INVESTOR RELATIONS

Press Release

National Commerce Corporation Announces Second Quarter 2017 Earnings

Company Release - 7/25/2017 6:30 PM ET

BIRMINGHAM, Ala., July 25, 2017 (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq:NCOM) (“NCC” or the “Company”), the parent company of National Bank of Commerce (“NBC”), today reported second quarter 2017 net income to common shareholders of $6.4 million, compared to $4.4 million for the second quarter of 2016.  Diluted net earnings per share were $0.48 in the second quarter of 2017, compared to $0.45 in the first quarter of 2017 and $0.39 in the second quarter of 2016.

During the second quarter of 2017, the Company successfully completed an underwritten public offering of 1,104,000 shares of its common stock at a price of $37.00 per share and announced the execution of a definitive agreement to acquire Patriot Bank, headquartered in Trinity, Florida.  “We are pleased to report these second quarter results, which reflect the hard work by our team during the quarter,” said President and Chief Executive Officer Richard Murray, IV.  “We also know that the year is only half complete, so we need to stay focused on our work to grow the business while maintaining an emphasis on asset quality.”

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

  • Net Interest Margin (taxable equivalent) of 4.34% for the second quarter of 2017, compared to 4.18% for the first quarter of 2017 and 4.23% for the second quarter of 2016.  The second quarter 2017 margin increased 0.16% compared to the 2017 first quarter due primarily to an increased yield on loans during the second quarter of 2017 compared to the 2017 first quarter.

  • Return on Average Assets of 1.06% for the second quarter of 2017, compared to 1.00% for the second quarter of 2016. 

  • Return on Average Tangible Common Equity of 11.49% for the second quarter of 2017, compared to 10.31% for the second quarter of 2016.

  • Second quarter 2017 loan growth (excluding mortgage loans held-for-sale) of $63.9 million. Excluding factored receivables in the Company’s factoring subsidiary, Corporate Billing, LLC, second quarter 2017 loan growth was approximately $48.8 million.

  • Deposits decreased $75.8 million during the 2017 second quarter, primarily due to a decline in a few large deposit relationships and the maturity of a $25.0 million certificate of deposit.

  • $133.1 million in 2017 second quarter mortgage production, compared to $130.9 million for the first quarter of 2017 and $91.5 million during the 2016 second quarter.  The first and second quarter of 2017 production includes mortgages closed by the mortgage division that the Company acquired in the Private Bancshares, Inc. transaction.

  • $251.0 million in 2017 second quarter purchased volume in the factoring division, compared to $253.6 million for the first quarter of 2017 and $167.1 million during the second quarter of 2016.

  • A decrease in non-acquired non-performing assets to $1.2 million at June 30, 2017, from $2.5 million at March 31, 2017.

  • Annualized net charge-offs of 0.07% of average loans for the second quarter of 2017, compared to net charge-offs of 0.05% for the second quarter of 2016.

  • Provision for loan losses of $1.2 million during the second quarter of 2017, compared to $156 thousand in the 2017 first quarter and $901 thousand in the second quarter of 2016.  The increase during the 2017 second quarter was attributable in part to net charge-offs during the 2017 second quarter and loan growth.

  • Ending tangible book value per share of $18.45.

  • Ending book value per share of $25.82.

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on July 26, 2017 to discuss earnings and operating results for the 2017 second quarter. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 55354529).  A replay of the conference call will be available until July 28, 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 the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, the Company acknowledges that the non-GAAP financial measures have a number of limitations.  As such, the Company 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.

Additional Information about the Proposed Merger with Patriot Bank and Where to Find It

NCC has filed with the SEC a proxy statement-prospectus included within a Registration Statement on Form S-4 (File No. 333-218826) in connection with the previously announced proposed merger of Patriot Bank, a Florida banking corporation, with and into NBC. Investors and security holders of Patriot Bank are urged to carefully read the important information contained in the proxy statement-prospectus regarding the proposed transaction. Copies of the proxy statement-prospectus and other relevant documents are available free of charge at the SEC’s website at www.sec.gov, and on NCC’s website at www.nationalbankofcommerce.com under the “Investor Relations” tab. The materials may also be obtained by writing to NCC at: National Commerce Corporation, c/o Investor Relations, 813 Shades Creek Parkway, Suite 100, Birmingham, Alabama 35209, or by calling (205) 313-8100.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Patriot Bank, NCC, NBC and their respective directors, executive officers, employees and agents may be deemed to be participants in the solicitation of proxies from Patriot Bank’s shareholders with respect to the proposed merger. Additional information regarding the interests of such potential participants is included in the proxy statement-prospectus and other relevant documents filed with the SEC.

