FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


Pinnacle Financial Partners Announces Agreement to Acquire BNC Bancorp

January 23, 2017, 07:10 AM
Filed Under: Mergers & Acquisitions

Pinnacle Financial Partners, Inc., the holding company and parent of Pinnacle Bank, and BNC Bancorp, the holding company and parent of Bank of North Carolina, jointly announced the signing of a definitive agreement pursuant to which BNC will merge with and into Pinnacle in an all-stock transaction. Upon completion of the merger, Pinnacle will merge Bank of North Carolina with and into Pinnacle Bank.

The merger will create a four state footprint concentrated in 12 of the largest urban markets in the Southeast, adding significant presence in Charlotte, Raleigh, Greensboro, Winston-Salem, Greenville-Spartanburg, and Charleston to Pinnacle’s Tennessee franchise. On a pro forma basis, Pinnacle is expected to be a top 50 public U.S. banking franchise by assets, with $20 billion in assets, $14 billion in loans and $15 billion in deposits. Pinnacle will operate the Carolinas and Virginia region out of BNC’s existing corporate headquarters in High Point, North Carolina.

Richard D. “Rick” Callicutt II, BNC’s President and Chief Executive Officer, will be named Chairman of the Carolinas and Virginia region once the acquisition is consummated and will join Pinnacle’s board along with three other BNC directors. David B. Spencer, BNC’s Senior Executive Vice President and Chief Financial Officer, will be named Executive Vice President supporting Mr. Callicutt in growing the firm’s presence in the Carolinas and Virginia and working in the combined company’s treasury and corporate finance areas.

“BNC represents the single best platform to expand our presence in urban, high-growth metropolitan markets,” Pinnacle President and CEO M. Terry Turner said. “This merger is consistent with Pinnacle’s strategy to become the dominant bank in southeastern commercial banking. BNC’s success can be attributed to its experienced financial services professionals and the culture they have created. I have admired Rick’s leadership and the significant growth he and the entire BNC team have achieved. I am very excited that we will be on the same team.”

Under the terms of the merger agreement, BNC shareholders will receive 0.5235 shares of Pinnacle common stock for every BNC share. All fractional shares will be cashed out as of the closing. Additionally, BNC’s outstanding stock options will be fully vested upon consummation of the merger, and all outstanding BNC options that are unexercised prior to the closing will be cashed out based on Pinnacle’s ten (10) trading-day average closing price ending on the trading day immediately preceding the closing date. Based on Pinnacle’s 20-day trailing average closing price as of Friday, January 20, 2017, the transaction is valued at approximately $35.70 per share, or $1.9 billion in the aggregate. Based on Pinnacle’s most recent dividend, BNC shareholders will receive an approximate 47 percent increase to their current $0.05 quarterly dividend per share upon completion of the transaction.

“Both we and Pinnacle have been committed to the idea that the Southeast deserves an impactful financial services firm with significant scale that operates with the culture of a community bank with local decision making led by banking professionals that are experienced and established in each market,” Callicutt said. “Bringing two of the Southeast’s best community banks together is a great thing for the region. By joining firms, Pinnacle and BNC can leverage each other’s competitive strengths and offer clients a broader array of superior banking services. Since BNC’s founding in 1991, we have focused on offering sophisticated services with a personal touch to business owners in the Carolinas and Virginia. We are excited for future growth opportunities as we continue that tradition with Pinnacle.”

The proposed merger has been approved unanimously by each company’s Board of Directors and is expected to close in the third quarter of 2017. The merger is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of both Pinnacle and BNC shareholders.

“Like Pinnacle, BNC has an experienced, engaged workforce focused on giving a high level of service to a client base that is sophisticated and growing rapidly,” Pinnacle Chairman Robert A. McCabe Jr. said. “We all look forward to this new partnership and not only the positive impact it will have on the combined client and associate base, but also the contributions it will make to the communities this combined firm will serve.”

Prior to the closing of the merger, Pinnacle anticipates the completion of a Tier I equity raise. Proceeds are intended to support Tier I regulatory capital as its and BNC’s existing trust preferred securities are expected to cease to qualify as Tier I capital following consummation of the merger. Pinnacle anticipates that the trust preferred securities will qualify as Tier II capital post-closing.

Assuming a fourth quarter 2017 technology conversion, and inclusive of the aforementioned Tier I equity raise, Pinnacle anticipates the transaction, with cost savings fully phased in and other adjustments, to be accretive to its 2018 earnings per share by approximately 10 percent (excluding acquisition-related and integration costs associated with the transaction). Pinnacle also estimates that the transaction will be accretive to tangible book value (including all acquisition-related and integration costs associated with the transaction).

Keefe, Bruyette & Woods served as financial advisor to Pinnacle, and Bass, Berry & Sims PLC served as Pinnacle’s legal advisor. Banks Street Partners, LLC and Sandler O’Neill + Partners, L.P., served as financial advisors to BNC, and Wachtell, Lipton, Rosen & Katz and Troutman Sanders LLP served as BNC’s legal advisors.

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.