Saturday, 31 December 2016

Troubled First NBC Bank to sell 9 branches to Whitney Bank

 
   First NBC Bank will sell nine of its branches and $1.3 billion in loans to Whitney Bank, a subsidiary of Hancock Holding Co., the companies announced after business hours Friday evening (Dec. 30).


The branches changing hands are in New Orleans, Metairie, Terrytown, Slidell,  Pearl River, Amite and Houma (see list below). The sale will leave First NBC with 29 locations, including eight in New Orleans and six in Jefferson Parish.

   In a statement, First NBC said it expects to come away with more than $200 million in cash from the deal. Whitney will take over the $605 million First NBC Bank borrowed from the Federal Home Loan Bank in Dallas, including $160 million it will acquire by Wednesday.


   The transaction marks the most notable move from First NBC since CEO Ashton Ryan stepped down earlier this month following months of questions about the bank's wherewithal. Regulators have scrutinized its business model, which has relied heavily on tax credits. New rules no longer allow those credits to be considered  prime assets, meaning they don't accurately reflect the bank's capital levels.

   First NBC, which was launched after Hurricane Katrina and raised $100 million when it took its stock public in 2013, has lagged in filing required financial records over the past year. Ryan's exit came after share prices, which had started the year near $40, tumbled to the $7 range.

   In November, the bank entered into a consent order with the Federal Deposit Insurance Corp. and the Louisiana Office of Financial Institutions. It agreed to review its management, accounting and loan review process and craft a strategy to bolster the bank's capital.

   A possible sale of the bank was among the alternatives First NBC was said to be considering, but a Whitney representative was careful to note the deal only involves the branches and certain assets and liabilities.

"First NBC's Board of Directors has undertaken a comprehensive review of its alternatives, and we believe this agreement is in the best interests of our organization," First NBC chairman Shivan Govidan said in a statement. "We beleive the successful completion of the transaction should significantly increase our liquidity and our financial flexibility as we move forward and seek to refocus our efforts of managing and growing our core business."

Pending regulatory approval, the deal is expected to close in the first quarter of 2017.

First NBC branches being sold to Whitney Bank:

* 3335 St. Charles Ave., New Orleans
* 521 Veterans Memorial Blvd., Metairie
* 4900 Veterans Memorial Blvd., Metairie (Transcontinental)
* 2021 Carol Sue Ave., Terrytown
* 4001 Pontchartrain Drive, Slidell
* 2130 Gause Blvd. W., Slidell
* 64243 Highway 41, Pearl River
* 1241 St. Charles St., Houma
* 400 W. Oak St., Amite

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