Filed Pursuant to Rule 425
Filing Person: Pinnacle Financial Partners, Inc.
Subject Company: Cavalry Bancorp, Inc.
Commission File No. 0-23605
[Logo of Pinnacle Financial Partners] [Logo of Cavalry Banking]
For Immediate Release
Contacts:
For Pinnacle For Cavalry
Harold Carpenter (investment community) Bill Jones
(615)744-3742 (615) 849-2272
http://www/cavb.com
Vicki Kessler (news media)
(615)320-7532
http://www.pnfp.com
Pinnacle Financial to Acquire Cavalry Bancorp
Strategic Acquisition in Rapidly Growing Rutherford County, Tenn.
Accretive to Pinnacle's 2006 Earnings
Joint webcast to begin at 10:00 a.m. CDT Oct. 3, 2005 http://www.pnfp.com
NASHVILLE, Tenn. & MURFREESBORO, Tenn., Oct. 3, 2005--Pinnacle Financial
Partners Inc. (Nasdaq: PNFP) and Cavalry Bancorp Inc. (Nasdaq: CAVB) announced
today a definitive agreement for Pinnacle Financial Partners Inc. ("Pinnacle")
to acquire all of the common stock of Cavalry Bancorp Inc. ("Cavalry") in a
stock transaction valued at approximately $175.5 million based on the Sept. 30,
2005, closing price of PNFP of $25.18 per common share.
The combination of Pinnacle and Cavalry provides many opportunities to both
companies' shareholders, including:
-- Accretion to Pinnacle's estimated earnings in 2006 on a GAAP basis
-- Further diversification of Pinnacle's revenue base with opportunities to
leverage insurance, investment management, trust and treasury management
services across the entire Pinnacle franchise
-- Creation of the second-largest bank holding company in Tennessee
-- An even stronger presence in the Nashville-Davidson-Murfreesboro MSA,
which is one the fastest growing in the United States, particularly the core
metropolitan counties of Davidson, Rutherford, Williamson and Sumner where
Pinnacle and Cavalry are strategically well positioned
-- No branch overlap and a modest merger integration plan whereby Pinnacle
will support its growth by utilizing many of the operational areas at Cavalry
Subject to shareholder and regulatory approval, the transaction is expected
to close in the first quarter of 2006, creating the second largest bank holding
company headquartered in Tennessee. The combined company will have projected
assets of more than $1.6 billion and 17 offices in the rapidly growing
Nashville-Davidson-Murfreesboro MSA.
The two firms will host a joint webcast conference call to discuss the
definitive agreement and other aspects of the business combination at 10:00 a.m.
CDT on Oct. 3, 2005. Interested parties may access the webcast by logging on to
http://www.pnfp.com and selecting the webcast icon on Pinnacle's home page. The
webcast is expected to last approximately one hour and will be available for 60
days for those that cannot participate in the webcast at the aforementioned
time.
"This combination affords one of the fastest growing banks in the nation an
opportunity to enter one of the fastest growing counties in the nation with an
established deposit market share of 22 percent," said M. Terry Turner, Pinnacle
president and chief executive officer. "Pinnacle already had plans to enter the
Rutherford County market on a de novo basis at the end of this year, and this
transaction puts us several years ahead of our growth plans in the
Murfreesboro/Rutherford County market. We expect to continue the very rapid
growth we had planned on a stand-alone basis, as well. Consequently, this is a
matter of Pinnacle simply finding a better way to execute its plan, as opposed
to substantively changing the plan."
Cavalry, with $605 million in total assets and $539 million in deposits as
of June 30, 2005, has eight offices in Rutherford County, the second largest
county in the Nashville-Davidson-Murfreesboro MSA with an estimated population
in excess of 200,000. At June 30, 2004, Cavalry held the No. 2 deposit market
share position in the rapidly growing Rutherford County market, home to the
largest undergraduate university in the state - Middle Tennessee State
University, State Farm Insurance, Nissan Motor Manufacturing Corporation and
over 150 manufacturers. Cavalry has one office in neighboring Bedford County,
also home to several large manufacturers.
Pinnacle has eight offices in three Nashville metropolitan counties and
total assets of $872 million and total deposits of $690 million as of June 30,
2005. Pinnacle has been the fastest growing of the 186 commercial banks
chartered in the U.S. in 2000.
Ed C. Loughry Jr., chairman and chief executive officer of Cavalry, will
become vice chairman of the Pinnacle board of directors when the transaction is
complete. He will be joined on the Pinnacle board by two other Cavalry board
members. Cavalry Executive Vice President and Chief Administrative Officer Bill
Jones will be the Rutherford County area executive for the combined company.
Jones will also join the Pinnacle leadership team. Cavalry President and Chief
Operating Officer Ronnie Knight will serve as a consultant to the combined
company, focusing his efforts on client retention and business development.
