News: $FNBC – First NBC Bank Holding Company Announces 2015 Third Quarter Results

NEW ORLEANS, Nov. 02, 2015 (GLOBE NEWSWIRE) — First NBC Bank Holding Company (NASDAQ:FNBC), the holding company for First NBC Bank (“Company”), today announced financial results for the third quarter of 2015. For the quarter ended September 30, 2015, the Company reported net income available to common shareholders of $17.7 million, or $0.95 per share, as compared to $16.8 million, or $0.90 per share, for the second quarter of 2015 and $14.0 million, or $0.75 per share, for the third quarter of 2014.

The Company’s earnings per share on a diluted basis were $0.92, $0.88, and $0.73 per diluted share, for the third quarter of 2015, second quarter of 2015, and third quarter of 2014, respectively.  This represents an increase of $0.04 per diluted share, or 4.5%, over the second quarter of 2015, and an increase of $0.19 per diluted share, or 26.0%, over the third quarter of 2014.

Performance Highlights

•   The Company had total assets of $4.3 billion at September 30, 2015, an increase of 15.8% from December 31, 2014.

•   Total loans increased $344.6 million, or 12.4%, from December 31, 2014.

•   Total deposits increased $496.1 million, or 15.9%, from December 31, 2014.

•   The Company’s investment in tax credit entities increased $30.7 million, or 21.8%, from December 31, 2014, primarily from increased investment in Federal Historic Rehabilitation tax credit projects.

•   Net interest income increased $2.7 million, or 10.3%, from the linked quarter of 2015, and increased $1.0 million, or 3.7%, from the third quarter of 2014.

•   The Company recorded a gain of $1.5 million in other noninterest income from the sale of a portion of its ownership interest in a certain Federal Historic Rehabilitation tax credit project.  The Company retained the Federal Historic Rehabilitation tax credits generated by the project as these were not subject to recapture.

Loans

The Company’s loans totaled $3.1 billion at September 30, 2015, an increase of $185.5 million, or 6.3%, from June 30, 2015, and an increase of $344.6 million, or 12.4%, from December 31, 2014.  Loan growth continues to be driven primarily by increases in construction and commercial loans. The increase in the Company’s construction loan portfolio of 18.5% from June 30, 2015 and 40.8% from December 31, 2014 was due primarily to the funding of construction loans related to hotels, residential real estate development, and federal tax credit related projects.

The increase in the Company’s commercial loan portfolio of 7.3% from June 30, 2015 and 13.2% from December 31, 2014 was due in part to increases in all segments of the portfolio. The Company does have exposure to the oil and gas industry in its commercial loan portfolio. At September 30, 2015, the Company’s direct oil and gas commercial loan portfolio was approximately $142.5 million, or 4.6%, of its total loan portfolio, with an additional $5.7 million in outstanding loan commitments.  Of this amount, the Company’s exposure to exploration and production in its oil and gas portfolio was approximately $74.2 million with outstanding commitments of $3.0 million.  The Company also has exposure to indirect oil and gas loans in its portfolio of $93.8 million with outstanding commitments of $5.3 million.  The Company is actively monitoring both its direct and indirect oil and gas related credits.

The following table sets forth the composition of the Company’s loan portfolio as of the dates indicated:

(In thousands) September 30, 2015   June 30, 2015   % Change   December 31, 2014   % Change
Construction $ 461,459     $ 389,552     18.5 %   $ 327,677     40.8 %
Commercial real estate 1,313,173     1,287,105     2.0     1,264,371     3.9  
Consumer real estate 156,498     149,273     4.8     132,950     17.7  
Commercial and industrial 1,166,889     1,087,224     7.3     1,030,629     13.2  
Consumer 20,835     20,159     3.4     18,637     11.8  
Total loans $ 3,118,854     $ 2,933,313     6.3 %   $ 2,774,264     12.4 %


Asset Quality

Nonperforming assets totaled $43.9 million at September 30, 2015, an increase of $2.5 million from June 30, 2015 and an increase of $15.2 million from December 31, 2014.  During the third quarter of 2015, total nonperforming loans increased $2.3 million, and other real estate owned increased $0.1 million. Nonperforming assets as a percent of total loans, other real estate owned and other assets owned was 1.40% at September 30, 2015, down 1 basis point from June 30, 2015 and up 37 basis points from December 31, 2014.

