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A Whitney Bank sign is installed Wednesday at a former First NBC branch on Veterans Memorial Boulevard in Metairie. First NBC filed for bankruptcy Thursday, a couple of weeks after federal regulators seized the bank and sold many of its assets to Whitney Bank, including a number of branch offices.

A federal grand jury has opened a criminal inquiry into the $1 billion collapse of First NBC Bank, a onetime darling of the New Orleans business community that failed earlier this year and was seized by regulators in the costliest collapse of an American bank since the height of the 2008-10 financial crisis, according to multiple sources with knowledge of the probe.

The grand jury has begun issuing subpoenas, the sources said.

It’s not clear what prosecutors' theory of the case is, but previous internal reviews of bank operations have noted First NBC founder and former CEO Ashton Ryan Jr.’s high appetite for risk and his “dominant influence” at the bank.

Investigators are also exploring the bank's dealings with Gregory St. Angelo, who served as First NBC's attorney, said the sources, who spoke on condition of anonymity.

St. Angelo took out multiple loans from the bank. In a 2014 deposition in a civil case, he estimated his loans from the bank totaled about $20 million, though he said he was not the lone guarantor on some of that debt.

Those loans, while substantial, were not nearly large enough to be a major cause of the bank’s failure. The bank's 10 biggest loans averaged about $76 million apiece, according to its 2015 financial filings, high for a bank of its size.

Ryan did not return a phone message from The Advocate. His attorney, Eddie Castaing, declined comment.

Multiple sources told The Advocate that St. Angelo is represented by Phillip Wittmann, who declined to confirm or deny his representation or otherwise comment on the matter.

St. Angelo, meanwhile, did not return a phone message left with his son, Bradley, who is also an attorney.

First NBC Bank Holding Co., the bank's parent company, has produced documents for the government, but it has not to his knowledge received a subpoena, the company's attorney, William Steffes, said. He declined to provide further details.

The criminal probe is among several inquiries aimed at determining what went wrong at the bank, which imploded in April. Since then, federal auditors have been scouring records and interviewing former executives for clues as to why First NBC was forced to absorb crippling losses in its final months.

The Federal Deposit Insurance Corp., a U.S. banking regulator that protects customers in the event of failure, was named as the receiver when First NBC was declared insolvent. The FDIC seized the beleaguered institution, ordered it closed and initiated a $1 billion cleanup.

Across the U.S., bank failures have slowed significantly since 2010, when regulators closed 157 banks, the highest tally since the savings-and-loan crisis ended in 1992. So far, six banks have failed in 2017, including First NBC; it is expected to be the most expensive collapse since 2010.

In addition to the FDIC and the FBI, the Securities and Exchange Commission is also investigating the bank's meltdown.

The opening of a grand jury investigation, while a significant step, does not necessarily mean that charges will be filed, and several observers said they had expected such an inquiry, given the scope of the bank’s losses.

It's also no surprise that investigators would aim their focus at the top: An internal review made public last year found that Ryan — a former partner at a Big Five accounting firm — had a "dominant influence" at the bank, and the review criticized the bank's board for a lack of "adequate oversight" over lending practices.

In some cases, the FDIC pursues litigation against bank officers and directors to try to recoup damages, typically alleging that they were negligent or failed in their fiduciary duty in overseeing some key area of the bank's business.

The agency is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and by interest earned on its investment portfolio of U.S. Treasury securities. No federal or state tax revenues are involved in bailouts, although the costs are passed on indirectly to those who use the banking system.

Internal fissures and oversight problems at First NBC became apparent when the bank filed its 2015 financials in August 2016. Four months later, Ryan was ousted as CEO but remained as president of the bank and its parent company. He resigned altogether in April.

First NBC disclosed the SEC investigation last year and said it was cooperating. That probe is likely aimed at uncovering possible securities violations, such as whether banking information was manipulated or whether insider trading occurred, experts say. It could also lead to federal civil litigation or an administrative proceeding.

In interviews, veterans of the banking business have described Ryan's unusual taste for risk and for making loans outside his local community. Over the years, the bank developed a reputation for lending money to some distressed clients even after their long-term prospects were exposed as questionable at best, according to lawsuits and court testimony.

First NBC, a community bank, began growing rapidly as soon as it was founded in 2006. Net loans grew by more than 100 percent between 2011 and 2015, reaching $3.4 billion.

The bank was Ryan's creation. Its name harked back to First National Bank of Commerce, a prominent New Orleans bank that Ryan led until it was acquired by Bank One in 1998. He spent the next seven years as CEO and president of First Bank & Trust.

As First NBC grew, so did Ryan's celebrity, earning him status as the city's best-known banker, even though his bank was far from the biggest. He played a prominent role in the city's business community in the wake of Hurricane Katrina in 2005, and he was a regular presence in many civic groups.

He earned roughly $1.6 million in total compensation in 2015, securities filings show.

When the company went public in 2013, Ryan got to ring the opening bell at the New York Stock Exchange. Nearly 4.2 million shares of stock were initially priced at $24 each. They rose to nearly $42 a share before tumbling in late 2015 amid questions about Ryan's management.

First NBC's situation deteriorated rapidly after that, with the bank taking heavy losses in its portfolio of loans and tax-credit investments, despite efforts to shore up its finances.

In an affidavit filed in Orleans Parish Civil District Court on April 28, the day of the seizure, Louisiana's head banking regulator said First NBC was "in an unsafe and unsound condition, and cannot any longer continue the business of banking."

"Relying on volatile funding sources, the bank has experienced rapid growth in assets that were not liquid," John Ducrest, commissioner of the Louisiana Office of Financial Institutions, said in the four-page affidavit outlining the reasons for the seizure.

After the collapse, First NBC Bank was acquired by Mississippi-based Hancock Holding Co., the parent company of Whitney Bank, in a deal that included $1.6 billion in deposits and $1 billion in assets, including $600 million in cash. The cost to the FDIC was estimated at $1 billion.

Staff writer Gordon Russell contributed to this story.

Follow Richard Thompson on Twitter, @rthompsonMSY.