INVESTOR RELATIONS

Press Release

National Commerce Corporation Announces Second Quarter 2016 Earnings

Company Release - 7/26/2016 6:30 PM ET

BIRMINGHAM, Ala., July 26, 2016 (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq:NCOM) (the “Company” or “NCC”), the parent company of National Bank of Commerce, today reported second quarter 2016 net income to common shareholders of $4.4 million, compared to $2.3 million for the second quarter of 2015.  Diluted net earnings per share were $0.39 in the second quarter of 2016, compared to $0.34 in the first quarter of 2016 and $0.24 in the second quarter of 2015.

“National Commerce had a good second quarter and first six months of 2016,” said John H. Holcomb, III, Chairman and Chief Executive Officer of the Company.  “This quarter was the first quarter for us to achieve a Return on Average Assets of 1.0%, and we are pleased to achieve that milestone.  With our consistent focus on asset quality, we are glad to see nice improvement in our asset quality metrics, though we remind ourselves that we need to continue to maintain focus in that area.”

Several important measures from the second quarter of 2016 are as follows:

  • Net Interest Margin (taxable equivalent) of 4.23%, up 0.01% from the 4.22% reported for the second quarter of 2015.  The margin increased 0.02% compared to the 2016 first quarter.
  • Return on Average Assets of 1.00%, compared to 0.75% for the second quarter of 2015 and 0.86% for the first quarter of 2016.
  • Return on Average Equity of 7.84%, compared to 5.22% for the second quarter of 2015 and 6.95% for the first quarter of 2016.
  • Return on Average Tangible Common Equity of 10.31%, compared to 6.35% for the second quarter of 2015 and 9.21% for the first quarter of 2016.
  • Second quarter 2016 loan growth (excluding mortgage loans held-for-sale) of $23.0 million.   
  • Decrease in deposits of $37.3 million.
  • $91.5 million in mortgage production, compared to $84.8 million for the second quarter of 2015.
  • $167.1 million in purchased volume in the factoring division, compared to $188.6 million for the second quarter of 2015.
  • Decrease in non-acquired non-performing assets to $2.7 million from $3.4 million at March 31, 2016.
  • Annualized net charge-offs of 0.05% of average loans, compared to 0.16% for the second quarter of 2015.
  • Provision for loan losses of $0.9 million, compared to $120 thousand in the second quarter of 2015 and $1.5 million in the first quarter of 2016. 
  • Ending tangible book value per share of $15.87.
  • Ending book value per share of $20.80.

The Company will host a live audio webcast conference call beginning at 8:00 a.m. Central Time on July 27, 2016 to discuss earnings and operating results for the second quarter of 2016.  Investors may call in (toll free) by dialing (855) 871-0559 (conference ID 46508527).  A replay of the conference call will be available until July 29, 2016 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 then 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.
  • “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.
  • “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 (in Birmingham, Huntsville, Auburn-Opelika, and Baldwin County) and ten full-service banking offices in central Florida (in Vero Beach through National Bank of Commerce; in Longwood, Winter Park, Orlando, and Oviedo through United Legacy Bank, a division of National Bank of Commerce; and in Tavares, Port Orange, St. Augustine, and Ormond Beach through Reunion Bank of Florida, a division of National Bank of Commerce), as well as a loan production office in Atlanta, Georgia.  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 based 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, 2015 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)
               
  For the Three Months Ended
  June 30,  March 31,  December 31,  September 30,  June 30, 
   2016    2016    2015    2015    2015  
Earnings Summary                    
Interest income $  18,382  $  18,313  $  16,488  $  13,450  $  12,714 
Interest expense  1,730   1,650   1,507   1,191   1,071 
Net interest income  16,652   16,663   14,981   12,259   11,643 
Provision for loan losses  901   1,533   631   201   120 
Other noninterest income (1)  3,357   3,125   2,136   2,353   2,206 
Merger/conversion-related expenses  12   138   395   122   168 
Other noninterest expense (2)  12,242   11,915   11,049   9,773   9,448 
Income before income taxes  6,854   6,202   5,042   4,516   4,113 
Income tax expense  2,072   2,083   1,667   1,453   1,264 
Net income before minority interest  4,782   4,119   3,375   3,063   2,849 
Net income attributable to minority interest  428   340   437   573   593 
Net income to common shareholders $  4,354  $  3,779  $  2,938  $  2,490  $  2,256 
               
