INVESTOR RELATIONS

Press Release

National Commerce Corporation Announces Fourth Quarter and Fiscal Year End 2016 Earnings

Company Release - 1/24/2017 6:30 PM ET

BIRMINGHAM, Ala., Jan. 24, 2017 (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq:NCOM) (the “Company” or “NCC”), the parent company of National Bank of Commerce, today reported fourth quarter 2016 net income to common shareholders of $4.9 million, compared to $2.9 million for the fourth quarter of 2015.  Diluted net earnings per share were $0.44 in the fourth quarter of 2016, compared to $0.43 in the third quarter of 2016 and $0.28 in the fourth quarter of 2015.  For the twelve months ended December 31, 2016, NCC earned $17.9 million, or $1.61 in diluted earnings per share, up from $9.6 million, or $1.02 per diluted share, for the year ended December 31, 2015.

“We are pleased to report a good year of growth in the company in 2016, along with expansion in our profitability,” said John H. Holcomb, III, Chairman and Chief Executive Officer of the Company.  “Our fourth quarter return on average assets of 1.05% brought the year’s total to 1.00%, and our diluted earnings per share of $1.61 for the year represents a 58% increase over 2015 levels.  We are also pleased with our asset quality performance, though, as always, we can never consider ourselves satisfied in this very important area of our business.”

“In 2017, we look forward to building on the foundation of 2016 and prior years, and to doing so with our new colleagues from Private Bank of Buckhead, who joined us on January 1,” continued Holcomb.  “Our future success in continuing to create shareowner value is dependent upon our adherence to our core values, with a focus on asset quality and risk management, growth, candor, accountability, and a leadership culture with an appropriate sense of humility.”

Several important measures from the 2016 fourth quarter and full year are as follows:

  • Net Interest Margin (taxable equivalent) of 3.99% for the fourth quarter of 2016 and 4.15% for the year ended December 31, 2016.  The fourth quarter 2016 margin decreased 0.19% compared to 4.18% reported for the third quarter of 2016, and was 0.07% below the 2015 fourth quarter’s 4.06%.  For the year ended December 31, 2016, the margin increased by 0.02%, compared to the year ended December 31, 2015.
  • Return on Average Assets (“ROAA”) of 1.05% for the fourth quarter of 2016, compared to 0.72% for the fourth quarter of 2015.  For the year, ROAA grew to 1.0%, compared to 0.72% in 2015. 
  • Return on Average Equity (“ROAE”) of 8.33% for the fourth quarter of 2016, compared to 5.76% for the fourth quarter of 2015.  For the year, ROAE was 7.89%, compared to 5.55% in 2015.
  • Return on Average Tangible Common Equity of 10.78% for the fourth quarter of 2016 and 10.32% for the year ended December 31, 2016, compared to 7.48% for the fourth quarter of 2015 and 6.96% for the year ended December 31, 2015.
  • Fourth quarter and full year 2016 loan growth (excluding mortgage loans held-for-sale) of $73.1 million and $166.1 million, respectively; non-acquired loans grew $66.5 million during the fourth quarter of 2016 and $205.7 million for the year ended December 31, 2016.  Growth in factored receivables accounted for $13.8 million of the fourth quarter growth and $16.3 million of the full year growth.     
  • Increase in deposits of $167.8 million during the 2016 fourth quarter and $153.3 million for the year ended December 31, 2016.
  • $76.0 million in 2016 fourth quarter mortgage production, compared to $58.9 million for the fourth quarter of 2015.  For the year ended December 31, 2016, mortgage production volume totaled $322.9 million, up 14.6% from the $281.7 million in mortgage production for the year ended December 31, 2015.
  • $187.7 million in 2016 fourth quarter purchased volume in the factoring division, compared to $172.1 million for the fourth quarter of 2015.  Purchase volume of $705.9 million for the full year was down 1.8% compared to the full year of purchase volume of $718.5 million in 2015.
  • Increase in non-acquired non-performing assets to $2.7 million, from $2.4 million at September 30, 2016.
  • Annualized net charge-offs of 0.08% of average loans for the fourth quarter of 2016 and 0.07% for the year ended December 31, 2016.
  • Provision for loan losses of $0.4 million during the fourth quarter of 2016, compared to $0.6 million in the fourth quarter of 2015.  Provision for loan losses for the year ended December 31, 2016 totaled $3.2 million, a $2.1 million increase over $1.1 million for the year ended December 31, 2015.
  • Ending tangible book value per share of $16.82.
  • Ending book value per share of $21.68.

