First NBC Bank Holding Co - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - First NBC Bank Holding Co	a4q2015earningscoverpage.htm

Exhibit 99.1

For Immediate Release

FIRST NBC BANK HOLDING COMPANY ANNOUNCES 2015 FOURTH QUARTER RESULTS

NEW ORLEANS, LA (February 1, 2016) – First NBC Bank Holding Company (NASDAQ: FNBC), the holding company for First NBC Bank (“Company”), today announced financial results for the fourth quarter of 2015. For the quarter ended December 31, 2015, the Company reported net income available to common shareholders of $15.7 million, or $0.85 per share, as compared to $18.1 million, or $0.97 per share, for the third quarter of 2015 and $15.3 million, or $0.82 per share, for the fourth quarter of 2014.

The Company’s earnings per share on a diluted basis were $0.82, $0.94, and $0.80 per diluted share, for the fourth quarter of 2015, third quarter of 2015, and fourth quarter of 2014, respectively. This represents a decrease of $0.12 per diluted share, or 12.8%, over the third quarter of 2015, and an increase of $0.02 per diluted share, or 2.5%, over the fourth quarter of 2014.

The Company's earnings per share for the fourth quarter of 2015 excluding the impact of merger and conversion related costs related to the State Investors, Bancorp, Inc. ("State Investors") acquisition was $0.89 per share and on a diluted basis was $0.86 per share. The impact from the merger and conversion related costs was a decrease of $0.04 per share.

Performance Highlights


•	The Company completed its acquisition of State Investors on November 30, 2015. The Company acquired assets of $254.6 million, which consisted primarily of loans of $182.2 million and investments of $27.4 million, and liabilities of $211.9 million, which consisted primarily of deposits of $152.7 million and borrowings of $55.9 million.


•	The pre-tax income attributable to State Investors totaled $0.5 million for the quarter ended December 31, 2015.


•	The Company continued to experience strong asset growth, with total assets of $4.8 billion at December 31, 2015, an increase of 28.6% from December 31, 2014.


•	The Company's total loans increased $732.8 million, or 26.4%, from December 31, 2014. The increase from the State Investors acquisition was $180.9 million, or 5.2%.


•	The Company's total deposits increased $724.1 million, or 23.2%, from December 31, 2014. The increase from the State Investors acquisition was $151.7 million, or 3.9%.


•	Net interest income for the fourth quarter of 2015 totaled $32.9 million, an increase of $4.1 million, or 14.3%, from the linked quarter of 2015 and an increase of $4.8 million, or 17.2%, from the fourth quarter of 2014.

Loans

The Company’s loans totaled $3.5 billion at December 31, 2015, an increase of $388.2 million, or 12.4%, from September 30, 2015, and an increase of $732.8 million, or 26.4%, from December 31, 2014. Total loans excluding the impact of the State Investors acquisition increased $207.3 million, or 6.6%, from September 30, 2015 and $551.9 million, or 19.9%, from December 31, 2014. Organic loan growth continued to be driven primarily by increases in construction, commercial real estate and commercial loans. The growth in consumer real estate loans was due to the acquisition of $114.6 million in consumer real estate loans as of December 31, 2015 from State Investors. The increase in the Company's construction loan portfolio of 13.2% from September 30, 2015 and 59.4% 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 coupled with $64.7 million of construction loans acquired from State Investors. The increase in the Company's commercial loan portfolio of 7.6% from September 30, 2015 and 21.8% from December 31, 2014 was due to the economic expansion in the New Orleans area and capture of new loan customers from other financial institutions. The Company does have exposure to the oil and gas industry in its commercial loan portfolio. At December 31, 2015, the Company's direct oil and gas commercial loan portfolio was approximately $158.4 million, or 4.5%, of its total loan portfolio, with an additional $6.7 million in outstanding loan commitments. Of this amount, the Company's exposure to exploration and production in its oil and gas portfolio was approximately $90.2 million with outstanding commitments of $3.4 million. The Company's remaining direct oil and gas exposure was primarily maritime service companies. The Company also had exposure to indirect oil and gas loans in its portfolio of $65.6 million with outstanding commitments of $13.1 million. The Company is actively monitoring both its direct and indirect oil and gas related loans and all of these loans were performing within their contractual terms.

