INVESTOR RELATIONS

Press Release

National Commerce Corporation Announces First Quarter 2017 Earnings

Company Release - 4/24/2017 6:00 PM ET

BIRMINGHAM, Ala., April 24, 2017 (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq:NCOM) (“NCC” or the “Company”), the parent company of National Bank of Commerce (“NBC”), today reported first quarter 2017 net income to common shareholders of $5.9 million, compared to $3.8 million for the first quarter of 2016.  Diluted net earnings per share were $0.45 in the first quarter of 2017, compared to $0.44 in the fourth quarter of 2016 and $0.34 in the first quarter of 2016.

“We are pleased with our first quarter performance, which provides us with a good start to 2017,” said John H. Holcomb, III, Chairman and Chief Executive Officer of the Company. “We look forward to the remainder of the year.”  

During the first quarter of 2017, the Company successfully completed its acquisition of Private Bancshares, Inc. through a merger of the companies, followed by the merger of their respective bank subsidiaries, Private Bank of Buckhead and NBC.  In March 2017, the Company completed the system integration of Private Bank of Buckhead to NBC’s core operating system.  “We are glad to have had a successful system conversion with Private Bank, and I want to personally thank all of our colleagues who worked so hard to make that conversion a success.  We will continue our focus on asset quality, customer service and growing our profitability, and we look forward to the remainder of 2017,” said Richard Murray, IV, President and Chief Operating Officer of the Company.

Several important measures from the first quarter of 2017 are as follows:

  • Net Interest Margin (taxable equivalent) of 4.18% for the first quarter of 2017, compared to 3.99% for the fourth quarter of 2016 and 4.21% for the first quarter of 2016.  The first quarter 2017 margin increased 0.19% compared to the 2016 fourth quarter due primarily to a change in funding mix, with higher levels of noninterest-bearing deposits in the 2017 first quarter compared to the 2016 fourth quarter.
  • Return on Average Assets of 1.00% for the first quarter of 2017, compared to 0.86% for the first quarter of 2016. 
  • Return on Average Tangible Common Equity of 11.45% for the first quarter of 2017, compared to 9.21% for the first quarter of 2016.
  • First quarter 2017 loan growth (excluding mortgage loans held-for-sale) of $329 million, including $261 million acquired in the Private Bancshares, Inc. transaction.  Excluding factored receivables in the Company’s factoring subsidiary, Corporate Billing, LLC, and loans acquired in the Private Bancshares, Inc. transaction, first quarter 2017 loan growth was approximately $53 million.
  • First quarter 2017 deposit growth of $413 million.  Excluding $286 million in deposits acquired in the Private Bancshares, Inc. transaction, deposits grew by $126 million.
  • $131 million in 2017 first quarter mortgage production, compared to $64 million for the first quarter of 2016.  The first quarter 2017 production includes mortgages closed by the mortgage division that the Company acquired in the Private Bancshares, Inc. transaction.
  • $254 million in 2017 first quarter purchased volume in the factoring division, compared to $179 million for the first quarter of 2016.
  • A decrease in non-acquired non-performing assets to $2.5 million, from $2.7 million at December 31, 2016.
  • Annualized net recoveries of 0.07% of average loans for the first quarter of 2017, compared to net charge-offs of 0.13% for the first quarter of 2016.
  • Provision for loan losses of $156 thousand during the first quarter of 2017, compared to $441 thousand in the 2016 fourth quarter and $1.5 million in the first quarter of 2016.  The decrease during the 2017 first quarter was attributable in part to net recoveries during the 2017 first quarter, general improvement in problem assets, and general economic factors.
  • Ending tangible book value per share of $16.48.
  • Ending book value per share of $24.51.

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on April 25, 2017 to discuss earnings and operating results for the 2017 first quarter. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 3350814).  A replay of the conference call will be available until April 27, 2017 and can be accessed by dialing (855) 859-2056.