Weighted average common and diluted shares outstanding             
Basic  10,866,788   10,855,871   10,345,146   9,438,541   9,438,541 
Diluted  11,067,972   11,039,208   10,552,871   9,594,472   9,569,695 
               
Net earnings per common share              
Basic $  0.40  $  0.35  $  0.28  $  0.26  $  0.24 
Diluted $  0.39  $  0.34  $  0.28  $  0.26  $  0.24 
               
  June 30,  March 31,  December 31,  September 30,  June 30, 
Selected Performance Ratios  2016   2016   2015   2015   2015 
Return on average assets (ROAA) (3)  1.00%  0.86%  0.72%  0.75%  0.75 %
Return on average equity (ROAE)  7.84   6.95   5.76   5.62   5.22 
Return on average tangible common equity              
(ROATCE)  10.31   9.21   7.48   6.85   6.35 
Net interest margin - taxable equivalent  4.23   4.21   4.06   4.02   4.22 
Efficiency ratio  61.24   60.91   66.86   67.72   69.43 
Operating efficiency ratio (2)  61.18   60.21   64.55   66.88   68.22 
Noninterest income / average assets (annualized)  0.77   0.71   0.52   0.71   0.73 
Noninterest expense / average assets (annualized)  2.83   2.76   2.80   2.99   3.19 
Yield on loans  5.06   5.17   5.17   5.13   5.15 
Cost of total deposits  0.40%  0.42%  0.40%  0.39%  0.38 %
               
  June 30,  March 31,  December 31,  September 30,  June 30, 
Factoring Metrics  2016   2016   2015   2015   2015 
Recourse purchased volume $  68,567  $  66,554  $  74,922  $  82,661  $  89,009 
Non-recourse purchased volume  98,550   112,196   97,142   100,055   99,614 
Total purchased volume $  167,117  $  178,750  $  172,064  $  182,716  $  188,623 
Average turn (days)  39.92   38.16   39.68   37.97   37.66 
Net charge-offs / total purchased volume  0.07%  0.27%  0.12%  0.06%  (0.04)%
Average discount rate  1.69%  1.72%  1.73%  1.74%  1.67 %
               
  June 30,  March 31,  December 31,  September 30,  June 30, 
Mortgage Metrics  2016   2016   2015   2015   2015 
Total production ($) $  91,466  $  63,802  $  58,903  $  82,276  $  84,796 
Refinance (%)  17.2%  18.2%  26.0%  19.1%  18.6 %
Purchases (%)  82.8%  81.8%  74.0%  80.9%  81.4 %
               
NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
 
  As of
  June 30,  March 31,  December 31,  September 30,  June 30, 
Balance Sheet Highlights  2016   2016   2015   2015   2015 
Cash and cash equivalents $  86,163  $  123,853  $  212,457  $  192,882  $  142,393 
Total securities  89,495   82,954   80,863   45,911   42,586 
Mortgage loans held-for-sale  19,468   12,529   15,020   7,926   13,750 
Acquired purchased credit-impaired loans  10,382   10,205   10,443   5,615   5,724 
Acquired non-purchased credit-impaired loans  346,685   356,305   370,872   123,730   131,953 
Nonacquired loans held for investment (4)  978,836   942,781   870,471   811,011   757,976 
CBI loans (factoring receivables)  70,673   74,248   67,628   74,780   75,000 
Total gross loans held for investment  1,406,576   1,383,539   1,319,414   1,015,136   970,653 
Allowance for loan losses  11,642   10,927   9,842   9,391   9,274 
Total intangibles  53,154   53,312   53,474   31,291   31,310 
Total assets  1,735,782   1,735,940   1,763,369   1,350,781   1,256,614 
Total deposits  1,460,877   1,498,197   1,514,458   1,141,837   1,051,483 
FHLB and other borrowings  7,000   7,000   22,000   22,000   22,000 
Subordinated debt  24,540   -   -   -   - 
Total liabilities  1,509,662   1,514,840   1,546,733   1,173,358   1,081,985 
Minority interest  7,362   7,275   7,372   7,508   7,527 
Common stock  109   109   108   94   94 
Total shareholders' equity  226,120   221,100   216,636   177,423   174,629 
Tangible common equity $  172,538  $  167,447  $  162,724  $  145,558  $  142,726 
End of period common shares outstanding  10,870,033   10,861,487   10,824,969   9,438,541   9,438,541 
               
