NEW ORLEANS -- New Orleans' troubled First NBC Bank will sell nine of its 38 branches and $1.3 billion in loans to Whitney Bank in a move aimed at raising cash for the battered company, officials said late Friday.
According to a report from our partners at The Advocate, First NBC officials said they will receive about $178 million for the loans, plus $15 million for the branch locations and a “premium” of $44 million, for a total of $237 million.
That’s substantially more than the $150 million or so that some analysts said the bank needed to raise to shore up its finances.
First NBC officials hailed the deal as a “major milestone” in their efforts to bring the beleaguered bank into compliance with a consent order — a sort of recovery plan — that was drawn up by state and federal regulators in November.
Signs of trouble for the bank started appearing early this year, when First NBC’s parent company said there were errors in its 2015 annual report having to do with historic rehabilitation tax credits. Officials later said First NBC’s annual reports for the four previous years were also unreliable.
This fall, federal regulators announced they had determined the bank was not “well-capitalized” and classified it as “troubled.”