National Commerce Corporation Announces Third Quarter 2015 Earnings

BIRMINGHAM, Ala., Oct. 21, 2015 (GLOBE NEWSWIRE) — National Commerce Corporation (NASDAQ:NCOM) (the “Company” or “NCC”) today reported third quarter 2015 net income to common shareholders of $2.5 million, compared with $1.5 million for the third quarter of 2014.  Diluted net earnings per share were $0.26 in both the 2015 and 2014 third quarters.

“We are pleased with our progress in the third quarter,” said John H. Holcomb, III, Chairman and CEO of the Company.  “Our team continues to do a great job serving our customers and growing the bank.  As always, we need to maintain our focus on continued profitability and performance.”

Several important measures from the third quarter are as follows:

  • Net Interest Margin (tax-effected) of 4.02%, compared with 3.87% for the third quarter of 2014. The margin declined from the 2015 second quarter by 0.20%, largely due to increased cash and fed funds balances.  During the third quarter of 2015, average cash and fed funds balances increased $54.6 million as compared to second quarter 2015 average balances.
  • Return on Average Assets of 0.75%, compared with 0.73% for the third quarter of 2014.  Return on Average Assets was also impacted by the larger average balances in cash and fed funds during the third quarter of 2015.
  • Return on Average Tangible Common Equity of 6.85%, compared with 6.76% for the third quarter of 2014.
  • Third quarter 2015 loan growth (excluding mortgage loans held for sale) of $44.5 million, representing an 18.2% annualized growth rate.  Excluding factoring receivables, loans grew at a 19.8% annualized growth rate.
  • Third quarter 2015 deposit growth of $90.4 million, representing a 34.1% annualized growth rate. 
  • $82.3 million in mortgage production, compared with $53.5 million for the third quarter of 2014.
  • $182.7 million in purchased volume in the factoring division.  Note that, because the Company entered the factoring business on August 29, 2014, the figure for the 2014 third quarter is not comparable since it only represents one month’s activity.
  • Increase in non-acquired non-performing assets to $4.5 million from $4.2 million at June 30, 2015 and $2.1 million at September 30, 2014.
  • Annualized net charge-offs of 0.03%, compared to 0.07% for the third quarter of 2014.
  • Ending tangible book value per share of $15.42.
  • Ending book value per share of $18.80.

The Company also announced the closing of its Kissimmee, Florida and English Village (Birmingham), Alabama branch banking offices effective December 31, 2015.  The Company’s mortgage division will continue to operate out of the English Village location.  In association with these closings, the Company expects to incur approximately $160 thousand in closing and severance costs in the fourth quarter of 2015, with a reduction in annualized operating expenses of approximately $500 thousand in 2016 from the reduced overhead expense associated with these offices.  Following these closings, the Company will still have five branch offices in the Orlando area and two in the Birmingham area, one of which is approximately two miles from the English Village location.

The Company will host a live audio webcast conference call beginning at 3:00 p.m. Central Time on October 22, 2015 to discuss third quarter 2015 results.  Investors may call in (toll free) by dialing (855) 871-0559 (conference ID 55748335).  A  replay  of  the conference call will be available beginning two hours after the completion of the call until 10:59 p.m. Central Time on Saturday, October 24, 2015 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 the Company’s Investor Relations Page located at www.nationalbankofcommerce.com.  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.  Our 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 our 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 end of period.
  • “Efficiency ratio” is defined as noninterest expense divided by our 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 our productivity measured by the amount of revenue generated for each dollar spent.
  • “Operating efficiency ratio” is defined as noninterest expense divided by our operating revenue, excluding one-time gains and losses on sales of securities and one-time gains and expenses related to merger and acquisition-related activities. This measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.

             
We believe that these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations.  As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they 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
NCC is a bank holding company headquartered in Birmingham, Alabama.  Through its subsidiary bank, National Bank of Commerce, NCC provides a broad array of financial services to businesses, business owners and professionals through eight full-service banking offices in Alabama and seven full-service banking offices in Central Florida.  The company also owns a majority stake in 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 nationwide.