The allowance for loan losses totaled $53.1 million at September 30, 2015, an increase of $2.7 million from June 30, 2015, and $10.7 million from December 31, 2014.  The increase in the allowance for loan losses compared to the linked quarter of 2015 was attributable to a $3.0 million provision for loan loss, partially offset by $0.3 million in net charge-offs during the third quarter of 2015. The ratio of allowance for loan losses to period-end loans was 1.70% at September 30, 2015, compared to 1.72% at June 30, 2015 and 1.53% at December 31, 2014.

Deposits

Total deposits at September 30, 2015 were $3.6 billion, an increase of $220.2 million, or 6.5%, from June 30, 2015 and an increase of $496.1 million, or 15.9%, from December 31, 2014.  Total deposits increased compared to the linked quarter due to an increase in NOW accounts primarily from a new public funds relationship during the third quarter of 2015.  The growth in the Company’s deposits of 15.9% from December 31, 2014 is due primarily to organic deposit growth of 14.1% across all deposit categories and 1.8% from assumption of deposit liabilities from the Crestview bank transaction in the first quarter of 2015. The Company’s tiered pricing strategy continues to be the catalyst for the Company’s continued deposit growth.

The following table sets forth the composition of the Company’s deposits as of the dates indicated:             

(In thousands) September 30, 2015   June 30, 2015   % Change   December 31, 2014   % Change
Noninterest-bearing $ 416,405     $ 390,001     6.8 %   $ 364,534     14.2 %
NOW accounts 691,261     586,596     17.8     476,825     45.0  
Money market accounts 1,175,184     1,118,679     5.1     1,055,505     11.3  
Savings deposits 57,079     55,982     2.0     49,634     15.0  
Certificates of deposit 1,276,989     1,245,487     2.5     1,174,352     8.7  
Total deposits $ 3,616,918     $ 3,396,745     6.5 %   $ 3,120,850     15.9 %


Net Interest Income

Net interest income for the third quarter ended September 30, 2015 totaled $28.8 million, an increase of $2.7 million, or 10.3%, from the second quarter of 2015, and an increase of $1.0 million, or 3.7%, from the third quarter of 2014. The increase in net interest income compared to the linked quarter was due primarily to the increase in interest income on loans of $3.6 million offset by an increase in interest expense of $0.8 million. The Company’s net interest margin was 3.04% for the quarter ended September 30, 2015, 18 basis points higher than the second quarter of 2015 and 33 basis points lower than the third quarter of 2014. The increase in the average yield on loans of 33 basis points compared to the linked quarter is due primarily to an increase in the average loan balance of $60.6 million, specifically, average commercial loans, which were at higher rates compared to the linked quarter.  The decrease of 13 basis points compared to the same period of 2014 is due to the composition of the Company’s loan portfolio which has been more heavily weighted to variable rate loans than fixed rate loans and the timing of the execution of Prime rate hedges to mitigate this shift compared to the third quarter of 2014.  As the Company’s loan portfolio continues to grow at a double digit pace, the Company has had to increase the notional amount of its Prime rate cash flow hedges.  The Company currently has $325.0 million in notional amount of Prime rate swaps compared to $250.0 million in notional amount during the third quarter of 2014, an increase of $75.0 million in notional amounts.  These Prime rate hedges are designed to mitigate the shift in the Company’s loan portfolio to a more evenly balanced portfolio. The Company issued subordinated debentures during the first quarter of 2015 due to the favorable rates in the market and as a good source of capital to continue its growth.  Until the funds from the subordinated debenture offering are fully deployed in future periods, they will continue to be a drag on the net interest margin. Excluding the impact of the subordinated debt issuance, the Company’s net interest margin for the third quarter of 2015 would have been 3.09%, compared to 2.91% in the linked quarter of 2015. The Company did invest the excess funds in higher rate accounts during the second quarter of 2015 which increased the average yield by 1 basis point compared to the linked quarter and 8 basis points compared to the third quarter of 2014.  Average interest-earning assets increased $100.4 million over the second quarter of 2015 and $489.8 million over the third quarter of 2014.  The cost of interest-bearing deposits increased 1 basis point compared to the second quarter of 2015 due to an increase in average NOW deposits in the higher balance tiers and decreased 9 basis points over the third quarter of 2014 due to the tiered pricing on all of its deposit products (including certificates of deposit).

