Exhibit 99.1

 

 

National Commerce Corporation Announces

Fourth Quarter and Fiscal Year End 2017 Earnings

 

BIRMINGHAM, AL (January 24, 2018) (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq: NCOM) (the “Company” or “NCC”), the parent company of National Bank of Commerce, today reported fourth quarter 2017 net income to common shareholders of $1.0 million, compared to $4.9 million for the fourth quarter of 2016.

 

The 2017 results include a write-down of the Company’s deferred tax asset (“DTA”) due to the enactment of the Tax Cuts and Jobs Act of 2017, increasing income tax expense for the fourth quarter and the year by $6.2 million. Diluted net earnings per share were $0.07 in the fourth quarter of 2017, compared to $0.46 in the third quarter of 2017 and $0.44 in the fourth quarter of 2016. The DTA write-down reduced fourth quarter 2017 diluted net earnings per share by approximately $0.41.

 

For the year ended December 31, 2017, NCC earned $20.0 million, or $1.41 in diluted net earnings per share, compared to $17.9 million, or $1.61 per diluted share, for the year ended December 31, 2016. The DTA write-down reduced 2017 diluted net earnings per share by approximately $0.44.

 

NCC’s 2017 fourth quarter and full year 2017 results include $815 thousand and $1.7 million, respectively, in after-tax merger- and conversion-related expenses, reducing diluted net earnings per share by approximately $0.05 and $0.12 for the 2017 fourth quarter and full year, respectively.

 

“We are pleased to report another good year of profitability, growth and strong asset quality,” said Richard Murray, IV, President and Chief Executive Officer of the Company. “Like many companies, our fourth quarter earnings were impacted by the need to write down our deferred tax asset to reflect the December enactment of the federal tax bill, but we were pleased with our overall operating performance. We are also encouraged about the positive impact that the tax bill is expected to have on our profitability in 2018.”

 

“With the January 1, 2018 closing of our acquisition of FirstAtlantic Financial Holdings, Inc., we added some great bankers operating in an excellent market,” continued Murray. “We are excited about our future with Mitch Hunt and the FirstAtlantic family. As always, I remind myself and all of our team that our future success is dependent upon our continued focus on the Company’s core values of asset quality, risk management, growth, candor, and accountability, while maintaining an appropriate sense of humility.”

 

 

Several important measures from the 2017 fourth quarter and full year are as follows:

 

●

Net Interest Margin (taxable equivalent) of 4.63% for the fourth quarter of 2017 and 4.44% for the year ended December 31, 2017. The fourth quarter 2017 margin increased 0.05% compared to 4.58% reported for the third quarter of 2017, and increased 0.64% compared to 3.99% reported for the fourth quarter of 2016. For the year ended December 31, 2017, the margin increased by 0.29% compared to the year ended December 31, 2016.

 

●

Return on Average Assets (“ROAA”) of 0.15% for the fourth quarter of 2017, compared to 1.05% for the fourth quarter of 2016. For the year, ROAA was 0.81%, compared to 1.00% in 2016. The 2017 ROAA figures were negatively impacted by the DTA write-down.

 

●

Return on Average Equity (“ROAE”) of 0.99% for the fourth quarter of 2017, compared to 8.33% for the fourth quarter of 2016. For the year, ROAE was 5.65%, compared to 7.89% in 2016. The 2017 ROAE figures were negatively impacted by the DTA write-down.

 

●

Return on Average Tangible Common Equity (“ROATCE”) of 1.41% for the fourth quarter of 2017 and 8.10% for the year ended December 31, 2017, compared to 10.78% for the fourth quarter of 2016 and 10.32% for the year ended December 31, 2016. The 2017 ROATCE figures were negatively impacted by the DTA write-down.

 

●

Fourth quarter and full year 2017 loan growth (excluding mortgage loans held-for-sale) of $81.7 million and $652.6 million, respectively; non-acquired loans grew $106.1 million during the fourth quarter of 2017 and $379.2 million during the year ended December 31, 2017. Factored receivables declined $0.4 million during the fourth quarter of 2017 and increased $34.8 million during the year ended December 31, 2017. The full year loan growth figures for 2017 include loans acquired in the Company’s acquisitions of Private Bancshares, Inc. and Patriot Bank.

