HoldCo Asset Management Sends Third Public Letter to FNBC's Board of Directors Presenting Comprehensive Restructuring Proposal

NEW YORK, Oct. 25, 2016 /PRNewswire/ -- On October 25, 2016, HoldCo Asset Management ("HoldCo") sent a letter to the Board of Directors of First NBC Bank Holding Company ("FNBC").  FNBC is located in New Orleans, Louisiana, and trades under the ticker FNBC.  The full text of the letter can be found at the following link:

http://holdcoam.com/wp-content/uploads/Third_Letter_to_FNBC.pdf 

In the letter, HoldCo presented a comprehensive restructuring proposal (including an indicative term sheet) pursuant to which (i) subordinated debt and SBLF preferred stock would convert to common equity representing 56% of the pro forma shares outstanding, (ii) existing common equity would be canceled in full, (iii) new money of $67.5 million would be injected into FNBC for common equity representing 44% of the pro forma shares outstanding; (iv) the 382(L)(5) exception of the Tax Code would be utilized to preserve, in large part, FNBC's tax assets without any annual limitation on usage; (v) a go-forward plan would contemplate an orderly shrinking of the bank by approximately $1 billion; and (vi) investments in tax entities would be sold to third parties and the tax credit business would be shut down completely. This comprehensive restructuring and recapitalization proposal would be effectuated through a consensual, prepackaged bankruptcy plan to be solicited in advance of the looming February 28, 2017 interest payment date on the subordinated debt. Importantly, the Board of Directors has the capacity to solicit and file the prepackaged bankruptcy, and the consent of common shareholders is not required.

HoldCo also expressed a potential willingness to invest $30.4 million of new equity capital in connection with the proposed transaction and vote its $8 million of subordinated debt in favor of this transaction. If this occurred, FNBC would only need to raise $37.1 million of new money and could conceivably do it through one institutional investor since new common equity allocable to that investor would not exceed 24.9% of the pro forma company.

HoldCo stands ready to begin due diligence and requests a meeting with the Board at its earliest convenience. HoldCo reminds the Board that its fiduciary duties flow to the corporation for the benefit of its residual claimants.

HoldCo invites you to read the previous letters that it sent to FNBC, which can be found at:  

http://holdcoam.com/wp-content/uploads/Letter_to_FNBC.pdf

and

http://holdcoam.com/wp-content/uploads/Second_Letter_to_FNBC.pdf

About HoldCo Asset Management

HoldCo Asset Management is an investment adviser located in New York City.  HoldCo was founded by Vik Ghei and Misha Zaitzeff.  HoldCo and its affiliates currently have approximately $500 million under management.  

Disclaimer

As of the publication date of this report, HoldCo Asset Management, LP and its affiliates (collectively "HoldCo"), have a long position in the subordinated debt and a short position in the stock of the company referenced herein. HoldCo may change its views about its investment positions in FNBC at any time, for any reason or no reason, and at any time may change the form or substance of any of its FNBC investment positions. If it does so, it will not be under obligation to inform anyone.

Notwithstanding anything contained herein, any proposed transaction is preliminary, indicative, subject to due diligence and non-binding in all respects, unless and until a definitive written agreement, binding letter of intent or other similarly binding agreement with respect thereto has been executed and delivered. None of HoldCo or its affiliates will be or are under any legal obligation of any kind whatsoever with respect to any transaction by virtue of this press release or its third public letter to FNBC's Board of Directors.

All content in this report represent the opinions of HoldCo. HoldCo has obtained all information herein from publicly available sources they believe to be accurate and reliable. However, such information is presented "as is," without warranty of any kind whether express or implied.  HoldCo stresses that the letter linked to in this press release is a highly imperfect, and very rough, attempt to piece together limited public information to formulate answers to some of the most pressing questions that it has about FNBC. This document is for informational purposes only and is not intended as an official confirmation of any transaction.  All data and other information are not warranted as to completeness or accuracy and reflect HoldCo's views as of this date, all of which are accordingly subject to change without notice.

This document does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.

The information contained in this document may include, or incorporate by reference, forward-looking statements, which would include any statements that are not statements of historical fact. These forward-looking statements may turn out to be wrong and can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors, most of which are beyond the HoldCo's control.

SOURCE HoldCo Asset Management