 
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
  June 30, March 31, December 31, September 30, June 30, 
   2017  2017   2016  2016  2016 
Earnings Summary           
Interest income $26,466 $24,899  $19,032 $18,836 $18,382 
Interest expense  2,513  2,469   2,042  1,959  1,730 
Net interest income  23,953  22,430   16,990  16,877  16,652 
Provision for loan losses  1,155  156   441  373  901 
Gain on sale of securities  28  -   -  -  - 
Other noninterest income (1)  5,072  5,440   3,472  4,002  3,357 
Merger/conversion-related expenses  344  387   169  160  12 
Other noninterest expense (2)  17,393  18,074   11,971  12,472  12,242 
Income before income taxes  10,161  9,253   7,881  7,874  6,854 
Income tax expense  3,281  2,841   2,600  2,639  2,072 
Net income before minority interest  6,880  6,412   5,281  5,235  4,782 
Net income attributable to minority interest  431  493   374  422  428 
Net income to common shareholders $6,449 $5,919  $4,907 $4,813 $4,354 
            
Weighted average common and diluted shares outstanding          
Basic  13,190,582  12,901,040   10,930,309  10,890,860  10,866,788 
Diluted  13,551,745  13,283,075   11,173,733  11,115,134  11,067,972 
            
Net earnings per common share           
Basic $0.49 $0.46  $0.45 $0.44 $0.40 
Diluted $0.48 $0.45  $0.44 $0.43 $0.39 
            
  June 30, March 31, December 31, September 30, June 30, 
Selected Performance Ratios  2017  2017   2016  2016  2016 
Return on average assets (ROAA) (3)  1.06% 1.00 % 1.05% 1.08% 1.00%
Return on average equity (ROAE)  7.86  7.67   8.33  8.36  7.84 
Return on average tangible common equity           
(ROATCE)  11.49  11.45   10.78  10.90  10.31 
Net interest margin - taxable equivalent  4.34  4.18   3.99  4.18  4.23 
Efficiency ratio  61.11  66.24   59.33  60.50  61.24 
Operating efficiency ratio (2)  59.92  64.85   58.50  59.73  61.18 
Noninterest income / average assets (annualized)  0.83  0.92   0.74  0.90  0.77 
Noninterest expense / average assets (annualized)  2.91  3.11   2.60  2.85  2.83 
Yield on loans  5.38  5.29   4.95  5.08  5.06 
Cost of total deposits  0.40% 0.40 % 0.40% 0.40% 0.40%
            
  June 30, March 31, December 31, September 30, June 30, 
Factoring Metrics  2017  2017   2016  2016  2016 
Recourse purchased volume $101,295 $127,882  $82,923 $71,872 $68,567 
Non-recourse purchased volume  149,740  125,751   104,797  100,486  98,550 
Total purchased volume $251,035 $253,633  $187,720 $172,358 $167,117 
Average turn (days)  38.47  35.61   38.35  38.13  39.92 
Net charge-offs / total purchased volume  0.12% 0.03 % 0.12% 0.05% 0.07%
Average discount rate  1.52% 1.44 % 1.67% 1.70% 1.69%
                  
   June 30,   March 31,    December 31,   September 30,   June 30,  
Mortgage Metrics  2017  2017   2016  2016  2016 
Total production ($) $133,063 $130,875  $76,028 $91,613 $91,466 
Refinance (%)  24.0% 27.4 % 40.2% 30.4% 17.2%
Purchases (%)  76.0% 72.6 % 59.8% 69.6% 82.8%
                  
