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

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

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

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

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

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on January 25, 2017 to discuss earnings and operating results for the 2016 fourth quarter and full year. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 48550731).  A replay of the conference call will be available until January 27, 2017 and can be accessed by dialing (855) 859-2056.

Investors who plan to participate in the live webcast of the conference call should access the webcast by visiting www.nationalbankofcommerce.com, and then clicking on the “Investor Relations” link under the “Learn More” tab located on that webpage.  A replay of the webcast will be available on the website for one year.  A copy of the news release will also be available at the same location.

Use of Non-GAAP Financial Measures

Some of the financial measures presented in this press release and included in the accompanying unaudited financial statements are not measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).  These non-GAAP financial measures include tangible common equity, return on average tangible common equity, tangible book value per share, allowance for loan losses to nonacquired loans, efficiency ratio and operating efficiency ratio.  The Company’s management uses the non-GAAP financial measures set forth below in its analysis of the Company’s performance.

• “Tangible common equity” is total shareholders’ equity less goodwill, other intangible assets and minority interest not included in intangible assets. 
• “Average tangible common equity” is defined as the average of tangible common equity for the applicable period.
• “Return on average tangible common equity,” or ROATCE, is defined as net income available to common shareholders divided by average tangible common equity.
• “Tangible book value per share” is defined as tangible common equity divided by total common shares outstanding.  This measure is important to investors interested in changes from period to period in book value per share exclusive of changes in intangible assets.

The Company’s management believes these above measures, each of which utilizes the concept of tangible common equity rather than total common equity, provide useful information to management and investors because they eliminate the impact of goodwill and other intangible assets created in an acquisition.  These measures are commonly used by investors when assessing financial institutions.

• “Allowance for loan losses to nonacquired loans” is defined as the total allowance for loan losses, less the allowance for loan losses attributable to factored receivables, divided by nonacquired loans held for investment, excluding factored receivables at the end of the period.  This measure is important to investors because it disaggregates the acquired and non-acquired loans and provides a measure that may be more comparable to a bank that has no acquired loans.   This measure also excludes the allowance and factored receivable balances at our subsidiary, Corporate Billing, LLC, which is helpful to investors because of the unique nature of that business and the rapid turnover of those receivables, and provides a measure that is more comparable to a bank that does not have a receivables factoring business.
• “Efficiency ratio” is defined as noninterest expense divided by operating revenue (which is equal to net interest income plus noninterest income), excluding one-time gains and losses on sales of securities.  This measure is important to investors looking for a measure of efficiency in productivity based on the amount of revenue generated for each dollar spent.
• “Operating efficiency ratio” is defined as noninterest expense divided by operating revenue, excluding one-time gains and losses on sales of securities and one-time gains and expenses related to merger and acquisition activities.  This measure is important to investors looking for a measure of efficiency in productivity based on the amount of revenue generated for each dollar spent.

The Company’s management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to NCC’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, NCC acknowledges that the non-GAAP financial measures have a number of limitations.  As such, NCC cautions readers that these disclosures should not be viewed as a substitute for results determined in accordance with GAAP, and that these disclosures are not necessarily comparable to non-GAAP financial measures that other companies use.  These non-GAAP financial measures exclude various items detailed in the attached “Non-GAAP Reconciliation.”

About National Commerce Corporation

National Commerce Corporation (Nasdaq:NCOM), a Delaware corporation, is a financial holding company headquartered in Birmingham, Alabama.  Substantially all of the operations of National Commerce Corporation are conducted through the company’s wholly owned subsidiary, National Bank of Commerce.  National Bank of Commerce currently operates seven full-service banking offices in Alabama, ten full-service banking offices in central and northeast Florida (including under the trade names United Legacy Bank and Reunion Bank of Florida) and two full-service banking offices in Atlanta, Georgia (including under the trade names Private Bank of Buckhead, Private Bank of Decatur and PrivatePlus Mortgage).  National Bank of Commerce provides a broad array of financial services for commercial and consumer customers.

Additionally, National Bank of Commerce owns a majority stake in Corporate Billing, LLC, a transaction-based finance company headquartered in Decatur, Alabama that provides factoring, invoicing, collection and accounts receivable management services to transportation companies and automotive parts and service providers throughout the United States and parts of Canada.

National Commerce Corporation files periodic reports with the U.S. Securities and Exchange Commission (the “SEC”).  Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.nationalbankofcommerce.com.  More information about National Commerce Corporation and National Bank of Commerce may be obtained at www.nationalbankofcommerce.com. 

Forward-Looking Statements
Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements for which NCC claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such.  In addition, certain statements may be contained in NCC’s future filings with the SEC, in press releases and in oral and written statements made by NCC or with NCC’s approval that are not statements of historical fact and that constitute forward-looking statements within the meaning of the Act.  Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of NCC’s plans, objectives and expectations or those of its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  Forward-looking statements are subject to various risks and uncertainties, including those risks and uncertainties described under the heading “Risk Factors” in NCC’s Annual Report on Form 10-K for the year ended December 31, 2015 and described in any subsequent reports that NCC has filed with the SEC.  Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements, and these statements should not be relied upon as predictions of future events.  NCC undertakes no obligation to update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.  In that respect, NCC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

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

 

