The bank's abrupt end marked a stark reversal of once-promising fortunes.The details are a little sparse here but, from the looks of things, FNBC specialized in financing post Katrina development projects via federal tax credits in a way that allowed them to play a little too much with money that was not yet actually money. To a certain extent, we could say this is pretty much what banks do. But there are rules and bounds to how much risk is prudent.
When First NBC was founded in 2006, it drew a who's who of backers, including Peyton and Eli Manning, the New Orleans-born star NFL quarterbacks, and set a Louisiana record for capital raised by a start-up bank.
First NBC was the creation of Ashton Ryan Jr., who chose a name that recalled First National Bank of Commerce, a prominent New Orleans bank that was acquired by Bank One in 1998.
As the new bank grew, so too did Ryan's celebrity, earning him status as the city's best-known banker, even though his bank was far from the biggest. He earned roughly $1.6 million in total compensation in 2015.
Over the years, he's been a regular presence within many of the city's civic groups, including the boards of Greater New Orleans Inc., the University of New Orleans Foundation and Junior Achievement of Greater New Orleans.
One especially imprudent behavior shows up here.
First NBC had made large loans to a small number of borrowers — much riskier than making a large number of small loans, because the failure of just a few big loans can be devastating. The bank's 10 biggest loans averaged about $76 million, according to its 2015 financial filings, high for a bank of its size.Long story short, this looks like a scheme to skim short term profit off of federal recovery funds and distribute large chunks of it to our friends in the circuit of civic swells. I would love to see who those 10 biggest loans went to. That information is probably available. Maybe the Advocate should have printed it.