  As of
  June 30, March 31, December 31, September 30, June 30, 
Balance Sheet Highlights  2017  2017   2016  2016  2016 
Cash and cash equivalents $224,760 $318,730  $217,293 $122,920 $86,163 
Total investment securities  101,569  98,390   99,709  102,848  89,495 
Mortgage loans held-for-sale  19,482  19,517   15,373  7,810  19,468 
Acquired purchased credit-impaired loans  21,065  22,465   11,975  11,995  12,900 
Acquired non-purchased credit-impaired loans  490,198  539,056   313,399  320,630  344,167 
Nonacquired loans held for investment (4)  1,252,970  1,153,897   1,076,209  1,009,677  978,836 
CBI loans (factoring receivables)  114,361  99,317   83,901  70,066  70,673 
Total gross loans held for investment  1,878,594  1,814,735   1,485,484  1,412,368  1,406,576 
Allowance for loan losses  13,407  12,565   12,113  11,950  11,642 
Total intangibles  103,270  103,519   52,803  52,962  53,154 
Total assets  2,418,052  2,445,149   1,950,784  1,779,278  1,735,782 
Total deposits  2,004,528  2,080,307   1,667,710  1,499,879  1,460,877 
FHLB and other borrowings  7,000  7,000   7,000  7,000  7,000 
Subordinated debt  24,527  24,513   24,500  24,487  24,540 
Total liabilities  2,054,792  2,127,727   1,713,740  1,547,105  1,509,662 
Minority interest  7,366  7,427   7,309  7,357  7,362 
Common stock  141  129   109  109  109 
Total shareholders' equity  363,260  317,422   237,044  232,173  226,120 
Tangible common equity $259,558 $213,410  $183,866 $178,788 $172,538 
End of period common shares outstanding  14,070,528  12,948,778   10,934,541  10,920,423  10,870,033 
            
  As of and For the Three Months Ended
  June 30, March 31, December 31, September 30, June 30, 
Asset Quality Analysis  2017  2017   2016  2016  2016 
Nonacquired            
Nonaccrual loans $50 $68  $69 $19 $248 
Other real estate and repossessed assets  -  1,849   2,068  2,068  2,068 
Loans past due 90 days or more and still accruing  1,172  538   581  358  406 
Total nonacquired nonperforming assets $1,222 $2,455  $2,718 $2,445 $2,722 
            
Acquired           
Nonaccrual loans $2,827 $2,949  $2,768 $2,982 $3,099 
Other real estate and repossessed assets  -  -   -  92  92 
Loans past due 90 days or more and still accruing  -  -   -  -  - 
Total acquired nonperforming assets $2,827 $2,949  $2,768 $3,074 $3,191 
            
Selected asset quality ratios           
Nonperforming assets / Assets  0.17% 0.22 % 0.28% 0.31% 0.34%
Nonperforming assets / (Loans + OREO + repossessed assets) 0.22  0.30   0.37  0.39  0.42 
Net charge-offs (recoveries) to average loans (annualized) 0.07  (0.07)  0.08  0.02  0.05 
Allowance for loan losses to total loans  0.71  0.69   0.82  0.85  0.83 
Nonacquired nonperforming assets / (Nonacquired loans +          
nonacquired OREO + nonacquired repossessed assets) (4) 0.10  0.21   0.25  0.24  0.28 
Allowance for loan losses to nonacquired nonperforming           
loans  1,097.14  2,073.43   1,863.54  3,169.76  1,780.12 
Allowance for loan losses to nonacquired loans (4)  1.03% 1.05 % 1.08% 1.13% 1.14%
            
  For the Three Months Ended
  June 30, March 31, December 31, September 30, June 30, 
Taxable Equivalent Yields/Rates  2017  2017   2016  2016  2016 
Interest income:           
Loans  5.38% 5.29 % 4.95% 5.08% 5.06%
Mortgage loans held-for-sale  3.72  4.13   2.99  4.12  3.51 
Interest on securities:           
Taxable  2.98  2.63   2.52  2.55  1.95 
Non-taxable  4.91  4.98   4.90  4.85  4.93 
Cash balances in other banks  1.09  0.84   0.63  0.60  0.65 
Total interest-earning assets  4.79  4.64   4.47  4.66  4.67 
            
Interest expense:           
Interest on deposits  0.57  0.56   0.55  0.54  0.54 
Interest on FHLB and other borrowings  4.01  3.19   4.04  4.04  4.08 
Interest on subordinated debt  6.36  6.42   6.30  6.32  6.34 
Total interest-bearing liabilities  0.68  0.68   0.69  0.68  0.62 
Net interest spread  4.11  3.96   3.78  3.98  4.05 
Net interest margin  4.34% 4.18 % 3.99% 4.18% 4.23%
            
