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National Commerce Corporation Announces Third Quarter 2015 Earnings

BIRMINGHAM, Ala., Oct. 21, 2015 (GLOBE NEWSWIRE) -- National Commerce Corporation (NASDAQ:NCOM) (the “Company” or “NCC”) today reported third quarter 2015 net income to common shareholders of $2.5 million, compared with $1.5 million for the third quarter of 2014. Diluted net earnings per share were $0.26 in both the 2015 and 2014 third quarters.

“We are pleased with our progress in the third quarter,” said John H. Holcomb, III, Chairman and CEO of the Company. “Our team continues to do a great job serving our customers and growing the bank. As always, we need to maintain our focus on continued profitability and performance.”

Several important measures from the third quarter are as follows:

  • Net Interest Margin (tax-effected) of 4.02%, compared with 3.87% for the third quarter of 2014. The margin declined from the 2015 second quarter by 0.20%, largely due to increased cash and fed funds balances. During the third quarter of 2015, average cash and fed funds balances increased $54.6 million as compared to second quarter 2015 average balances.
  • Return on Average Assets of 0.75%, compared with 0.73% for the third quarter of 2014. Return on Average Assets was also impacted by the larger average balances in cash and fed funds during the third quarter of 2015.
  • Return on Average Tangible Common Equity of 6.85%, compared with 6.76% for the third quarter of 2014.
  • Third quarter 2015 loan growth (excluding mortgage loans held for sale) of $44.5 million, representing an 18.2% annualized growth rate. Excluding factoring receivables, loans grew at a 19.8% annualized growth rate.
  • Third quarter 2015 deposit growth of $90.4 million, representing a 34.1% annualized growth rate.
  • $82.3 million in mortgage production, compared with $53.5 million for the third quarter of 2014.
  • $182.7 million in purchased volume in the factoring division. Note that, because the Company entered the factoring business on August 29, 2014, the figure for the 2014 third quarter is not comparable since it only represents one month’s activity.
  • Increase in non-acquired non-performing assets to $4.5 million from $4.2 million at June 30, 2015 and $2.1 million at September 30, 2014.
  • Annualized net charge-offs of 0.03%, compared to 0.07% for the third quarter of 2014.
  • Ending tangible book value per share of $15.42.
  • Ending book value per share of $18.80.


The Company also announced the closing of its Kissimmee, Florida and English Village (Birmingham), Alabama branch banking offices effective December 31, 2015. The Company’s mortgage division will continue to operate out of the English Village location. In association with these closings, the Company expects to incur approximately $160 thousand in closing and severance costs in the fourth quarter of 2015, with a reduction in annualized operating expenses of approximately $500 thousand in 2016 from the reduced overhead expense associated with these offices. Following these closings, the Company will still have five branch offices in the Orlando area and two in the Birmingham area, one of which is approximately two miles from the English Village location.

The Company will host a live audio webcast conference call beginning at 3:00 p.m. Central Time on October 22, 2015 to discuss third quarter 2015 results. Investors may call in (toll free) by dialing (855) 871-0559 (conference ID 55748335). A replay of the conference call will be available beginning two hours after the completion of the call until 10:59 p.m. Central Time on Saturday, October 24, 2015 and can be accessed by dialing (855) 859-2056.

Investors who plan to participate in the live webcast of the conference call should access the webcast by visiting the Company’s Investor Relations Page located at www.nationalbankofcommerce.com. A replay of the webcast will be available on the website for one year. A copy of the news release will also be available at the same location.

Use of Non-GAAP Financial Measures

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

  • “Tangible common equity” is total shareholders’ equity less goodwill, other intangible assets and minority interest not included in intangible assets.
  • “Average tangible common equity” is defined as the average of our tangible common equity for the applicable period.
  • “Return on average tangible common equity,” or ROATCE, is defined as net income available to common shareholders divided by average tangible common equity.
  • “Tangible book value per share” is defined as tangible common equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
  • “Allowance for loan losses to nonacquired loans” is defined as the total allowance for loan losses less the allowance for loan losses attributable to factored receivables divided by nonacquired loans held for investment excluding factored receivables at end of period.
  • “Efficiency ratio” is defined as noninterest expense divided by our operating revenue (which is equal to net interest income plus noninterest income) excluding one-time gains and losses on sales of securities. This measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.
  • “Operating efficiency ratio” is defined as noninterest expense divided by our operating revenue, excluding one-time gains and losses on sales of securities and one-time gains and expenses related to merger and acquisition-related activities. This measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.