NCC 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 NCC 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, 2014 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.  You should not rely upon forward-looking statements 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
    September 30,   June 30,   March 31,   December 31,   September 30,  
      2015       2015       2015       2014       2014    
Earnings Summary                      
Interest income   $   13,450     $   12,714     $   12,193     $   10,578     $   8,107    
Interest expense       1,191         1,071         1,027         846         730    
Net interest income       12,259         11,643         11,166         9,732         7,377    
Provision for loan losses       201         120         161         826         152    
Gain (loss) on sale of securities       –         –         –         –         (33 )  
Other noninterest income (1)       2,353         2,206         1,764         1,419         1,353    
Merger/conversion-related expenses       122         168         79         246         262    
Other noninterest expense (2)       9,773         9,448         9,211         6,910         5,719    
Income before income taxes       4,516         4,113         3,479         3,169         2,564    
Income tax expense       1,453         1,264         1,092         1,158         841    
Net income before minority interest       3,063         2,849         2,387         2,011         1,723    
Net income attributable to minority interest       573         593         466         304         208    
Net income to common shareholders   $   2,490     $   2,256     $   1,921     $   1,707     $   1,515    
                       
Weighted average common and diluted shares outstanding                    
Basic     9,438,541       9,438,541       7,701,663       6,223,377       5,855,276    
Diluted     9,594,472       9,569,695       7,801,577       6,305,626       5,929,386    
                       
Net earnings per common share                      
Basic   $   0.26     $   0.24     $   0.25     $   0.27     $   0.26    
Diluted   $   0.26     $   0.24     $   0.25     $   0.27     $   0.26    
                       
    September 30,   June 30,   March 31,   December 31,   September 30,  
Selected Performance Ratios     2015       2015       2015       2014       2014    
Return on average assets (ROAA) (3)       0.75   %     0.75   %     0.67   %     0.72   %     0.73   %
Return on average equity (ROAE)       5.62         5.22         5.58         6.11         6.17    
Return on average tangible common equity (ROATCE)       6.85         6.35         7.15         7.86         6.76    
Net interest margin – taxable equivalent       4.02         4.22         4.25         4.58         3.87    
Efficiency ratio       67.72         69.43         71.85         64.17         68.51    
Operating efficiency ratio (2)       66.88         68.22         71.24         61.97         65.51    
Noninterest income / average assets (annualized)       0.71         0.73         0.62         0.60         0.65    
Noninterest expense / average assets (annualized)       2.99         3.19         3.24         3.01         2.87    
Yield on loans       5.13         5.15         5.26         5.37         4.73    
Cost of total deposits       0.39   %     0.38   %     0.38   %     0.36   %     0.35   %
                       
    September 30,   June 30,   March 31,   December 31,   September 30,  
Factoring Metrics     2015       2015       2015       2014       2014    
Recourse purchased volume   $   82,661     $   89,009     $   84,725     $   107,891      N/A   
Non-recourse purchased volume       100,055         99,614         90,402         90,791      N/A   
Total purchased volume   $   182,716     $   188,623     $   175,127     $   198,682      N/A   
Average turn (days)       37.97         37.66         41.57         40.08      N/A   
Net charge-offs / total purchased volume       0.06   %     (0.04 ) %     0.09   %     0.02   %  N/A   
Average discount rate       1.74   %     1.67   %     1.65   %     1.65   %  N/A   
                       
    September 30,   June 30,   March 31,   December 31,   September 30,  
Mortgage Metrics     2015       2015       2015       2014       2014    
Total production ($)   $   82,276     $   84,796     $   55,731     $   55,931     $   53,542    
Refinance (%)       19.1    %      18.6    %      26.9    %      22.6    %      19.0   %
Purchases (%)       80.9    %      81.4    %      73.1    %      77.4    %      81.0   %
                       
    As of
    September 30,   June 30,   March 31,   December 31,   September 30,  
Balance Sheet Highlights     2015       2015       2015       2014       2014    
Cash and cash equivalents   $   192,882     $   142,393     $   149,907     $   123,435     $   90,909    
Total securities       45,911         42,586         37,631         34,932         34,439    
Mortgage loans held for sale       7,926         13,750         13,804         9,329         11,329    
Acquired purchased credit-impaired loans       5,615         5,724         8,852         9,077         –    
Acquired non-purchased credit-impaired loans       123,730         131,953         138,040         143,981         –    
Nonacquired loans held for investment (4)       811,011         757,976         704,307         653,063         623,958    
CBI loans (factoring receivables)       74,780         75,000         69,541         82,600         81,926    
Total gross loans held for investment     1,015,136         970,653         920,740         888,721         705,884    
Allowance for loan losses       9,391         9,274         9,522         9,802         9,018    
Total intangibles       31,291         31,310         30,560         30,591         23,115    
Total assets     1,350,781        1,256,614        1,206,667        1,138,426         897,982    
Total deposits     1,141,837       1,051,483       1,000,217         971,060         763,509    
Borrowings       22,000         22,000         22,000         22,000         22,000    
Total liabilities     1,173,358       1,081,985       1,034,495       1,002,265         793,931    
Minority interest       7,508         7,527         7,166         7,239         7,142    
Common stock       94         94         94         75         59    
Total shareholders’ equity       177,423         174,629         172,172         136,161         104,051    
Tangible common equity   $   145,558     $   142,726     $   141,380     $   105,265     $   80,728    
End of period common shares outstanding     9,438,541       9,438,541       9,438,541       7,541,541       5,924,579    
                       
