How solar energy works: The simplified version
An $810 million alleged Ponzi scheme run through a California solar power company has ensnared Hancock Whitney Corp., resulting in a multimillion-dollar hit to the bank’s first-quarter profits.
DC Solar, a maker of mobile solar power generators based in Benicia, California, filed for bankruptcy protection in February after federal investigators raided the company’s offices, according to bankruptcy documents and company filings.
Among the creditors, documents show, is Hancock Whitney, which has headquarters in both Gulfport and New Orleans.
The alleged fraud also hit several other banks and insurance companies across the U.S., including insurance giant Progressive Corp., which said it could lose tens of millions of dollars due to its investment.
For Hancock Whitney, the alleged fraud prompted an increase in the bank’s provision for loan losses and lowered its first-quarter earnings by $10.1 million, or 9 cents a share, according to the company’s quarterly report released late Tuesday. That pushed the bank’s earnings down to 91 cents a share, below analysts’ average estimates.
The bank’s shares slumped following the earnings report, falling 1.9 percent to $43.55 a share on Wednesday.
A spokesman for the bank did not respond to requests for comment.
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