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on January 25, 2017 to discuss earnings and operating results for the 2016 fourth quarter and full year. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 48550731).  A replay of the conference call will be available until January 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 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.

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 our 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, 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 
   December 31, September 30, June 30, March 31, December 31,  
    2016  2016  2016  2016  2015  
Earnings Summary             
Interest income  $  19,032 $  18,836 $  18,382 $  18,313 $  16,488  
Interest expense     2,042    1,959    1,730    1,650    1,507  
Net interest income     16,990    16,877    16,652    16,663    14,981  
Provision for loan losses      441    373    901    1,533    631  
Other noninterest income (1)     3,472    4,002    3,357    3,125    2,136  
Merger/conversion-related expenses      169    160    12    138    395  
Other noninterest expense (2)     11,971    12,472    12,242    11,915    11,049  
Income before income taxes     7,881    7,874    6,854    6,202    5,042  
Income tax expense      2,600    2,639    2,072    2,083    1,667  
Net income before minority interest      5,281    5,235    4,782    4,119    3,375  
Net income attributable to minority interest      374    422    428    340    437  
Net income to common shareholders  $  4,907 $  4,813 $  4,354 $  3,779 $  2,938  
              
Weighted average common and diluted shares outstanding            
     Basic     10,930,309    10,890,860    10,866,788    10,855,871    10,345,146  
  Diluted     11,171,583    11,115,134    11,067,972    11,039,208    10,552,871  
              
Net earnings per common share             
  Basic  $  0.45 $  0.44 $  0.40 $  0.35 $  0.28  
  Diluted  $  0.44 $  0.43 $  0.39 $  0.34 $  0.28  
              
   December 31, September 30, June 30, March 31, December 31,  
Selected Performance Ratios   2016  2016  2016  2016  2015  
Return on average assets (ROAA) (3)     1.05%   1.08%   1.00%   0.86%   0.72% 
Return on average equity (ROAE)     8.33    8.36    7.84    6.95    5.76  
Return on average tangible common equity             
  (ROATCE)     10.78    10.90    10.31    9.21    7.48  
Net interest margin - taxable equivalent     3.99    4.18    4.23    4.21    4.06  
Efficiency ratio     59.33    60.50    61.24    60.91    66.86  
Operating efficiency ratio (2)     58.50    59.73    61.18    60.21    64.55  
Noninterest income / average assets (annualized)     0.74    0.90    0.77    0.71    0.52  
Noninterest expense / average assets (annualized)     2.60    2.85    2.83    2.76    2.80  
Yield on loans     4.95    5.08    5.06    5.17    5.17  
Cost of total deposits     0.40%   0.40%   0.40%   0.42%   0.40% 
              
   December 31, September 30, June 30, March 31, December 31,  
Factoring Metrics   2016  2016  2016  2016  2015  
Recourse purchased volume  $  82,923 $  71,872 $  68,567 $  66,554 $  74,922  
Non-recourse purchased volume     104,797    100,486    98,550    112,196    97,142  
Total purchased volume  $  187,720 $  172,358 $  167,117 $  178,750 $  172,064  
Average turn (days)     38.35    38.13    39.92    38.16    39.68  
Net charge-offs / total purchased volume     0.12%   0.05%   0.07%   0.27%   0.12% 
Average discount rate     1.67%   1.70%   1.69%   1.72%   1.73% 
              
   December 31, September 30, June 30, March 31, December 31,  
Mortgage Metrics   2016  2016  2016  2016  2015  
Total production ($)  $  76,028 $  91,613 $  91,466 $  63,802 $  58,903  
 Refinance (%)     40.2   30.4   17.2   18.2   26.0% 
 Purchases (%)     59.8   69.6   82.8   81.8   74.0% 
              