Investors who plan to participate in the live webcast of the conference call should access the webcast by visiting www.nationalbankofcommerce.com and clicking on the “Investor Relations” link under the “Learn More” tab located on that webpage.  A replay of the webcast will be available on the website for one year.  A copy of the news release will also be available at the same location.

Use of Non-GAAP Financial Measures

Some of the financial measures presented in this press release and included in the accompanying unaudited financial statements are not measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).  These non-GAAP financial measures include tangible common equity, return on average tangible common equity, tangible book value per share, allowance for loan losses to nonacquired loans, efficiency ratio and operating efficiency ratio.  The Company’s management uses the non-GAAP financial measures set forth below in its analysis of the Company’s performance.

  • “Tangible common equity” is total shareholders’ equity less goodwill, other intangible assets and minority interest not included in intangible assets. 
  • “Average tangible common equity” is defined as the average of tangible common equity for the applicable period.
  • “Return on average tangible common equity,” or ROATCE, is defined as net income available to common shareholders divided by average tangible common equity.
  • “Tangible book value per share” is defined as tangible common equity divided by total common shares outstanding.  This measure is important to investors interested in changes from period to period in book value per share exclusive of changes in intangible assets.

The Company’s management believes these above measures, each of which utilizes the concept of tangible common equity rather than total common equity, provide useful information to management and investors because they eliminate the impact of goodwill and other intangible assets created in an acquisition.  These measures are commonly used by investors when assessing financial institutions.

  • “Allowance for loan losses to nonacquired loans” is defined as the total allowance for loan losses, less the allowance for loan losses attributable to factored receivables, divided by nonacquired loans held for investment, excluding factored receivables at the end of the period.  This measure is important to investors because it disaggregates the acquired and non-acquired loans and provides a measure that may be more comparable to a bank that has no acquired loans.   This measure also excludes the allowance and factored receivable balances at the Company’s subsidiary, Corporate Billing, LLC, which is helpful to investors because of the unique nature of that business and the rapid turnover of those receivables, and provides a measure that is more comparable to a bank that does not have a receivables factoring business.
  • “Efficiency ratio” is defined as noninterest expense divided by operating revenue (which is equal to net interest income plus noninterest income), excluding one-time gains and losses on sales of securities.  This measure is important to investors looking for a measure of efficiency in productivity based on the amount of revenue generated for each dollar spent.
  • “Operating efficiency ratio” is defined as noninterest expense divided by operating revenue, excluding one-time gains and losses on sales of securities and one-time gains and expenses related to merger and acquisition activities.  This measure is important to investors looking for a measure of efficiency in productivity based on the amount of revenue generated for each dollar spent.

The Company’s management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to NCC’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, NCC acknowledges that the non-GAAP financial measures have a number of limitations.  As such, NCC cautions readers that these disclosures should not be viewed as a substitute for results determined in accordance with GAAP, and that these disclosures are not necessarily comparable to non-GAAP financial measures that other companies use.  These non-GAAP financial measures exclude various items detailed in the attached “Non-GAAP Reconciliation.”

About National Commerce Corporation

National Commerce Corporation (Nasdaq:NCOM), a Delaware corporation, is a financial holding company headquartered in Birmingham, Alabama.  Substantially all of the operations of National Commerce Corporation are conducted through the company’s wholly owned subsidiary, National Bank of Commerce.  National Bank of Commerce currently operates seven full-service banking offices in Alabama, ten full-service banking offices in central and northeast Florida (including under the trade names United Legacy Bank and Reunion Bank of Florida) and two full-service banking offices in Atlanta, Georgia (including under the trade names Private Bank of Buckhead, Private Bank of Decatur and PrivatePlus Mortgage).  National Bank of Commerce provides a broad array of financial services for commercial and consumer customers.

Additionally, National Bank of Commerce owns a majority stake in Corporate Billing, LLC, a transaction-based finance company headquartered in Decatur, Alabama that provides factoring, invoicing, collection and accounts receivable management services to transportation companies and automotive parts and service providers throughout the United States and parts of Canada.