 

●

Increase in deposits of $188.5 million during the 2017 fourth quarter and $618.1 million during the year ended December 31, 2017. The full year deposit growth figures for 2017 include deposits acquired in the Company’s acquisitions of Private Bancshares, Inc. and Patriot Bank.

 

●

For the fourth quarter of 2017, mortgage production volume totaled $121.0 million, compared to $76.0 million for the fourth quarter of 2016. For the year ended December 31, 2017, mortgage production volume totaled $507.6 million, compared to $322.9 million for the year ended December 31, 2016. The 2017 mortgage production volume benefitted from the addition of the PrivatePlus Mortgage division added in the Private Bancshares, Inc. acquisition.

 

 

●

For the fourth quarter of 2017, purchased volume in the factoring division totaled $267.2 million, compared to $187.7 million for the fourth quarter of 2016. For the year ended December 31, 2017, purchase volume totaled $1.03 billion, compared to $705.9 million for the year ended December 31, 2016.

 

●

Decrease in non-acquired non-performing assets to $0.8 million at December 31, 2017, from $1.9 million at September 30, 2017.

 

●

Annualized net charge-offs of 0.14% of average loans outstanding for the fourth quarter of 2017 and 0.05% for the year ended December 31, 2017.

 

●

Provision for loan losses of $1.5 million for the fourth quarter of 2017, compared to $0.4 million for the fourth quarter of 2016. Provision for loan losses for the year ended December 31, 2017 totaled $3.9 million, compared to $3.2 million for the year ended December 31, 2016.

 

●

Ending tangible book value per share of $19.05.

 

●

Ending book value per share of $27.05.

 

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on January 25, 2018 to discuss earnings and operating results for the 2017 fourth quarter and full year. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 5036417).  A replay of the conference call will be available until January 27, 2018 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, average tangible common equity, return on average tangible common equity, tangible book value per share, efficiency ratio and operating efficiency ratio. The Company’s management uses these non-GAAP financial measures in its analysis of the Company’s performance.

 

 

●

“Tangible common equity” is defined as 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 that these 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.

 

●

“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 the Company’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, the Company acknowledges that the non-GAAP financial measures have a number of limitations. As such, the Company 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, twenty-one full-service banking offices in central and northeast Florida (including under the trade names United Legacy Bank, Reunion Bank of Florida, Patriot Bank and FirstAtlantic Bank) 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, 2016 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.

 

Contact:

 

National Commerce Corporation

 

William E. Matthews, V	Lowell Womack, Jr.
Vice Chairman and Chief Financial Officer	Director of Financial Reporting
(205) 313-8122	(205) 313-8147

 

 

NATIONAL COMMERCE CORPORATION

Unaudited Financial Highlights

(In thousands, except share and per share amounts and percentages or as otherwise noted)

 

		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2017				2017				2017				2017				2016
Earnings Summary
Interest income		$	30,224			$	28,202			$	26,466			$	24,899			$	19,032
Interest expense			2,824				2,561				2,513				2,469				2,042
Net interest income			27,400				25,641				23,953				22,430				16,990
Provision for loan losses			1,478				1,105				1,155				156				441
(Loss) gain on sale of securities			(119	)			-				28				-				-
Other noninterest income (1)			4,984				4,630				5,072				5,440				3,472
Merger/conversion-related expenses (2)			1,172				417				344				387				169
Other noninterest expense (3)			18,078				17,654				17,393				18,074				11,971
Income before income taxes			11,537				11,095				10,161				9,253				7,881
Income tax expense			3,890				3,828				3,281				2,841				2,600
Deferred tax asset write-down			6,231				-				-				-				-
Total income tax expense			10,121				3,828				3,281				2,841				2,600
Net income before minority interest			1,416				7,267				6,880				6,412				5,281
Net income attributable to minority interest			413				570				431				493				374
Net income to common shareholders		$	1,003			$	6,697			$	6,449			$	5,919			$	4,907
Weighted average common and diluted shares outstanding
Basic			14,783,597				14,300,974				13,190,582				12,901,040				10,930,309
Diluted			15,173,984				14,679,546				13,551,745				13,283,075				11,173,733
Net earnings per common share
Basic		$	0.07			$	0.47			$	0.49			$	0.46			$	0.45
Diluted		$	0.07			$	0.46			$	0.48			$	0.45			$	0.44

