First NBC Bank To Buy State Investors Bancorp

(RTTNews) - First NBC Bank Holding Co (NBCB) on Tuesday agreed to acquire State Investors Bancorp Inc (SIBC) in a deal that further expands its presence in its primary market of New Orleans metropolitan area.

Under the terms of the merger deal, shareholders of State Investors will receive $21.25 in cash for each share of State Investors stock owned by them at the effective time of the merger. The aggregate cash consideration payable to shareholders of State Investors is expected to equate to about $49 million.

The deal also provides that holders of stock options to purchase shares of State Investors common stock will receive, in exchange for their stock options, cash consideration equal to the difference between $21.25 and the exercise price of the option.

State Investors operates four full service banking offices, all of which are located in the New Orleans metropolitan area. As of September 30, State Investors reported assets of $269 million, loans of $213 million and deposits of $158 million.

First NBC said it estimates annual pre-tax expense reductions associated with the deal to be about 55% of the annual operating expenses of State Investors. The expense savings are estimated to be fully achieved on an after-tax basis during the first full year of operations following the merger. Acquisition and conversion related costs are estimated to be about $3.4 million on an after-tax basis.

The deal is expected to be accretive to First NBC's fully diluted earnings per share by about 4.4% in 2016. The deal is expected to result in tangible book value dilution of about 2.1%, which is expected to be earned back in 3.0 years.

The estimated internal rate of return for the transaction is expected to be greater than 17%, and, therefore, in excess of First NBC's cost of capital.

The deal has been approved by the boards of of First NBC and State Investors, and is expected to close in the second quarter of 2015.