   As of 
   December 31, September 30, June 30, March 31, December 31,  
Balance Sheet Highlights   2016  2016  2016  2016  2015  
Cash and cash equivalents  $  217,293 $  122,920 $  86,163 $  123,853 $  212,457  
Total investment securities     99,709    102,848    89,495    82,954    80,863  
Mortgage loans held-for-sale     15,373    7,810    19,468    12,529    15,020  
Acquired purchased credit-impaired loans     9,507    9,500    10,382    10,205    10,443  
Acquired non-purchased credit-impaired loans     315,867    323,125    346,685    356,305    370,872  
Nonacquired loans held for investment (4)     1,076,209    1,009,677    978,836    942,781    870,471  
CBI loans (factoring receivables)      83,901    70,066    70,673    74,248    67,628  
Total gross loans held for investment     1,485,484    1,412,368    1,406,576    1,383,539    1,319,414  
Allowance for loan losses     12,113    11,950    11,642    10,927    9,842  
Total intangibles      52,768    52,962    53,154    53,312    53,474  
Total assets     1,951,658    1,779,278    1,735,782    1,735,940    1,763,369  
Total deposits     1,667,710    1,499,879    1,460,877    1,498,197    1,514,458  
FHLB and other borrowings     7,000    7,000    7,000    7,000    22,000  
Subordinated debt     24,500    24,487    24,540    -    -  
Total liabilities      1,714,614    1,547,105    1,509,662    1,514,840    1,546,733  
Minority interest      7,309    7,357    7,362    7,275    7,372  
Common stock     109    109    109    109    108  
Total shareholders' equity     237,044    232,173    226,120    221,100    216,636  
Tangible common equity  $  183,901 $  178,788 $  172,538 $  167,447 $  162,724  
End of period common shares outstanding     10,934,541    10,920,423    10,870,033    10,861,487    10,824,969  
              
   As of and For the Three Months Ended 
   December 31, September 30, June 30, March 31, December 31,  
Asset Quality Analysis   2016  2016  2016  2016  2015  
Nonacquired              
Nonaccrual loans  $  69 $  19 $  248 $  184 $  187  
Other real estate and repossessed assets     2,068    2,068    2,068    2,792    3,873  
Loans past due 90 days or more and still accruing     581    358    406    452    252  
Total nonacquired nonperforming assets   $  2,718 $  2,445 $  2,722 $  3,428 $  4,312  
              
Acquired             
Nonaccrual loans  $  2,768 $  2,982 $  3,099 $  3,617 $  3,508  
Other real estate and repossessed assets     -    92    92    92    92  
Loans past due 90 days or more and still accruing     -    -    -    -    -  
Total acquired nonperforming assets   $  2,768 $  3,074 $  3,191 $  3,709 $  3,600  
              
Selected asset quality ratios             
Nonperforming assets / Assets     0.28%   0.31%   0.34%   0.41%   0.45% 
Nonperforming assets / (Loans + OREO + repossessed assets)    0.37    0.39    0.42    0.51    0.60  
Net charge-offs (recoveries) to average loans (annualized)    0.08    0.02    0.05    0.13    0.06  
Allowance for loan losses to total loans     0.82    0.85    0.83    0.79    0.75  
Nonacquired nonperforming assets / (Nonacquired loans +            
  nonacquired OREO + nonacquired repossessed assets) (4)    0.25    0.24    0.28    0.36    0.49  
Allowance for loan losses to nonacquired nonperforming             
  loans     1,863.54    3,169.76    1,780.12    1,718.08    2,241.91  
Allowance for loan losses to nonacquired loans (4)     1.08%   1.13%   1.14%   1.11%   1.07% 
              
   For the Three Months Ended 
   December 31, September 30, June 30, March 31, December 31,  
Taxable Equivalent Yields/Rates   2016  2016  2016  2016  2015  
Interest income:             
  Loans     4.95%   5.08%   5.06%   5.17%   5.17% 
  Mortgage loans held-for-sale     2.99    4.12    3.51    4.40    3.44  
  Interest on securities:             
  Taxable     2.52    2.55    1.95    2.68    3.05  
  Non-taxable     4.90    4.85    4.93    4.90    4.96  
Cash balances in other banks     0.63    0.60    0.65    0.58    0.35  
Total interest-earning assets     4.47    4.66    4.67    4.63    4.46  
              
Interest expense:             
  Interest on deposits     0.55    0.54    0.54    0.56    0.54  
  Interest on FHLB and other borrowings     4.04    4.04    4.08    2.97    2.01  
  Interest on subordinated debt     6.30    6.32    6.34    -    -  
  Total interest-bearing liabilities     0.69    0.68    0.62    0.58    0.57  
  Net interest spread     3.78    3.98    4.05    4.05    3.89  
  Net interest margin     3.99%   4.18%   4.23%   4.21%   4.06% 
              
