First NBC Bank has announced that it has entered into a Consent Order with the Federal Deposit Insurance Corporation (FDIC) and the Louisiana Office of Financial Institutions (OFI).

The Consent Order was issued on November 10, 2016, and requires the Bank to take certain actions.

First NBC's chairman of the board Shivan Govindan said: “First NBC is committed to addressing all the matters specified in the Consent Order and has begun the work required, all with the goal of satisfying its terms. First NBC is currently profitable and is positioned to extend our commercial customer relationships and increase share of wallet while enhancing its regulatory position.”

Under the Consent Order, the Bank has agreed, among other things, to: review the Bank's management, its loan review and problem loan identification processes, and its loan portfolio policy and procedures; formulate a strategic plan (including a plan to sustain adequate liquidity), a plan to reduce classified assets, a capital plan to meet and maintain certain minimum capital levels and a profit and budget plan; enhance internal controls; and hold additional on-balance sheet liquidity.

The Bank is required to submit these plans, policies and procedures to the FDIC and Louisiana OFI for a written determination that they have no supervisory objection to them. Upon receipt of a no supervisory objection determination from the FDIC and Louisiana OFI, the Bank is required to implement and ensure adherence to the plans, policies and procedures.

With respect to liquidity, in addition to the submission of a liquidity plan, the Consent Order requires the Bank to enhance its on-balance sheet liquidity on a near-term basis to achieve certain progressively higher benchmarks, including as a percentage of total deposits and total liabilities.

With respect to capital, the Consent Order requires the Bank to submit a plan to achieve and maintain a Tier 1 Leverage Capital ratio equal to or greater than 10 percent of the Bank’s Average Total Assets, a Tier 1 Risk-Based Capital ratio equal to or greater than 13 percent of the Bank’s Total Risk-Weighted Assets, and a Total Risk-Based Capital ratio equal to or greater than 15% of the Bank’s Total Risk Weighted Assets.

The Consent Order contains deadlines by which the Bank has agreed to achieve certain deliverables. The Consent Order will continue until modified or terminated by the FDIC and the Louisiana OFI.

Govindan continued: “Many of the matters outlined in the Consent Order were initially identified earlier this year. Since that time, First NBC has devoted significant time and resources to strengthening our business and addressing the matters raised. Our recent results demonstrate the progress we have made executing our strategy.

“First NBC is one of Louisiana’s leading community banks, widely recognized for our superior customer service and positive contributions to the local economy. We are confident that we are taking the right steps to address the matters in the Consent Order and position First NBC for long-term success.”

First NBC also announced that it has received, as expected, a notification from the Nasdaq Stock Market (Nasdaq) informing First NBC that it was not in compliance with Nasdaq Listing Rule 5250(c)(1) because it had not timely filed its Quarterly Report on Form 10-Q for the period ended September 30, 2016.

First NBC had previously announced that its quarterly report would be delayed as a result of the time needed for First NBC to complete the engagement of its new auditor and for the new auditor to complete its review of First NBC’s quarterly financial statements. The Nasdaq notification letter has no immediate impact on the listing or trading of First NBC’s common stock on the Nasdaq Global Select Market.

Under Nasdaq rules, First NBC has until January 17, 2017, to submit a plan to regain compliance with its reporting obligations. If First NBC is unable to cure the deficiency, or if it determines not to timely submit a compliance plan to Nasdaq, First NBC’s common stock would be subject to delisting by Nasdaq.