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Balance Sheets
(In thousands, except share and per share data)
Assets
	December 31, 2016			December 31, 2015
Cash and due from banks	$	35,897		$	27,173
Interest-bearing deposits with banks		181,396			185,284
Cash and cash equivalents		217,293			212,457
Investment securities held-to-maturity (fair value of $25,894 and $27,843 at December 31, 2016
and December 31, 2015, respectively)		26,329			27,458
Investment securities available-for-sale		73,380			53,405
Other investments		7,879			6,235
Mortgage loans held-for-sale		15,373			15,020
Loans, net of unearned income		1,485,484			1,319,414
Less: allowance for loan losses		12,113			9,842
Loans, net		1,473,371			1,309,572
Premises and equipment, net		31,884			31,432
Accrued interest receivable		4,129			3,510
Bank-owned life insurance		28,034			27,223
Other real estate		2,068			3,965
Goodwill		50,736			50,686
Core deposit intangible, net		2,032			2,788
Other assets		19,150			19,618
Total assets	$	1,951,658		$	1,763,369
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	429,030		$	382,946
Interest-bearing demand		262,261			202,649
Savings and money market		703,289			611,887
Time		273,130			316,976
Total deposits		1,667,710			1,514,458
Federal Home Loan Bank advances		7,000			22,000
Subordinated debt		24,500			-
Accrued interest payable		829			627
Other liabilities		14,575			9,648
Total liabilities		1,714,614			1,546,733
Commitments and contingencies
Shareholders’ equity:
Preferred stock, 250,000 shares authorized, no shares issued or outstanding		-			-
Common stock, $0.01 par value, 30,000,000 shares authorized, 10,934,541 and 10,824,969
shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively		109			108
Additional paid-in capital		205,372			202,456
Retained earnings		24,005			6,152
Accumulated other comprehensive income		249			548
Total shareholders' equity attributable to National Commerce Corporation		229,735			209,264
Noncontrolling interest		7,309			7,372
Total shareholders' equity		237,044			216,636
Total liabilities and shareholders' equity	$	1,951,658		$	1,763,369

 

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

 

NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
	For the Three Months Ended
(Dollars in thousands)	December 31, 2016						September 30, 2016						June 30, 2016						March 31, 2016						December 31, 2015
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	$	1,446,629	$	18,012	4.95	%	$	1,399,016	$	17,853	5.08	%	$	1,391,789	$	17,523	5.06	%	$	1,352,737	$	17,373	5.17	%	$	1,204,437	$	15,699	5.17	%
Mortgage loans held-for-sale		10,366		78	2.99			13,986		145	4.12			17,288		151	3.51			10,503		115	4.40			9,697		84	3.44
Securities:
Taxable securities		82,881		525	2.52			76,787		493	2.55			78,907		383	1.95			61,764		412	2.68			48,097		370	3.05
Tax-exempt securities		25,910		319	4.90			26,029		317	4.85			26,036		319	4.93			26,041		317	4.90			21,982		275	4.96
Cash balances in other banks		140,813		224	0.63			101,422		152	0.60			80,140		129	0.65			151,318		218	0.58			191,077		168	0.35
Total interest-earning assets		1,706,599	$	19,158	4.47			1,617,240	$	18,960	4.66			1,594,160	$	18,505	4.67			1,602,363	$	18,435	4.63			1,475,290	$	16,596	4.46
Noninterest-earning assets		149,709						148,275						148,959						156,260						145,791
Total assets	$	1,856,308					$	1,765,515					$	1,743,119					$	1,758,623					$	1,621,081
Interest-bearing liabilities
Interest-bearing transaction accounts	$	235,340	$	149	0.25	%	$	214,439	$	125	0.23	%	$	210,776	$	124	0.24	%	$	204,339	$	123	0.24	%	$	196,140	$	129	0.26	%
Savings and money market deposits		633,765		791	0.50			612,618		713	0.46			603,173		698	0.47			620,429		762	0.49			542,631		612	0.45
Time deposits		273,293		643	0.94			283,022		661	0.93			288,350		654	0.91			306,106		684	0.90			291,399		654	0.89
Federal Home Loan Bank and other borrowed money		7,000		71	4.04			7,000		71	4.04			7,000		71	4.08			10,959		81	2.97			22,104		112	2.01
Subordinated debt		24,494		388	6.30			24,498		389	6.32			11,605		183	6.34			-		-	-			-		-	-
Total interest-bearing liabilities		1,173,892	$	2,042	0.69			1,141,577	$	1,959	0.68			1,120,904	$	1,730	0.62			1,141,833	$	1,650	0.58			1,052,274	$	1,507	0.57
Noninterest-bearing deposits		431,253						381,205						388,363						386,674						354,812
Total funding sources		1,605,145						1,522,782						1,509,267						1,528,507						1,407,086
Noninterest-bearing liabilities		16,914						13,780						10,495						11,386						11,696
Shareholders' equity		234,249						228,953						223,357						218,730						202,299
	$	1,856,308					$	1,765,515					$	1,743,119					$	1,758,623					$	1,621,081
Net interest rate spread					3.78	%					3.98	%					4.05	%					4.05	%					3.89	%
Net interest income/margin (taxable equivalent)				17,116	3.99	%				17,001	4.18	%				16,775	4.23	%				16,785	4.21	%				15,089	4.06	%
Tax equivalent adjustment				126						124						123						122						108
Net interest income/margin			$	16,990	3.96	%			$	16,877	4.15	%			$	16,652	4.20	%			$	16,663	4.18	%			$	14,981	4.03	%

Contact:
National Commerce Corporation
William E. Matthews, V
Vice Chairman and Chief Financial Officer
(205) 313-8122