 

		December 31,				September 30,				June 30,				March 31,				December 31,
Selected Performance Ratios		2017				2017				2017				2017				2016
Return on average assets (ROAA) (4)			0.15	%			1.08	%			1.06	%			1.00	%			1.05	%
Return on average equity (ROAE)			0.99				7.06				7.86				7.67				8.33
Return on average tangible common equity (ROATCE)			1.41				9.94				11.49				11.45				10.78
Net interest margin - taxable equivalent			4.63				4.58				4.34				4.18				3.99
Efficiency ratio			59.44				59.70				61.11				66.24				59.33
Operating efficiency ratio (3)			55.82				58.32				59.92				64.85				58.50
Noninterest income / average assets (annualized)			0.76				0.75				0.83				0.92				0.74
Noninterest expense / average assets (annualized)			2.92				2.92				2.91				3.11				2.60
Yield on loans			5.45				5.45				5.38				5.29				4.95
Cost of total deposits			0.43	%			0.41	%			0.40	%			0.40	%			0.40	%

 

		December 31,				September 30,				June 30,				March 31,				December 31,
Factoring Metrics		2017				2017				2017				2017				2016
Recourse purchased volume		$	108,628			$	104,304			$	101,295			$	127,882			$	82,923
Non-recourse purchased volume			158,565				155,157				149,740				125,751				104,797
Total purchased volume		$	267,193			$	259,461			$	251,035			$	253,633			$	187,720
Average turn (days)			43.59				41.11				38.47				35.61				38.35
Net charge-offs / total purchased volume			0.18	%			0.05	%			0.12	%			0.03	%			0.12	%
Average discount rate			1.59	%			1.58	%			1.52	%			1.44	%			1.67	%

 

		December 31,				September 30,				June 30,				March 31,				December 31,
Mortgage Metrics		2017				2017				2017				2017				2016
Total production ($)		$	120,969			$	122,656			$	133,063			$	130,875			$	76,028
Refinance (%)			22.1	%			23.6	%			24.0	%			27.4	%			40.2	%
Purchases (%)			77.9	%			76.4	%			76.0	%			72.6	%			59.8	%

 

 

NATIONAL COMMERCE CORPORATION

Unaudited Financial Highlights

(In thousands, except share and per share amounts and percentages or as otherwise noted)

 

		As of
		December 31,				September 30,				June 30,				March 31,				December 31,
Balance Sheet Highlights		2017				2017				2017				2017				2016
Cash and cash equivalents		$	235,288			$	134,549			$	224,760			$	318,730			$	217,293
Total investment securities			111,396				111,158				101,569				98,390				99,709
Mortgage loans held-for-sale			29,191				15,278				19,482				19,517				15,373
Acquired purchased credit-impaired loans			25,696				26,924				21,065				22,465				11,975
Acquired non-purchased credit-impaired loans			538,276				561,118				490,198				539,056				313,399
Nonacquired loans held for investment (5)			1,455,376				1,349,254				1,252,970				1,153,897				1,076,209
CBI loans (factoring receivables)			118,710				119,110				114,361				99,317				83,901
Total gross loans held for investment			2,138,058				2,056,406				1,878,594				1,814,735				1,485,484
Allowance for loan losses			14,985				14,264				13,407				12,565				12,113
Total intangibles			117,849				119,688				103,270				103,519				52,803
Total assets			2,737,676				2,549,134				2,418,052				2,445,149				1,950,784
Total deposits			2,285,831				2,097,373				2,004,528				2,080,307				1,667,710
FHLB and other borrowings			7,000				7,941				7,000				7,000				7,000
Subordinated debt			24,553				24,540				24,527				24,513				24,500
Total liabilities			2,337,718				2,150,541				2,054,792				2,127,727				1,713,740
Minority interest			7,348				7,504				7,366				7,427				7,309
Common stock			148				148				141				129				109
Total shareholders' equity			399,958				398,593				363,260				317,422				237,044
Tangible common equity		$	281,695			$	278,335			$	259,558			$	213,410			$	183,866
End of period common shares outstanding			14,788,436				14,777,230				14,070,528				12,948,778				10,934,541