We believe that these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. These non-GAAP financial measures exclude various items detailed in the attached “Non-GAAP Reconciliation.”

About National Commerce Corporation
NCC is a bank holding company headquartered in Birmingham, Alabama. Through its subsidiary bank, National Bank of Commerce, NCC provides a broad array of financial services to businesses, business owners and professionals through eight full-service banking offices in Alabama and seven full-service banking offices in Central Florida. The company also owns a majority stake in a transaction-based finance company headquartered in Decatur, Alabama that provides factoring, invoicing, collection and accounts receivable management services to transportation companies and automotive parts and service providers nationwide.

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

Forward-Looking Statements
Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements for which NCC claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such. In addition, certain statements may be contained in NCC’s future filings with the SEC, in press releases and in oral and written statements made by NCC or with NCC’s approval that are not statements of historical fact and that constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of NCC’s plans, objectives and expectations or those of its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to various risks and uncertainties, including those risks and uncertainties described under the heading “Risk Factors” in NCC’s Annual Report on Form 10-K for the year ended December 31, 2014 and described in any subsequent reports that NCC has filed with the SEC. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. You should not rely upon forward-looking statements as predictions of future events. NCC undertakes no obligation to update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. In that respect, NCC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2015 2015 2015 2014 2014
Earnings Summary
Interest income $ 13,450 $ 12,714 $ 12,193 $ 10,578 $ 8,107
Interest expense 1,191 1,071 1,027 846 730
Net interest income 12,259 11,643 11,166 9,732 7,377
Provision for loan losses 201 120 161 826 152
Gain (loss) on sale of securities - - - - (33)
Other noninterest income (1) 2,353 2,206 1,764 1,419 1,353
Merger/conversion-related expenses 122 168 79 246 262
Other noninterest expense (2) 9,773 9,448 9,211 6,910 5,719
Income before income taxes 4,516 4,113 3,479 3,169 2,564
Income tax expense 1,453 1,264 1,092 1,158 841
Net income before minority interest 3,063 2,849 2,387 2,011 1,723
Net income attributable to minority interest 573 593 466 304 208
Net income to common shareholders $ 2,490 $ 2,256 $ 1,921 $ 1,707 $ 1,515
Weighted average common and diluted shares outstanding
Basic 9,438,541 9,438,541 7,701,663 6,223,377 5,855,276
Diluted 9,594,472 9,569,695 7,801,577 6,305,626 5,929,386
Net earnings per common share
Basic $ 0.26 $ 0.24 $ 0.25 $ 0.27 $ 0.26
Diluted $ 0.26 $ 0.24 $ 0.25 $ 0.27 $ 0.26
September 30, June 30, March 31, December 31, September 30,
Selected Performance Ratios 2015 2015 2015 2014 2014
Return on average assets (ROAA) (3) 0.75 % 0.75 % 0.67 % 0.72 % 0.73 %
Return on average equity (ROAE) 5.62 5.22 5.58 6.11 6.17
Return on average tangible common equity (ROATCE) 6.85 6.35 7.15 7.86 6.76
Net interest margin - taxable equivalent 4.02 4.22 4.25 4.58 3.87
Efficiency ratio 67.72 69.43 71.85 64.17 68.51
Operating efficiency ratio (2) 66.88 68.22 71.24 61.97 65.51
Noninterest income / average assets (annualized) 0.71 0.73 0.62 0.60 0.65
Noninterest expense / average assets (annualized) 2.99 3.19 3.24 3.01 2.87
Yield on loans 5.13 5.15 5.26 5.37 4.73
Cost of total deposits 0.39 % 0.38 % 0.38 % 0.36 % 0.35 %
September 30, June 30, March 31, December 31, September 30,
Factoring Metrics 2015 2015 2015 2014 2014
Recourse purchased volume $ 82,661 $ 89,009 $ 84,725 $ 107,891 N/A
Non-recourse purchased volume 100,055 99,614 90,402 90,791 N/A
Total purchased volume $ 182,716 $ 188,623 $ 175,127 $ 198,682 N/A
Average turn (days) 37.97 37.66 41.57 40.08 N/A
Net charge-offs / total purchased volume 0.06 % (0.04)% 0.09 % 0.02 % N/A
Average discount rate 1.74 % 1.67 % 1.65 % 1.65 % N/A
September 30, June 30, March 31, December 31, September 30,
Mortgage Metrics 2015 2015 2015 2014 2014
Total production ($) $ 82,276 $ 84,796 $ 55,731 $ 55,931 $ 53,542
Refinance (%) 19.1 % 18.6 % 26.9 % 22.6 % 19.0 %
Purchases (%) 80.9 % 81.4 % 73.1 % 77.4 % 81.0 %
As of
September 30, June 30, March 31, December 31, September 30,
Balance Sheet Highlights 2015 2015 2015 2014 2014
Cash and cash equivalents $ 192,882 $ 142,393 $ 149,907 $ 123,435 $ 90,909
Total securities 45,911 42,586 37,631 34,932 34,439
Mortgage loans held for sale 7,926 13,750 13,804 9,329 11,329
Acquired purchased credit-impaired loans 5,615 5,724 8,852 9,077 -
Acquired non-purchased credit-impaired loans 123,730 131,953 138,040 143,981 -
Nonacquired loans held for investment (4) 811,011 757,976 704,307 653,063 623,958
CBI loans (factoring receivables) 74,780 75,000 69,541 82,600 81,926
Total gross loans held for investment 1,015,136 970,653 920,740 888,721 705,884
Allowance for loan losses 9,391 9,274 9,522 9,802 9,018
Total intangibles 31,291 31,310 30,560 30,591 23,115
Total assets 1,350,781 1,256,614 1,206,667 1,138,426 897,982
Total deposits 1,141,837 1,051,483 1,000,217 971,060 763,509
Borrowings 22,000 22,000 22,000 22,000 22,000
Total liabilities 1,173,358 1,081,985 1,034,495 1,002,265 793,931
Minority interest 7,508 7,527 7,166 7,239 7,142
Common stock 94 94 94 75 59
Total shareholders' equity 177,423 174,629 172,172 136,161 104,051
Tangible common equity $ 145,558 $ 142,726 $ 141,380 $ 105,265 $ 80,728
End of period common shares outstanding 9,438,541 9,438,541 9,438,541 7,541,541 5,924,579
As of and For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
Asset Quality Analysis 2015 2015 2015 2014 2014
Nonacquired
Nonaccrual loans $ 829 $ 2,688 $ 618 $ 2,276 $ 1,087
Other real estate and repossessed assets 3,562 1,494 1,494 823 830
Loans past due 90 days or more and still accruing 148 44 168 217 176