   As of 
   December 31, September 30, June 30, March 31, December 31,  
    2016  2016  2016  2016  2015  
Shareholders' Equity and Capital Ratios             
Tier 1 Leverage Ratio     9.57%   9.74%   9.51%   9.13%   9.68% 
Tier 1 Common Capital Ratio     11.46    11.64    11.25    11.18    11.18  
Tier 1 Risk-based Capital Ratio     11.46    11.64    11.25    11.18    11.18  
Total Risk-based Capital Ratio     13.89    14.19    13.79    11.97    11.91  
Equity / Assets     12.15    13.05    13.03    12.74    12.29  
Tangible common equity to tangible assets     9.68%   10.36%   10.25%   9.95%   9.52% 
Book value per share  $  21.68 $  21.26 $  20.80 $  20.36 $  20.01  
Tangible book value per share  $  16.82 $  16.37 $  15.87 $  15.42 $  15.03  
              
   For the Three Months Ended 
   December 31, September 30, June 30, March 31, December 31,  
    2016  2016  2016  2016  2015  
Detail of other noninterest expense             
Salaries and employee benefits  $  6,935 $  6,948 $  6,907 $  6,945 $  6,077  
Commission-based compensation     1,076    1,104    1,036    875    844  
Occupancy and equipment expense     1,193    1,181    1,131    1,135    1,048  
Data processing expenses     568    572    618    667    511  
Advertising and marketing expenses     156    198    191    160    19  
Legal fees     163    182    179    122    173  
FDIC insurance assessments     234    246    257    263    242  
Property and casualty insurance premiums     95    90    166    223    169  
Accounting and audit expenses     211    252    249    250    332  
Consulting and other professional expenses     201    330    184    243    387  
Telecommunications expenses     114    146    140    159    132  
ORE, Repo asset and other collection expenses     41    142    89    59    256  
Core deposit intangible amortization     182    191    192    191    175  
Other noninterest expense     971    1,050    915    761    1,079  
  Total noninterest expense  $  12,140 $  12,632 $  12,254 $  12,053 $  11,444  
                   
   As of
 
   December 31,
 September 30,
 June 30,
 March 31,
 December 31,
  
Non-GAAP Reconciliation   2016  2016  2016  2016  2015  
Total shareholders' equity  $  237,044 $  232,173 $  226,120 $  221,100 $  216,636  
Less: intangible assets     52,768    52,962    53,154    53,312    53,474  
Less: minority interest not included in intangible assets     375    423    428    341    438  
Tangible common equity  $  183,901 $  178,788 $  172,538 $  167,447 $  162,724  
Common shares outstanding at year or period end      10,934,541    10,920,423    10,870,033    10,861,487    10,824,969  
Tangible book value per share  $  16.82 $  16.37 $  15.87 $  15.42 $  15.03  
Total assets at end of period  $  1,951,658 $  1,779,278 $  1,735,782 $  1,735,940 $  1,763,369  
Less: intangible assets     52,768    52,962    53,154    53,312    53,474  
Adjusted total assets at end of period  $  1,898,890 $  1,726,316 $  1,682,628 $  1,682,628 $  1,709,895  
Tangible common equity to tangible assets     9.68%   10.36%   10.25%   9.95%   9.52% 
Total allowance for loan losses  $  12,113 $  11,950 $  11,642 $  10,927 $  9,842  
Less: allowance for loan losses attributable to                   
  CBI (factoring receivables)     500    500    500    500    500  
Adjusted allowance for loan losses at end of period  $  11,613 $  11,450 $  11,142 $  10,427 $  9,342  
Nonacquired loans held for investment (4)     1,076,209    1,009,677    978,836    942,781    870,471  
Allowance for loan losses to nonacquired loans (4)     1.08%   1.13%   1.14%   1.11%   1.07% 
                   