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



(In thousands)	December 31, 2015		September 30, 2015		% Change		December 31, 2014		% Change
Construction	$	522,278	$	461,459	13.2	%	$	327,677	59.4	%
Commercial real estate		1,443,418		1,313,173	9.9			1,264,371	14.2
Consumer real estate		264,422		156,498	69.0			132,950	98.9
Commercial		1,255,202		1,166,889	7.6			1,030,629	21.8
Consumer		21,697		20,835	4.1			18,637	16.4
Total loans	$	3,507,017	$	3,118,854	12.4	%	$	2,774,264	26.4	%

The following table sets forth the composition of the Company’s loan portfolio excluding the loans acquired from State Investors as of the dates indicated.



(In thousands)	December 31, 2015		September 30, 2015		% Change		December 31, 2014		% Change
Construction	$	457,602	$	461,459	(0.8	)%	$	327,677	39.7	%
Commercial real estate		1,443,418		1,313,173	9.9			1,264,371	14.2
Consumer real estate		149,775		156,498	(4.3	)		132,950	12.7
Commercial		1,255,202		1,166,889	7.6			1,030,629	21.8
Consumer		20,162		20,835	(3.2	)		18,637	8.2
Total loans	$	3,326,159	$	3,118,854	6.6	%	$	2,774,264	19.9	%

Investment in Short-Term Receivables

At December 31, 2015, the Company’s investment in short-term receivables was $95.5 million, a decrease of $84.0 million from September 30, 2015 and $141.6 million from December 31, 2014. The decrease in investment in short-term receivables was primarily due to the Company's strategic decision to increase its liquidity and capital position. The decrease in the Company’s investment in short-term receivables was a significant factor contributing to the increase of $119.3 million from September 30, 2015 and $280.4 million from December 31, 2014 in short-term investments, as the proceeds from the Company’s investment in short-term receivables were reinvested in short-term investments pending further deployment through the Company’s loan portfolio.

Included in the Company’s investment in short-term receivables was $69.0 million due from a U.S. company that produces ethanol for blending in gasoline. As of December 31, 2015, $15.0 million of that balance was past due, with an additional $24.7 million past due as of the date of this release. In addition to the Company’s rights against the obligor on the receivables, the Company and the receivables seller are parties to an agreement providing for certain repurchase obligations by the receivables seller with respect to past due receivables. At this time, based on its analysis of the financial capabilities of the obligor and the receivables seller and after consultation with independent counsel, management does not expect that the Company will incur any loss on its investment in its investment in short-term receivables related to the past due receivables.

Asset Quality

Nonperforming assets totaled $45.7 million at December 31, 2015, an increase of $1.9 million from September 30, 2015 and an increase of $17.1 million from December 31, 2014. During the fourth quarter of 2015, total nonperforming loans increased $1.2 million, while other real estate owned increased $0.7 million. Nonperforming assets as a percent of total loans, other real estate owned and other repossessed assets was 1.30% at December 31, 2015, down 10 basis points from September 30, 2015 and up 27 basis points from December 31, 2014.

The allowance for loan losses was $55.8 million at December 31, 2015, an increase of $2.7 million from September 30, 2015, and $13.5 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 fourth quarter of 2015. The ratio of allowance for loan losses to period-end loans was 1.59% at December 31, 2015, compared to 1.70% at September 30, 2015 and 1.53% at December 31, 2014. The ratio of allowance for loan losses to period-end loans excluding State Investors was 1.68% at December 31, 2015.