Total nonacquired nonperforming assets $ 4,539 $ 4,226 $ 2,280 $ 3,316 $ 2,093
Acquired
Nonaccrual loans $ 2,829 $ 2,795 $ 2,576 $ 2,589 $ -
Other real estate and repossessed assets 72 142 542 557 -
Loans past due 90 days or more and still accruing - - - 80 -
Total acquired nonperforming assets $ 2,901 $ 2,937 $ 3,118 $ 3,226 $ -
Selected asset quality ratios
Nonperforming assets / assets 0.55 % 0.57 % 0.45 % 0.57 % 0.23 %
Nonperforming assets / loans + OREO + repossessed assets 0.73 0.74 0.58 0.73 0.30
Net charge-offs (recoveries) to average loans (annualized) 0.03 0.16 0.20 0.02 0.07
Allowance for loan losses to total loans 0.93 0.96 1.03 1.10 1.28
Nonacquired nonperforming assets / Nonacquired loans + nonacquired OREO + nonacquired repossessed assets (4) 0.56 0.56 0.32 0.51 0.33
Allowance for loan losses to nonacquired nonperforming loans 961.21 339.46 1,211.45 393.18 714.01
Allowance for loan losses to nonacquired loans (4) 1.10 % 1.13 % 1.22 % 1.35 % 1.42 %
For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
Taxable Equivalent Yields/Rates 2015 2015 2015 2014 2014
Interest income:
Loans 5.13 % 5.15 % 5.26 % 5.37 % 4.73 %
Mortgage loans held for sale 4.17 4.02 3.63 4.32 4.26
Interest on securities:
Taxable 3.34 3.33 2.92 3.17 3.04
Non-taxable 4.88 5.08 5.72 5.73 5.97
Cash balances in other banks 0.31 0.38 0.36 0.26 0.26
Total interest-earning assets 4.41 4.60 4.64 4.97 4.25
Interest expense:
Interest on deposits 0.50 0.50 0.49 0.46 0.44
Interest on FHLB & other borrowings 2.00 2.01 2.01 2.02 2.00
Total interest-bearing liabilities 0.54 0.54 0.53 0.52 0.50
Net interest spread 3.87 4.06 4.11 4.45 3.75
Net interest margin 4.02 % 4.22 % 4.25 % 4.58 % 3.87 %
As of
September 30, June 30, March 31, December 31, September 30,
2015 2015 2015 2014 2014
Shareholders' Equity and Capital Ratios
Tier 1 Leverage Ratio 10.39 % 11.09 % 11.41 % 10.68 % 9.87 %
Tier 1 Common Capital Ratio 12.88 12.86 13.54 10.66 11.12
Tier 1 Risk-based Capital Ratio 12.88 12.86 13.54 10.66 11.12
Total Risk-based Capital Ratio 13.79 13.78 14.55 11.75 12.37
Equity / Assets 13.13 13.90 14.27 11.96 11.59
Tangible common equity to tangible assets 11.03 % 11.65 % 12.02 % 9.50 % 9.23 %
Book value per share $ 18.80 $ 18.50 $ 18.24 $ 18.05 $ 17.56
Tangible book value per share $ 15.42 $ 15.12 $ 14.98 $ 13.96 $ 13.63
For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2015 2015 2015 2014 2014
Detail of other noninterest expense
Salaries and employee benefits $ 5,186 $ 5,114 $ 4,987 $ 3,717 $ 3,547
Commission-based compensation 1,048 1,056 796 900 459
Occupancy and equipment expense 871 829 836 572 477
Data processing expenses 464 487 425 291 295
Advertising and marketing expenses 124 125 173 126 79
Legal fees 177 135 167 222 267
FDIC insurance assessments 205 152 206 151 131
Accounting and audit expenses 211 212 223 208 102
Consulting and other professional expenses 238 164 105 109 54
Telecommunications expenses 144 135 128 79 67
ORE, Repo asset and other collection expenses 79 71 122 102 32
Core deposit intangible amortization 111 111 111 18 -
Other noninterest expense 1,037 1,025 1,011 661 471
Total noninterest expense $ 9,895 $ 9,616 $ 9,290 $ 7,156 $ 5,981
As of
September 30, June 30, March 31, December 31, September 30,
Non-GAAP Reconciliation 2015 2015 2015 2014 2014
Total shareholders' equity $ 177,423 $ 174,629 $ 172,172 $ 136,161 $ 104,051
Less: intangible assets 31,291 31,310 30,560 30,591 23,115
Less: minority interest not included in intangible assets 574 593 232 305 208
Tangible common equity $ 145,558 $ 142,726 $ 141,380 $ 105,265 $ 80,728
Common shares outstanding at year or period end 9,438,541 9,438,541 9,438,541 7,541,541 5,924,579
Tangible book value per share $ 15.42 $ 15.12 $ 14.98 $ 13.96 $ 13.63
Total assets at end of period $1,350,781 $1,256,614 $1,206,667 $1,138,426 $897,982
Less: intangible assets 31,291 31,310 30,560 30,591 23,115
Adjusted total assets at end of period $1,319,490 $1,225,304 $1,176,107 $1,107,835 $ 874,867
Tangible common equity to tangible assets 11.03 % 11.65 % 12.02 % 9.50 % 9.23 %
Total allowance for loan losses $ 9,391 $ 9,274 $ 9,522 $ 9,802 $ 9,018
Less: allowance for loan losses attributable to CBI (factoring receivables) 500 715 956 955 175
Adjusted allowance for loan losses at end of period $ 8,891 $ 8,559 $ 8,566 $ 8,847 $ 8,843
Nonacquired loans held for investment (4) 811,011 757,976 704,307 653,063 623,958
Allowance for loan losses to nonacquired loans (4) 1.10 % 1.13 % 1.22 % 1.35 % 1.42 %
For the Three Months Ended
September 30, June 30, March 31, December 31, September 30,
2015 2015 2015 2014 2014
Non-GAAP Reconciliation
Total average shareholders' equity $ 175,821 $ 173,354 $ 139,618 $ 110,855 $ 97,344
Less: average intangible assets 31,158 30,555 30,553 24,417 8,291
Less: average minority interest not included in intangible assets 371 315 46 277 188
Average tangible common equity $ 144,292 $ 142,484 $ 109,019 $ 86,161 $ 88,865
Net income to common shareholders 2,490 2,256 1,921 1,707 1,515
Return on average tangible common equity (ROATCE) 6.85 % 6.35 % 7.15 % 7.86 % 6.76 %
Efficiency ratio:
Net interest income $ 12,259 $ 11,643 $ 11,166 $ 9,732 $ 7,377
Total noninterest income 2,353 2,206 1,764 1,419 1,320
Less: gain (loss) on sale of securities - - - - (33)
Operating revenue $ 14,612 $ 13,849 $ 12,930 $ 11,151 $ 8,730
Expenses:
Total noninterest expenses $ 9,895 $ 9,616 $ 9,290 $ 7,156 $ 5,981
Efficiency ratio 67.72 % 69.43 % 71.85 % 64.17 % 68.51 %
Operating efficiency ratio:
Net interest income $ 12,259 $ 11,643 $ 11,166 $ 9,732 $ 7,377
Total noninterest income 2,353 2,206 1,764 1,419 1,320
Less: gain (loss) on sale of securities - - - - (33)
Operating revenue $ 14,612 $ 13,849 $ 12,930 $ 11,151 $ 8,730
Expenses:
Total noninterest expenses $ 9,895 $ 9,616 $ 9,290 $ 7,156 $ 5,981
Less: merger/conversion expenses 122 168 79 246 262
Adjusted noninterest expenses $ 9,773 $ 9,448 $ 9,211 $ 6,910 $ 5,719
Operating efficiency ratio 66.88 % 68.22 % 71.24 % 61.97 % 65.51 %
(1) Excludes securities gains
(2) Excludes merger and conversion related expenses
(3) Net income to common shareholders / average assets
(4) Excludes CBI loans