 

 

		As of and For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Asset Quality Analysis		2017				2017				2017				2017				2016
Nonacquired
Nonaccrual loans		$	82			$	70			$	50			$	68			$	69
Other real estate and repossessed assets			-				150				-				1,849				2,068
Loans past due 90 days or more and still accruing			677				1,690				1,172				538				581
Total nonacquired nonperforming assets		$	759			$	1,910			$	1,222			$	2,455			$	2,718
Acquired
Nonaccrual loans		$	2,640			$	2,625			$	2,827			$	2,949			$	2,768
Other real estate and repossessed assets			1,094				1,021				-				-				-
Loans past due 90 days or more and still accruing			-				-				-				-				-
Total acquired nonperforming assets		$	3,734			$	3,646			$	2,827			$	2,949			$	2,768
Selected asset quality ratios
Nonperforming assets / Assets			0.16	%			0.22	%			0.17	%			0.22	%			0.28	%
Nonperforming assets / (Loans + OREO + repossessed assets)			0.21				0.27				0.22				0.30				0.37
Net charge-offs (recoveries) to average loans (annualized)			0.14				0.05				0.07				(0.07	)			0.08
Allowance for loan losses to total loans			0.70				0.69				0.71				0.69				0.82
Nonacquired nonperforming assets / (Nonacquired loans + nonacquired OREO + nonacquired repossessed assets) (5)			0.05				0.14				0.10				0.21				0.25
Allowance for loan losses / (Nonacquired nonaccrual loans + nonacquired loans past due 90 days or more and still accruing)			1,974.31				810.45				1,097.14				2,073.43				1,863.54

 

 

		As of
		December 31,				September 30,				June 30,				March 31,				December 31,
Additional Information - Allowance for Loan Losses		2017				2017				2017				2017				2016
Allowance for loan losses excluding CBI loans (factoring receivables)			14,385				13,764				12,907				12,065				11,613
Nonacquired loans held for investment (5)			1,455,376				1,349,254				1,252,970				1,153,897				1,076,209
Allowance for loan losses allocated to CBI loans (factoring receivables)			600				500				500				500				500
CBI loans (factoring receivables)			118,710				119,110				114,361				99,317				83,901

 

 

NATIONAL COMMERCE CORPORATION

Unaudited Financial Highlights

(In thousands, except share and per share amounts and percentages or as otherwise noted)

 

		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Taxable Equivalent Yields/Rates		2017				2017				2017				2017				2016
Interest income:
Loans			5.45	%			5.45	%			5.38	%			5.29	%			4.95	%
Mortgage loans held-for-sale			2.96				3.56				3.72				4.13				2.99
Interest on securities:
Taxable			3.09				3.03				2.98				2.63				2.52
Non-taxable			4.81				4.86				4.91				4.98				4.90
Cash balances in other banks			1.37				1.32				1.09				0.84				0.63
Total interest-earning assets			5.10				5.04				4.79				4.64				4.47
Interest expense:
Interest on deposits			0.62				0.59				0.57				0.56				0.55
Interest on FHLB and other borrowings			3.82				3.95				4.01				3.19				4.04
Interest on subordinated debt			6.27				6.27				6.36				6.42				6.30
Total interest-bearing liabilities			0.73				0.70				0.68				0.68				0.69
Net interest spread			4.37				4.34				4.11				3.96				3.78
Net interest margin			4.63	%			4.58	%			4.34	%			4.18	%			3.99	%

 