   For the Three Months Ended
 
   December 31,
 September 30,
 June 30,
 March 31,
 December 31,
  
    2016  2016  2016  2016  2015  
Non-GAAP Reconciliation                  
Total average shareholders' equity  $  234,249 $  228,953 $  223,357 $  218,730 $  202,299  
Less: average intangible assets     52,871    53,056    53,234    53,388    46,113  
Less: average minority interest not included                   
  in intangible assets     262    282    284    231    331  
Average tangible common equity  $  181,116 $  175,615 $  169,839 $  165,111 $  155,855  
Net income to common shareholders     4,907    4,813    4,354    3,779    2,938  
Return on average tangible common equity (ROATCE)     10.78%   10.90%   10.31%   9.21%   7.48% 
Efficiency ratio:                  
Net interest income  $  16,990 $  16,877 $  16,652 $  16,663 $  14,981  
Total noninterest income     3,472    4,002    3,357    3,125    2,136  
Less:  gain (loss) on sale of securities      -    -    -    -    -  
Operating revenue  $  20,462 $  20,879 $  20,009 $  19,788 $  17,117  
Expenses:                  
Total noninterest expenses  $  12,140 $  12,632 $  12,254 $  12,053 $  11,444  
Efficiency ratio     59.33%   60.50%   61.24%   60.91%   66.86% 
Operating efficiency ratio:                  
Net interest income  $  16,990 $  16,877 $  16,652 $  16,663 $  14,981  
Total noninterest income     3,472    4,002    3,357    3,125    2,136  
Less: gain (loss) on sale of securities      -    -    -    -    -  
Operating revenue  $  20,462 $  20,879 $  20,009 $  19,788 $  17,117  
Expenses:                  
Total noninterest expenses  $  12,140 $  12,632 $  12,254 $  12,053 $  11,444  
Less: merger/conversion-related expenses     169    160    12    138    395  
Adjusted noninterest expenses  $  11,971 $  12,472 $  12,242 $  11,915 $  11,049  
Operating efficiency ratio     58.50%   59.73%   61.18%   60.21%   64.55% 
                   
(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
 December 31, 2016
 December 31, 2015
Cash and due from banks $  35,897 $  27,173
Interest-bearing deposits with banks    181,396    185,284
  Cash and cash equivalents    217,293    212,457
Investment securities held-to-maturity (fair value of $25,894 and $27,843 at December 31, 2016      
  and December 31, 2015, respectively)    26,329    27,458
Investment securities available-for-sale    73,380    53,405
Other investments    7,879    6,235
Mortgage loans held-for-sale    15,373    15,020
Loans, net of unearned income    1,485,484    1,319,414
Less: allowance for loan losses    12,113    9,842
  Loans, net    1,473,371    1,309,572
Premises and equipment, net    31,884    31,432
Accrued interest receivable    4,129    3,510
Bank-owned life insurance    28,034    27,223
Other real estate    2,068    3,965
Goodwill    50,736    50,686
Core deposit intangible, net    2,032    2,788
Other assets    19,150    19,618
  Total assets $  1,951,658 $  1,763,369
      
Liabilities and Shareholders’ Equity
 Deposits:      
  Noninterest-bearing demand $  429,030 $  382,946
  Interest-bearing demand    262,261    202,649
  Savings and money market    703,289    611,887
  Time    273,130    316,976
  Total deposits    1,667,710    1,514,458
 Federal Home Loan Bank advances    7,000    22,000
 Subordinated debt    24,500    -
 Accrued interest payable    829    627
 Other liabilities    14,575    9,648
  Total liabilities    1,714,614    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, 10,934,541 and 10,824,969      
  shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively    109    108
  Additional paid-in capital    205,372    202,456
  Retained earnings    24,005    6,152
  Accumulated other comprehensive income    249    548
  Total shareholders' equity attributable to National Commerce Corporation    229,735    209,264
  Noncontrolling interest    7,309    7,372
  Total shareholders' equity    237,044    216,636
  Total liabilities and shareholders' equity $  1,951,658 $  1,763,369

 

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except per share data)
      
 For the Three Months Ended For the Twelve Months Ended
 December 31, December 31,
  2016  2015  2016  2015 
Interest and dividend income:     
  Interest and fees on loans$  18,082 $  15,777 $  71,225 $  52,720 
  Interest and dividends on taxable investment securities   525    370    1,813    1,154 
  Interest on non-taxable investment securities   201    173    802    466 
  Interest on interest-bearing deposits and federal funds sold   224    168    723    505 
  Total interest income   19,032    16,488    74,563    54,845 
Interest expense:            
  Interest on deposits   1,583    1,395    6,127    4,354 
  Interest on borrowings   71    112    294    442 
  Interest on subordinated debt   388    -    960    - 
  Total interest expense   2,042    1,507    7,381    4,796 
  Net interest income   16,990    14,981    67,182    50,049 
Provision for loan losses   441    631    3,248    1,113 
  Net interest income after provision for loan losses   16,549    14,350    63,934    48,936 
Other income:            
  Service charges and fees on deposit accounts   523    402    2,019    1,288 
  Mortgage origination and fee income   1,711    1,063    6,975    5,278 
  Merchant sponsorship revenue   613    365    2,168    861 
  Income from bank-owned life insurance   196    182    810    433 
  Wealth management fees   10    10    49    53 
  Gain (loss) on other real estate   (31)   -    244    (24)
  Other   450    114    1,691    570 
  Total other income   3,472    2,136    13,956    8,459 
Other expense:            
  Salaries and employee benefits   6,935    6,077    27,735    21,364 
  Commission-based compensation   1,076    844    4,091    3,744 
  Occupancy and equipment   1,193    1,048    4,640    3,584 
  Core deposit intangible amortization   182    175    756    508 
  Other operating expense   2,754    3,300    11,857    11,045 
  Total other expense   12,140    11,444    49,079    40,245 
  Earnings before income taxes   7,881    5,042    28,811    17,150 
Income tax expense   2,600    1,667    9,394    5,476 
  Net earnings    5,281    3,375    19,417    11,674 
  Less: Net earnings attributable to noncontrolling interest   374    437    1,564    2,069 
  Net earnings attributable to National Commerce Corporation$  4,907 $  2,938 $  17,853 $  9,605 
             
