Strengthening its footprint in the New Orleans metropolitan
area, First NBC Bank Holding Company (
) is set to acquire State Investors Bancorp, Inc. (
). The merger-deal is expected to close in second-quarter 2015.
Louisiana-based State Investors - the holding company of
State-Investors Bank - operates four full service banking offices,
spread in the New Orleans metropolitan area. As of Sep 30, 2014,
State Investors had assets of $269 million, loans of $213 million
and deposits of $158 million.
As per the merger deal, for every State Investors share held at the
time of the merger, shareholders of State Investors will get a cash
amount of $21.25, resulting in a total cash consideration of around
$49million. Further, the holders of stock options will get cash
consideration equal to the difference between $21.25 and the
exercise price of the option, for buying shares of State Investors
common stock. Notably, for the outstanding stock options, First NBC
expects to pay around $2 million.
An Attractive Deal
The acquisition of the 120 year old bank will not only boost the
loan and deposit balances of First NBC, but also brings certain
It is anticipated that First NBC will realize annual pre-tax
expense reductions of around 55% of the annual operating expenses
of State Investors. First NBC will be able to fully achieve the
cost savings on an after-tax basis during the first full year of
operations, upon closure of the merger. On an after-tax basis,
acquisition and conversion related costs are projected to be around
The deal is expected to be around 2.3% accretive to First NBC's
earnings per share in 2015 and 4.4% accretive in 2016. Further, the
transaction is expected to fetch an internal rate of return of more
than 17%, exceeding First NBC's cost of capital.
President and Chief Executive Officer of First NBC, Ashton J. Ryan,
Jr. stated, "This transaction enables us to further expand our
presence within the New Orleans metropolitan area, our primary
market." He further added "We also believe that the significant
cost savings expected to result from the merger will enhance
Concurrent with the latest press release, First NBC mentioned that
it will continue to trade on the NASDAQ Global Select Market with a
new ticker symbol "FNBC" instead of the existing symbol "NBCB".
This will be effective from Jan 1, 2015.
Currently First NBC carries a Zacks Rank #2 (Buy). Some
better-ranked stocks in the south-east banking space include
Customers Bancorp, Inc. (
) and First Community Bancshares, Inc. (
). Both the stocks sport a Zacks Rank #1 (Strong Buy).
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