  As of and For the Three Months Ended
  June 30,  March 31,  December 31,  September 30,  June 30, 
Asset Quality Analysis  2016   2016   2015   2015   2015 
Nonacquired                
Nonaccrual loans $  248  $  184  $  187  $  829  $  2,688 
Other real estate and repossessed assets  2,068   2,792   3,873   3,562   1,494 
Loans past due 90 days or more and still accruing  406   452   252   148   44 
Total nonacquired nonperforming assets $  2,722  $  3,428  $  4,312  $  4,539  $  4,226 
               
Acquired              
Nonaccrual loans $  3,099  $  3,617  $  3,508  $  2,829  $  2,795 
Other real estate and repossessed assets  92   92   92   72   142 
Loans past due 90 days or more and still accruing  -   -   -   -   - 
Total acquired nonperforming assets $  3,191  $  3,709  $  3,600  $  2,901  $  2,937 
               
Selected asset quality ratios              
Nonperforming assets / Assets  0.34%  0.41%  0.45%  0.55%  0.57 %
Nonperforming assets / (Loans + OREO + repossessed assets)  0.42   0.51   0.60   0.73   0.74 
Net charge-offs (recoveries) to average loans (annualized)  0.05   0.13   0.06   0.03   0.16 
Allowance for loan losses to total loans  0.83   0.79   0.75   0.93   0.96 
Nonacquired nonperforming assets / (Nonacquired loans +              
nonacquired OREO + nonacquired repossessed assets) (4)  0.28   0.36   0.49   0.56   0.56 
Allowance for loan losses to nonacquired nonperforming              
loans  1,780.12   1,718.08   2,241.91   961.21   339.46 
Allowance for loan losses to nonacquired loans (4)  1.14%  1.11%  1.07%  1.10%  1.13 %
               
  For the Three Months Ended
  June 30,  March 31,  December 31,  September 30,  June 30, 
Taxable Equivalent Yields/Rates  2016   2016   2015   2015   2015 
Interest income:                
Loans  5.06%  5.17%  5.17%  5.13%  5.15 %
Mortgage loans held-for-sale  3.51   4.40   3.44   4.17   4.02 
Interest on securities:              
Taxable  1.94   2.68   3.05   3.30   3.33 
Non-taxable  5.01   4.90   4.96   4.99   5.08 
Cash balances in other banks  0.65   0.58   0.35   0.31   0.38 
Total interest-earning assets  4.67   4.63   4.46   4.41   4.60 
               
Interest expense:              
Interest on deposits  0.54   0.56   0.54   0.50   0.50 
Interest on FHLB and other borrowings  4.08   2.97   2.01   2.00   2.01 
Interest on subordinated debt  6.34   -   -   -   - 
Total interest-bearing liabilities  0.62   0.58   0.57   0.54   0.54 
Net interest spread  4.05   4.05   3.89   3.87   4.06 
Net interest margin  4.23%  4.21%  4.06%  4.02%  4.22 %
               
NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
 
  As of
  June 30,  March 31,  December 31,  September 30,  June 30, 
   2016   2016   2015   2015   2015 
Shareholders' Equity and Capital Ratios                
Tier 1 Leverage Ratio  9.51%  9.13%  9.68%  10.39%  11.09 %
Tier 1 Common Capital Ratio  11.25   11.18   11.18   12.88   12.86 
Tier 1 Risk-based Capital Ratio  11.25   11.18   11.18   12.88   12.86 
Total Risk-based Capital Ratio  13.79   11.97   11.91   13.79   13.78 
Equity / Assets  13.03   12.74   12.29   13.13   13.90 
Tangible common equity to tangible assets  10.25%  9.95%  9.52%  11.03%  11.65 %
Book value per share $  20.80  $  20.36  $  20.01  $  18.80  $  18.50 
Tangible book value per share $  15.87  $  15.42  $  15.03  $  15.42  $  15.12 
               