		As of
		December 31,				September 30,				June 30,				March 31,				December 31,
		2017				2017				2017				2017				2016
Shareholders' Equity and Capital Ratios
Tier 1 Leverage Ratio			10.89	%			11.42	%			10.69	%			8.86	%			9.57	%
Tier 1 Common Capital Ratio			12.31				12.78				13.17				11.06				11.46
Tier 1 Risk-based Capital Ratio			12.31				12.78				13.17				11.06				11.46
Total Risk-based Capital Ratio			14.10				14.64				15.18				13.07				13.90
Equity / Assets			14.61				15.64				15.02				12.98				12.15
Tangible common equity to tangible assets			10.75	%			11.46	%			11.21	%			9.11	%			9.69	%
Book value per share		$	27.05			$	26.97			$	25.82			$	24.51			$	21.68
Tangible book value per share		$	19.05			$	18.84			$	18.45			$	16.48			$	16.82

 

		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2017				2017				2017				2017				2016
Detail of noninterest income
Service charges and fees on deposit accounts		$	733			$	671			$	640			$	667			$	523
Mortgage origination and fee income			2,450				2,780				3,154				3,145				1,711
Merchant sponsorship revenue			592				622				602				744				613
Income from bank-owned life insurance			210				210				219				216				196
Rental income			240				84				-				-				-
Wealth management fees			11				12				14				10				10
(Loss) gain on sale of other real estate			(66	)			6				105				(1	)			(31	)
(Loss) gain on sale of investments			(119	)			-				28				-				-
Other noninterest income			814				245				338				659				450
Total noninterest income		$	4,865			$	4,630			$	5,100			$	5,440			$	3,472

 

		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2017				2017				2017				2017				2016
Detail of noninterest expense
Salaries and employee benefits		$	10,016			$	9,804			$	9,663			$	10,073			$	6,935
Commission-based compensation			1,700				1,748				1,684				1,723				1,076
Occupancy and equipment expense			1,889				1,692				1,479				1,473				1,193
Data processing expenses			1,437				976				1,007				948				568
Advertising and marketing expenses			349				309				327				468				156
Legal fees			219				204				193				233				163
FDIC insurance assessments			145				351				408				258				234
Property and casualty insurance premiums			253				229				209				143				95
Accounting and audit expenses			209				288				294				318				211
Consulting and other professional expenses			888				510				517				497				201
Telecommunications expenses			217				203				169				186				114
ORE, Repo asset and other collection expenses			75				26				49				272				41
Core deposit intangible amortization			393				366				348				348				182
Other noninterest expense			1,460				1,365				1,390				1,521				971
Total noninterest expense		$	19,250			$	18,071			$	17,737			$	18,461			$	12,140

 

 

NATIONAL COMMERCE CORPORATION

Unaudited Financial Highlights

(In thousands, except share and per share amounts and percentages or as otherwise noted)

 

		As of
		December 31,				September 30,				June 30,				March 31,				December 31,
Non-GAAP Reconciliation		2017				2017				2017				2017				2016
Total shareholders' equity		$	399,958			$	398,593			$	363,260			$	317,422			$	237,044
Less: intangible assets			117,849				119,688				103,270				103,519				52,803
Less: minority interest not included in intangible assets			414				570				432				493				375
Tangible common equity		$	281,695			$	278,335			$	259,558			$	213,410			$	183,866
Common shares outstanding at year or period end			14,788,436				14,777,230				14,070,528				12,948,778				10,934,541
Tangible book value per share		$	19.05			$	18.84			$	18.45			$	16.48			$	16.82
Total assets at end of period		$	2,737,676			$	2,549,134			$	2,418,052			$	2,445,149			$	1,950,784
Less: intangible assets			117,849				119,688				103,270				103,519				52,803
Adjusted total assets at end of period		$	2,619,827			$	2,429,446			$	2,314,782			$	2,341,630			$	1,897,981
Tangible common equity to tangible assets			10.75	%			11.46	%			11.21	%			9.11	%			9.69	%

 