    As of and For the Three Months Ended
    September 30,   June 30,   March 31,   December 31,   September 30,  
Asset Quality Analysis     2015       2015       2015       2014       2014    
Nonacquired                      
Nonaccrual loans   $   829     $   2,688     $   618     $   2,276     $   1,087    
Other real estate and repossessed assets       3,562         1,494         1,494         823         830    
Loans past due 90 days or more and still accruing       148         44         168         217         176    
Total nonacquired nonperforming assets   $   4,539     $   4,226     $   2,280     $   3,316     $   2,093    
                       
Acquired                      
Nonaccrual loans   $   2,829     $   2,795     $   2,576     $   2,589     $   –    
Other real estate and repossessed assets       72         142         542         557         –    
Loans past due 90 days or more and still accruing       –         –         –          80         –    
Total acquired nonperforming assets   $   2,901     $   2,937     $   3,118     $   3,226     $   –    
                       
Selected asset quality ratios                      
Nonperforming assets / assets       0.55   %     0.57   %     0.45   %     0.57   %     0.23   %
Nonperforming assets / loans + OREO + repossessed assets       0.73         0.74         0.58         0.73         0.30    
Net charge-offs (recoveries) to average loans (annualized)       0.03         0.16         0.20         0.02         0.07    
Allowance for loan losses to total loans       0.93         0.96         1.03         1.10         1.28    
Nonacquired nonperforming assets / Nonacquired loans + nonacquired OREO + nonacquired repossessed assets (4)       0.56         0.56         0.32         0.51         0.33    
Allowance for loan losses to nonacquired nonperforming loans       961.21         339.46         1,211.45         393.18         714.01    
Allowance for loan losses to nonacquired loans (4)       1.10   %     1.13   %     1.22   %     1.35   %     1.42   %
                       
    For the Three Months Ended
    September 30,   June 30,   March 31,   December 31,   September 30,  
Taxable Equivalent Yields/Rates     2015       2015       2015       2014       2014    
Interest income:                      
Loans       5.13   %     5.15   %     5.26   %     5.37   %     4.73   %
Mortgage loans held for sale       4.17         4.02         3.63         4.32         4.26    
Interest on securities:                      
Taxable       3.34         3.33         2.92         3.17         3.04    
Non-taxable       4.88         5.08         5.72         5.73         5.97    
Cash balances in other banks       0.31         0.38         0.36         0.26         0.26    
Total interest-earning assets       4.41         4.60         4.64         4.97         4.25    
                       
Interest expense:                      
Interest on deposits       0.50         0.50         0.49         0.46         0.44    
Interest on FHLB & other borrowings       2.00         2.01         2.01         2.02         2.00    
Total interest-bearing liabilities       0.54         0.54         0.53         0.52         0.50    
Net interest spread       3.87         4.06         4.11         4.45         3.75    
Net interest margin       4.02   %     4.22   %     4.25   %     4.58   %     3.87   %
                       
    As of
    September 30,   June 30,   March 31,   December 31,   September 30,  
      2015       2015       2015       2014       2014    
Shareholders’ Equity and Capital Ratios                      
Tier 1 Leverage Ratio       10.39   %     11.09   %     11.41   %     10.68   %     9.87   %
Tier 1 Common Capital Ratio       12.88         12.86         13.54         10.66         11.12    
Tier 1 Risk-based Capital Ratio       12.88         12.86         13.54         10.66         11.12    
Total Risk-based Capital Ratio       13.79         13.78         14.55         11.75         12.37    
Equity / Assets       13.13         13.90         14.27         11.96         11.59    
Tangible common equity to tangible assets       11.03   %     11.65   %     12.02   %     9.50   %     9.23   %
Book value per share   $   18.80     $   18.50     $   18.24     $   18.05     $   17.56    
Tangible book value per share   $   15.42     $   15.12     $   14.98     $   13.96     $   13.63    
                       
