BNC Bancorp, the parent firm of Bank of North Carolina, has agreed to take over the operations of KeySource Financial in a deal that involves a 100 per cent stock exchange.

The merger provides an opportunity for both firms to expand their presence in the Raleigh-Dunham market. KeySource has an extensive offering in the Greater Dunham and Raleigh markets, with total assets of $206 million, consisting of $157 million in loans and $166 million in deposits as of 30 September 2011.

Based on the 20 December closing price of BNC's common stock on the Nasdaq, the acquisition is valued at around $12.2 million. 

This is the third deal involving BNC in the fourth quarter, including the completed acquisitions of Blue Ridge Savings Bank on 14 October and Regent Bank of South Carolina, due 30 December. 

"The key to our expansion is balance. The addition of KeySource, along with the recent acquisitions, provides us growth markets where we believe we can achieve above average loan growth," said Rick Callicutt, president of Bank of North Carolina. 

The transaction remains subject to regulatory approval and is expected to close by the second quarter of 2012.