In the aftermath of the costliest failure of an American bank since 2010, Whitney Bank officials are continuing an evaluation of their acquisition of the former First NBC Bank that is expected to lead to branch closures in the New Orleans area.
On Wednesday, workers hung a 400-pound Whitney sign at a former First NBC branch on Veterans Memorial Boulevard in Metairie acquired by Whitney after the smaller bank's April 28 collapse.
Whitney took over 29 former First NBC locations — 24 in Louisiana and five in Florida — but more than half of them are within a short distance of an existing Whitney branch, leading to speculation about closings and potential layoffs.
The hefty new sign bearing Whitney's iconic logo suggested the Veterans location is here to stay, but it also threw into question the Whitney branch that's less than 300 feet away.
Even First NBC's former Central Business District headquarters is just a block and a half from Whitney's headquarters.
John Hairston, president and CEO of Whitney's Mississippi-based parent, Hancock Holding Co., said the company expects to finalize its decisions on branches by Friday. "There is a fair amount of overlap of locations," he acknowledged.
"There are a number of locations that are — when I say across the street or next door, they are truly next door," he said. "That's a little unusual for a transaction of this nature, but that's the reality."
Whitney has roughly 150 to 200 open positions across the company, he said, and officials hope that former First NBC employees who are displaced by the branch closings will apply for those jobs. The process is expected to take about three months.
Along with the branches, Whitney gained about 400 employees as part of the First NBC deal.
"There obviously won't be enough positions for everyone, so we're working very vigorously to communicate to each affected associate whether their role will continue or not," Hairston said.
In the face of long-mounting concerns about its past accounting practices and capital levels, the Louisiana Office of Financial Regulators seized First NBC on April 28 and appointed the Federal Deposit Insurance Corp. as receiver. The FDIC then entered into a purchase and assumption agreement with Whitney. The bank paid a $35 million premium for assuming First NBC’s deposits.
Whitney's acquisition included approximately $1.6 billion in First NBC deposits and $1 billion in certain assets, such as cash, securities and loans. Net cash to Whitney totaled about $600 million.
The deal was First NBC's second with Whitney in recent months. Earlier this year, in a bid to stabilize its shaky finances, First NBC sold nine branches and $1.3 billion in loans to Hancock, a transaction that it said provided it with more than $200 million in cash. Whitney subsequently closed 10 south Louisiana branches, largely to eliminate overlapping locations that were a result of the deal.
First NBC was the fourth — and by far the largest — American bank to close thus far this year, according to the FDIC.