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People's Utah Bancorp CEO finds M&A pricing expectations challenging

People's Utah Bancorp President and CEO Richard Beard said Jan. 26 that the American Fork, Utah-based company is discussing M&A with potential groups.

He noted though that "[p]ricing expectations continue to be a challenge," exacerbated by recent publicly announced deals at high multiples. "Even with our current share price where it is, we believe that the deals are rich," he said during the company's fourth-quarter 2016 earnings call, according to a transcript.

"Where acquisitions may not be available, we will continue to seek to expand our franchise by placing bricks-and-mortar branches in communities hospitable to our model of community banking," Beard said. "We are currently reviewing locations that we will intend to open in 2018."

The chief executive said that People's Utah Bancorp intends to open one to two branches each year to expand its footprint in the market area where the economics make sense.

In a Jan. 25 earnings release, the company said that investments in new branches that are scheduled to open during the first half could impact its efficiency ratio in 2017. It said it had expected opening one of the branches at the end of 2016, but permitting delays have moved the opening to 2017. The company's efficiency ratio was 56.45% for 2016, compared to 60.23% for 2015.

The company reported net income of $6.5 million, or 36 cents per share, for the fourth quarter of 2016, compared to $4.9 million, or 27 cents per share, for the year-ago period. Full-year 2016 net income was $23.6 million, or $1.30 per share, compared to 2015's $19.6 million, or $1.17 per share.