Deposits

Total deposits at December 31, 2015 were $3.8 billion, an increase of $228.0 million, or 6.3%, from September 30, 2015, and an increase of $724.1 million, or 23.2%, from December 31, 2014. Total deposits increased compared to the linked quarter due to an increase in NOW accounts primarily from the acquisition of $27.2 million in NOW deposit accounts from State Investors. The growth in the Company's savings deposits of 39.8% from the linked quarter and 60.7% from December 31, 2014 was due primarily to the acquisition of $26.1 million in savings accounts from State Investors. The assumption of deposit liabilities from First National Bank

of Crestview in the first quarter of 2015 and the acquisition of State Investors in the fourth quarter of 2015 contributed to 7.4% of the deposit growth as of December 31, 2015 while the remaining 15.8% was due to organic deposit growth. The Company's relationship banking strategy supported by its tiered pricing strategy continued to be the catalyst for the Company's continued organic deposit growth.

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



(In thousands)	December 31, 2015		September 30, 2015		% Change		December 31, 2014		% Change
Noninterest-bearing	$	369,515	$	416,405	(11.3	)%	$	364,534	1.4	%
NOW accounts		741,469		691,261	7.3			476,825	55.5
Money market accounts		1,277,078		1,175,184	8.7			1,055,505	21.0
Savings deposits		79,779		57,079	39.8			49,634	60.7
Certificates of deposit		1,377,095		1,276,989	7.8			1,174,352	17.3
Total deposits	$	3,844,936	$	3,616,918	6.3	%	$	3,120,850	23.2	%

The following table sets forth the composition of the Company’s deposits excluding the deposits acquired from State Investors as of the dates indicated.



(In thousands)	December 31, 2015		September 30, 2015		% Change		December 31, 2014		% Change
Noninterest-bearing	$	369,515	$	416,405	(11.3	)%	$	364,534	1.4	%
NOW accounts		714,258		691,261	3.3			476,825	49.8
Money market accounts		1,268,118		1,175,184	7.9			1,055,505	20.1
Savings deposits		53,717		57,079	(5.9	)		49,634	8.2
Certificates of deposit		1,287,658		1,276,989	0.8			1,174,352	9.6
Total deposits	$	3,693,266	$	3,616,918	2.1	%	$	3,120,850	18.3	%

Net Interest Income

Net interest income for the fourth quarter ended December 31, 2015 totaled $32.9 million, an increase of $4.1 million, or 14.3%, from the third quarter of 2015 and an increase of $4.8 million, or 17.2%, from the three month period ended December 31, 2014. The increase in net interest income compared to the linked quarter was due primarily to the increase in interest income on loans of $5.5 million offset by a decrease in interest income from short-term investments of $0.6 million and an increase in interest expense of $0.8 million. The Company’s net interest margin was 3.28% for the quarter ended December 31, 2015, 24 basis points higher than the third quarter of 2015 and 5 basis points lower than the fourth quarter of 2014. The increase in the average yield on loans of 25 basis points compared to the linked quarter was due primarily to an increase in the average loan balance of $266.2 million which increased interest income on loans compared to the linked quarter by $5.5 million, reflecting an increase of $3.5 million due to volume and $2.0 million due to rate. The increase of 22 basis points in the loan yield compared to the same period of 2014 is due primarily to the impact of a shift in the loan mix to higher yielding construction and commercial real estate loans as well as the effect of the Federal Reserve rate increase during the period on the Company's floating rate portfolio. The increases in the average loan yield over the linked quarter and fourth quarter of 2014 were due to the same factors. As the Company's loan portfolio continues to grow at a double digit pace, the Company has increased the notional amount of its Prime rate cash flow hedges. The Company had $325.0 million in notional amount of Prime rate swaps at December 31, 2015 compared to $250.0 million in notional amount during the fourth quarter of 2014, an increase of $75.0 million. These Prime rate hedges are designed to mitigate the shift in the Company's loan portfolio to a more evenly balanced portfolio. The Company's excess liquidity continued to be a drag on the net interest margin. The excess liquidity resulted primarily from the proceeds of the subordinated debt issuance, during the first quarter of 2015, which had not been deployed, and the decrease in the average balance of its investments in short-term receivables, which were reinvested in short-term investments, compared to the linked quarter of 2015 and the same quarterly period of 2014. The Company borrowed $200.0 million of 10 year notes with interest rates based on short-term LIBOR from the Federal Home Loan Bank(FHLB) during the fourth quarter of 2015 for additional liquidity to fund loan growth. The Company invested its excess funds in higher rate accounts, beginning in the second quarter of 2015, which has increased the average yield by 1 basis point compared to the linked quarter and 10 basis points compared to the fourth quarter of 2014. Average interest-earning assets increased $230.3 million over the third quarter of 2015 and $641.0 million over the fourth quarter of 2014. The cost of interest-bearing deposits was flat compared to the linked quarter of 2015 and decreased 5 basis points over the fourth quarter of 2014 due to the tiered pricing on all of its deposit products (including certificates of deposit). Throughout 2014 and 2015, the Company's margin compressed and in the third quarter of 2015 plateaued. The compression was primarily the result of the shift in its loan portfolio from fixed to floating rate loans as a result of customer preference and the impact of the proceeds from the subordinated debt issuance, during the first quarter of 2015, in order to enhance the capital position of the Bank. The increase in the Company's margin in the fourth quarter of 2015 was the result of several factors which included its long-term floating rate borrowings from FHLB, the continued growth of its loan portfolio, the mix of its earning assets and the acquisition of State Investors. The Company anticipates that these factors will have a positive impact on its margin in future periods.