National Commerce Corporation files periodic reports with the U.S. Securities and Exchange Commission (the “SEC”).  Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.nationalbankofcommerce.com.  More information about National Commerce Corporation and National Bank of Commerce may be obtained at www.nationalbankofcommerce.com

Forward-Looking Statements
Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements for which NCC claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such.  In addition, certain statements may be contained in NCC’s future filings with the SEC, in press releases and in oral and written statements made by NCC or with NCC’s approval that are not statements of historical fact and that constitute forward-looking statements within the meaning of the Act.  Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of NCC’s plans, objectives and expectations or those of its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  Forward-looking statements are subject to various risks and uncertainties, including those risks and uncertainties described under the heading “Risk Factors” in NCC’s Annual Report on Form 10-K for the year ended December 31, 2016 and described in any subsequent reports that NCC has filed with the SEC.  Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements, and these statements should not be relied upon as predictions of future events.  NCC undertakes no obligation to update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.  In that respect, NCC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages or as otherwise noted)
            
  For the Three Months Ended
  March 31, December 31, September 30, June 30, March 31, 
   2017   2016  2016  2016  2016 
Earnings Summary           
Interest income $  24,899  $  19,032 $  18,836 $  18,382 $  18,313 
Interest expense    2,469     2,042    1,959    1,730    1,650 
Net interest income    22,430     16,990    16,877    16,652    16,663 
Provision for loan losses    156     441    373    901    1,533 
Other noninterest income (1)    5,440     3,472    4,002    3,357    3,125 
Merger/conversion-related expenses    387     169    160    12    138 
Other noninterest expense (2)    18,074     11,971    12,472    12,242    11,915 
Income before income taxes    9,253     7,881    7,874    6,854    6,202 
Income tax expense    2,841     2,600    2,639    2,072    2,083 
Net income before minority interest    6,412     5,281    5,235    4,782    4,119 
Net income attributable to minority interest    493     374    422    428    340 
Net income to common shareholders $  5,919  $  4,907 $  4,813 $  4,354 $  3,779 
            
Weighted average common and diluted shares outstanding          
  Basic    12,901,040     10,930,309    10,890,860    10,866,788    10,855,871 
  Diluted    13,283,075     11,173,733    11,115,134    11,067,972    11,039,208 
            
Net earnings per common share           
  Basic $  0.46  $  0.45 $  0.44 $  0.40 $  0.35 
  Diluted $  0.45  $  0.44 $  0.43 $  0.39 $  0.34 
            
  March 31, December 31, September 30, June 30, March 31, 
Selected Performance Ratios  2017   2016  2016  2016  2016 
Return on average assets (ROAA) (3)    1.00 %   1.05%   1.08%   1.00%   0.86%
Return on average equity (ROAE)    7.67     8.33    8.36    7.84    6.95 
Return on average tangible common equity           
  (ROATCE)    11.45     10.78    10.90    10.31    9.21 
Net interest margin - taxable equivalent    4.18     3.99    4.18    4.23    4.21 
Efficiency ratio    66.24     59.33    60.50    61.24    60.91 
Operating efficiency ratio (2)    64.85     58.50    59.73    61.18    60.21 
Noninterest income / average assets (annualized)    0.92     0.74    0.90    0.77    0.71 
Noninterest expense / average assets (annualized)    3.11     2.60    2.85    2.83    2.76 
Yield on loans    5.29     4.95    5.08    5.06    5.17 
Cost of total deposits    0.40 %   0.40%   0.40%   0.40%   0.42%
            
