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Acquisitions | 6 Months Ended
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Jun. 30, 2017
Acquisitions [Abstract] |
Acquisitions | 2. Acquisitions ﻿ On March 10, 2017, the Company, through its banking subsidiary, Whitney Bank (“Whitney”), completed the acquisition of certain assets and liabilities, including nine branches, from First NBC Bank (“FNBC”), referred to as the FNBC I transaction. Whitney paid approximately $323 million in cash consideration ($326 million cash paid net of $3 million in branch cash acquired), including a $41.6 million transaction premium for the earnings stream acquired. ﻿ On April 28, 2017, the Louisiana Office of Financial Institutions (“OFI”) closed FNBC and appointed the FDIC as receiver. Whitney signed a purchase and assumption agreement with the FDIC to acquire certain additional assets and liabilities of FNBC, referred to as the FNBC II transaction. Whitney continued operations of FNBC’s 29 branch locations (24 in Louisiana and five in Florida) and acquired select assets and assumed select liabilities, including substantially all of the transaction and savings deposits. Whitney paid a premium of $35 million to the FDIC for the earnings stream acquired and received $798 million in cash ($640 million in preliminary settlements for the net liabilities assumed and $158 million in branch cash acquired). ﻿ Under the FNBC II purchase and assumption agreement, Whitney had an option to purchase (or assume the leases for) the branch and non-branch locations, including furniture, fixtures, and equipment subsequent to the date of the transaction, subject to FDIC approval. This option was exercised for seven branches and will add additional acquired assets from this transaction in the third quarter of 2017. A final cash settlement with the FDIC is expected to occur in the second half of 2017. ﻿ The FNBC I and FNBC II transactions were accounted for as business combinations and therefore, assets acquired and liabilities assumed were recorded at estimated fair values on the acquisition dates. The following table sets forth the acquisition date preliminary fair value of the assets acquired and liabilities assumed, consideration, and the resulting goodwill recorded in each of the FNBC I and FNBC II transactions, and in the aggregate. ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  |  | FNBC I |  |  | FNBC II |  |  |
﻿(in thousands) |  |  | March 10, 2017 |  |  | April 28, 2017 |  |  | Total
﻿ASSETS |  |  |  |  |  |  |  |  |
﻿Cash and due from banks |  | $ | 2,856 |  | $ | 157,932 |  | $ | 160,788
﻿Interest-bearing time deposits with other banks |  |  | — |  |  | 382,622 |  |  | 382,622
﻿Fed funds sold and other short-term investments |  |  | — |  |  | 148 |  |  | 148
﻿Securities |  |  | — |  |  | 213,877 |  |  | 213,877
﻿Total loans |  |  | 1,211,523 |  |  | 165,577 |  |  | 1,377,100
﻿Property and equipment |  |  | 11,837 |  |  | 500 |  |  | 12,337
﻿Accrued interest receivable |  |  | 2,969 |  |  | 885 |  |  | 3,854
﻿Identifiable intangible assets |  |  | 3,900 |  |  | 20,500 |  |  | 24,400
﻿Other assets |  |  | 63 |  |  | 4,097 |  |  | 4,160
﻿ Total identifiable assets |  |  | 1,233,148 |  |  | 946,138 |  |  | 2,179,286
﻿ |  |  |  |  |  |  |  |  |
﻿LIABILITIES |  |  |  |  |  |  |  |  |
﻿Deposits |  |  | 398,171 |  |  | 1,530,338 |  |  | 1,928,509
﻿Short-term borrowings |  |  | 510,749 |  |  | 85,886 |  |  | 596,635
﻿Long-term debt |  |  | 93,120 |  |  | — |  |  | 93,120
﻿Other liabilities |  |  | 1,607 |  |  | 3,079 |  |  | 4,686
﻿ Total liabilities |  |  | 1,003,647 |  |  | 1,619,303 |  |  | 2,622,950
﻿ Net identifiable assets acquired (liabilities assumed) |  |  | 229,501 |  |  | (673,165) |  |  | (443,664)
﻿Consideration |  |  |  |  |  |  |  |  |
﻿Cash (paid) received |  |  | (325,564) |  |  | 640,435 |  |  | 314,871
﻿Unsettled net consideration receivable from FDIC |  |  | — |  |  | 9,721 |  |  | 9,721
﻿ Total consideration |  |  | (325,564) |  |  | 650,156 |  |  | 324,592
﻿ Goodwill |  | $ | 96,063 |  | $ | 23,009 |  | $ | 119,072