The following table sets forth the Company’s average volume of and rates on its interest-earning assets and interest-bearing liabilities for the periods indicated.



	For the Three Months Ended
	December 31, 2015				September 30, 2015				December 31, 2014
(In thousands)	Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate
Interest-earning assets:
Short-term investments	$	242,654	0.29	%	$	187,282	0.28	%	$	31,260	0.19	%
Investment in short-term receivables		108,886	3.19	%		223,728	2.54	%		238,560	2.91	%
Investment securities		361,408	2.31	%		337,805	2.58	%		336,600	2.47	%
Loans		3,273,310	5.30	%		3,007,096	5.05	%		2,738,885	5.08	%

Total interest-earning assets	$	3,986,258	4.67	%	$	3,755,911	4.44	%	$	3,345,305	4.62	%

Interest-bearing liabilities:
Savings	$	63,387	0.62	%	$	54,512	0.64	%	$	49,964	0.74	%
Money market deposits		1,242,473	1.21	%		1,143,464	1.21	%		1,010,242	1.25	%
NOW accounts		703,704	1.09	%		669,915	1.08	%		473,903	1.14	%
Certificates of deposit		1,091,449	1.85	%		1,040,785	1.83	%		958,358	1.82	%
CDARS®		218,119	2.21	%		227,315	2.23	%		229,319	2.14	%

Total interest-bearing deposits	$	3,319,132	1.45	%	$	3,135,991	1.45	%	$	2,721,786	1.50	%

Fed funds purchased and repurchase agreements		94,697	1.48	%		108,205	1.40	%		117,788	1.41	%
Borrowings		158,851	3.71	%		103,392	5.26	%		49,312	1.48	%

Total interest-bearing liabilities	$	3,572,680	1.55	%	$	3,347,588	1.57	%	$	2,888,886	1.49	%

Net interest spread			3.12	%			2.87	%			3.13	%
Net interest margin			3.28	%			3.04	%			3.33	%



	For the Years Ended
	December 31, 2015				December 31, 2014
(In thousands)	Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate
Interest-earning assets:
Short-term investments	$	170,238	0.27	%	$	31,855	0.20	%
Investment in short-term receivables		198,752	2.77	%		230,604	2.82	%
Investment securities		345,868	2.49	%		361,582	2.53	%
Loans		3,019,476	5.03	%		2,587,105	5.19	%

Total interest-earning assets	$	3,734,334	4.46	%	$	3,211,146	4.67	%

Interest-bearing liabilities:
Savings	$	56,704	0.63	%	$	52,303	0.78	%
Money market deposits		1,148,754	1.21	%		859,743	1.34	%
NOW accounts		618,439	1.06	%		497,346	1.14	%
Certificates of deposit		1,028,109	1.83	%		996,700	1.82	%
CDARS®		221,726	2.23	%		205,560	2.18	%

