Bank of North Carolina, a High Point-based bank with a significant presence in the Triangle, is being acquired by the second-largest bank headquartered in Tennessee for about $1.9 billion in stock.
When the acquisition is completed, Nashville-based Pinnacle Bank expects to have $20 billion in assets, $14 billion in loans and $15 billion in deposits, making it one of the 50 largest banks in the nation in terms of assets.
Bank of North Carolina will be merged into Pinnacle Bank. The combined bank will operate in a dozen of the largest urban markets in the Southeast, including Raleigh and Charlotte, and would have more than 120 branches.
“The merger combines two of the highest-performing commercially-focused franchises in the southeast,” Pinnacle CEO Terry Turner told analysts during a conference call Monday morning. “As you know, I have never desired to acquire fixer-uppers.”
Turner also praised BNC for having “one of the best bank management teams with which I’m familiar.”
The deal announced Sunday night is the latest in a wave of banking industry consolidation as banks in North Carolina and elsewhere beef up to absorb the increased regulatory costs imposed on them in the wake of the recession. BNC itself has acquired three banks since the start of 2015: one each in North Carolina (High Point Bank and Trust), Virginia and South Carolina.
BNC, which was founded in 1991, has 76 branches in North and South Carolina and Virginia, including seven Triangle offices, and $7.4 billion in assets. Pinnacle has more assets – $11.2 billion – but its 45 branches are fewer.
Rick Callicutt, BNC’s president and CEO, will become chairman of the Carolinas and Virginia region for Pinnacle once the deal is completed and will join Pinnacle’s board of directors, as will three other BNC board members. The new Carolinas and Virginia region of Pinnacle will be run out of BNC’s existing headquarters in High Point.
Callicutt said that the deal would enable the combined bank to pursue larger clients and offer a broader array of bank services.
“We don’t see any significant branch closures,” he added.
BNC shareholders will received 0.5235 shares of stock in Pinnacle Financial Partners, the corporate parent of Pinnacle Bank, for every share of BNC stock they own. Based on Pinnacle’s average closing price over the last 20 days, BNC shareholders will receive stock valued at $35.70, a 7.5 percent premium over the Friday closing price of BNC stock of $33.20.
The deal, which has been approved by each bank’s board of directors, is expected to be completed in the third quarter.
BNC announced Sunday that its net income for all of 2016 was $62.9 million, up 42 percent.