The following tables set forth the Company’s average volume and rates on its interest-earning assets and interest-bearing liabilities for the periods indicated:  

  For the Three Months Ended
  September 30, 2015   June 30, 2015   September 30, 2014
(In thousands) Average
Balance
  Average
Yield/Rate
  Average
Balance
  Average
Yield/Rate
  Average
Balance
  Average
Yield/Rate
Interest-earning assets:                      
Short-term investments $ 187,282     0.28 %   $ 140,189     0.27 %   $ 12,804     0.20 %
Investment in short-term receivables 223,728     2.54 %   229,804     2.64 %   233,044     2.85 %
Investment securities 337,805     2.58 %   339,041     2.62 %   367,135     2.51 %
Loans 3,007,096     5.05 %   2,946,483     4.72 %   2,653,083     5.18 %
                       
Total interest-earning assets $ 3,755,911     4.44 %   $ 3,655,517     4.23 %   $ 3,266,066     4.70 %
                       
Interest-bearing liabilities:                      
Savings $ 54,512     0.64 %   $ 55,475     0.63 %   $ 51,360     0.75 %
Money market deposits 1,143,464     1.21 %   1,114,547     1.20 %   909,405     1.35 %
NOW accounts 669,915     1.08 %   568,084     1.03 %   485,143     1.17 %
Certificates of deposit 1,040,785     1.83 %   1,002,521     1.82 %   979,988     1.81 %
CDARS® 227,315     2.23 %   221,870     2.24 %   211,028     2.20 %
                       
Total interest-bearing deposits $ 3,135,991     1.45 %   $ 2,962,497     1.44 %   $ 2,636,924     1.54 %
                       
Fed funds purchased and repurchase agreements 108,205     1.40 %   118,935     1.40 %   110,594     1.42 %
Borrowings 103,392     5.26 %   103,392     5.14 %   61,143     1.58 %
                       
Total interest-bearing liabilities $ 3,347,588     1.57 %   $ 3,184,824     1.56 %   $ 2,808,661     1.54 %
                       
Net interest spread     2.87 %       2.67 %       3.16 %
Net interest margin     3.04 %       2.86 %       3.37 %

 

  For the Nine Months Ended
  September 30, 2015   September 30, 2014
(In thousands) Average
Balance
  Average
Yield/Rate
  Average
Balance
  Average
Yield/Rate
Interest-earning assets:              
Short-term investments $ 145,835     0.26 %   $ 32,056     0.20 %
Investment in short-term receivables 229,037     2.71 %   227,924     2.79 %
Investment securities 340,632     2.56 %   370,000     2.55 %
Loans 2,933,935     4.93 %   2,535,956     5.23 %
               
Total interest-earning assets $ 3,649,439     4.38 %   $ 3,165,936     4.69 %
               
Interest-bearing liabilities:              
Savings $ 54,452     0.63 %   $ 53,091     0.80 %
Money market deposits 1,117,171     1.21 %   809,025     1.37 %
NOW accounts 589,705     1.04 %   505,247     1.14 %
Certificates of deposit 1,006,763     1.82 %   1,009,622     1.82 %
CDARS® 222,941     2.24 %   197,553     2.19 %
               
Total interest-bearing deposits $ 2,991,032     1.45 %   $ 2,574,538     1.55 %
               
Fed funds purchased and repurchase agreements 116,278     1.41 %   100,776     1.48 %
Borrowings 92,550     5.07 %   58,345     1.90 %
               
Total interest-bearing liabilities $ 3,199,860     1.55 %   $ 2,733,659     1.56 %
               
Net interest spread     2.83 %       3.13 %
Net interest margin     3.02 %       3.34 %


Noninterest Income

Noninterest income for the third quarter of 2015 totaled $3.1 million, a decrease of $0.4 million, or 11.5%, compared to the linked quarter, and an increase of $0.1 million, or 3.8%, compared to the third quarter of 2014.  The decrease in noninterest income for the linked quarter was due primarily to decreases in state tax credits earned of $0.2 million and loss on the sale on other assets of $0.2 million from the sale of an acquired branch. 