Total interest-bearing deposits	$	3,073,732	1.45	%	$	2,611,652	1.54	%

Fed funds purchased and repurchase agreements		110,838	1.42	%		105,064	1.46	%
Borrowings		109,262	4.57	%		56,068	1.81	%

Total interest-bearing liabilities	$	3,293,832	1.55	%	$	2,772,784	1.54	%

Net interest spread			2.91	%			3.13	%
Net interest margin			3.09	%			3.34	%

Noninterest Income

Noninterest income for the fourth quarter of 2015 totaled $3.4 million, an increase of $2.5 million compared to the linked quarter, and an increase of $1.1 million, or 50.2%, compared to the fourth quarter of 2014. The increase in noninterest income for the linked quarter was due primarily to increases in state tax credits earned of $0.4 million, Community Development Entity (CDE) fees earned of $0.3 million and other noninterest income of $1.6 million. The increase in state tax credits earned was due primarily to additional income earned as the result of a partnership with a Louisiana Capital Company to bridge state tax credits for their purchase and resale on a national basis which has significantly increased the volume of the Company's state tax credit business. The increase in CDE fees earned was due to the annual fees collected from Federal New Markets Tax Credits projects which are still in their compliance period and reached their annual renewal date. The increase compared to the linked quarter was due primarily to the impairment charge of $0.9 million of a Small Business Investment Company investment and the loss of $0.7 million on the sale of a state tax credit investment both recorded during the third quarter of 2015.

The increase in noninterest income for the fourth quarter of 2015 compared to the fourth quarter of 2014 resulted primarily from increases of $0.9 million in state tax credits earned and $0.4 million in rental income from real estate properties. The increases compared to the same period of 2014 were due to the fact that the Company received more State Historic Rehabilitation Tax Credits than the prior year fourth quarter and the Company recognizing rental income from the consolidation of a Low-Income Housing investment Variable Interest Entity (VIE) that owned Low-Income Housing units.

Noninterest Expense

Noninterest expense for the three month period ended December 31, 2015 totaled $31.9 million, an increase of $8.9 million, or 38.5%, compared to the linked quarter, and an increase of $9.6 million, or 43.2%, compared to the three month period ended December 31, 2014. The increase over the linked-quarter and fourth quarter of 2014 was due primarily to increases in all components of noninterest expense. The increase was driven primarily by an increase in impairment of investment in tax credit entities of $5.0 million and $4.3 million compared to the linked quarter and fourth quarter of 2014, respectively.

Taxes

The Company’s tax benefit for the quarter ended December 31, 2015 was $14.4 million, a decrease of $0.2 million compared to the third quarter of 2015, and an increase of $3.8 million compared to the fourth quarter of 2014. The decrease over the linked quarter was due primarily to a decrease in the federal tax credits recognized during the fourth quarter of 2015. The increase over the fourth quarter of 2014 continued 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 as well as its municipal bond and bank owned life insurance income.

Shareholders’ Equity

Shareholders’ equity totaled $501.1 million at December 31, 2015, an increase of $64.8 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 39 full service banking offices located throughout its markets, along with a loan production office in Gulfport, Mississippi, and had 565 employees at December 31, 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).

For further information contact:

First NBC Bank Holding Company

Ashton J. Ryan, Jr.

President and Chief Executive Officer

(504) 671-3801

aryanjr@firstnbcbank.com

FIRST NBC BANK HOLDING COMPANY

CONSOLIDATED BALANCE SHEETS (UNAUDITED)



