According to the law firm press release, First NBC is a bank holding company. The Company offers a range of financial services through its wholly owned banking subsidiary, First NBC Bank.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements and/or failed to disclose adverse facts regarding First NBC’s business and financial results, including that First NBC had improperly accounted for certain of its tax credit entities, that the carrying value of its investments in tax credits on its books was overstated and these investments should have been marked as impaired and charges taken against them on a more timely basis, and that First NBC had a larger exposure to the oil and gas industry than it had disclosed during the Class Period and had failed to take adequate reserves against this growing exposure. As a result of these false and misleading statements and omissions, First NBC stock traded at artificially inflated prices during the Class Period, reaching a high of $42.47 per share.
Then, starting in early 2016, First NBC began to disclose errors its accounting dating back to 2011. On February 1, 2016, First NBC announced that its earnings for the fourth quarter and fiscal year 2015 had significantly underperformed analysts’ expectations, based, in large part, on the Company having taken an $8.2 million tax credit impairment. The price of First NBC stock fell $3.20 per share on this news to close at $27.20 per share. On March 16, 2016, First NBC announced it had discovered errors in its accounting for its Federal and State Historic Rehabilitation tax credit entities that could potentially require the Company to restate its previously reported fiscal year 2015 financial results. As a result of this news, the price of First NBC stock dropped 22%, or $5.33 per share, to close at $19.09 per share on March 16, 2016.
Then on April 8, 2016, First NBC announced that it would be forced to restate its consolidated financial statements for fiscal years 2014, 2013, 2012 and 2011, including each of the interim periods within fiscal years 2015, 2014 and 2013 – the Company’s entire reporting history as a publicly traded company – and that the Company’s financial statements for fiscal years 2011 through 2015 could no longer be relied upon. First NBC blamed “an error in the Company’s methodology for the recognition of impairment of its investment in tax credit entities” and disclosed that “the Company had not properly consolidated variable interest entities related to Low-Income Housing Tax Credit entities.” On this news, the price of First NBC stock declined another 2%, or $0.47 per share, to close at $18.65 per share the next trading day.
On May 11, 2017, the Court issued Judgment in favor of Defendants.