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Regulators approve $1.9B purchase of BNC Bancorp by Pinnacle

Regulators approve $1.9B purchase of BNC Bancorp by Pinnacle

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Federal and state regulators have approved the $1.9 billion sale of BNC Bancorp of High Point to Pinnacle Financial Partners Inc.

The all-stock deal, announced Jan. 23, required permission from the Federal Deposit Insurance Corp., Federal Reserve Bank of Atlanta, Tennessee Department of Financial Institutions and North Carolina Office of the Commissioner of Banks.

The deal still needs approvals from both banks’ shareholders. The banks expect to close the transaction in late June or early July.

“BNC has so much to contribute, and with both teams fully integrated into one company, we believe our combined efforts will make us one of the premier financial services firms in the Southeast,” Terry Turner, Pinnacle’s president and chief executive, said in a statement

It would be Pinnacle’s first presence in the Carolinas and Virginia, gaining 76 BNC branches, including 20 in the Triad and three in Forsyth County. Pinnacle Bank would be the surviving brand.

Pinnacle would keep an operational hub in High Point, led by BNC chief executive and president Rick Callicutt, who would become chairman of Pinnacle’s Carolinas and Virginia region.

The proposed deal would allow Pinnacle to move closer to becoming a top-50 bank with nearly $19 billion in total assets once it acquires BNC’s $7.4 billion as of Dec. 31. Pinnacle has $11.4 billion in total assets. It could become the nation’s 36th largest bank in terms of market capitalization.

Pinnacle will cover a four-state footprint with presence in 12 of the largest urban markets in the Southeast, gaining the Triad, Triangle and Charlotte markets in North Carolina, Greenville-Spartanburg and Charleston in South Carolina; and Roanoke in Virginia.

The deal, when completed, would leave BB&T Corp. as the only major bank based in the Triad.

Pinnacle would own 60 percent of the combined bank, while BNC would own 36 percent and a separate group of private-equity investors 4 percent through a planned $175 million Tier 1 capital raise.

“I challenge you to find a better fitting target for our goals than BNC,” Turner said. “This merger is consistent with Pinnacle’s strategy to become the dominant bank in Southeastern commercial banking.”

Brian Martin, an analyst with FIG Partners of Atlanta, called the proposed deal as “positive for Pinnacle as it is consistent with their strategy of becoming one of the dominant commercial banks in the Southeast.”

“The acquisition of BNC checks these boxes and does not come as a surprise,” Martin said.

“In our view, Pinnacle is paying a rich but fair price to significantly increase its scale in some of the best urban high-growth southeast markets.”

There will be four BNC directors, including Callicutt and former Wachovia Corp. top executive Ken Thompson, joining the Pinnacle board, expanding it to 18 members.

Thompson represents private-equity group Aquiline Capital Partners LLC on the BNC board. Aquiline holds 1.51 million shares and a 3.1 percent stake. Aquiline spent at least $120 million to acquire that holding.

rcraver@wsjournal.com (336) 727-7376 @rcraverWSJ

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