The increase in noninterest income for the third quarter of 2015 compared to the third quarter of 2014 resulted primarily from an increase of $0.9 million in other noninterest income primarily from the $1.5 million gain from the sale of a portion of the Company’s ownership interest in a certain Federal Rehabilitation Historic tax credit project and  $0.4 million in rental income from its real estate subsidiary offset by a decrease in other noninterest income primarily due to a decrease of  $0.9 million from the realized loss on a SBIC investment.  The increase in noninterest income was offset by decreases of $0.5 million from the gain on sale of loans related to the guaranteed portion of SBA/USDA loans sold in the third quarter of 2014, $0.2 million from the loss on sale of other assets from the sale of an acquired branch, and $0.1 million in state tax credits earned.

Noninterest Expense

Noninterest expense for the three month period ended September 30, 2015 totaled $26.0 million, an increase of $2.9 million, or 12.4%, compared to the linked quarter, and an increase of $5.9 million, or 29.5%, compared to the same three month period of 2014. The increase over the linked quarter was due primarily to increases in impairment of investment in tax credit entities of $3.5 million, occupancy and equipment expenses of $0.4 million, and professional fees of $0.3 million, offset by decreases in salaries and employee benefits of $0.6 million due primarily to the increase in deferred salary expenses associated with the growth in new loan originations, taxes, licenses and FDIC assessments of $0.2 million, and other noninterest expense of $0.6 million due primarily to expenses related to the Company’s real estate subsidiary.

The increase over the prior year three month period was due to increases in all components of noninterest expense due to the organic growth of the Company, its increased investment in federal tax credit programs, as well as the Crestview bank transaction in the first quarter of 2015.

Taxes

The Company’s tax benefit for the quarter ended September 30, 2015 was $14.8 million, an increase of $1.4 million compared to the second quarter of 2015, and $8.2 million compared to the third quarter of 2014. The increase continues to be driven by the Company’s increased investment in projects that generate Federal Historic Rehabilitation tax credits.

The Company expects to experience an effective tax rate below the statutory rate of 35% due primarily to its receipt of Federal New Markets Tax Credits, Low-Income Housing Tax Credits and Federal Historic Rehabilitation Tax Credits.

Shareholders’ Equity

Shareholders’ equity totaled $486.2 million at September 30, 2015, an increase of $49.8 million from year-end 2014. The increase was primarily attributable to the Company’s earnings over the period.

About First NBC Bank Holding Company

First NBC Bank Holding Company, headquartered in New Orleans, Louisiana, offers a broad range of financial services through its wholly-owned banking subsidiary, First NBC Bank, a Louisiana state non-member bank. The Company’s primary markets are the New Orleans metropolitan area, Mississippi Gulf Coast, and the Florida panhandle. The Company operates 35 full service banking offices located throughout its markets, along with a loan production office in Gulfport, Mississippi, and had 525 employees at September 30, 2015.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures typically adjust GAAP performance measures to adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature.   Management believes these non-GAAP financial measures provide information useful to investors in understanding the Company’s financial results, and the Company believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting the Company’s business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators.  These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and the Company strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.  A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2014, and other reports and statements the Company has filed with Securities and Exchange Commission (“SEC”), which are available at the SEC’s website (www.sec.gov).

 

