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First NBC Bank selling 9 branches to Whitney Bank


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First NBC Bank selling 9 branches to Whitney Bank

Whitney Bank agreed to buy about $1.3 billion in loans, nine branches in Louisiana with roughly $511 million in transaction and savings deposits, and to assume $605 million in Federal Home Loan Bank of Dallas borrowings from First NBC Bank Holding Co. unit First NBC Bank.

Whitney Bank, a unit of Hancock Holding Co., will acquire about $160 million of the identified loans on or before Jan. 4, 2017.

The branches to be sold are at 400 W. Oak St., Amite; 1241 Saint Charles St., Houma; 521 Veterans Memorial Blvd., Metairie; 4900 Veterans Memorial Blvd., Metairie; 2021 Carol Sue Ave., Terrytown; 4001 Pontchartrain Drive, Slidell; 2130 Gause Blvd. W., Slidell; 64243 Hwy. 41, Pearl River; and 3335 Saint Charles Ave., New Orleans.

In a news release, First NBC described the deal announcement as "a major milestone" in its efforts to meet the requirements of the previously disclosed consent order. First NBC will receive cash in the transaction equal to the difference between the loans purchased and liabilities assumed at deal completion, which is currently estimated to be about $178 million.

Whitney Bank will also pay First NBC Bank the greater of the fair market value or book value of the nine branches and related assets, currently estimated at roughly $15 million, and a premium for the acquisition currently estimated at about $44 million.

The amount of cash actually received by First NBC Bank at deal closing is subject to adjustment as provided in the purchase agreement. First NBC expects the transaction to provide total cash liquidity in excess of $200 million upon completion and will also result in an increase in available funding under its available credit facilities.

In a news release, First NBC Chairman Shivan Govindan said the transaction is expected to strengthen the company's regulatory capital ratios by 300 to 400 basis points as a result of the reduction in assets and borrowings. "As First NBC moves into 2017, the Company will have a continued emphasis on addressing the matters raised in the consent order, focusing on core banking operations, substantially reducing non-interest expense, lowering funding costs and managing nonperforming assets," Govindan said.

Hancock President and CEO John Hairston said in a separate news release that the company expects the transaction to add roughly $26 million of incremental annual earnings once completed.

Deal completion is expected to occur during the first quarter of 2017, subject to receipt of regulatory approval. Until the transaction closes, First NBC will continue to operate all 38 of its branches and the rest of its businesses in the normal course.

Morgan Stanley & Co. LLC is serving as financial adviser to Hancock, and Wachtell Lipton Rosen & Katz is serving as legal adviser. Sandler O'Neill & Partners LP acted as financial adviser to First NBC and First NBC Bank, and Skadden Arps Slate Meagher & Flom LLP and Fenimore Kay Harrison & Ford LLP acted as legal advisers to First NBC Bank.

SNL data shows that as of Sept. 30, New Orleans-based First NBC Bank had assets of $4.92 billion, while Gulfport, Miss.-based Whitney Bank had assets of $23.02 billion.