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