  March 31, December 31, September 30, June 30, March 31, 
Factoring Metrics  2017   2016  2016  2016  2016 
Recourse purchased volume $  127,882  $  82,923 $  71,872 $  68,567 $  66,554 
Non-recourse purchased volume    125,751     104,797    100,486    98,550    112,196 
Total purchased volume $  253,633  $  187,720 $  172,358 $  167,117 $  178,750 
Average turn (days)    35.61     38.35    38.13    39.92    38.16 
Net charge-offs / total purchased volume    0.03 %   0.12%   0.05%   0.07%   0.27%
Average discount rate    1.44 %   1.67%   1.70%   1.69%   1.72%
            
  March 31, December 31, September 30, June 30, March 31, 
Mortgage Metrics  2017   2016  2016  2016  2016 
Total production ($) $  130,875  $  76,028 $  91,613 $  91,466 $  63,802 
 Refinance (%)    27.4  %   40.2 %   30.4 %   17.2 %   18.2%
 Purchases (%)    72.6  %   59.8 %   69.6 %   82.8 %   81.8%
            
  As of
  March 31, December 31, September 30, June 30, March 31, 
Balance Sheet Highlights  2017   2016  2016  2016  2016 
Cash and cash equivalents $  318,730  $  217,293 $  122,920 $  86,163 $  123,853 
Total investment securities    98,390     99,709    102,848    89,495    82,954 
Mortgage loans held-for-sale    19,517     15,373    7,810    19,468    12,529 
Acquired purchased credit-impaired loans    20,012     9,507    9,500    10,382    10,205 
Acquired non-purchased credit-impaired loans    541,509     315,867    323,125    346,685    356,305 
Nonacquired loans held for investment (4)    1,153,897     1,076,209    1,009,677    978,836    942,781 
CBI loans (factoring receivables)    99,317     83,901    70,066    70,673    74,248 
Total gross loans held for investment    1,814,735     1,485,484    1,412,368    1,406,576    1,383,539 
Allowance for loan losses    12,565     12,113    11,950    11,642    10,927 
Total intangibles    103,519     52,803    52,962    53,154    53,312 
Total assets    2,445,149     1,950,784    1,779,278    1,735,782    1,735,940 
Total deposits    2,080,307     1,667,710    1,499,879    1,460,877    1,498,197 
FHLB and other borrowings    7,000     7,000    7,000    7,000    7,000 
Subordinated debt    24,513     24,500    24,487    24,540    - 
Total liabilities    2,127,727     1,713,740    1,547,105    1,509,662    1,514,840 
Minority interest    7,427     7,309    7,357    7,362    7,275 
Common stock    129     109    109    109    109 
Total shareholders' equity    317,422     237,044    232,173    226,120    221,100 
Tangible common equity $  213,410  $  183,866 $  178,788 $  172,538 $  167,447 
End of period common shares outstanding    12,948,778     10,934,541    10,920,423    10,870,033    10,861,487 
            
  As of and For the Three Months Ended
  March 31, December 31, September 30, June 30, March 31, 
Asset Quality Analysis  2017   2016  2016  2016  2016 
Nonacquired            
Nonaccrual loans $  68  $  69 $  19 $  248 $  184 
Other real estate and repossessed assets    1,849     2,068    2,068    2,068    2,792 
Loans past due 90 days or more and still accruing    538     581    358    406    452 
Total nonacquired nonperforming assets $  2,455  $  2,718 $  2,445 $  2,722 $  3,428 
            
Acquired           
Nonaccrual loans $  2,949  $  2,768 $  2,982 $  3,099 $  3,617 
Other real estate and repossessed assets    -     -    92    92    92 
Loans past due 90 days or more and still accruing    -     -    -    -    - 
Total acquired nonperforming assets $  2,949  $  2,768 $  3,074 $  3,191 $  3,709 
            
