Pinnacle Financial and BNC Bancorp had specific needs before they hammered out the details of what is currently the year’s second-biggest bank deal.

Pinnacle, in Nashville, Tenn., wanted to be in a number of fast-growing Southeastern markets. It was also important for the $11.2 billion-asset company to retain the management team of any bank it bought.

BNC, a $7.4 billion-asset company based in High Point, N.C., was nearing $10 billion in assets, where it would face closer regulatory scrutiny. The company decided that, if it ended up selling, it would need to find a larger institution that could offer an attractive consideration for its shareholders.

Something clicked with the companies; it took them just five months to negotiate an all-stock deal valued at $1.9 billion. The deal, announced in January, will be Pinnacle’s first expansion outside of Tennessee.

Pinnacle had an eye on BNC for some time before the parties started talking. In September 2015, BNC appeared on a list of 11 targets reviewed by Pinnacle’s board, the company disclosed in a regulatory filing tied to the transaction.

An investment bank representing BNC contacted Terry Turner, Pinnacle’s president and CEO, in August, offering to introduce him to Rick Callicutt II, BNC’s president and CEO. The $10 billion-asset threshold was given as the main reason the leaders should talk.

Turner and Callicutt held their meeting in late September in Nashville.

Turner alluded to that meeting during an October conference call to discuss quarterly results, telling analysts that Pinnacle was looking at deals beyond Tennessee while specifically mentioning North Carolina.

"We are in the relatively early stage of exploration," Turner said. "We've had conversations with a number of people that I would characterize as casual."

Pinnacle did not develop tunnel vision, the filing said. Its board reviewed other unnamed targets during a Nov. 1 meeting.

Executives at BNC and Pinnacle kept meeting, having dinner in Naples, Fla., in mid-November while attending an investor conference. The CEOs met again in Nashville in early December and in Atlanta in early January.

Pinnacle’s team kept busy as negotiations progressed.

Executives met with representatives of the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Tennessee Department of Financial Institutions over several days in early January to discuss the merger. The company also met with an investment bank to discuss a public offering to help finance the anticipated transaction.

The financial terms changed very little during negotiations. Pinnacle first proposed an exchange ratio of 0.5 to 0.51 shares of its stock; the finalized deal had a roughly 0.52 ratio. Then again, the offer values BNC at 291% of its tangible book value, which is among the richest premiums announced this year in bank M&A.

A big requirement for Turner was retaining Callicutt and Chief Financial Officer David Spencer.

Callicutt is to become chairman of the Carolinas and Virginia for Pinnacle, earning $630,000 annually. He is also set to receive a cash payment of nearly $2 million when the deal closes to settle benefits under his employment agreement with BNC.

Spencer, who is also expected to stay on, in an unspecified role, will receive about $1.7 million when the deal is completed to settle his BNC employment agreement.

The filing also disclosed that Ken Thompson is expected to be one of the four BNC directors to join Pinnacle’s board. Thompson, who represents a large BNC investor, Aquiline Capital Partners, was chairman and CEO of Wachovia in Charlotte, N.C., until his ouster just months before the financial crisis.

Pinnacle also pledged to increase its quarterly dividend to match what BNC pays its shareholders.

The deal’s prospects received a boost on Dec. 20 when BNC’s board met with its advisers. The board was told that a “limited number” of merger partners existed and that “none of the potential strategic partners … represented a likely attractive alternative to the proposed transaction” with Pinnacle, the filing said.

Turner and Callicutt, meanwhile, agreed to do everything they could to announce a deal by Jan. 22. That let Pinnacle move quickly on raising capital, while allowing BNC to announce the deal alongside its fourth-quarter results.

The companies sprinted toward the targeted date. Due diligence efforts progressed — Pinnacle’s review of BNC’s loan book continued until the week a deal was reached — and each board met regularly for updates. Drafts of the merger agreement were circulated as Callicutt and Spencer negotiated their post-closing arrangements.

Aquiline in mid-January entered into a shareholder support agreement, pledging to back the deal.

Each board approved the merger and the deal was announced on Jan. 22, as planned, in a Sunday night press release. The next day, Pinnacle launched a public offering that eventually raised $191 million in net proceeds.

"BNC represents the single-best platform to expand our presence in urban, high-growth metropolitan markets," Turner said in the release announcing the deal, which is expected to close in the third quarter. "This merger is consistent with Pinnacle's strategy to become the dominant bank in southeastern commercial banking."

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