Pinnacle Financial Completes Merger with Cavalry Bancorp
March 15 2006 - 4:04PM
Business Wire
Pinnacle Financial Partners Inc. (Nasdaq: PNFP) today announced
that it had completed its merger with Cavalry Bancorp Inc. (Nasdaq:
CAVB), creating the second largest bank holding company
headquartered in Tennessee with combined assets of approximately
$1.8 billion. Based on the fixed exchange ratio of 0.95 shares of
Pinnacle for each share of Cavalry, Pinnacle will issue
approximately 6.9 million shares of Pinnacle common stock to
Cavalry shareholders in a tax-free exchange. As a result, based on
today's closing price of Pinnacle common stock of $27.11 per share,
the transaction would be valued at approximately $186 million.
Former shareholders of Cavalry are now shareholders of Pinnacle.
Cavalry shareholders holding Cavalry stock certificates should
receive information regarding the transfer of their stock
certificates within the next few weeks. Cavalry shareholders whose
share ownership is held in brokerage accounts should see the effect
of the transfer in their brokerage accounts over the next few days.
Cavalry will continue to operate under the Cavalry name until the
systems and operations of the two companies are integrated, which
is expected to be completed during the second quarter of 2006. "The
more we have learned about Cavalry's franchise since announcing
this transaction in October, the more excited we have become about
the opportunities this merger creates," said Terry Turner, Pinnacle
president and chief executive officer. The merger of Pinnacle and
Cavalry provides many benefits to shareholders including: -- The
transaction is anticipated to be accretive to Pinnacle's estimated
earnings in 2006; -- Further diversification of the company's
revenue base with opportunities to leverage insurance, investment
management, trust and treasury management services across the
entire Pinnacle franchise; and -- A merger integration plan that
requires very few position eliminations at either firm due to using
many of the operations personnel at Cavalry to support Pinnacle's
current and projected growth. Ed C. Loughry Jr., former chairman
and CEO of Cavalry and incoming vice-chairman of Pinnacle, said,
"We have received overwhelming support from our clients since we
announced our merger with Pinnacle. Our clients appreciate that
they will continue to do business with a local company and the
professionals they have worked with for years will continue in
their current roles. Also, because the number of shares to be
awarded our shareholders was fixed at the time of announcement, all
shareholders have benefited from the 7.7 percent increase in
Pinnacle's stock price since that time." Cavalry Executive Vice
President and Chief Administrative Officer Bill Jones will be
Pinnacle's Rutherford County area executive and will serve on
Pinnacle's leadership team. Cavalry President and Chief Operating
Officer Ronnie Knight will serve as a consultant to Pinnacle,
focusing his efforts on assisting the company in capitalizing on
the significant growth opportunities in Rutherford County. Jones,
who is also the past president of the Rutherford County Chamber of
Commerce, said, "Our merger with Pinnacle enforces our
long-standing commitment to Rutherford County. The fact that we
will maintain a significant portion of the combined company's
operational infrastructure in Rutherford County enables us to not
only protect many existing jobs in Murfreesboro, but provide a
solid base to add jobs in our area in the future." Loughry, who has
been with Cavalry since 1968, in addition to his serving as
Pinnacle's vice chairman will also be a member of Pinnacle's
executive committee of the board of directors. Two other Cavalry
board members, James C. Cope and William H. Huddleston IV, join
Loughry on the Pinnacle board. Cope is a partner in the law firm of
Cope, Hudson, Scarlett, Reed & McCreary in Murfreesboro. In
addition to practicing general law, he serves as attorney for
Rutherford County, the Middle Tennessee Electric Membership
Corporation, the Murfreesboro Housing Authority and the
Smyrna/Rutherford County Airport Authority. Cope is past President
of the Middle Tennessee State University Foundation and the
Murfreesboro Rotary Club. Huddleston is president of
Huddleston-Steele Engineering Inc. in Murfreesboro. He currently
serves on the City of Murfreesboro Construction Board of
Adjustments and Appeals, the First United Methodist Church Council
of Stewards and is president of The Webb School Alumni Board. With
the addition of Cavalry, Pinnacle now has 17 offices in the rapidly
growing Nashville-Davidson-Murfreesboro MSA. The merger puts
Pinnacle in the sixth position in overall market share in the MSA
and first in market share in rapidly growing Rutherford County.
Pinnacle Financial Partners Inc., the largest financial services
firm headquartered in Nashville, offers a full range of banking,
investment and insurance products and services designed for small-
to mid-sized businesses and consumers interested in a deep
relationship with their financial advisor. Pinnacle provides
financial planning services by a certified financial planner (CFP
(R)), and a number of Pinnacle's senior financial advisors provide
comprehensive wealth management services to help clients increase,
protect and distribute their assets. Pinnacle opened its first
office in October 2000 in downtown Nashville and three years later
had become the fastest-growing of the 186 national banks chartered
in 2000. Additional information on Pinnacle can be found at
www.pnfp.com Certain of the statements in this release may
constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The words
"expect," "anticipate," "intend," "plan," "believe," "seek,"
"estimate" and similar expressions are intended to identify such
forward-looking statements, but other statements not based on
historical information may also be considered forward-looking. All
forward-looking statements are subject to risks, uncertainties and
other facts that may cause the actual results, performance or
achievements of Pinnacle to differ materially from any results
expressed or implied by such forward-looking statements. Such
factors include, without limitation, (i) unanticipated
deterioration in the financial condition of borrowers resulting in
significant increases in loan losses and provisions for those
losses, (ii) the inability of Pinnacle to continue to grow its loan
portfolio at historic rates, (iii) increased competition with other
financial institutions, (iv) lack of sustained growth in the
economy in the Nashville, Tennessee area, (v) rapid fluctuations or
unanticipated changes in interest rates, (vi) the inability of
Pinnacle to satisfy regulatory requirements for its expansion
plans, (vii) the inability of Pinnacle to execute its expansion
plans, (viii) the inability of Pinnacle to successfully integrate
Cavalry's operations with Pinnacle's and (ix) changes in the
legislative and regulatory environment. A more detailed description
of these and other risks is contained in Pinnacle's most recent
annual report on Form 10-K. Many of such factors are beyond
Pinnacle's ability to control or predict, and readers are cautioned
not to put undue reliance on such forward-looking statements.
Pinnacle disclaims any obligation to update or revise any
forward-looking statements contained in this release, whether as a
result of new information, future events or otherwise.
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