(In thousands)	December 31, 2015			December 31, 2014
Assets
Cash and due from banks	$	50,270		$	32,484
Short-term investments		298,784			18,404
Investment in short-term receivables		95,499			237,135
Investment securities available for sale, at fair value		285,826			247,647
Investment securities held to maturity		82,074			89,076
Mortgage loans held for sale		2,597			1,622
Loans, net of allowance for loan losses of $55,824 and $42,336, respectively		3,451,193			2,731,928
Bank premises and equipment, net		67,155			51,170
Accrued interest receivable		13,994			11,451
Goodwill and other intangible assets		15,666			7,831
Investment in real estate properties		58,328			16,480
Investment in tax credit entities		163,581			140,913
Cash surrender value of bank-owned life insurance		48,691			47,289
Other real estate		5,232			5,549
Deferred tax asset		144,880			83,461
Other assets		39,232			28,177
Total assets	$	4,823,002		$	3,750,617
Liabilities and equity
Deposits:
Noninterest-bearing	$	369,515		$	364,534
Interest-bearing		3,475,421			2,756,316
Total deposits		3,844,936			3,120,850
Short-term borrowings		8,000			—
Repurchase agreements		79,251			117,991
Long-term borrowings		338,795			40,000
Accrued interest payable		8,728			6,650
Other liabilities		42,167			28,752
Total liabilities		4,321,877			3,314,243
Shareholders’ equity:
Preferred stock
Convertible preferred stock Series C – no par value; 1,680,219 shares authorized; No shares outstanding at December 31, 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 December 31, 2015 and December 31, 2014		37,935			37,935
Common stock- par value $1 per share; 100,000,000 shares authorized; 19,077,572 shares issued and outstanding at December 31, 2015 and 18,576,488 shares issued and outstanding at December 31, 2014		19,078			18,576
Additional paid-in capital		242,979			239,528
Accumulated earnings		222,516			155,599
Accumulated other comprehensive loss, net		(21,385	)		(19,737	)
Total shareholders’ equity		501,123			436,372
Noncontrolling interest		2			2
Total equity		501,125			436,374
Total liabilities and equity	$	4,823,002		$	3,750,617

FIRST NBC BANK HOLDING COMPANY

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



	For the Three Months Ended						For the Years Ended
	December 31,						December 31,
(In thousands, except per share data)	2015			2014			2015			2014
Interest income:
Loans, including fees	$	43,742		$	35,096		$	151,945		$	134,256
Investment securities		2,105			2,094			8,617			9,147
Investment in short-term receivables		876			1,751			5,514			6,512
Short-term investments		176			15			464			63
		46,899			38,956			166,540			149,978
Interest expense:
Deposits		12,140			10,262			44,522			40,183
Borrowings and securities sold under repurchase agreements		1,840			603			6,572			2,546
		13,980			10,865			51,094			42,729
Net interest income		32,919			28,091			115,446			107,249
Provision for loan losses		3,000			3,000			14,600			12,000
Net interest income after provision for loan losses		29,919			25,091			100,846			95,249
Noninterest income:
Service charges on deposit accounts		571			542			2,311			2,147
Investment securities gain (loss), net		—			—			(50	)		135
(Loss) gain on assets sold, net		(10	)		1			(272	)		64
Gain on sale of loans, net		—			—			147			649
Cash surrender value income on bank-owned life insurance		348			354			1,402			1,102
State tax credits earned		908			(45	)		2,590			2,313
Community Development Entity fees earned		443			581			882			1,565
ATM fee income		529			490			2,082			1,958
Rental property income		449			26			1,718			105
Other		197			338			(417	)		1,575
		3,435			2,287			10,393			11,613
Noninterest expense:
Salaries and employee benefits		8,755			7,072			30,473			24,867
Occupancy and equipment expenses		3,318			2,830			12,475			10,795
Professional fees		3,034			2,441			8,878			7,479
Taxes, licenses and FDIC assessments		2,241			1,364			6,709			5,146
Impairment of investment in tax credit entities		8,228			3,881			18,980			14,059
Write-down of foreclosed assets		132			198			261			385
Data processing		1,631			1,275			6,188			4,721
Advertising and marketing		1,178			1,067			3,596			2,886
Rental property expenses		942			13			2,205			53
Other		2,464			2,156			10,812			7,858
		31,923			22,297			100,577			78,249
Income before income taxes		1,431			5,081			10,662			28,613
Income tax benefit		(14,404	)		(10,622	)		(56,634	)		(26,976	)
Net income attributable to Company		15,835			15,703			67,296			55,589
Less preferred stock dividends		(94	)		(94	)		(379	)		(379	)
Less earnings allocated to participating securities		—			(302	)		(295	)		(1,066	)
Income available to common shareholders	$	15,741		$	15,307		$	66,622		$	54,144
Earnings per common share – basic	$	0.85		$	0.82		$	3.54		$	2.92
Earnings per common share – diluted	$	0.82		$	0.80		$	3.44		$	2.84