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Balance Sheets
(In thousands, except share and per share data)
Assets
September 30, 2015 December 31, 2014
Cash and due from banks $ 23,221 $ 14,236
Interest-bearing deposits with banks 169,661 109,199
Cash and cash equivalents 192,882 123,435
Investment securities held-to-maturity (fair value of $17,051 at September 30, 2015) 17,172 -
Investment securities available-for-sale 28,739 34,932
Other investments 5,844 5,421
Mortgage loans held-for-sale 7,926 9,329
Loans, net of unearned income 1,015,136 888,721
Less: allowance for loan losses 9,391 9,802
Loans, net 1,005,745 878,919
Premises and equipment, net 27,331 27,560
Accrued interest receivable 2,331 2,193
Bank owned life insurance 11,934 10,641
Other real estate 3,562 1,008
Deferred tax assets, net 12,381 11,444
Goodwill 29,867 28,834
Core deposit intangible, net 1,424 1,757
Other assets 3,643 2,953
Total assets $ 1,350,781 $ 1,138,426
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand $ 271,202 $ 217,643
Interest-bearing demand 193,771 154,816
Savings and money market 446,726 392,394
Time 230,138 206,207
Total deposits 1,141,837 971,060
Federal Home Loan Bank advances 22,000 22,000
Accrued interest payable 479 431
Other liabilities 9,042 8,774
Total liabilities 1,173,358 1,002,265
Commitments
Shareholders’ equity:
Preferred stock, 250,000 shares authorized, no shares issued or outstanding - -
Common stock, at September 30, 2015, $0.01 par value, 30,000,000 shares authorized and 9,438,541 shares issued and outstanding;
at December 31, 2014, $0.01 par value, 12,500,000 shares authorized and 7,541,541 shares issued and outstanding 94 75
Additional paid-in capital 165,914 131,455
Retained earnings (deficit) 3,214 (3,453)
Accumulated other comprehensive income 693 845
Total shareholders' equity attributable to National Commerce Corporation 169,915 128,922
Noncontrolling interest 7,508 7,239
Total shareholders' equity 177,423 136,161
Total liabilities and shareholders' equity $1,350,781 $1,138,426