  As of
  June 30, March 31, December 31, September 30, June 30, 
   2017  2017   2016  2016  2016 
Shareholders' Equity and Capital Ratios           
Tier 1 Leverage Ratio  10.69% 8.86 % 9.57% 9.74% 9.51%
Tier 1 Common Capital Ratio  13.17  11.06   11.46  11.64  11.25 
Tier 1 Risk-based Capital Ratio  13.17  11.06   11.46  11.64  11.25 
Total Risk-based Capital Ratio  15.18  13.07   13.90  14.19  13.79 
Equity / Assets  15.02  12.98   12.15  13.05  13.03 
Tangible common equity to tangible assets  11.21% 9.11 % 9.69% 10.36% 10.25%
Book value per share $25.82 $24.51  $21.68 $21.26 $20.80 
Tangible book value per share $18.45 $16.48  $16.82 $16.37 $15.87 
            
  For the Three Months Ended
  June 30, March 31, December 31, September 30, June 30, 
   2017  2017   2016  2016  2016 
Detail of other noninterest expense           
Salaries and employee benefits $9,663 $10,073  $6,935 $6,948 $6,907 
Commission-based compensation  1,684  1,723   1,076  1,104  1,036 
Occupancy and equipment expense  1,479  1,473   1,193  1,181  1,131 
Data processing expenses  1,007  948   568  572  618 
Advertising and marketing expenses  327  468   156  198  191 
Legal fees  193  233   163  182  179 
FDIC insurance assessments  408  258   234  246  257 
Property and casualty insurance premiums  209  143   95  90  166 
Accounting and audit expenses  294  318   211  252  249 
Consulting and other professional expenses  517  497   201  330  184 
Telecommunications expenses  169  186   114  146  140 
ORE, Repo asset and other collection expenses  49  272   41  142  89 
Core deposit intangible amortization  348  348   182  191  192 
Other noninterest expense  1,390  1,521   971  1,050  915 
Total noninterest expense $17,737 $18,461  $12,140 $12,632 $12,254 
                  
  As of
  June 30, March 31, December 31, September 30, June 30, 
Non-GAAP Reconciliation  2017  2017   2016  2016  2016 
Total shareholders' equity $363,260 $317,422  $237,044 $232,173 $226,120 
Less: intangible assets  103,270  103,519   52,803  52,962  53,154 
Less: minority interest not included in intangible assets  432  493   375  423  428 
Tangible common equity $259,558 $213,410  $183,866 $178,788 $172,538 
Common shares outstanding at year or period end  14,070,528  12,948,778   10,934,541  10,920,423  10,870,033 
Tangible book value per share $18.45 $16.48  $16.82 $16.37 $15.87 
Total assets at end of period $2,418,052 $2,445,149  $1,950,784 $1,779,278 $1,735,782 
Less: intangible assets  103,270  103,519   52,803  52,962  53,154 
Adjusted total assets at end of period $2,314,782 $2,341,630  $1,897,981 $1,726,316 $1,682,628 
Tangible common equity to tangible assets  11.21% 9.11 % 9.69% 10.36% 10.25%
Total allowance for loan losses $13,407 $12,565  $12,113 $11,950 $11,642 
Less: allowance for loan losses attributable to           
CBI (factoring receivables)  500  500   500  500  500 
Adjusted allowance for loan losses at end of period $12,907 $12,065  $11,613 $11,450 $11,142 
Nonacquired loans held for investment (4)  1,252,970  1,153,897   1,076,209  1,009,677  978,836 
Allowance for loan losses to nonacquired loans (4)  1.03% 1.05 % 1.08% 1.13% 1.14%
                  
  For the Three Months Ended
  June 30, March 31, December 31, September 30, June 30, 
   2017  2017   2016  2016  2016 
Non-GAAP Reconciliation           
Total average shareholders' equity $328,886 $312,971  $234,249 $228,953 $223,357 
Less: average intangible assets  103,403  103,004   52,872  53,056  53,234 
Less: average minority interest not included           
in intangible assets  318  295   262  282  284 
Average tangible common equity $225,165 $209,672  $181,115 $175,615 $169,839 
Net income to common shareholders  6,449  5,919   4,907  4,813  4,354 
Return on average tangible common equity (ROATCE)  11.49% 11.45 % 10.78% 10.90% 10.31%
Efficiency ratio:                 
Net interest income $23,953 $22,430  $16,990 $16,877 $16,652 
Total noninterest income  5,100  5,440   3,472  4,002  3,357 
Less:  gain (loss) on sale of securities  28  -   -  -  - 
Operating revenue $29,025 $27,870  $20,462 $20,879 $20,009 
Expenses:                 
Total noninterest expenses $17,737 $18,461  $12,140 $12,632 $12,254 
Efficiency ratio  61.11% 66.24 % 59.33% 60.50% 61.24%
Operating efficiency ratio:           
Net interest income $23,953 $22,430  $16,990 $16,877 $16,652 
Total noninterest income  5,100  5,440   3,472  4,002  3,357 
Less:  gain (loss) on sale of securities  28  -   -  -  - 
Operating revenue $29,025 $27,870  $20,462 $20,879 $20,009 
Expenses:           
Total noninterest expenses $17,737 $18,461  $12,140 $12,632 $12,254 
Less: merger/conversion-related expenses  344  387   169  160  12 
Adjusted noninterest expenses $17,393 $18,074  $11,971 $12,472 $12,242 
Operating efficiency ratio  59.92% 64.85 % 58.50% 59.73% 61.18%
                  