﻿ ﻿ The loans acquired were recorded at estimated fair value at the acquisition dates with no carryover of the related allowance for loan losses. The acquired loans were considered to be performing (“purchased credit performing”) based on such factors as past due status, nonaccrual status and are accounted for under Accounting Standards Codification (“ASC”) 310-20. The unpaid principal balance of the loans acquired totaled $1.4 billion, of which approximately $47.6 million is not expected to be collected. The difference at the acquisition dates between the fair value and the contractual amounts due (the “fair value discount”) of $57.5 million will be accreted into income over the estimated lives of the loan pools established in the valuation. ﻿ The Company assumed approximately $604 million of borrowings in the FNBC I transaction, consisting of both short-term and long-term Federal Home Loan Bank (“FHLB”) borrowings. The short-term borrowings consist of $460 million in variable-rate term notes; $200 million matures in 2025 and $260 million matures in 2026. These notes re-price quarterly and may be re-paid at the Company’s option, either in whole or in-part, on any quarterly re-pricing date. Also included in short-term borrowings are $51 million in fixed-rate term notes that mature in 2017. The long-term borrowings include $93.1 million in fixed-rate term notes; $88 million that mature in 2018, $3.2 million that mature in 2019, and $1.9 million that mature in 2023. Short-term borrowings in the FNBC II transaction consisted of securities sold under repurchase agreements. ﻿ Identifiable intangible assets consist of core deposit intangibles totaling $24.4 million that are being amortized using sum of years’ digits over the asset’s life of eight years for the FNBC I transaction and nine years for the FNBC II transaction. Goodwill totaling $119 million represents the excess of the consideration paid over the fair value of the net assets acquired, or the excess of the fair value of the liabilities assumed over the net consideration received. The tax basis of goodwill generated from these transactions is expected to be deductible for federal income tax purposes. ﻿ ﻿
﻿ |  |
﻿Goodwill balance at December 31, 2016 | $ | 621,193
﻿Additions: |  |
﻿ Goodwill from FNBC I |  | 96,063
﻿ Goodwill from FNBC II |  | 23,009
﻿Goodwill balance at June 30, 2017 | $ | 740,265
﻿ Goodwill for the FNBC I transaction was adjusted by $495,000 in the second quarter of 2017 related to changes to a property valuation. The Company expects to adjust goodwill for the FNBC II transaction as we finalize purchase accounting and complete the final settlement with the FDIC. ﻿ ﻿ The operating results of the Company for the three and six months ended June 30, 2017 include the results from the operations acquired in the FNBC transactions since the respective acquisition dates. Estimating reliable historical financial information is impracticable as only selected components of the businesses, as historically operated, were acquired. A number of post-acquisition events, including the consolidation of certain branch locations and the integration of operations, cash and investments acquired make quantifying discrete earnings contributions of the businesses acquired impracticable. As such, neither supplemental pro forma financial information of the combined entity, nor revenue and earnings contributed by the businesses acquired since the dates of acquisition are presented. ﻿ The Company incurred merger-related costs in connection with the FNBC I and FNBC II transactions. The following table reflects the merger-related costs for the three and six months ended June 30, 2017 for both the FNBC I and FNBC II transactions combined. The Company expects to incur additional merger-related expense in the third quarter of 2017. ﻿ ﻿
﻿ |  |  |  |  |
﻿(in thousands) |  | Three months ended June 30, 2017 |  |  | Six months ended June 30, 2017
﻿Personnel expense | $ | 1,435 |  | $ | 1,542
﻿Net occupancy and equipment expense |  | 276 |  |  | 277
﻿Professional services expense |  | 2,200 |  |  | 6,827
﻿Other real estate |  | (1,511) |  |  | (1,511)
﻿Advertising expense |  | 901 |  |  | 1,031
﻿Other expense |  | 713 |  |  | 2,311
﻿Total merger-related expenses | $ | 4,014 |  | $ | 10,477
﻿

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