First NBC Bank in New Orleans has issued a new warning about its finances.
The $4.9 billion-asset company disclosed in a regulatory filing Tuesday that it expects to record a “material valuation allowance” tied to its deferred-tax asset at Dec. 31.
First NBC said it could not disclose the financial impact, noting that it hasn’t completed the process of valuing certain loans, tax credit entities and low-income housing projects. The company also said it has not yet completed its consolidated financial statements for 2016.
While the company recently filed its call report with the Federal Deposit Insurance Corp., the filing warned that the document “should not be relied upon in making any investment decision” since it had not yet determined the valuation allowance.
First NBC's call report indicated that the company's bank lost $58.6 million in the fourth quarter, largely due to a nearly $86 million loan-loss provision. The document also revealed that nonperforming commercial-and-industrial loans totaled $229 million at Dec. 31, representing a 75% increase from Sept. 30.
On a positive note, First NBC said the Nasdaq had approved its plan for complying with the exchange’s listing rules. Under its plan, the company agreed to file its third-quarter and full-year 2016 reports by April 30.
The disclosures are the latest in a fast-moving chain of events for the company.
First NBC warned in October that regulators had "deemed it to be in troubled condition." At June 30, First NBC's Tier 1 risk-based ratio and total risk-based capital ratio were both below 7.3%. Earlier this year the company restated several years of financial reports, reducing capital by $99.2 million.
The company disclosed in November that its bank had entered into a consent order that requires it to review its management, loan review and problem-loan identification processes and its loan portfolio policy and procedures. The bank must submit a plan for maintaining a Tier 1 leverage capital ratio of at least 10%, a Tier 1 risk-based capital ratio of at least 13% and a total risk-based capital ratio of 15% or more.
By December, the company had replaced Ashton Ryan with an interim CEO, though Ryan remains the company's president.
First NBC also agreed to sell nine branches and about $1.3 billion in loans to Hancock Holding in Gulfport, Miss. The company said the deal should increase its regulatory capital ratios by 300 to 400 basis points while also increasing available funding under its credit facilities.