Selected asset quality ratios           
Nonperforming assets / Assets    0.22 %   0.28%   0.31%   0.34%   0.41%
Nonperforming assets / (Loans + OREO + repossessed assets)
Net charge-offs (recoveries) to average loans (annualized)   (0.07)    0.08    0.02    0.05    0.13 
Allowance for loan losses to total loans    0.69     0.82    0.85    0.83    0.79 
Nonacquired nonperforming assets / (Nonacquired loans +          
  nonacquired OREO + nonacquired repossessed assets) (4)   0.21     0.25    0.24    0.28    0.36 
Allowance for loan losses to nonacquired nonperforming           
  loans    2,073.43     1,863.54    3,169.76    1,780.12    1,718.08 
Allowance for loan losses to nonacquired loans (4)    1.05 %   1.08%   1.13%   1.14%   1.11%
            
  For the Three Months Ended
  March 31, December 31, September 30, June 30, March 31, 
Taxable Equivalent Yields/Rates  2017   2016  2016  2016  2016 
Interest income:           
  Loans    5.29 %   4.95%   5.08%   5.06%   5.17%
  Mortgage loans held-for-sale    4.13     2.99    4.12    3.51    4.40 
  Interest on securities:           
   Taxable    2.63     2.52    2.55    1.95    2.68 
   Non-taxable    4.98     4.90    4.85    4.93    4.90 
Cash balances in other banks    0.84     0.63    0.60    0.65    0.58 
Total interest-earning assets    4.64     4.47    4.66    4.67    4.63 
            
Interest expense:           
  Interest on deposits    0.56     0.55    0.54    0.54    0.56 
  Interest on FHLB and other borrowings    3.19     4.04    4.04    4.08    2.97 
  Interest on subordinated debt    6.42     6.30    6.32    6.34    - 
  Total interest-bearing liabilities    0.68     0.69    0.68    0.62    0.58 
  Net interest spread    3.96     3.78    3.98    4.05    4.05 
  Net interest margin    4.18 %   3.99%   4.18%   4.23%   4.21%
            
  As of
  March 31, December 31, September 30, June 30, March 31, 
   2017   2016  2016  2016  2016 
Shareholders' Equity and Capital Ratios           
Tier 1 Leverage Ratio    8.86 %   9.57%   9.74%   9.51%   9.13%
Tier 1 Common Capital Ratio    11.06     11.46    11.64    11.25    11.18 
Tier 1 Risk-based Capital Ratio    11.06     11.46    11.64    11.25    11.18 
Total Risk-based Capital Ratio    13.07     13.90    14.19    13.79    11.97 
Equity / Assets    12.98     12.15    13.05    13.03    12.74 
Tangible common equity to tangible assets    9.11 %   9.69%   10.36%   10.25%   9.95%
Book value per share $  24.51  $  21.68 $  21.26 $  20.80 $  20.36 
Tangible book value per share $  16.48  $  16.82 $  16.37 $  15.87 $  15.42 
            
  For the Three Months Ended
  March 31, December 31, September 30, June 30, March 31, 
   2017   2016  2016  2016  2016 
Detail of other noninterest expense           
Salaries and employee benefits $  10,073  $  6,935 $  6,948 $  6,907 $  6,945 
Commission-based compensation    1,723     1,076    1,104    1,036    875 
Occupancy and equipment expense    1,473     1,193    1,181    1,131    1,135 
Data processing expenses    948     568    572    618    667 
Advertising and marketing expenses    468     156    198    191    160 
Legal fees    233     163    182    179    122 
FDIC insurance assessments    258     234    246    257    263 
Property and casualty insurance premiums    143     95    90    166    223 
Accounting and audit expenses    318     211    252    249    250 
Consulting and other professional expenses    497     201    330    184    243 
Telecommunications expenses    186     114    146    140    159 
ORE, Repo asset and other collection expenses    272     41    142    89    59 
Core deposit intangible amortization    348     182    191    192    191 
Other noninterest expense    1,521     971    1,050    915    761 
  Total noninterest expense $  18,461  $  12,140 $  12,632 $  12,254 $  12,053 
              
