As of the stock closing Friday, the value of the all-stock transaction is estimated to be $1.9 billion, according to a news release announcing the acquisition. In the transaction, following which Bank of North Carolina will become Pinnacle Bank, BNC shareholders will receive 0.5235 shares of Pinnacle common stock for every BNC share. Unexercised options of BNC stock will be fully vested after the merger, the news release said.
“We believe the merger is strategically compelling,” said Terry Turner, president and CEO of Pinnacle, in a call with investors Monday. “I’ve never desired to acquire fixer-uppers, and each of the last three quarterly earning calls I have talked about laying plans to expand into strong markets in the Southeast.”
Richard Callicutt II, BNC’s president and CEO, will become chairman of the Carolinas and Virginia region when the transaction is complete; CFO David Spencer will be named executive vice president, according to a news release. Callicutt and three other BNC directors will join the Pinnacle Financial Partners board of directors.
Callicutt said he did not foresee any branch closures as a result of the acquisition.
The acquisition brings together the 76 banking offices of BNC — including several in the Charleston and Greenville-Spartanburg regions — with the second-largest bank holding company based in Tennessee. The new company will have approximately $20 billion in assets, $14 billion in loans and $15 billion in deposits.
The deal moves Pinnacle into six of its nine target markets in the Southeast — Atlanta, Richmond, Va., and Virginia Beach, Va., are the three remaining target markets.
According to preliminary figures, South Carolina will constitute 8% of the deposits for the company. The Charleston-North Charleston market will account for 4.2% of deposits.
Callicutt said he and Turner began discussions about a potential acquisition in October, after a meeting of the BNC board of directors.
In its latest filing with the Securities and Exchange Commission, BNC Bancorp reported a slight drop in its net income from the third quarter to the fourth, but it also had a $2.1 million increase in its operating net income and a $190 million increase in originated loans in that time.
Pinnacle Financial Partners hopes to complete a $175 million Tier I equity raise before the acquisition is complete, according to a news release.
The boards of directors for each company have approved the acquisition unanimously, and officials said they expect the deal to close in the third quarter, pending regulatory and shareholder approvals.