(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
 June 30, 2017
 December 31, 2016
Cash and due from banks$27,619 $35,897
Interest-bearing deposits with banks 197,141  181,396
Cash and cash equivalents 224,760  217,293
Investment securities held-to-maturity (fair value of $26,288 and $25,894 at June 30, 2017     
and December 31, 2016, respectively) 26,107  26,329
Investment securities available-for-sale 75,462  73,380
Other investments 10,600  7,879
Mortgage loans held-for-sale 19,482  15,373
Loans, net of unearned income 1,878,594  1,485,484
Less: allowance for loan losses 13,407  12,113
Loans, net 1,865,187  1,473,371
Premises and equipment, net 35,141  31,884
Accrued interest receivable 5,082  4,129
Bank-owned life insurance 31,762  28,034
Other real estate -  2,068
Deferred tax assets, net 14,809  13,486
Goodwill 98,955  50,771
Core deposit intangible, net 4,315  2,032
Other assets 6,390  4,755
Total assets$2,418,052 $1,950,784
      
Liabilities and Shareholders’ Equity
Deposits:     
Noninterest-bearing demand$608,280 $429,030
Interest-bearing demand 322,020  262,261
Savings and money market 810,941  703,289
Time 263,287  273,130
Total deposits 2,004,528  1,667,710
Federal Home Loan Bank advances 7,000  7,000
Subordinated debt 24,527  24,500
Accrued interest payable 709  829
Other liabilities 18,028  13,701
Total liabilities 2,054,792  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, 14,070,528 and 10,934,541     
shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively 141  109
Additional paid-in capital 318,932  205,372
Retained earnings 36,373  24,005
Accumulated other comprehensive income 448  249
Total shareholders' equity attributable to National Commerce Corporation 355,894  229,735
Noncontrolling interest 7,366  7,309
Total shareholders' equity 363,260  237,044
Total liabilities and shareholders' equity$2,418,052 $1,950,784
      

 

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except share and per share data)
      
 For the Three Months Ended For the Six Months Ended
 June 30, June 30,
  2017  2016  2017  2016
Interest and dividend income:           
Interest and fees on loans$24,987 $17,669 $48,580 $35,152
Interest and dividends on taxable investment securities 606  383  1,177  795
Interest on non-taxable investment securities 197  201  397  401
Interest on interest-bearing deposits and federal funds sold 676  129  1,211  347
Total interest income 26,466  18,382  51,365  36,695
Interest expense:           
Interest on deposits 2,054  1,476  4,064  3,045
Interest on borrowings 70  71  141  152
Interest on subordinated debt 389  183  777  183
Total interest expense 2,513  1,730  4,982  3,380
Net interest income 23,953  16,652  46,383  33,315
Provision for loan losses 1,155  901  1,311  2,434
Net interest income after provision for loan losses 22,798  15,751  45,072  30,881
Other income:           
Service charges and fees on deposit accounts 640  505  1,307  985
Mortgage origination and fee income 3,154  1,627  6,299  3,019
Merchant sponsorship revenue 602  491  1,346  1,013
Income from bank-owned life insurance 219  204  435  408
Wealth management fees 14  11  24  24
Gain on other real estate 105  119  104  275
Gain on sale of investment securities available-for-sale 28  -  28  -
Other 338  400  997  758
Total other income 5,100  3,357  10,540  6,482
Other expense:           
Salaries and employee benefits 9,663  6,907  19,736  13,852
Commission-based compensation 1,684  1,036  3,407  1,911
Occupancy and equipment 1,479  1,131  2,952  2,266
Core deposit intangible amortization 348  192  696  383
Other operating expense 4,563  2,988  9,407  5,895
Total other expense 17,737  12,254  36,198  24,307
Earnings before income taxes 10,161  6,854  19,414  13,056
Income tax expense 3,281  2,072  6,122  4,155
Net earnings 6,880  4,782  13,292  8,901
Less: Net earnings attributable to noncontrolling interest 431  428  924  768
Net earnings attributable to National Commerce Corporation$6,449 $4,354 $12,368 $8,133
            