FIRST NBC BANK HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands) September 30, 2015   December 31, 2014
Assets      
Cash and due from banks $ 33,759     $ 32,484  
Short-term investments 179,526     18,404  
Investment in short-term receivables 182,945     237,135  
Investment securities available for sale, at fair value 273,702     247,647  
Investment securities held to maturity 83,319     89,076  
Mortgage loans held for sale 2,647     1,622  
Loans, net of allowance for loan losses of $53,076 and $42,336, respectively 3,065,778     2,731,928  
Bank premises and equipment, net 58,549     52,881  
Accrued interest receivable 11,919     11,451  
Goodwill and other intangible assets 8,942     7,831  
Investment in real estate properties 51,727     12,771  
Investment in tax credit entities 171,609     140,913  
Cash surrender value of bank-owned life insurance 48,342     47,289  
Other real estate 4,575     5,549  
Deferred tax asset 127,855     83,461  
Other assets 39,852     30,175  
Total assets $ 4,345,046     $ 3,750,617  
Liabilities and equity      
Deposits:      
Noninterest-bearing $ 416,405     $ 364,534  
Interest-bearing 3,200,513     2,756,316  
Total deposits 3,616,918     3,120,850  
Repurchase agreements 93,775     117,991  
Long-term borrowings 103,392     40,000  
Accrued interest payable 7,503     6,650  
Other liabilities 37,267     28,752  
Total liabilities 3,858,855     3,314,243  
Shareholders’ equity:      
Preferred stock      
Convertible preferred stock Series C – no par value; 1,680,219 shares authorized; No shares outstanding at September 30, 2015 and 364,983 shares issued and outstanding at December 31, 2014     4,471  
Preferred stock Series D – no par value; 37,935 shares authorized, issued and outstanding at September 30, 2015 and December 31, 2014 37,935     37,935  
Common stock- par value $1 per share; 100,000,000 shares authorized; 19,068,301 shares issued and outstanding at September 30, 2015 and 18,576,488 shares issued and outstanding at December 31, 2014 19,068     18,576  
Additional paid-in capital 242,376     239,528  
Accumulated earnings 206,353     155,599  
Accumulated other comprehensive loss, net (19,543 )   (19,737 )
Total shareholders’ equity 486,189     436,372  
Noncontrolling interest 2     2  
Total equity 486,191     436,374  
Total liabilities and equity $ 4,345,046     $ 3,750,617  

FIRST NBC BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
(In thousands, except per share data) 2015   2014   2015   2014
Interest income:              
Loans, including fees $ 38,270     $ 34,664     $ 108,203     $ 99,160  
Investment securities 2,193     2,323     6,512     7,053  
Investment in short-term receivables 1,434     1,675     4,638     4,761  
Short-term investments 130     6     288     48  
  42,027     38,668     119,641     111,022  
Interest expense:              
Deposits 11,476     10,268     32,382     29,921  
Borrowings and securities sold under repurchase agreements 1,752     640     4,732     1,943  
  13,228     10,908     37,114     31,864  
Net interest income 28,799     27,760     82,527     79,158  
Provision for loan losses 3,000     3,000     11,600     9,000  
Net interest income after provision for loan losses 25,799     24,760     70,927     70,158  
Noninterest income:              
Service charges on deposit accounts 596     548     1,740     1,605  
Investment securities gain (loss), net     79     (50 )   135  
Gain (loss) on assets sold, net (273 )   (76 )   (262 )   63  
Gain on sale of loans, net 31     579     147     649  
Cash surrender value income on bank-owned life insurance 349     352     1,054     748  
State tax credits earned 495     597     1,682     2,358  
Community Development Entity fees earned 183     109     439     984  
ATM fee income 529     490     1,553     1,468  
Other 1,238     356     2,912     1,316  
  3,148     3,034     9,215     9,326  
Noninterest expense:              
Salaries and employee benefits 7,122     6,456     21,718     17,795  
Occupancy and equipment expenses 3,377     2,737     9,314     8,005  
Professional fees 2,002     1,628     5,844     5,038  
Taxes, licenses and FDIC assessments 1,536     1,240     4,468     3,782  
Impairment of investment in tax credit entities 6,160     3,974     13,659     10,178  
Write-down of foreclosed assets 29     1     129     187  
Data processing 1,554     1,207     4,557     3,446  
Advertising and marketing 727     685     2,418     1,819  
Other 3,451     2,119     9,454     5,702  
  25,958     20,047     71,561     55,952  
Income before income taxes 2,989     7,747     8,581     23,532  
Income tax benefit (14,790 )   (6,612 )   (42,458 )   (16,354 )
Net income attributable to Company 17,779     14,359     51,039     39,886  
Less preferred stock dividends (95 )   (95 )   (285 )   (285 )
Less earnings allocated to participating securities     (275 )   (299 )   (764 )
Income available to common shareholders $ 17,684     $ 13,989     $ 50,455     $ 38,837  
Earnings per common share – basic $ 0.95     $ 0.75     $ 2.69     $ 2.10  
Earnings per common share – diluted $ 0.92     $ 0.73     $ 2.62     $ 2.04  

 