Weighted average common and diluted shares outstanding            
  Basic   10,930,309    10,345,146    10,886,092    9,238,784 
  Diluted   11,171,583    10,552,871    11,093,987    9,395,741 
      
Basic earnings per common share$  0.45 $  0.28 $  1.64 $  1.04 
Diluted earnings per common share$  0.44 $  0.28 $  1.61 $  1.02 

 

NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
 
                
 For the Three Months Ended
(Dollars in thousands)December 31, 2016September 30, 2016June 30, 2016March 31, 2016December 31, 2015
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$  1,446,629$  18,0124.95%$  1,399,016$  17,8535.08%$  1,391,789$  17,5235.06%$  1,352,737$  17,3735.17%$  1,204,437$  15,6995.17%
Mortgage loans held-for-sale   10,366   78 2.99     13,986   145 4.12     17,288   151 3.51     10,503   115 4.40     9,697   84 3.44  
Securities:               
Taxable securities   82,881   525 2.52     76,787   493 2.55     78,907   383 1.95     61,764   412 2.68     48,097   370 3.05  
Tax-exempt securities   25,910   319 4.90     26,029   317 4.85     26,036   319 4.93     26,041   317 4.90     21,982   275 4.96  
Cash balances in other banks   140,813   224 0.63     101,422   152 0.60     80,140   129 0.65     151,318   218 0.58     191,077   168 0.35  
Total interest-earning assets   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     1,475,290$16,596 4.46  
Noninterest-earning assets 149,709   148,275    148,959   156,260   145,791  
Total assets$ 1,856,308  $ 1,765,515  $ 1,743,119  $ 1,758,623  $ 1,621,081  
                
Interest-bearing liabilities 
              
Interest-bearing transaction accounts$  235,340$  1490.25%$  214,439$  1250.23%$  210,776$  1240.24%$  204,339$  1230.24%$  196,140$  1290.26%
Savings and money market deposits   633,765   791 0.50     612,618   713 0.46     603,173   698 0.47     620,429   762 0.49     542,631   612 0.45  
Time deposits   273,293   643 0.94     283,022   661 0.93     288,350   654 0.91     306,106   684 0.90     291,399   654 0.89  
Federal Home Loan Bank and other borrowed money   7,000   71 4.04     7,000   71 4.04     7,000   71 4.08     10,959   81 2.97     22,104   112 2.01  
Subordinated debt   24,494   388 6.30     24,498   389 6.32     11,605   183 6.34     -   -  -    -   -  - 
Total interest-bearing liabilities   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     1,052,274$1,507 0.57  
Noninterest-bearing deposits   431,253     381,205     388,363     386,674     354,812  
Total funding sources 1,605,145   1,522,782   1,509,267   1,528,507   1,407,086  
Noninterest-bearing liabilities   16,914     13,780     10,495     11,386     11,696  
Shareholders' equity   234,249     228,953     223,357     218,730     202,299  
 $1,856,308  $1,765,515  $1,743,119  $1,758,623  $1,621,081  
Net interest rate spread  3.78%  3.98%  4.05%  4.05%  3.89%
Net interest income/margin (taxable equivalent)    17,1163.99%    17,0014.18%    16,7754.23%    16,7854.21%    15,0894.06%
Tax equivalent adjustment    126     124     123     122     108 
Net interest income/margin $  16,9903.96% $  16,8774.15% $  16,6524.20% $  16,6634.18% $  14,9814.03%
                


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