FIRST NBC BANK HOLDING COMPANY

EARNINGS PER COMMON SHARE



	For the Three Months Ended December 31,				For the Years Ended December 31,
(In thousands, except per share data)	2015		2014		2015		2014
Basic: Income available to common shareholders	$	15,741	$	15,307	$	66,622	$	54,144
Weighted-average common shares outstanding	18,633		18,574		18,806		18,541
Basic earnings per share	$	0.85	$	0.82	$	3.54	$	2.92
Diluted: Income attributable to common shareholders	$	15,741	$	15,307	$	66,622	$	54,144
Weighted-average common shares outstanding	18,633		18,574		18,806		18,541
Effect of dilutive securities:
Stock options outstanding	434		406		414		389
Restricted stock awards outstanding	8		—		4		—
Warrants	118		123		119		119
Weighted-average common shares outstanding – assuming dilution	19,193		19,104		19,343		19,049
Diluted earnings per share	$	0.82	$	0.80	$	3.44	$	2.84

FIRST NBC BANK HOLDING COMPANY

SUMMARY FINANCIAL INFORMATION



	For the Three Months Ended December 31,								For the Three Months Ended September 30,
	For the Three Months Ended December 31,						% Change		For the Three Months Ended September 30,			% Change
(In thousands)	2015				2014		% Change		2015			% Change
EARNINGS DATA
Total interest income	$	46,899		$	38,956		20.4	%	$	42,027		11.6	%
Total interest expense		13,980			10,865		28.7	%		13,228		5.7	%
Net interest income		32,919			28,091		17.2	%		28,799		14.3	%
Provision for loan losses		3,000			3,000		—	%		3,000		—	%
Total noninterest income		3,435			2,287		50.2	%		891		285.5	%
Total noninterest expense		31,923			22,297		43.2	%		23,051		38.5	%
Income before income taxes		1,431			5,081		(71.8	)%		3,639		(60.7	)%
Income tax (benefit) expense		(14,404	)		(10,622	)	35.6	%		(14,562	)	(1.1	)%
Net income		15,835			15,703		0.8	%		18,201		(13.0	)%
Preferred stock dividends		(94	)		(94	)	—	%		(95	)	(1.1	)%
Earnings allocated to participating securities		—			(302	)	(100.0	)%		—		—	%
Net income available to common shareholders	$	15,741		$	15,307		2.8	%	$	18,106		(13.1	)%

AVERAGE BALANCE SHEET DATA
Total assets	$	4,508,334		$	3,701,892		21.8	%	$	4,261,539		5.8	%
Total interest-earning assets		3,986,258			3,345,304		19.2	%		3,755,911		6.1	%
Total loans		3,273,310			2,738,885		19.5	%		3,007,096		8.9	%
Total interest-bearing deposits		3,319,132			2,721,786		21.9	%		3,135,991		5.8	%
Total interest-bearing liabilities		2,572,680			2,888,886		(10.9	)%		3,347,588		(23.1	)%
Total deposits		3,706,671			3,066,652		20.9	%		3,532,476		4.9	%
Total shareholders' equity		492,342			429,295		14.7	%		477,607		3.1	%