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except per share data)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
Interest and dividend income:
Interest and fees on loans$ 12,925 $ 7,744 $ 36,943 $ 19,583
Interest and dividends on taxable investment securities 259 276 784 903
Interest on non-taxable investment securities 137 43 293 127
Interest on interest-bearing deposits and federal funds sold 129 44 337 151
Total interest income 13,450 8,107 38,357 20,764
Interest expense:
Interest on deposits 1,080 619 2,959 1,693
Interest on borrowings 111 111 330 330
Total interest expense 1,191 730 3,289 2,023
Net interest income 12,259 7,377 35,068 18,741
Provision for loan losses 201 152 482 152
Net interest income after provision for loan losses 12,058 7,225 34,586 18,589
Other income:
Service charges and fees on deposit accounts 311 174 886 512
Mortgage origination and fee income 1,439 1,013 4,215 2,766
Merchant sponsorship revenue 305 - 496 -
Income from bank owned life insurance 86 59 251 179
Wealth management fees 11 14 43 43
(Loss) gain on other real estate - - (24) 5
(Loss) gain on sale of investment securities available-for-sale - (33) - (33)
Other 201 93 456 141
Total other income 2,353 1,320 6,323 3,613
Other expense:
Salaries and employee benefits 5,186 3,547 15,287 9,662
Commission-based compensation 1,048 459 2,900 1,236
Occupancy and equipment 871 477 2,536 1,372
Core deposit intangible amortization 111 - 333 -
Other operating expense 2,679 1,498 7,745 4,027
Total other expense 9,895 5,981 28,801 16,297
Earnings before income taxes 4,516 2,564 12,108 5,905
Income tax expense 1,453 841 3,809 2,001
Net earnings 3,063 1,723 8,299 3,904
Less: Net earnings attributable to noncontrolling interest 573 208 1,632 208
Net earnings attributable to National Commerce Corporation$ 2,490 $ 1,515 $ 6,667 $ 3,696
Basic earnings per common share$ 0.26 $ 0.26 $ 0.75 $ 0.64
Diluted earnings per common share$ 0.26 $ 0.26 $ 0.74 $ 0.63

NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
For the Three Months Ended
(Dollars in thousands)September 30, 2015June 30, 2015March 31, 2015December 31, 2014September 30, 2014
Interest-earning assetsAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ RateAverage BalanceInterest Income/ ExpenseAverage Yield/ Rate
Loans$ 992,223 $ 12,826 5.13%$ 944,373 $ 12,116 5.15%$ 903,563 $ 11,709 5.26%$ 748,373 $ 10,124 5.37%$ 640,806 $ 7,636 4.73%
Mortgage loans held for sale 9,890 104 4.17 11,180 112 4.02 9,487 85 3.63 9,914 108 4.32 10,348 111 4.26
Securities:
Taxable securities 30,728 259 3.34 32,402 269 3.33 35,540 256 2.92 34,366 275 3.17 36,011 276 3.04
Tax-exempt securities 17,649 217 4.88 14,297 181 5.08 4,750 67 5.72 4,640 67 5.73 4,584 69 5.97
Cash balances in other banks 166,715 129 0.31 112,081 105 0.38 114,579 103 0.36 48,646 32 0.26 67,191 44 0.26
Total interest-earning assets 1,217,205 $ 13,535 4.41 1,114,333 $ 12,783 4.60 1,067,919 $ 12,220 4.64 845,939 $ 10,606 4.97 758,940 $ 8,136 4.25
Non-interest-earning assets 96,824 95,949 94,118 96,203 68,521
Total assets$1,314,029 $1,210,282 $1,162,037 $942,142 $827,461
Interest-bearing liabilities
Interest-bearing transaction accounts$ 182,056 $ 118 0.26%$ 157,261 $ 97 0.25%$ 159,706 $ 99 0.25%$ 135,882 $ 96 0.28%$ 125,356 $ 89 0.28%
Savings & money market deposits 443,306 486 0.43 408,117 417 0.41 391,321 377 0.39 330,459 309 0.37 308,942 295 0.38
Time deposits 228,298 476 0.83 208,388 447 0.86 209,016 442 0.86 161,368 329 0.81 118,023 235 0.79
Federal Home Loan Bank & other borrowed money 22,000 111 2.00 22,000 110 2.01 22,000 109 2.01 22,027 112 2.02 22,000 111 2.00
Total interest-bearing liabilities 875,660 $ 1,191 0.54 795,766 $ 1,071 0.54 782,043 $ 1,027 0.53 649,736 $ 846 0.52 574,321 $ 730 0.50
Non-interest-bearing deposits 254,402 233,136 232,497 172,290 150,566
Total funding sources 1,130,062 1,028,902 1,014,540 822,026 724,887
Non-interest-bearing liabilities 8,146 8,026 7,879 9,261 5,230
Shareholders' equity 175,821 173,354 139,618 110,855 97,344
$1,314,029 $1,210,282 $1,162,037 $942,142 $827,461
Net interest rate spread 3.87% 4.06% 4.11% 4.45% 3.75%
Net interest income/margin (taxable equivalent) 12,344 4.02% 11,712 4.22% 11,193 4.25% 9,760 4.58% 7,406 3.87%
Tax equivalent adjustment 85 69 27 28 29
Net interest income/margin $ 12,259 4.00% $ 11,643 4.19% $ 11,166 4.24% $ 9,732 4.56% $ 7,377 3.86%



Contact: National Commerce Corporation Will Matthews Vice Chairman and Chief Financial Officer (205) 313-8122

Source:National Commerce Corporation