Loughry said, "Both firms bring unique strengths that will create a very
dynamic financial services firm in our marketplaces. We admire Pinnacle's
intense focus on distinctive service and effective advice and are excited to be
part of what has proven to be an extremely successful business model. We will
help take advantage of both sets of resources, such as the moving of Pinnacle's
operations to our facilities in Murfreesboro and expanding services we offer our
current clients. This is truly a win-win."
Pinnacle Chairman Robert A. McCabe Jr. said, "The complementary client base
and product and service offerings of the two firms will allow us to deepen our
client relationships even further and will provide the company additional fee
income opportunities. The combination also increases our lending capacity to
better serve our larger clients."
McCabe said Pinnacle will benefit from Cavalry's greater focus on retail
business and its strong presence in the retail and commercial real estate
sectors. Pinnacle will also leverage Cavalry's trust and insurance agency
capabilities across the combined company. Cavalry's clients will have access to
Pinnacle's extensive treasury management and financial planning services and
strong commercial banking experience. Cavalry clients will have new conveniences
such as courier pick-up of deposits for commercial clients and free use of any
ATM anywhere in the world for many account types.
Until the combined company integrates its systems in mid-2006, Cavalry will
continue to operate under the Cavalry brand. The Cavalry name will be changed to
Pinnacle when the systems conversion is complete. Pinnacle intends to move its
deposit operations, item processing and data processing functions to
Murfreesboro after the transaction closes.
Under the terms of the definitive agreement, shareholders of Cavalry will
receive a fixed exchange of 0.95 shares of Pinnacle common stock for each share
of CAVB common stock they own, or approximately 6.9 million shares of PNFP.
Based on a closing price of $25.18 for PNFP common stock on Sept. 30, 2005, each
CAVB share would be valued at $23.92 per share pursuant to the 0.95 exchange
ratio. As a result, Cavalry shareholders will own approximately 42 percent of
the combined firm. Cavalry had approximately 7.3 million common shares
outstanding as of Sept. 30, 2005.
The acquisition, unanimously approved by the two companies' boards of
directors, will be accretive to Pinnacle's estimated earnings per share in
fiscal year 2006, exclusive of any merger-related charges. Merger-related
charges are anticipated to approximate $16.0 million (pretax) and will impact
the earnings of both companies in 2005 and 2006. It is anticipated that the
resulting synergies from the combination of the two firms will increase the
combined company's anticipated 2006 net earnings by approximately $500,000 to $1
million, including the amortization costs associated with intangibles and the
funding costs associated with the acquisition.
Raymond James & Associates Inc. served as financial advisor to Pinnacle.
Hovde Financial LLC acted as financial advisor to Cavalry.
In connection with the proposed acquisition of Cavalry, Pinnacle will file
with the Securities and Exchange Commission a registration statement on Form S-4
to register the shares of Pinnacle common stock to be issued to the shareholders
of Cavalry.
The registration statement will include a joint proxy statement/prospectus
that will be sent to the shareholders of Cavalry seeking their approval of the
proposed transaction and to the shareholders of Pinnacle seeking their approval
of an amendment to Pinnacle's charter to increase the number of its authorized
shares of common stock and approving the proposed transaction.
INVESTMENT OUTLOOK
Management has developed several financial forecast scenarios for the next
several quarters. Pinnacle continues to estimate that its third quarter 2005
diluted earnings per share will approximate $0.21 to $0.22. Based on anticipated
growth trends and future investments in the franchise, Pinnacle continues to
estimate that diluted earnings per share for the year ending Dec. 31, 2005, to
range between $0.84 and $0.87. Additionally, Pinnacle currently estimates total
asset balances will approximate $1 billion by the end of 2005 as a result of
continued organic growth. Pinnacle also estimates that its 2006 fully diluted
earnings per share for the year ending Dec. 31, 2006, to range between $1.14 and
$1.22. All estimates are exclusive of any merger-related expenses associated
with the Cavalry acquisition and assume the merger will occur pursuant to a
prescribed plan, which includes closing the transaction in the first quarter of
2006 and other factors.
As noted previously, management has developed several scenarios under which
these estimates can be achieved and believes these estimates to be reasonable
based on these scenarios. However, unanticipated events or developments may
cause the actual results of Pinnacle to differ materially from these estimates.
Pinnacle Financial Partners Inc., the largest financial services firm
headquartered in Nashville, provides a full range of banking, investment and
insurance products and services designed for small- to mid-sized businesses and
their owners. 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 Commerce Center in
downtown Nashville. Since then the firm has added offices in the Green Hills,
Rivergate and West End areas of Davidson County; in Brentwood, Cool Springs and
Franklin in Williamson County; and in Hendersonville in Sumner County.
Cavalry Bancorp is the parent of Cavalry Banking, a community-oriented
financial institution operating nine retail offices in Rutherford and Bedford
Counties in Middle Tennessee.
