Mea culpa.
Admitting he should have moved more quickly to retool management during a decade of explosive growth, First NBC Bank Chairman and Chief Executive Ashton Ryan Jr. announced several changes designed to improve the New Orleans company's governance practices.
At the top of the list, Ryan said he would give up the chairman post, while remaining CEO. Ryan also serves as First NBC's president.
"When we started the bank, we were small and we didn't need to have a chairman separate from the CEO," Ryan said during a Thursday conference call with investors. "We really have probably not been as forward-looking in [governance] as we should have been, so we're trying to make up for that."
First NBC will also appoint a treasurer to oversee assets and liabilities, which will allow Chief Financial Officer Mary Beth Verdigets to focus more on financial reporting. Ryan said First NBC would appoint another director "with significant public company financial reporting experience."
The conference call was First NBC's first ever, but the company said it would begin holding quarterly calls starting with its third-quarter earnings.
Errors in its accounting for tax credits forced NBC to
First NBC has yet to file reports for the quarters that ended March 31 and June 30. It is expected to do so later this month.
Ryan reiterated First NBC's previously announced commitment to hire a chief operating officer, but he added a new twist Thursday, hinting that the prospective COO would be a strong candidate to eventually succeed him.
"We think [adding a COO] will be a way to strengthen the oversight of the operating divisions of the company plus hopefully lead to a transition to CEO," Ryan said. "At 68 years old, it's time to be thinking of [succession]. We've always had a plan for succession. It's time to start executing on that."
First NBC has been an active player in the tax-credit business since its founding in 2006, shortly after New Orleans was devastated by Hurricane Katrina. Until the discovery of the accounting problems, tax credits had been a lucrative business line, Ryan said. He added that First NBC continues to see plenty of new investment opportunities as New Orleans continues to rebuild.
Ryan said First NBC would actively pursue new tax-credit deals, but with $231 million already on its books, it would likely act as a syndicator for other banks interested in obtaining tax credits. "We couldn't possibly put it all on our books," he said.
Tax credits "are still a very profitable business for us and we want to continue to have that be a part of our returns," Ryan added.
First NBC held its conference call after the markets closed Thursday. In midday trading Friday, shares were down more than 5%, to $12.19.
In a research note Friday, Hovde Group analytst Kevin Fitzsimmons reiterated his "strong buy" rating, predicting that "as the sizable uncertainty that has heavily weighed on the shares in recent months finally begins to abate" investors would soon conclude the stock has been oversold.