    For the Three Months Ended
    September 30,   June 30,   March 31,   December 31,   September 30,  
      2015       2015       2015       2014       2014    
Detail of other noninterest expense                      
Salaries and employee benefits   $   5,186     $   5,114     $   4,987     $   3,717     $   3,547    
Commission-based compensation       1,048         1,056         796         900         459    
Occupancy and equipment expense       871         829         836         572         477    
Data processing expenses       464         487         425         291         295    
Advertising and marketing expenses       124         125         173         126         79    
Legal fees       177         135         167         222         267    
FDIC insurance assessments       205         152         206         151         131    
Accounting and audit expenses       211         212         223         208         102    
Consulting and other professional expenses       238         164         105         109         54    
Telecommunications expenses       144         135         128         79         67    
ORE, Repo asset and other collection expenses       79         71         122         102         32    
Core deposit intangible amortization       111         111         111         18         –     
Other noninterest expense       1,037         1,025         1,011         661         471    
Total noninterest expense   $   9,895     $   9,616     $   9,290     $   7,156     $   5,981    
                                           
    As of
    September 30,   June 30,   March 31,   December 31,   September 30,  
Non-GAAP Reconciliation     2015       2015       2015       2014       2014    
Total shareholders’ equity   $   177,423     $   174,629     $   172,172     $   136,161     $   104,051    
Less: intangible assets       31,291         31,310         30,560         30,591         23,115    
Less: minority interest not included in intangible assets       574         593         232         305         208    
Tangible common equity   $   145,558     $   142,726     $   141,380     $   105,265     $   80,728    
Common shares outstanding at year or period end     9,438,541       9,438,541       9,438,541       7,541,541       5,924,579    
Tangible book value per share   $   15.42     $   15.12     $   14.98     $   13.96     $   13.63    
Total assets at end of period   $ 1,350,781     $ 1,256,614     $ 1,206,667     $ 1,138,426     $ 897,982    
Less: intangible assets       31,291         31,310         30,560         30,591         23,115    
Adjusted total assets at end of period   $ 1,319,490     $ 1,225,304     $ 1,176,107     $ 1,107,835     $   874,867    
Tangible common equity to tangible assets       11.03   %     11.65   %     12.02   %     9.50   %     9.23   %
Total allowance for loan losses   $   9,391     $   9,274     $   9,522     $   9,802     $   9,018    
Less: allowance for loan losses attributable to CBI (factoring receivables)       500         715         956         955         175    
Adjusted allowance for loan losses at end of period   $   8,891     $   8,559     $   8,566     $   8,847     $   8,843    
Nonacquired loans held for investment (4)       811,011         757,976         704,307         653,063         623,958    
Allowance for loan losses to nonacquired loans (4)       1.10   %     1.13   %     1.22   %     1.35   %     1.42   %
                                           
    For the Three Months Ended
    September 30,   June 30,   March 31,   December 31,   September 30,  
      2015       2015       2015       2014       2014    
Non-GAAP Reconciliation                      
Total average shareholders’ equity   $   175,821     $   173,354     $   139,618     $   110,855     $   97,344    
Less: average intangible assets       31,158         30,555         30,553         24,417         8,291    
Less: average minority interest not included in intangible assets       371         315         46         277         188    
Average tangible common equity   $   144,292     $   142,484     $   109,019     $   86,161     $   88,865    
Net income to common shareholders       2,490         2,256         1,921         1,707         1,515    
Return on average tangible common equity (ROATCE)       6.85   %     6.35   %     7.15   %     7.86   %     6.76   %
Efficiency ratio:                                          
Net interest income   $   12,259     $   11,643     $   11,166     $   9,732     $   7,377    
Total noninterest income       2,353         2,206         1,764         1,419         1,320    
Less:  gain (loss) on sale of securities       –         –         –         –         (33 )  
Operating revenue   $   14,612     $   13,849     $   12,930     $   11,151     $   8,730    
Expenses:                                          
Total noninterest expenses   $   9,895     $   9,616     $   9,290     $   7,156     $   5,981    
Efficiency ratio       67.72   %     69.43   %     71.85   %     64.17   %     68.51   %
Operating efficiency ratio:                                          
Net interest income   $   12,259     $   11,643     $   11,166     $   9,732     $   7,377    
Total noninterest income       2,353         2,206         1,764         1,419         1,320    
Less:  gain (loss) on sale of securities       –         –         –         –         (33 )  
Operating revenue   $   14,612     $   13,849     $   12,930     $   11,151     $   8,730    
Expenses:                                          
Total noninterest expenses   $   9,895     $   9,616     $   9,290     $   7,156     $   5,981    
Less: merger/conversion expenses       122         168         79         246         262    
Adjusted noninterest expenses   $   9,773     $   9,448     $   9,211     $   6,910     $   5,719    
Operating efficiency ratio       66.88   %     68.22   %     71.24   %     61.97   %     65.51   %
                                           