Additional information concerning Pinnacle can be accessed at
http://www.pnfp.com. Additional information concerning Cavalry can be accessed
at http://www.cavb.com.
###
Pinnacle Financial Partners/Cavalry Bancorp Merger
Combined Company Fact Sheet
Size at Closing Projected for January 2006
PNFP projected to be second largest bank holding company headquartered in
Tennessee
Fifth largest market share in Nashville-Davidson-Murfreesboro MSA 5.3
percent (behind SunTrust, AmSouth, Bank of America, Regions Bank)
Combined assets of more than $1.6 billion
Assets as of June 30, 2005:
PNFP - $872 million
Cavalry - $605 million
Offices: Combined 17
Pinnacle: Eight total in the downtown, Green Hills, Rivergate, and West End
areas of Davidson County; the Brentwood, Cool Springs and Franklin areas of
Williamson County; and Hendersonville in Sumner County (all in the
Nashville-Davidson-Murfreesboro MSA)
Cavalry: Nine including six in Murfreesboro, Tenn., and two in Smyrna,
Tenn., in Rutherford County; and one in Shelbyville, Tenn., in neighboring
Bedford County.
Associates: 366
Pinnacle: 156
Cavalry: 210
Geographic Markets:
Pinnacle's offices in Davidson, Williamson and Sumner counties are in very
high-growth markets. The Nashville-Davidson-Murfreesboro MSA is the 18th fastest
growing market in population nationwide and the 4th fastest growing market in
per capita income nationwide. Williamson County has the highest per capita
income of any Tennessee county and is one of the fastest growing counties in the
state.
Cavalry's offices in Rutherford County are strategically positioned in the
fastest growing county in the nation based on its annualized job growth rate.
The county is home to many major employers, including Nissan's North American
operations, Middle Tennessee State University (the state's largest undergraduate
university), State Farm Insurance and the Alvin C. York Veterans Hospital.
Trading Symbols and Websites
Pinnacle: PNFP (Nasdaq) http://www.pnfp.com
Cavalry: CAVB (Nasdaq) http://www.cavb.com
Additional Information and Where to Find It
In connection with the proposed merger, Pinnacle and Cavalry will file a
joint proxy statement/prospectus with the Securities and Exchange Commission
("SEC").
INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS
TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PINNACLE, CAVALRY AND THE PROPOSED
TRANSACTION.
Investors and security holders may obtain free copies of these documents
once they are available through the website maintained by the SEC at
http://www.sec.gov. Free copies of the joint proxy statement/prospectus also may
be obtained by directing a request by telephone or mail to Pinnacle Financial
Partners Inc., 211 Commerce Street, Suite 300, Nashville, TN 37201, Attention:
Investor Relations (615) 744-3710 or Cavalry Banking Corp., 114 West College
Street, P.O. Box 188, Murfreesboro, TN 37133, Attention: Investor Relations
(615) 849-2272.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
such jurisdiction.
Participants in the Solicitation
The directors and executive officers of Pinnacle and Cavalry may be deemed
to be participants in the solicitation of proxies with respect to the proposed
transaction. Information about Pinnacle's directors and executive officers is
contained in the proxy statement filed by Pinnacle with the Securities and
Exchange Commission on March 14, 2005, which is available on Pinnacle's web site
(www.pnfp.com) and at the address provided above. Information about Cavalry's
directors and executive officers is contained in the proxy statement filed by
Cavalry with the Securities and Exchange Commission on March 18, 2005. Other
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests by security holding or
otherwise, will be contained in the joint proxy statement/prospectus and other
relevant material to be filed with the Securities and Exchange Commission when
they become available.
Forward-Looking Statements
All statements, other than statements of historical fact included in this
release, are 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 including statements about
the benefits of the merger to Pinnacle and Cavalry, future financial and
operating results and Pinnacle's plans, objectives and intentions. 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, among others, the risk that the cost savings
and any revenue synergies from the merger may be realized or take longer than
anticipated, disruption from the merger with customers, suppliers or employee
relationships, the risk of successful integration of the two businesses, the
failure of Cavalry or Pinnacle shareholders to approve the merger and the
ability to obtain required governmental approvals of the proposed terms and
anticipated schedule. Additional factors which could affect the forward looking
statements can be found in the Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K of both Pinnacle and Cavalry filed or
furnished with the Securities and Exchange Commission and available on the
Commission's website set forth above. Pinnacle and Cavalry disclaim 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.
MULTIMEDIA AVAILABLE:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=4986011
CONTACT: Pinnacle Financial Partners Inc.
Investment Community:
Harold Carpenter, 615-744-3742
or
News Media:
Vicki Kessler, 615-320-7532
http://www.pnfp.com
or
Cavalry Bancorp Inc. Bill Jones, 615-849-2272
http://www.cavb.com
SOURCE: Pinnacle Financial Partners Inc.