Weighted average common and diluted shares outstanding           
Basic 13,190,582  10,866,788  13,046,611  10,861,330
Diluted 13,551,745  11,067,972  13,422,704  11,059,906
            
Basic earnings per common share$0.49 $0.40 $0.95 $0.75
Diluted earnings per common share$0.48 $0.39 $0.92 $0.74
            

 

NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
 
                
 For the Three Months Ended
(Dollars in thousands)June 30, 2017March 31, 2017December 31, 2016September 30, 2016June 30, 2016
Interest-earning assetsAverage
Balance
Interest
Income/
Expense
Average
Yield/ Rate
Average
Balance
Interest
Income/
Expense
Average
Yield/ Rate
Average
Balance
Interest
Income/
Expense
Average
Yield/ Rate
Average
Balance
Interest
Income/
Expense
Average
Yield/ Rate
Average
Balance
Interest
Income/
Expense
Average
Yield/ Rate
Loans$1,849,258 $24,823 5.38%$1,793,241 $23,377 5.29%$1,446,629 $18,012 4.95%$1,399,016 $17,853 5.08%$1,391,789 $17,523 5.06%
Mortgage loans held-for-sale 18,321  170 3.72  21,809  222 4.13  10,366  78 2.99  13,986  145 4.12  17,288  151 3.51 
Securities:                                        
Taxable securities 81,645  606 2.98  88,062  571 2.63  82,881  525 2.52  76,787  493 2.55  78,907  383 1.95 
Tax-exempt securities 25,573  313 4.91  25,824  317 4.98  25,910  319 4.90  26,029  317 4.85  26,036  319 4.93 
Cash balances in other banks 249,361  676 1.09  258,672  535 0.84  140,813  224 0.63  101,422  152 0.60  80,140  129 0.65 
Total interest-earning assets 2,224,158 $26,588 4.79  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 
Noninterest-earning assets 218,088       220,006       149,709       148,275       148,959      
Total assets$2,442,246      $2,407,614      $1,856,308      $1,765,515      $1,743,119      
                                         
Interest-bearing liabilities                                        
Interest-bearing transaction accounts$341,238 $243 0.29%$332,361 $217 0.26%$235,340 $149 0.25%$214,439 $125 0.23%$210,776 $124 0.24%
Savings and money market deposits 821,130  1,138 0.56  804,537  1,096 0.55  633,765  791 0.50  612,618  713 0.46  603,173  698 0.47 
Time deposits 290,097  673 0.93  306,404  697 0.92  273,293  643 0.94  283,022  661 0.93  288,350  654 0.91 
Federal Home Loan Bank and other borrowed money 7,000  70 4.01  9,016  71 3.19  7,000  71 4.04  7,000  71 4.04  7,000  71 4.08 
Subordinated debt 24,520  389 6.36  24,507  388 6.42  24,494  388 6.30  24,498  389 6.32  11,605  183 6.34 
Total interest-bearing liabilities 1,483,985 $2,513 0.68  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 
Noninterest-bearing deposits 612,910       600,897       431,253       381,205       388,363      
Total funding sources 2,096,895       2,077,722       1,605,145       1,522,782       1,509,267      
Noninterest-bearing liabilities 16,465       16,921       16,914       13,780       10,495      
Shareholders' equity 328,886       312,971       234,249       228,953       223,357      
 $2,442,246      $2,407,614      $1,856,308      $1,765,515      $1,743,119      
Net interest rate spread      4.11%      3.96%      3.78%      3.98%      4.05%
Net interest income/margin (taxable equivalent)    24,075 4.34%    22,553 4.18%    17,116 3.99%    17,001 4.18%    16,775 4.23%
Tax equivalent adjustment    122      123      126      124      123  
Net interest income/margin   $23,953 4.32%   $22,430 4.16%   $16,990 3.96%   $16,877 4.15%   $16,652 4.20%
                                         


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