(1) Excludes securities gains                      
(2) Excludes merger and 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
  September 30, 2015     December 31, 2014  
Cash and due from banks  $   23,221     $   14,236  
Interest-bearing deposits with banks      169,661         109,199  
Cash and cash equivalents      192,882         123,435  
Investment securities held-to-maturity (fair value of $17,051 at September 30, 2015)      17,172         –  
Investment securities available-for-sale      28,739         34,932  
Other investments      5,844         5,421  
Mortgage loans held-for-sale      7,926         9,329  
Loans, net of unearned income      1,015,136         888,721  
Less: allowance for loan losses      9,391         9,802  
Loans, net      1,005,745         878,919  
Premises and equipment, net      27,331         27,560  
Accrued interest receivable      2,331         2,193  
Bank owned life insurance      11,934         10,641  
Other real estate      3,562         1,008  
Deferred tax assets, net      12,381         11,444  
Goodwill      29,867         28,834  
Core deposit intangible, net      1,424         1,757  
Other assets      3,643         2,953  
Total assets  $   1,350,781     $   1,138,426  
               
Liabilities and Shareholders’ Equity
Deposits:     
Noninterest-bearing demand  $   271,202     $   217,643  
Interest-bearing demand      193,771         154,816  
Savings and money market      446,726         392,394  
Time      230,138         206,207  
Total deposits      1,141,837         971,060  
Federal Home Loan Bank advances      22,000         22,000  
Accrued interest payable      479         431  
Other liabilities      9,042         8,774  
Total liabilities      1,173,358         1,002,265  
Commitments               
Shareholders’ equity:     
Preferred stock, 250,000 shares authorized, no shares issued or outstanding      –         –  
Common stock, at September 30, 2015, $0.01 par value, 30,000,000 shares authorized and 9,438,541 shares issued and outstanding;              
at December 31, 2014, $0.01 par value, 12,500,000 shares authorized and 7,541,541 shares issued and outstanding      94         75  
Additional paid-in capital      165,914         131,455  
Retained earnings (deficit)      3,214         (3,453 )
Accumulated other comprehensive income      693         845  
Total shareholders’ equity attributable to National Commerce Corporation      169,915         128,922  
Noncontrolling interest      7,508         7,239  
Total shareholders’ equity      177,423         136,161  
Total liabilities and shareholders’ equity  $ 1,350,781     $ 1,138,426  
               

 

 
NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except per share data) 
           
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
    2015     2014       2015     2014  
Interest and dividend income:          
Interest and fees on loans $   12,925   $   7,744     $   36,943   $   19,583  
Interest and dividends on taxable investment securities     259       276         784       903  
Interest on non-taxable investment securities     137       43         293       127  
Interest on interest-bearing deposits and federal funds sold     129       44         337       151  
Total interest income     13,450       8,107         38,357       20,764  
Interest expense:          
Interest on deposits     1,080       619         2,959       1,693  
Interest on borrowings     111       111         330       330  
Total interest expense     1,191       730         3,289       2,023  
Net interest income     12,259       7,377         35,068       18,741  
Provision for loan losses     201       152         482       152  
Net interest income after provision for loan losses     12,058       7,225         34,586       18,589  
Other income:          
Service charges and fees on deposit accounts     311       174         886       512  
Mortgage origination and fee income     1,439       1,013         4,215       2,766  
Merchant sponsorship revenue     305       –         496       –  
Income from bank owned life insurance     86       59         251       179  
Wealth management fees     11       14         43       43  
(Loss) gain on other real estate     –       –         (24 )     5  
(Loss) gain on sale of investment securities available-for-sale     –       (33 )       –       (33 )
Other     201       93         456       141  
Total other income     2,353       1,320         6,323       3,613  
Other expense:                          
Salaries and employee benefits     5,186       3,547         15,287       9,662  
Commission-based compensation     1,048       459         2,900       1,236  
Occupancy and equipment     871       477         2,536       1,372  
Core deposit intangible amortization     111       –         333       –  
Other operating expense     2,679       1,498         7,745       4,027  
Total other expense     9,895       5,981         28,801       16,297  
Earnings before income taxes     4,516       2,564         12,108       5,905  
Income tax expense     1,453       841         3,809       2,001  
Net earnings      3,063       1,723         8,299       3,904  
Less: Net earnings attributable to noncontrolling interest     573       208         1,632       208  
Net earnings attributable to National Commerce Corporation $   2,490   $   1,515     $   6,667   $   3,696  
                           