  For the Three Months Ended
               
  June 30,  March 31,  December 31,  September 30,  June 30, 
   2016   2016   2015   2015   2015 
Detail of other noninterest expense                
Salaries and employee benefits $  6,907  $  6,945  $  6,077  $  5,186  $  5,114 
Commission-based compensation  1,036   875   844   1,048   1,056 
Occupancy and equipment expense  1,131   1,135   1,048   871   829 
Data processing expenses  618   667   511   464   487 
Advertising and marketing expenses  191   160   19   124   125 
Legal fees  179   122   173   177   135 
FDIC insurance assessments  257   263   242   205   152 
Property and casualty insurance premiums  166   223   169   143   146 
Accounting and audit expenses  249   250   332   211   212 
Consulting and other professional expenses  184   243   387   238   164 
Telecommunications expenses  140   159   132   144   135 
ORE, Repo asset and other collection expenses  89   59   256   79   71 
Core deposit intangible amortization  192   191   175   111   111 
Other noninterest expense  915   761   1,079   894   879 
Total noninterest expense $  12,254  $  12,053  $  11,444  $  9,895  $  9,616 
                 
   
NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
 
  As of
  June 30,  March 31,  December 31,  September 30,  June 30,
 
Non-GAAP Reconciliation  2016   2016   2015   2015   2015 
Total shareholders' equity $  226,120  $  221,100  $  216,636  $  177,423  $  174,629 
Less: intangible assets  53,154   53,312   53,474   31,291   31,310 
Less: minority interest not included in intangible assets  428   341   438   574   593 
Tangible common equity $  172,538  $  167,447  $  162,724  $  145,558  $  142,726 
Common shares outstanding at year or period end  10,870,033   10,861,487   10,824,969   9,438,541   9,438,541 
Tangible book value per share $  15.87  $  15.42  $  15.03  $  15.42  $  15.12 
Total assets at end of period $  1,735,782  $  1,735,940  $  1,763,369  $  1,350,781  $  1,256,614 
Less: intangible assets  53,154   53,312   53,474   31,291   31,310 
Adjusted total assets at end of period $  1,682,628  $  1,682,628  $  1,709,895  $  1,319,490  $  1,225,304 
Tangible common equity to tangible assets  10.25%  9.95%  9.52%  11.03%  11.65 %
Total allowance for loan losses $  11,642  $  10,927  $  9,842  $  9,391  $  9,274 
Less: allowance for loan losses attributable to              
CBI (factoring receivables)  500   500   500   500   715 
Adjusted allowance for loan losses at end of period $  11,142  $  10,427  $  9,342  $  8,891  $  8,559 
Nonacquired loans held for investment (4)  978,836   942,781   870,471   811,011   757,976 
Allowance for loan losses to nonacquired loans (4)  1.14%  1.11%  1.07%  1.10%  1.13 %
                 
  For the Three Months Ended
  June 30,  March 31,  December 31,  September 30,  June 30,
 
   2016   2016   2015   2015   2015 
Non-GAAP Reconciliation                
Total average shareholders' equity $  223,357  $  218,730  $  202,299  $  175,821  $  173,354 
Less: average intangible assets  53,234   53,388   46,113   31,158   30,555 
Less: average minority interest not included              
in intangible assets  284   231   331   371   315 
Average tangible common equity $  169,839  $  165,111  $  155,855  $  144,292  $  142,484 
Net income to common shareholders  4,354   3,779   2,938   2,490   2,256 
Return on average tangible common equity (ROATCE)  10.31%  9.21%  7.48%  6.85%  6.35 %
Efficiency ratio:                
Net interest income $  16,652  $  16,663  $  14,981  $  12,259  $  11,643 
Total noninterest income  3,357   3,125   2,136   2,353   2,206 
Less:  gain (loss) on sale of securities  -   -   -   -   - 
Operating revenue $  20,009  $  19,788  $  17,117  $  14,612  $  13,849 
Expenses:                
Total noninterest expenses $  12,254  $  12,053  $  11,444  $  9,895  $  9,616 
Efficiency ratio  61.24%  60.91%  66.86%  67.72%  69.43 %
Operating efficiency ratio:                
Net interest income $  16,652  $  16,663  $  14,981  $  12,259  $  11,643 
Total noninterest income  3,357   3,125   2,136   2,353   2,206 
Less:  gain (loss) on sale of securities  -   -   -   -   - 
Operating revenue $  20,009  $  19,788  $  17,117  $  14,612  $  13,849 
Expenses:                
Total noninterest expenses $  12,254  $  12,053  $  11,444  $  9,895  $  9,616 
Less: merger/conversion-related expenses  12   138   395   122   168 
Adjusted noninterest expenses $  12,242  $  11,915  $  11,049  $  9,773  $  9,448 
Operating efficiency ratio  61.18%  60.21%  64.55%  66.88%  68.22 %
                 