  As of
  March 31, December 31, September 30, June 30, March 31, 
Non-GAAP Reconciliation  2017   2016  2016  2016  2016 
Total shareholders' equity $  317,422  $  237,044 $  232,173 $  226,120 $  221,100 
Less: intangible assets    103,519     52,803    52,962    53,154    53,312 
Less: minority interest not included in intangible assets    493     375    423    428    341 
Tangible common equity $  213,410  $  183,866 $  178,788 $  172,538 $  167,447 
Common shares outstanding at year or period end    12,948,778     10,934,541    10,920,423    10,870,033    10,861,487 
Tangible book value per share $  16.48  $  16.82 $  16.37 $  15.87 $  15.42 
Total assets at end of period $  2,445,149  $  1,950,784 $  1,779,278 $  1,735,782 $  1,735,940 
Less: intangible assets    103,519     52,803    52,962    53,154    53,312 
Adjusted total assets at end of period $  2,341,630  $  1,897,981 $  1,726,316 $  1,682,628 $  1,682,628 
Tangible common equity to tangible assets    9.11 %   9.69%   10.36%   10.25%   9.95%
Total allowance for loan losses $  12,565  $  12,113 $  11,950 $  11,642 $  10,927 
Less: allowance for loan losses attributable to           
  CBI (factoring receivables)    500     500    500    500    500 
Adjusted allowance for loan losses at end of period $  12,065  $  11,613 $  11,450 $  11,142 $  10,427 
Nonacquired loans held for investment (4)    1,153,897     1,076,209    1,009,677    978,836    942,781 
Allowance for loan losses to nonacquired loans (4)    1.05 %   1.08%   1.13%   1.14%   1.11%
            
  For the Three Months Ended
  March 31, December 31, September 30, June 30, March 31, 
   2017   2016  2016  2016  2016 
Non-GAAP Reconciliation           
Total average shareholders' equity $  312,971  $  234,249 $  228,953 $  223,357 $  218,730 
Less: average intangible assets    103,004     52,872    53,056    53,234    53,388 
Less: average minority interest not included           
  in intangible assets    295     262    282    284    231 
Average tangible common equity $  209,672  $  181,115 $  175,615 $  169,839 $  165,111 
Net income to common shareholders    5,919     4,907    4,813    4,354    3,779 
Return on average tangible common equity (ROATCE)    11.45 %   10.78%   10.90%   10.31%   9.21%
Efficiency ratio:           
Net interest income $  22,430  $  16,990 $  16,877 $  16,652 $  16,663 
Total noninterest income    5,440     3,472    4,002    3,357    3,125 
Less:  gain (loss) on sale of securities    -     -    -    -    - 
Operating revenue $  27,870  $  20,462 $  20,879 $  20,009 $  19,788 
Expenses:           
Total noninterest expenses $  18,461  $  12,140 $  12,632 $  12,254 $  12,053 
Efficiency ratio    66.24 %   59.33%   60.50%   61.24%   60.91%
Operating efficiency ratio:           
Net interest income $  22,430  $  16,990 $  16,877 $  16,652 $  16,663 
Total noninterest income    5,440     3,472    4,002    3,357    3,125 
Less:  gain (loss) on sale of securities    -     -    -    -    - 
Operating revenue $  27,870  $  20,462 $  20,879 $  20,009 $  19,788 
Expenses:           
Total noninterest expenses $  18,461  $  12,140 $  12,632 $  12,254 $  12,053 
Less: merger/conversion-related expenses    387     169    160    12    138 
Adjusted noninterest expenses $  18,074  $  11,971 $  12,472 $  12,242 $  11,915 
Operating efficiency ratio    64.85 %   58.50%   59.73%   61.18%   60.21%
            
(1) Excludes securities gains  
(2) Excludes merger/conversion-related expenses  
(3) Net income to common shareholders / average assets  
(4) Excludes CBI loans (factoring receivables)  


NATIONAL COMMERCE CORPORATION 
Unaudited Consolidated Balance Sheets 
(In thousands, except share and per share data) 
    