FIRST NBC BANK HOLDING COMPANY
EARNINGS PER COMMON SHARE
 
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
(In thousands, except per share data) 2015   2014   2015   2014
Basic: Income available to common shareholders $ 17,684     $ 13,989     $ 50,455     $ 38,837  
Weighted-average common shares outstanding 18,630     18,556     18,737     18,530  
Basic earnings per share $ 0.95     $ 0.75     $ 2.69     $ 2.10  
Diluted: Income available to common shareholders $ 17,684     $ 13,989     $ 50,455     $ 38,837  
Weighted-average common shares outstanding 18,630     18,556     18,737     18,530  
Effect of dilutive securities:              
Stock options outstanding 420     381     407     382  
Restricted stock awards outstanding 6         3      
Warrants 115     117     119     118  
Weighted-average common shares outstanding – assuming dilution 19,171     19,054     19,266     19,030  
Diluted earnings per share $ 0.92     $ 0.73     $ 2.62     $ 2.04  

 

FIRST NBC BANK HOLDING COMPANY
SUMMARY FINANCIAL INFORMATION
 
  For the Three Months Ended
September 30,
      For the Three
Months Ended
June 30,
   
    % Change     % Change
(In thousands) 2015   2014     2015  
                   
EARNINGS DATA                  
Total interest income $ 42,027     $ 38,668     8.7 %   $ 38,508     9.1 %
Total interest expense 13,228     10,908     21.3 %   12,402     6.7 %
Net interest income 28,799     27,760     3.7 %   26,106     10.3 %
Provision for loan losses 3,000     3,000     %   5,600     (46.4 )%
Total noninterest income 3,148     3,034     3.8 %   3,557     (11.5 )%
Total noninterest expense 25,958     20,047     29.5 %   23,099     12.4 %
Income before income taxes 2,989     7,747     (61.4 )%   964     210.1 %
Income tax (benefit) expense (14,790 )   (6,612 )   123.7 %   (16,228 )   (8.9 )%
Net income 17,779     14,359     23.8 %   17,192     3.4 %
Preferred stock dividends (95 )   (95 )   %   (95 )   %
Earnings allocated to participating securities     (275 )   (100.0 )%   (300 )   (100.0 )%
Net income available to common shareholders $ 17,684     $ 13,989     26.4 %   $ 16,797     5.3 %
                   
AVERAGE BALANCE SHEET DATA                  
Total assets $ 4,261,539     $ 3,593,868     18.6 %   $ 4,091,331     4.2 %
Total interest-earning assets 3,755,911     3,266,066     15.0 %   3,656,517     2.7 %
Total loans 3,007,096     2,653,083     13.3 %   2,946,483     2.1 %
Total interest-bearing deposits 3,135,991     2,636,924     18.9 %   2,962,497     5.9 %
Total interest-bearing liabilities 3,347,588     2,808,661     19.2 %   3,184,824     5.1 %
Total deposits 3,532,476     2,968,093     19.0 %   3,372,999     4.7 %
Total shareholders’ equity 477,600     414,754     15.2 %   457,545     4.4 %
                   
SELECTED RATIOS(1)                  
Return on average common equity 16.04 %   15.30 %       16.59 %    
Return on average equity 14.77 %   13.74 %       15.07 %    
Return on average assets 1.66 %   1.59 %       1.69 %    
Net interest margin 3.04 %   3.37 %       2.86 %    
Efficiency ratio(2) 81.25 %   65.10 %       77.87 %    
Tier 1 leverage ratio 9.50 %   11.31 %       9.80 %    
Tier 1 risk-based capital ratio 10.44 %   12.37 %       10.79 %    
Total risk-based capital ratio 13.30 %   13.62 %       13.72 %    
Common equity Tier 1 capital ratio 10.44 %     NA         10.79 %    
                   
ASSET QUALITY RATIOS(1)                  
Nonperforming loans to total loans(3)(5) 1.25 %   0.90 %       1.25 %    
Nonperforming assets to total assets(4) 1.01 %   0.82 %       1.00 %    
Allowance for loan losses to total loans(5) 1.70 %   1.49 %       1.72 %    
Allowance for loan losses to nonperforming loans(3) 136.13 %   165.47 %       137.40 %    
Net charge-offs to average loans 0.03 %   0.03 %       0.02 %    

(1) With the exception of end-of-period ratios, all ratios are based on average monthly balances during the respective periods.
(2) Efficiency ratio is the ratio of noninterest expense to net interest income and noninterest income.  See the Company’s Non-GAAP efficiency ratio calculation which excludes the impact of the noninterest income and expense related to its tax credit investments.
(3) Nonperforming loans consist of nonaccrual loans and restructured loans.
(4) Nonperforming assets consist of nonperforming loans and real estate and other property that has been repossessed.
(5) Total loans are net of unearned discounts and deferred fees and costs.