(1) Excludes securities gains
(2) Excludes merger/conversion-related expenses
(3) Net income to common shareholders / average assets
(4) Excludes CBI loans
 


NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Balance Sheets
(In thousands, except share and per share data)
    
Assets
  June 30, 2016
 December 31, 2015
 
Cash and due from banks $27,283 $27,173 
Interest-bearing deposits with banks  58,880  185,284 
Cash and cash equivalents  86,163  212,457 
Investment securities held-to-maturity (fair value of $28,215 and $27,843 at June 30, 2016   
and December 31, 2015, respectively)  26,993  27,458 
Investment securities available-for-sale  62,502  53,405 
Other investments  7,715  6,235 
Mortgage loans held-for-sale  19,468  15,020 
Loans, net of unearned income  1,406,576  1,319,414 
Less: allowance for loan losses  11,642  9,842 
Loans, net  1,394,934  1,309,572 
Premises and equipment, net  32,496  31,432 
Accrued interest receivable  3,690  3,510 
Bank-owned life insurance  27,631  27,223 
Other real estate  2,160  3,965 
Deferred tax assets, net  13,853  14,190 
Goodwill  50,748  50,686 
Core deposit intangible, net  2,406  2,788 
Other assets  5,023  5,428 
Total assets $1,735,782 $1,763,369 
        
 Liabilities and Shareholders’ Equity 
Deposits:   
Noninterest-bearing demand $384,854 $382,946 
Interest-bearing demand  207,673  202,649 
Savings and money market  584,347  611,887 
Time  284,003  316,976 
Total deposits  1,460,877  1,514,458 
Federal Home Loan Bank advances  7,000  22,000 
Subordinated debt  24,540  - 
Accrued interest payable  671  627 
Other liabilities  16,574  9,648 
Total liabilities  1,509,662  1,546,733 
Commitments and contingencies       
Shareholders’ equity:   
Preferred stock, 250,000 shares authorized, no shares issued or outstanding  -  - 
Common stock, $0.01 par value, 30,000,000 shares authorized, 10,870,033 and 10,824,969   
shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively  109  108 
Additional paid-in capital  203,370  202,456 
Retained earnings  14,285  6,152 
Accumulated other comprehensive income  994  548 
Total shareholders' equity attributable to National Commerce Corporation  218,758  209,264 
Noncontrolling interest  7,362  7,372 
Total shareholders' equity  226,120  216,636 
Total liabilities and shareholders' equity $1,735,782 $1,763,369 
        

 

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except per share data)
       
  For the Three Months Ended For the Six Months Ended
  June 30, June 30,
  2016 2015  2016 2015 
Interest and dividend income:              
Interest and fees on loans $17,669 $12,226  $35,152 $24,018 
Interest and dividends on taxable investment securities  380  269   792  525 
Interest on non-taxable investment securities  204  114   404  156 
Interest on interest-bearing deposits and federal funds sold    129    105     347    208 
Total interest income  18,382  12,714   36,695  24,907 
Interest expense:      
Interest on deposits  1,476  961   3,045  1,879 
Interest on borrowings  71  110   152  219 
Interest on subordinated debt    183    -     183    - 
Total interest expense    1,730    1,071     3,380    2,098 
Net interest income  16,652  11,643   33,315  22,809 
Provision for loan losses    901    120     2,434    281 
Net interest income after provision for loan losses  15,751  11,523   30,881  22,528 
Other income:      
Service charges and fees on deposit accounts  505  308   985  575 
Mortgage origination and fee income  1,627  1,505   3,019  2,776 
Merchant sponsorship revenue  491  191   1,013  191 
Income from bank-owned life insurance  204  86   408  165 
Wealth management fees  11  13   24  32 
Gain (loss) on other real estate  119  (11)  275  (24)
Other    400    114     758    255 
Total other income    3,357    2,206     6,482    3,970 
Other expense:              
Salaries and employee benefits  6,907  5,114   13,852  10,101 
Commission-based compensation  1,036  1,056   1,911  1,852 
Occupancy and equipment  1,131  829   2,266  1,665 
Core deposit intangible amortization  192  111   383  222 
Other operating expense    2,988    2,506     5,895    5,066 
Total other expense    12,254    9,616     24,307    18,906 
Earnings before income taxes  6,854  4,113   13,056  7,592 
Income tax expense    2,072    1,264     4,155    2,356 
Net earnings  4,782  2,849   8,901  5,236 
Less: Net earnings attributable to noncontrolling interest    428    593     768    1,059 
Net earnings attributable to National Commerce Corporation $  4,354 $  2,256  $  8,133 $  4,177 
               