Assets 
 March 31, 2017 December 31, 2016 
Cash and due from banks$40,237$35,897 
Interest-bearing deposits with banks 278,493 181,396 
Cash and cash equivalents 318,730 217,293 
Investment securities held-to-maturity (fair value of $25,823 and $25,894 at March 31, 2017   
and December 31, 2016, respectively) 26,057 26,329 
Investment securities available-for-sale 72,333 73,380 
Other investments 8,338 7,879 
Mortgage loans held-for-sale 19,517 15,373 
Loans, net of unearned income 1,814,735 1,485,484 
Less: allowance for loan losses 12,565 12,113 
Loans, net 1,802,170 1,473,371 
Premises and equipment, net 35,148 31,884 
Accrued interest receivable 4,790 4,129 
Bank-owned life insurance 31,544 28,034 
Other real estate 1,849 2,068 
Deferred tax assets, net 14,842 13,486 
Goodwill 98,856 50,771 
Core deposit intangible, net 4,663 2,032 
Other assets 6,312 4,755 
Total assets$2,445,149$1,950,784 
    
 Liabilities and Shareholders’ Equity  
Deposits:   
Noninterest-bearing demand$617,851$429,030 
Interest-bearing demand 345,602 262,261 
Savings and money market 820,206 703,289 
Time 296,648 273,130 
Total deposits 2,080,307 1,667,710 
Federal Home Loan Bank advances 7,000 7,000 
Subordinated debt 24,513 24,500 
Accrued interest payable 860 829 
Other liabilities 15,047 13,701 
Total liabilities 2,127,727 1,713,740 
    
Shareholders’ equity:   
Preferred stock, 250,000 shares authorized, no shares issued or outstanding - - 
Common stock, $0.01 par value, 30,000,000 shares authorized, 12,948,778 and 10,934,541   
shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively 129 109 
Additional paid-in capital 279,618 205,372 
Retained earnings 29,924 24,005 
Accumulated other comprehensive income 324 249 
Total shareholders' equity attributable to National Commerce Corporation 309,995 229,735 
Noncontrolling interest 7,427 7,309 
Total shareholders' equity 317,422 237,044 
Total liabilities and shareholders' equity$2,445,149$1,950,784 
    

 

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except share and per share data)
    
 For the Three Months Ended 
 March 31, 
  2017  2016 
Interest and dividend income:   
Interest and fees on loans$23,593 $17,483 
Interest and dividends on taxable investment securities 571  412 
Interest on non-taxable investment securities 200  200 
Interest on interest-bearing deposits and federal funds sold 535  218 
Total interest income 24,899  18,313 
Interest expense:   
Interest on deposits 2,010  1,569 
Interest on borrowings 71  81 
Interest on subordinated debt 388  - 
Total interest expense 2,469  1,650 
Net interest income 22,430  16,663 
Provision for loan losses 156  1,533 
Net interest income after provision for loan losses 22,274  15,130 
Other income:   
Service charges and fees on deposit accounts 667  480 
Mortgage origination and fee income 3,145  1,392 
Merchant sponsorship revenue 744  522 
Income from bank-owned life insurance 216  204 
Wealth management fees 10  13 
Gain (loss) on other real estate (1) 156 
Other 659  358 
Total other income 5,440  3,125 
Other expense:     
Salaries and employee benefits 10,073  6,945 
Commission-based compensation 1,723  875 
Occupancy and equipment 1,473  1,135 
Core deposit intangible amortization 348  191 
Other operating expense 4,844  2,907 
Total other expense 18,461  12,053 
Earnings before income taxes 9,253  6,202 
Income tax expense 2,841  2,083 
Net earnings 6,412  4,119 
Less: Net earnings attributable to noncontrolling interest 493  340 
Net earnings attributable to National Commerce Corporation$5,919 $3,779 
      
