples Bancorp shareholders is subject to adjustment to maintain value at $52. The maximum adjustment is 15 percent up or down from a Shawmut stock price of $24.125.
 Joel B. Alvord, chairman and chief executive officer of Shawmut National, said, "This in-market acquisition of Peoples Bancorp will give Shawmut the lead market share in New England's second largest city. Under Woodie Titcomb, Peoples has been widely recognized for having the best asset quality ratios of any bank in New England. Peoples reported uninterrupted earnings throughout the recent recession. Through various cost savings and revenue enhancements, we expect Peoples Bancorp will increase Shawmut's earnings per share and financial performance ratios in 1994.
 "For Peoples customers, Shawmut will deliver a larger menu of products and services, greater convenience, and the same commitment to serving the financial needs of Worcester's consumers and businesses."
 Woodbury C. Titcomb, president and chief executive officer of Peoples, said, "Peoples has had a long tradition as an independent institution, well-grounded in the fundamentals of banking and providing high-quality services to Worcester County. We are proud of the value created for our shareholders since becoming a public company in 1986 and of the professional environment in which our associates have performed.
 "Banking in New England is at a crossroads. Even extremely healthy institutions, such as Peoples, are best served by combining to create a wider array of services for customers and the leanest possible cost structure. We are delighted that Peoples is joining with an institution that shares our values. Together we are creating the strongest bank in our region."
 As of June 30, 1993, Peoples Bancorp had $913 million in assets and 23 branches of Peoples Savings Bank in central Massachusetts. For the first six months of 1993, Peoples reported net income of $5.65 million, or $1.67 a share. For full-year 1992, Peoples' net income was $11.0 million, or $3.62 a share.
 The purchase represents 15.9 times People's earnings per share for the 12 months ending June 30, 1993, and 1.76 times its fully diluted book value of $102 million as of June 30, 1993. The transaction will be treated as a tax-free pooling of interests and is expected to close in the first quarter of 1994, subject to approval by Peoples shareholders and regulators. Upon completion of the transaction, Peoples Savings Bank will be merged into Shawmut Bank, N.A.
 As part of the agreement, Peoples granted Shawmut an option to acquire up to 660,000 shares of Peoples common stock at $35 a share under certain circumstances.
 Shawmut also has a pending agreement to acquire New Dartmouth Bank of Manchester, N.H., for $143 million in an exchange of common stock. Shawmut National Corporation had $25.3 billion in assets as of June 30 and about 300 branches in Massachusetts, Connecticut, and Rhode Island. Shawmut is a leading provider of financial services to consumers and small- to medium-sized businesses in the region. The corporation maintains dual headquarters in Hartford, Conn., and Boston.
 -0- 8/26/93
 /CONTACT: (media) Robert L. Guenther of Shawmut, 203-240-1267, or Joan S. Scano of Peoples, 508-791-3861; or (investor) Thomas R. Rice of Shawmut, 203-728-4872 or James K. Hunt of Peoples, 508-791-3861/

CO: Shawmut National Corporation; Peoples Bancorp of Worcester Inc. ST: Massachusetts, Connecticut IN: FIN SU: TNM

DD-JL -- NE014 -- 6260 08/26/93 14:53 EDT
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Publication:PR Newswire
Date:Aug 26, 1993

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