Share price of
) increased 3.6% as the company announced a definite agreement to
acquire Harbor Bank Group, Inc. on Thursday. The latter is the
parent company of Harbor National Bank and is based in Charleston,
As per the stock deal, shareholders of Harbor Bank Group, in return
of each of their existing shares will receive 0.950 share of BNC
Bancorp. Considering the closing price of BNC Bancorp on Jun 4, the
deal is worth nearly $50.6 million.
The deal is expected to close by fourth-quarter 2014. However, it
is subject to regulatory approval and consent of Harbor Bank
BNC Bancorp's positive stock price movement following the news
release indicates the bullish stance of investors. Let's see how
the deal is beneficial for the acquirer.
As of Mar 31, 2014, Harbor Bank Group has assets worth $306
million, while loans and deposits stand at $253 million and $250
million, respectively. The acquisition will thus, further
strengthen the balance sheet position of BNC Bancorp. According to
Rick Callicutt, President and Chief Executive Officer of BNC
Bancorp, after the completion of the deal, the company will feature
in top ten of the Charleston region in terms of total deposit
Moreover, South Carolina is witnessing steady recovery with a
faster declining pace of unemployment than the overall nation.
Increasing demand for loans in this region reflect investors'
confidence. Further, growth in consumer spending testifies to
Therefore, the latest deal will enable BNC Bancorp to expand in the
lucrative Charleston market of South Carolina. Moreover, the
company intends to capitalize on the local expertise of Harbor Bank
Group, operating in the Charleston market since 2005.
BNC Bancorp is an active acquirer and synergies from meaningful
acquisitions have supported its top line growth in the past.
Earlier this month, BNC Bancorp acquired Community First Financial
Group, Inc. Also in April, the company acquired South Street
Financial Corp. Both the acquired units serve to enhance the
company's presence in North Carolina.
Additionally, the company has delivered positive earnings surprise
in the trailing three out of four quarters while maintaining an
average surprise of 13.7%. Moreover, as of Mar 31, 2014, BNC
Bancorp's capital ratios were well above the minimum regulatory
requirements. Therefore, given its healthy earnings power and a
strong capital position we foresee meaningful investments in the
quarters to follow.
BNC Bancorp currently carries a Zacks Rank #3 (Hold). Better-ranked
South-East banks include
Capital City Bank Group Inc.
Customers Bancorp, Inc.
Middleburg Financial Corporation
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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