Weighted average common and diluted shares outstanding   
Basic 12,901,040  10,855,871 
Diluted 13,283,075  11,039,208 
    
Basic earnings per common share$0.46 $0.35 
Diluted earnings per common share$0.45 $0.34 
    

 

NATIONAL COMMERCE CORPORATION 
Average Balance Sheets and Net Interest Analysis 
                 
 For the Three Months Ended 
(Dollars in thousands)March 31, 2017December 31, 2016September 30, 2016June 30, 2016March 31, 2016 
Interest-earning assetsAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ Rate 
Loans$  1,793,241$  23,3775.29%$  1,446,629$  18,0124.95%$  1,399,016$  17,8535.08%$  1,391,789$  17,5235.06%$  1,352,737$  17,3735.17% 
Mortgage loans held-for-sale   21,809   222 4.13     10,366   78 2.99     13,986   145 4.12     17,288   151 3.51     10,503   115 4.40   
Securities:                
Taxable securities   88,062   571 2.63     82,881   525 2.52     76,787   493 2.55     78,907   383 1.95     61,764   412 2.68   
Tax-exempt securities   25,824   317 4.98     25,910   319 4.90     26,029   317 4.85     26,036   319 4.93     26,041   317 4.90   
Cash balances in other banks   258,672   535 0.84     140,813   224 0.63     101,422   152 0.60     80,140   129 0.65     151,318   218 0.58   
Total interest-earning assets   2,187,608$  25,022 4.64     1,706,599$  19,158 4.47     1,617,240$  18,960 4.66     1,594,160$  18,505 4.67     1,602,363$  18,435 4.63   
Noninterest-earning assets   220,006     149,709     148,275     148,959     156,260   
Total assets$  2,407,614  $  1,856,308  $  1,765,515  $  1,743,119  $  1,758,623   
                 
Interest-bearing liabilities                
Interest-bearing transaction accounts$  332,361$  2170.26%$  235,340$  1490.25%$  214,439$  1250.23%$  210,776$  1240.24%$  204,339$  1230.24% 
Savings and money market deposits   804,537   1,096 0.55     633,765   791 0.50     612,618   713 0.46     603,173   698 0.47     620,429   762 0.49   
Time deposits   306,404   697 0.92     273,293   643 0.94     283,022   661 0.93     288,350   654 0.91     306,106   684 0.90   
Federal Home Loan Bank and other borrowed money   9,016   71 3.19     7,000   71 4.04     7,000   71 4.04     7,000   71 4.08     10,959   81 2.97   
Subordinated debt   24,507   388 6.42     24,494   388 6.30     24,498   389 6.32     11,605   183 6.34     -   -  -  
Total interest-bearing liabilities   1,476,825$  2,469 0.68     1,173,892$  2,042 0.69     1,141,577$  1,959 0.68     1,120,904$  1,730 0.62     1,141,833$  1,650 0.58   
Noninterest-bearing deposits   600,897     431,253     381,205     388,363     386,674   
Total funding sources   2,077,722     1,605,145     1,522,782     1,509,267     1,528,507   
Noninterest-bearing liabilities   16,921     16,914     13,780     10,495     11,386   
Shareholders' equity   312,971     234,249     228,953     223,357     218,730   
 $  2,407,614  $  1,856,308  $  1,765,515  $  1,743,119  $  1,758,623   
Net interest rate spread  3.96%  3.78%  3.98%  4.05%  4.05% 
Net interest income/margin (taxable equivalent)    22,5534.18%    17,1163.99%    17,0014.18%    16,7754.23%    16,7854.21% 
Tax equivalent adjustment    123     126     124     123     122  
Net interest income/margin $  22,4304.16% $  16,9903.96% $  16,8774.15% $  16,6524.20% $  16,6634.18% 
                 

 

Contact:
National Commerce Corporation
William E. Matthews, V                                            
Vice Chairman and Chief Financial Officer              
(205) 313-8122

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Source: National Commerce Corporation