		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2017				2017				2017				2017				2016
Non-GAAP Reconciliation
Total average shareholders' equity		$	402,317			$	376,129			$	328,886			$	312,971			$	234,249
Less: average intangible assets			119,415				108,553				103,403				103,004				52,872
Less: average minority interest not included in intangible assets			357				356				318				295				262
Average tangible common equity		$	282,545			$	267,220			$	225,165			$	209,672			$	181,115
Net income to common shareholders			1,003				6,697				6,449				5,919				4,907
Return on average tangible common equity (ROATCE)			1.41	%			9.94	%			11.49	%			11.45	%			10.78	%
Efficiency ratio:
Net interest income		$	27,400			$	25,641			$	23,953			$	22,430			$	16,990
Total noninterest income			4,865				4,630				5,100				5,440				3,472
Less: gain (loss) on sale of securities			(119	)			-				28				-				-
Operating revenue		$	32,384			$	30,271			$	29,025			$	27,870			$	20,462
Expenses:
Total noninterest expenses		$	19,250			$	18,071			$	17,737			$	18,461			$	12,140
Efficiency ratio			59.44	%			59.70	%			61.11	%			66.24	%			59.33	%
Operating efficiency ratio:
Net interest income		$	27,400			$	25,641			$	23,953			$	22,430			$	16,990
Total noninterest income			4,865				4,630				5,100				5,440				3,472
Less: (Loss) gain on sale of securities			(119	)			-				28				-				-
Operating revenue		$	32,384			$	30,271			$	29,025			$	27,870			$	20,462
Expenses:
Total noninterest expenses		$	19,250			$	18,071			$	17,737			$	18,461			$	12,140
Less: merger/conversion-related expenses			1,172				417				344				387				169
Adjusted noninterest expenses		$	18,078			$	17,654			$	17,393			$	18,074			$	11,971
Operating efficiency ratio			55.82	%			58.32	%			59.92	%			64.85	%			58.50	%

 

(1) Excludes securities gains

(2) After-tax impact of merger conversion-related exenses of $815, $340, $248, $300, and $168, respectively, for the periods presented

(3) Excludes merger/conversion-related expenses

(4) Net income to common shareholders / average assets

(5) Excludes CBI loans (factoring receivables)

 

 

NATIONAL COMMERCE CORPORATION

Unaudited Consolidated Balance Sheets

(In thousands, except share and per share data)

 

		December 31, 2017				December 31, 2016
Assets
Cash and due from banks		$	36,246			$	35,897
Interest-bearing deposits with banks			199,042				181,396
Cash and cash equivalents			235,288				217,293
Investment securities held-to-maturity (fair value of $25,932 and $25,894 at December 31, 2017 and December 31, 2016, respectively)			25,562				26,329
Investment securities available-for-sale			85,834				73,380
Other investments			11,350				7,879
Mortgage loans held-for-sale			29,191				15,373
Loans, net of unearned income			2,138,058				1,485,484
Less: allowance for loan losses			14,985				12,113
Loans, net			2,123,073				1,473,371
Premises and equipment, net			52,455				31,884
Accrued interest receivable			6,157				4,129
Bank-owned life insurance			31,584				28,034
Other real estate			1,094				2,068
Deferred tax assets, net			12,041				13,486
Goodwill			113,394				50,771
Core deposit intangible, net			4,455				2,032
Other assets			6,198				4,755
Total assets		$	2,737,676			$	1,950,784
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand		$	697,144			$	429,030
Interest-bearing demand			362,266				262,261
Savings and money market			951,846				703,289
Time			274,575				273,130
Total deposits			2,285,831				1,667,710
Federal Home Loan Bank advances and other borrowings			7,000				7,000
Subordinated debt			24,553				24,500
Accrued interest payable			900				829
Other liabilities			19,434				13,701
Total liabilities			2,337,718				1,713,740
Shareholders’ equity:
Preferred stock, 250,000 shares authorized, no shares issued or outstanding			-				-
Common stock, $0.01 par value, 30,000,000 shares authorized, 14,788,436 and 10,934,541 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively			148				109
Additional paid-in capital			347,999				205,372
Retained earnings			43,989				24,005
Accumulated other comprehensive income			474				249
Total shareholders equity attributable to National Commerce Corporation			392,610				229,735
Noncontrolling interest			7,348				7,309
Total shareholders equity			399,958				237,044
Total liabilities and shareholders equity		$	2,737,676			$	1,950,784

 

 

NATIONAL COMMERCE CORPORATION

Unaudited Consolidated Statements of Earnings

(In thousands, except share and per share data)

 