Weighted average common and diluted shares outstanding      
Basic  10,866,788  9,438,541   10,861,330  8,574,900 
Diluted  11,067,972  9,569,695   11,059,906  8,687,986 
       
Basic earnings per common share $0.40 $0.24  $0.75 $0.49 
Diluted earnings per common share $0.39 $0.24  $0.74 $0.48 
       

 

NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
 
                 
  For the Three Months Ended
(Dollars in thousands) June 30, 2016March 31, 2016December 31, 2015September 30, 2015June 30, 2015
Interest-earning assets Average 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 $1,391,789 $17,523  5.06%$1,352,737 $17,373  5.17%$1,204,437 $15,699  5.17%$992,223 $12,826  5.13%$944,373 $12,116  5.15%
Mortgage loans held-for-sale  17,288  151  3.51  10,503  115  4.40  9,697  84  3.44  9,890  104  4.17  11,180  112  4.02 
Securities:                
Taxable securities  78,907  380  1.94  61,764  412  2.68  48,097  370  3.05  31,132  259  3.30  32,402  269  3.33 
Tax-exempt securities  26,036  324  5.01  26,041  317  4.90  21,982  275  4.96  17,245  217  4.99  14,297  181  5.08 
Cash balances in other banks  80,140  129  0.65  151,318  218  0.58  191,077  168  0.35  166,715  129  0.31  112,081  105  0.38 
Total interest-earning assets  1,594,160 $18,507  4.67  1,602,363 $18,435  4.63  1,475,290 $16,596  4.46  1,217,205 $13,535  4.41  1,114,333 $12,783  4.60 
Noninterest-earning assets  148,959      156,260      145,791      96,824      95,949     
Total assets $1,743,119   $1,758,623   $1,621,081   $1,314,029   $1,210,282   
                           
Interest-bearing liabilities                
Interest-bearing transaction accounts $210,776 $124  0.24%$204,339 $123  0.24%$196,140 $129  0.26%$182,056 $118  0.26%$157,261 $97  0.25%
Savings and money market deposits  603,173  698  0.47  620,429  762  0.49  542,631  612  0.45  443,306  486  0.43  408,117  417  0.41 
Time deposits  288,350  654  0.91  306,106  684  0.90  291,399  654  0.89  228,298  476  0.83  208,388  447  0.86 
Federal Home Loan Bank and other borrowed money  7,000  71  4.08  10,959  81  2.97  22,104  112  2.01  22,000  111  2.00  22,000  110  2.01 
Subordinated debt  11,605  183  6.34  -  -  -
  -  -  -  -  -  -
  -  -  - 
Total interest-bearing liabilities  1,120,904 $1,730  0.62  1,141,833 $1,650  0.58  1,052,274 $1,507  0.57  875,660 $1,191  0.54  795,766 $1,071  0.54 
Noninterest-bearing deposits  388,363      386,674      354,812      254,402      233,136     
Total funding sources  1,509,267    1,528,507    1,407,086    1,130,062    1,028,902   
Noninterest-bearing liabilities  10,495    11,386    11,696    8,146    8,026   
Shareholders' equity  223,357    218,730    202,299    175,821    173,354   
  $1,743,119   $1,758,623   $1,621,081   $1,314,029   $1,210,282   
Net interest rate spread      4.05%     4.05%     3.89%     3.87%     4.06%
Net interest income/margin (taxable equivalent)   16,777  4.23%  16,785  4.21%  15,089  4.06%  12,344  4.02%  11,712  4.22%
Tax equivalent adjustment   125    122    108    85    69  
Net interest income/margin  $16,652  4.20% $16,663  4.18% $14,981  4.03% $12,259  4.00% $11,643  4.19%
                           
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