Basic earnings per common share $   0.26   $   0.26     $   0.75   $   0.64  
Diluted earnings per common share $   0.26   $   0.26     $   0.74   $   0.63  
           

 

 
NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
 
                               
  For the Three Months Ended
(Dollars in thousands) September 30, 2015 June 30, 2015 March 31, 2015 December 31, 2014 September 30, 2014
Interest-earning assets 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 Average Balance Interest Income/ Expense Average Yield/ Rate
Loans $   992,223   $   12,826     5.13 % $   944,373   $   12,116     5.15 % $   903,563   $   11,709     5.26 % $   748,373   $   10,124     5.37 % $   640,806   $   7,636     4.73 %
Mortgage loans held for sale     9,890       104      4.17        11,180       112      4.02       9,487       85      3.63       9,914       108      4.32       10,348       111      4.26  
Securities:                              
Taxable securities     30,728       259      3.34        32,402       269      3.33       35,540       256      2.92       34,366       275      3.17       36,011       276      3.04  
Tax-exempt securities     17,649       217      4.88        14,297       181      5.08       4,750       67      5.72       4,640       67      5.73       4,584       69      5.97  
Cash balances in other banks     166,715       129      0.31        112,081       105      0.38       114,579       103      0.36       48,646       32      0.26       67,191       44      0.26  
Total interest-earning assets     1,217,205   $   13,535      4.41        1,114,333   $   12,783      4.60       1,067,919   $   12,220      4.64       845,939   $   10,606      4.97       758,940   $   8,136      4.25  
Non-interest-earning assets     96,824               95,949               94,118               96,203               68,521          
Total assets $ 1,314,029       $ 1,210,282       $ 1,162,037       $ 942,142       $ 827,461      
                                                   
Interest-bearing liabilities                              
Interest-bearing transaction accounts $   182,056   $   118     0.26 % $   157,261   $   97     0.25 % $   159,706   $   99     0.25 % $   135,882   $   96     0.28 % $   125,356   $   89     0.28 %
Savings & money market deposits     443,306       486      0.43        408,117       417      0.41       391,321       377      0.39       330,459       309      0.37       308,942       295      0.38  
Time deposits    228,298     476     0.83      208,388     447     0.86     209,016     442     0.86     161,368     329     0.81     118,023       235      0.79  
Federal Home Loan Bank & other borrowed money     22,000       111      2.00        22,000       110      2.01       22,000       109      2.01       22,027       112      2.02       22,000       111      2.00  
Total interest-bearing liabilities     875,660   $   1,191      0.54        795,766   $   1,071      0.54       782,043   $   1,027      0.53       649,736   $   846      0.52       574,321   $   730      0.50  
Non-interest-bearing deposits     254,402               233,136               232,497           172,290               150,566          
Total funding sources     1,130,062           1,028,902           1,014,540           822,026           724,887      
Non-interest-bearing liabilities     8,146           8,026           7,879           9,261           5,230      
Shareholders’ equity     175,821           173,354           139,618           110,855           97,344      
  $ 1,314,029       $ 1,210,282       $ 1,162,037       $ 942,142       $ 827,461      
Net interest rate spread           3.87 %           4.06 %           4.11 %           4.45 %           3.75 %
Net interest income/margin (taxable equivalent)       12,344     4.02 %       11,712     4.22 %       11,193     4.25 %       9,760     4.58 %       7,406     3.87 %
Tax equivalent adjustment       85           69           27           28           29    
Net interest income/margin   $   12,259     4.00 %   $   11,643     4.19 %   $   11,166     4.24 %   $   9,732     4.56 %   $   7,377     3.86 %
                                                   

 

 

CONTACT: Contact:
National Commerce Corporation
Will Matthews                                    
Vice Chairman and Chief Financial Officer                
(205) 313-8122

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