LONDON, UK / ACCESSWIRE / January 24, 2017 / Active Wall St. blog coverage looks at the headline from Tennessee-based Pinnacle Financial Partners, Inc. (NASDAQ: PNFP) and North Carolina-based BNC Bancorp (NASDAQ: BNCN). Pinnacle Financial Partners announced on January 22, 2017, that it has entered into an agreement to acquire BNC Bancorp. The all-stock transaction is valued at $1.9 billion. Register with us now for your free membership and blog access at:

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Sharing his thoughts on the merger, M. Terry Turner, President and CEO of Pinnacle said:

"BNC represents the single best platform to expand our presence in urban, high-growth metropolitan markets. This merger is consistent with Pinnacle's strategy to become the dominant bank in south-eastern commercial banking."

Richard D. "Rick" Callicutt II, BNC's President and CEO added:

"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."

Terms of the Merger

The transaction is between Pinnacle, the holding company of Pinnacle Bank and BNC which is the holding and parent company of Bank of North Carolina, a commercial bank with total assets of $7.4 billion. Post the merger, Bank of North Carolina will be merged with and into Pinnacle Bank.

As per the merger agreement, BNC's shareholders will receive 0.5235 shares of Pinnacle's common stock for every BNC's share. The purchase price is approximately $35.70 per share based on Pinnacle's 20-day trailing average. All fractional shares will be cashed out at the time of the closing including any outstanding BNC stock options that remain unexercised. These will be cashed out based on Pinnacle's ten-day average immediately prior to the deal's closing. The merger has already been approved unanimously by the Board of Directors of both companies and is expected to close in the third quarter of 2017, subject to customary closing conditions.

Post the merger, Pinnacle is expected to own 60% whereas BNC will own 36% in the merged entity. The remaining 4% stake will be used to raise $175 million as tier 1 capital from private equity investors prior to the completion of the merger, as announced by Pinnacle in January 23, 2017.

BNC's current CEO Richard D. "Rick" Callicutt II will be the Chairman of the merged bank's Carolinas and Virginia region and will operate from BNC's existing corporate headquarters in High Point. He will join Pinnacle's Board along with three other BNC Directors.

How Pinnacle benefits from the merger?

The BNC acquisition paves the way for Pinnacle's entry into Southeast states of Carolinas and Virginia. BNC, which has branches in North Carolina, South Carolina, and Virginia will enable Pinnacle to gain significant presence the urban markets of Charlotte, Raleigh, Greensboro, Winston-Salem, Greenville-Spartanburg, and Charleston.

The proposed deal would allow Pinnacle to move closer to its aim of becoming a top-50 bank with more than $20 billion in total assets, $14 billion in loans, and $15 billion in deposits, post the merger.

Pinnacle expects that the transaction will be accretive to its 2018 earnings per share by approximately 10% after taking into account the cost savings and other adjustments.

The BNC deal is Pinnacle's largest transaction till date. Pinnacle had acquired Avenue Financial Holdings in June 2016 for $201.4 million. In September 2015, Pinnacle had completed the acquisition of Magna Bank. In April 2015, Pinnacle had announced the acquisition of Chattanooga-based CapitalMark Bank & Trust for $187 million.

BNC has been on an acquisition spree since 2001. Its list of acquisitions includes - Independence Bank in 2001; Sterling South Financial in 2006; Beach First National Bank in 2010; Regents Bank and Blue Ridge Savings and Trust in 2011; KeySource, Gateway, Carolina Federal, and First Trust Bank in 2012; Randolph Bank & Trust in 2013; Home Savings Bank, Harrington National Bank, and Harbor Bank in 2014; Valley Bank and Certus Bank in 2015; Southcoast Financial Corp. and High Point Bank & Trust Co. in 2016.

Stock Performance

At the close on Monday, January 23, 2017, Pinnacle Financial Partners' share price finished yesterday's trading session at $64.25, climbing 1.50%. A total volume of 1.03 million shares exchanged hands, which was higher than the 3 months' average volume of 234.10 thousand shares. The stock has rallied 23.28% and 20.84% in the last three months and past six months, respectively. Furthermore, in the previous twelve months, shares of the Company have soared 34.23%. The stock is trading at a PE ratio of 22.11 and has a dividend yield of 0.87%. The Company's shares have a market capital of $2.93 billion.

BNC Bancorp's stock closed the trading session at $33.35, marginally up by 0.45% from its previous closing price of $33.20. A total volume of 1.71 million shares have exchanged hands, which was higher than the 3-month average volume of 281.95 thousand shares. BNC Bancorp's stock price surged 36.40% in the last three months, 38.78% in the past six months, and 55.62% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 4.55%. The Company's shares are trading at a PE ratio of 23.64 and have a dividend yield of 0.60%. BNC's stock has a market capital of $1.70 billion.

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