		For the Three Months Ended								For the Twelve Months Ended
		December 31,								December 31,
		2017				2016				2017				2016
Interest and dividend income:
Interest and fees on loans		$	28,834			$	18,082			$	104,194			$	71,225
Interest and dividends on taxable investment securities			756				525				2,627				1,813
Interest on non-taxable investment securities			191				201				783				802
Interest on interest-bearing deposits and federal funds sold			443				224				2,187				723
Total interest income			30,224				19,032				109,791				74,563
Interest expense:
Interest on deposits			2,365				1,583				8,530				6,127
Interest on borrowings			71				71				284				294
Interest on subordinated debt			388				388				1,553				960
Total interest expense			2,824				2,042				10,367				7,381
Net interest income			27,400				16,990				99,424				67,182
Provision for loan losses			1,478				441				3,894				3,248
Net interest income after provision for loan losses			25,922				16,549				95,530				63,934
Other income:
Service charges and fees on deposit accounts			733				523				2,711				2,019
Mortgage origination and fee income			2,450				1,711				11,529				6,975
Merchant sponsorship revenue			592				613				2,560				2,168
Income from bank-owned life insurance			210				196				855				810
Rental income			240				-				324				-
Wealth management fees			11				10				47				49
(Loss) gain on other real estate			(66	)			(31	)			44				244
Loss on sale of investment securities available-for-sale			(119	)			-				(91	)			-
Other			814				450				2,056				1,691
Total other income			4,865				3,472				20,035				13,956
Other expense:
Salaries and employee benefits			10,016				6,935				39,556				27,735
Commission-based compensation			1,700				1,076				6,855				4,091
Occupancy and equipment			1,889				1,193				6,533				4,640
Core deposit intangible amortization			393				182				1,455				756
Other operating expense			5,252				2,754				19,120				11,857
Total other expense			19,250				12,140				73,519				49,079
Earnings before income taxes			11,537				7,881				42,046				28,811
Income tax expense			10,121				2,600				20,071				9,394
Net earnings			1,416				5,281				21,975				19,417
Less: Net earnings attributable to noncontrolling interest			413				374				1,907				1,564
Net earnings attributable to National Commerce Corporation		$	1,003			$	4,907			$	20,068			$	17,853
Weighted average common and diluted shares outstanding
Basic			14,783,597				10,930,309				13,800,595				10,886,092
Diluted			15,173,984				11,173,733				14,193,433				11,093,987
Basic earnings per common share		$	0.07			$	0.45			$	1.45			$	1.64
Diluted earnings per common share		$	0.07			$	0.44			$	1.41			$	1.61

 

 

NATIONAL COMMERCE CORPORATION

Average Balance Sheets and Net Interest Analysis

 