SELECTED RATIOS(1)
Return on average common equity		13.83	%		16.10	%				16.42	%
Return on average equity		12.16	%		14.51	%				15.12	%
Return on average assets		1.39	%		1.68	%				1.69	%
Net interest margin		3.28	%		3.33	%				3.04	%
Efficiency ratio(2)		87.81	%		73.40	%				77.64	%
Tier 1 leverage ratio		8.98	%		10.66	%				9.53	%
Tier 1 risk-based capital ratio		10.07	%		11.59	%				10.47	%
Total risk-based capital ratio		12.81	%		12.84	%				13.33	%
Common equity Tier 1 capital ratio		10.07	%		NA					10.47	%

ASSET QUALITY RATIOS(1)
Nonperforming loans to total loans(3)(5)		1.15	%		0.82	%				1.25	%
Nonperforming assets to total assets(4)		0.95	%		0.76	%				1.01	%
Allowance for loan losses to total loans(5)		1.59	%		1.53	%				1.70	%
Allowance for loan losses to nonperforming loans(3)		138.98	%		185.71	%				136.13	%
Net charge-offs to average loans		0.04	%		0.07	%				0.03	%

(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



	For the Three Months Ended
	December 31,			September 30,			December 31,
(In thousands, except per share data)	2015			2015			2014
Income before income taxes:
Income before income taxes (GAAP)	$	1,431		$	3,639		$	5,081
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)	22,887			24,340			19,312
Income before income taxes (Non-GAAP)	24,318			27,979			24,393
Income tax expense-adjusted (Non-GAAP)(2)	(8,483		)	(9,778		)	(8,690		)

Net income (GAAP)	$	15,835		$	18,201		$	15,703

Pro forma income related to investment in tax credit entities:
Income before income taxes (GAAP)	$	1,431		$	3,639		$	5,081
Pro forma interest income adjustment
Pro forma interest income related to investment in tax credit entities(3)	2,186			2,192			1,806
Noninterest expense adjustment(4)
Impairment of investment in tax credit entities(5)	8,228			3,254			3,881
Other direct expenses(6)	783			727			779
Pro forma income before income taxes (Non-GAAP)	12,628			9,812			11,547
Income tax expense-adjusted (Non-GAAP)(2)	(4,405		)	(3,429		)	(4,114		)

Pro forma net income (Non-GAAP)	$	8,223		$	6,383		$	7,433

Adjusted Efficiency Ratio:
Noninterest expense (GAAP)	$	31,923		$	23,051		$	22,297
Adjustments:
Impairment of investment in tax credit entities(5)	8,228			3,254			3,881
Other direct expenses(6)	783			727			779
Adjusted noninterest expense (Non-GAAP)	22,912			19,070			17,637

Net interest income (GAAP)	32,919			28,799			28,091
Noninterest income (GAAP)	3,435			891			2,287
Adjustments:
State tax credits earned	908			495			(45		)
Community Development Entity fees earned	443			183			581
Adjusted noninterest income (Non-GAAP)	2,084			213			1,751
Adjusted total revenue (Non-GAAP)	$	35,003		$	29,012		$	29,842
Adjusted efficiency ratio (Non-GAAP)	65.46		%	65.73		%	59.10		%

Adjusted earnings per share:
Income available to common shareholders (GAAP)	$	15,741		$	18,106		$	15,307
Adjustments:
Merger and acquisition professional fees(7)	687			—			—
Conversion costs(8)	154			195			—
Adjusted income available to common shareholders (Non-GAAP)(9)	$	16,582		$	18,301		$	15,307
Basic earnings per share, excluding merger-related expenses (Non-GAAP)	$	0.89		$	0.98		$	0.82
Diluted earnings per share, excluding merger-related expenses (Non-GAAP)	$	0.86		$	0.95		$	0.80

(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 December 31, 2015, September 30, 2015, and December 31, 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.

(7) Merger and acquisition professional fees represents merger-related expenses related to the cash acquisition of State Investors.

(8) Conversion costs represents merger-related expenses related to the system conversions of First National Bank of Crestview and State Investors.

(9) Adjusted income available to common shareholders excludes the impact of non-operating merger-related expenses incurred in the periods shown.

First NBC Bank Holding Co - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 2, 2016

Attached files

First NBC Bank Holding Co Reports