 

FIRST NBC BANK HOLDING COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
IMPACT OF INVESTMENT IN FEDERAL TAX CREDIT PROGRAMS
 
  For the Three Months Ended
  September 30,   June 30,   September 30,
(In thousands) 2015   2015   2014
           
Income before income taxes:          
Income before income taxes (GAAP) $ 2,989     $ 964     $ 7,747  
Income adjustment before income taxes related to the impact of tax credit related activities (Non-GAAP)          
Tax equivalent income associated with investment in federal tax credit programs(1) 24,340     25,397     14,057  
Income before income taxes (Non-GAAP) 27,329     26,361     21,804  
Income tax expense-adjusted (Non-GAAP)(2) (9,550 )   (9,169 )   (7,445 )
           
Net income (GAAP) $ 17,779     $ 17,192     $ 14,359  
           
Pro forma income related to investment in tax credit entities:          
Income before income taxes (GAAP) $ 2,989     $ 964     $ 7,747  
Pro forma interest income adjustment          
Pro forma interest income related to investment in tax credit entities(3) 2,184     2,051     1,544  
Noninterest expense adjustment(4)          
Impairment of investment in tax credit entities(5) 6,160     2,647     3,974  
Other direct expenses(6) 727     639     557  
Pro forma income before income taxes (Non-GAAP) 12,060     6,301     13,822  
Income tax expense-adjusted (Non-GAAP)(2) (4,215 )   (2,191 )   (4,720 )
           
Pro forma net income (Non-GAAP) $ 7,845     $ 4,110     $ 9,102  
           
Adjusted Efficiency Ratio:          
Noninterest expense (GAAP) $ 25,958     $ 23,099     $ 20,047  
Adjustments:          
Impairment of investment in tax credit entities(5) 6,160     2,647     3,974  
Other direct expenses(6) 727     639     557  
Adjusted noninterest expense (Non-GAAP) 19,071     19,813     15,516  
Net interest income (GAAP) 28,799     26,106     27,760  
Noninterest income (GAAP) 3,148     3,557     3,034  
Adjustments:          
State tax credits earned 495     668     597  
Community Development Entity fees earned 183     133     109  
Adjusted noninterest income (Non-GAAP) 2,470     2,756     2,328  
Adjusted total revenue (Non-GAAP) $ 31,269     $ 28,862     $ 30,088  
Adjusted efficiency ratio (Non-GAAP) 60.99 %   68.65 %   51.57 %

(1) Tax equivalent income associated with investment in federal tax credit programs represents the gross amount of tax benefit from federal tax credits.
(2) Income tax expense is calculated on the adjusted non-GAAP effective tax rate for the Company at each quarter end period ended September 30, 2015, June 30, 2015, and September 30, 2014, respectively.
(3) Pro forma interest income adjustment related to investment in tax credit entities is calculated based on the average investment in tax credit entities utilizing the average yield on loans had the investment in tax credit entities been invested in loans.
(4) Noninterest expense adjustments related to the Company’s investment in federal tax credit programs are included as adjustments to income as if the Company had invested in loans instead of federal tax credit programs. These expenses are directly related to the Company’s investment in federal tax credit programs. Noninterest expense adjustments for direct expenses related to the Company’s investment in federal tax credit programs exclude general and administrative costs associated with the Company’s investment in federal tax credit programs.
(5) Impairment of investment in tax credit entities represents impairment recorded during the current period, as evaluated by the Company at the end of each reporting period.
(6) Other direct expenses represent fees and expenses incurred as a result of the Company’s investment in federal tax credit programs.

 

CONTACT: For further information contact:
First NBC Bank Holding Company
Ashton J. Ryan, Jr.
President and Chief Executive Officer
(504) 671-3801
aryanjr@firstnbcbank.com