		For the Three Months Ended
(Dollars in thousands)		December 31, 2017												September 30, 2017												June 30, 2017												March 31, 2017												December 31, 2016
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		$	2,091,443			$	28,704				5.45	%		$	1,937,115			$	26,634				5.45	%		$	1,849,258			$	24,823				5.38	%		$	1,793,241			$	23,377				5.29	%		$	1,446,629			$	18,012				4.95	%
Mortgage loans held-for-sale			18,237				136				2.96				16,811				151				3.56				18,321				170				3.72				21,809				222				4.13				10,366				78				2.99
Securities:
Taxable securities			97,175				756				3.09				90,969				694				3.03				81,645				606				2.98				88,062				571				2.63				82,881				525				2.52
Tax-exempt securities			25,005				303				4.81				25,286				310				4.86				25,573				313				4.91				25,824				317				4.98				25,910				319				4.90
Cash balances in other banks			128,606				443				1.37				159,973				533				1.32				249,361				676				1.09				258,672				535				0.84				140,813				224				0.63
Total interest-earning assets			2,360,466			$	30,342				5.10				2,230,154			$	28,322				5.04				2,224,158			$	26,588				4.79				2,187,608			$	25,022				4.64				1,706,599			$	19,158				4.47
Noninterest-earning assets			255,239												228,231												218,088												220,006												149,709
Total assets		$	2,615,705											$	2,458,385											$	2,442,246											$	2,407,614											$	1,856,308
Interest-bearing liabilities
Interest-bearing transaction accounts		$	331,876			$	277				0.33	%		$	314,925			$	207				0.26	%		$	341,238			$	243				0.29	%		$	332,361			$	217				0.26	%		$	235,340			$	149				0.25	%
Savings and money market deposits			884,660				1,381				0.62				827,526				1,233				0.59				821,130				1,138				0.56				804,537				1,096				0.55				633,765				791				0.50
Time deposits			285,669				707				0.98				273,630				661				0.96				290,097				673				0.93				306,404				697				0.92				273,293				643				0.94
Federal Home Loan Bank and other borrowed money			7,381				71				3.82				7,228				72				3.95				7,000				70				4.01				9,016				71				3.19				7,000				71				4.04
Subordinated debt			24,547				388				6.27				24,533				388				6.27				24,520				389				6.36				24,507				388				6.42				24,494				388				6.30
Total interest-bearing liabilities			1,534,133			$	2,824				0.73				1,447,842			$	2,561				0.70				1,483,985			$	2,513				0.68				1,476,825			$	2,469				0.68				1,173,892			$	2,042				0.69
Noninterest-bearing deposits			657,786												615,130												612,910												600,897												431,253
Total funding sources			2,191,919												2,062,972												2,096,895												2,077,722												1,605,145
Noninterest-bearing liabilities			21,469												19,284												16,465												16,921												16,914
Shareholders' equity			402,317												376,129												328,886												312,971												234,249
		$	2,615,705											$	2,458,385											$	2,442,246											$	2,407,614											$	1,856,308
Net interest rate spread											4.37	%											4.34	%											4.11	%											3.96	%											3.78	%
Net interest income/margin (taxable equivalent)							27,518				4.63	%							25,761				4.58	%							24,075				4.34	%							22,553				4.18	%							17,116				3.99	%
Tax equivalent adjustment							118												120												122												123												126
Net interest income/margin						$	27,400				4.61	%						$	25,641				4.56	%						$	23,953				4.32	%						$	22,430				4.16	%						$	16,990				3.96	%

 

 

NATIONAL COMMERCE CORPORATION

Average Balance Sheets and Net Interest Analysis

 

(Dollars in thousands)		December 31, 2017												December 31, 2016
Interest-earning assets		Average Balance				Interest Income/ Expense				Average Yield/ Rate				Average Balance				Interest Income/ Expense				Average Yield/ Rate
Loans		$	1,918,634			$	103,539				5.40	%		$	1,397,681			$	70,761				5.06	%
Mortgage loans held for sale			18,779				679				3.62				13,031				489				3.75
Securities:
Taxable securities			89,492				2,627				2.94				75,110				1,813				2.41
Tax-exempt securities			25,420				1,243				4.89				26,004				1,273				4.90
Cash balances in other banks			198,689				2,187				1.10				118,438				723				0.61
Total interest-earning assets			2,251,014			$	110,275				4.90				1,630,264			$	75,059				4.60
Non-interest earning assets			230,482												150,703
Total assets		$	2,481,496											$	1,780,967
Interest-bearing liabilities
Interest-bearing transactions accounts		$	330,057			$	944				0.29	%		$	216,271			$	521				0.24	%
Savings and money market deposits			834,664				4,848				0.58				617,527				2,964				0.48
Time deposits			288,851				2,738				0.95				287,641				2,642				0.92
Federal Home Loan Bank and other borrowed money			7,651				284				3.71				7,985				294				3.68
Subordinated debt			24,527				1,553				6.33				15,200				960				6.32
Total interest-bearing liabilities			1,485,750			$	10,367				0.70				1,144,624			$	7,381				0.64
Non-interest bearing deposits			621,819												396,925
Total funding sources			2,107,569												1,541,549
Non-interest bearing liabilities			18,549												13,067
Shareholders' equity			355,378												226,351
		$	2,481,496											$	1,780,967
Net interest rate spread											4.20	%											3.96	%
Net interest income/margin (taxable equivalent)							99,908				4.44	%							67,678				4.15	%
Tax equivalent adjustment							484												496
Net interest income/margin						$	99,424				4.42	%						$	67,182				4.12	%