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National Commerce Corporation Announces Fourth Quarter and FYE 2015 Earnings

BIRMINGHAM, Ala., Jan. 26, 2016 (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq:NCOM) (the “Company” or “NCC”), the parent company of National Bank of Commerce, today reported fourth quarter 2015 net income to common shareholders of $2.9 million, compared to $1.7 million for the fourth quarter of 2014. Diluted net earnings per share were $0.28 in the 2015 fourth quarter, compared to $0.27 in the 2015 third quarter.

For the full year, NCC reported net income of $9.6 million, up from $5.4 million in 2014, and diluted net earnings per share of $1.02, compared to $0.91 in 2014.

On October 31, 2015, the Company completed the acquisition of Reunion Bank of Florida, incurring approximately $395 thousand in merger-related expenses. Also, as previously announced, the Company closed its Kissimmee, Florida and English Village (Birmingham), Alabama branch banking offices, effective December 31, 2015. In connection with these closings, the Company incurred approximately $165 thousand in closing and severance costs in the fourth quarter of 2015.

“We are pleased to welcome the Reunion team and its customers to our company,” said John H. Holcomb, III, Chairman and Chief Executive Officer of the Company. “Our team’s work in 2015 has National Commerce Corporation well-positioned for 2016 and beyond. We will continue our focus on asset quality, customer service and growing our profitability, and we look forward to 2016.”

Several important measures from the fourth quarter of 2015 are as follows:

  • Net Interest Margin (tax-effected) of 4.06%, down from 4.58% for the fourth quarter of 2014. The margin increased 0.04% compared to the 2015 third quarter. During the fourth quarter of 2015, average cash and federal funds balances were $191.1 million, compared to $48.6 million in the 2014 fourth quarter and $166.7 million in the 2015 third quarter. The 2014 fourth quarter margin was also higher than the 2015 fourth quarter due to the proportionately larger size of factoring revenues as a percentage of total revenues, resulting from the higher yields in the factoring division.
  • Return on Average Assets of 0.72% for both the 2015 and 2014 fourth quarters. Return on Average Assets was impacted by the larger average balances in cash and federal funds during the fourth quarter of 2015.
  • Return on Average Tangible Common Equity of 7.48%, compared to 7.86% for the fourth quarter of 2014.
  • Fourth quarter 2015 loan growth (excluding mortgage loans held-for-sale) of $304.3 million. The fourth quarter loan growth includes loans acquired in the October 31, 2015 Reunion acquisition totaling approximately $258.4 million.
  • Fourth quarter 2015 deposit growth of $372.6 million. The fourth quarter deposit growth includes deposits acquired in the October 31, 2015 Reunion acquisition totaling approximately $277.7 million.
  • $58.9 million in mortgage production, compared to $55.9 million for the fourth quarter of 2014.
  • $172.1 million in purchased volume in the factoring division, compared to $198.7 million for the 2014 fourth quarter.
  • A slight decrease in non-acquired non-performing assets to $4.3 million from $4.5 million at September 30, 2015, and an increase compared to $3.3 million at December 31, 2014.
  • Annualized net charge-offs of 0.06%, compared to 0.02% for the fourth quarter of 2014.
  • Ending tangible book value per share of $15.03.
  • Ending book value per share of $20.01.

The Company will host a live audio webcast conference call beginning at 9:00 a.m. Central Time on January 27, 2016 to discuss earnings and operating results for the fourth quarter and year ended December 31, 2015. Investors may call in (toll free) by dialing (855) 871-0559 (conference ID 30845889). 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 January 29, 2016 and can be accessed by dialing (855) 859-2056.

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

Use of Non-GAAP Financial Measures

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

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


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

About National Commerce Corporation

National Commerce Corporation (Nasdaq:NCOM), a Delaware corporation, is a financial holding company and bank holding company headquartered in Birmingham, Alabama. Substantially all of the operations of NCC 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 (in Birmingham, Huntsville, Auburn-Opelika, and Baldwin County) and ten full-service banking offices in Central Florida (in Vero Beach through National Bank of Commerce; in Longwood, Winter Park, Orlando, and Oviedo through United Legacy Bank, a division of National Bank of Commerce; and in Tavares, Port Orange, St. Augustine and Ormond Beach through Reunion Bank of Florida, a division of National Bank of Commerce). 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 based 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.

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 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, 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, and these statements should not be relied upon as predictions of future events. NCC undertakes no obligation to update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. In that respect, NCC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
Earnings Summary
Interest income$ 16,488 $ 13,450 $ 12,714 $ 12,193 $ 10,578
Interest expense 1,507 1,191 1,071 1,027 846
Net interest income 14,981 12,259 11,643 11,166 9,732
Provision for loan losses 631 201 120 161 826
Other noninterest income (1) 2,298 2,353 2,206 1,764 1,419
Merger/conversion-related expenses 395 122 168 79 246
Other noninterest expense (2) 11,211 9,773 9,448 9,211 6,910
Income before income taxes 5,042 4,516 4,113 3,479 3,169
Income tax expense 1,667 1,453 1,264 1,092 1,158
Net income before minority interest 3,375 3,063 2,849 2,387 2,011
Net income attributable to minority interest 437 573 593 466 304
Net income to common shareholders$ 2,938 $ 2,490 $ 2,256 $ 1,921 $ 1,707
Weighted average common and diluted shares outstanding
Basic 10,345,146 9,438,541 9,438,541 7,701,663 6,223,377
Diluted 10,552,871 9,594,472 9,569,695 7,801,577 6,305,626
Net earnings per common share
Basic$ 0.28 $ 0.26 $ 0.24 $ 0.25 $ 0.27
Diluted$ 0.28 $ 0.26 $ 0.24 $ 0.25 $ 0.27
December 31, September 30, June 30, March 31, December 31,
Selected Performance Ratios 2015 2015 2015 2015 2014
Return on average assets (ROAA) (3) 0.72 % 0.75 % 0.75 % 0.67 % 0.72 %
Return on average equity (ROAE) 5.76 5.62 5.22 5.58 6.11
Return on average tangible common equity
(ROATCE) 7.48 6.85 6.35 7.15 7.86
Net interest margin - taxable equivalent 4.06 4.02 4.22 4.25 4.58
Efficiency ratio 67.17 67.72 69.43 71.85 64.17
Operating efficiency ratio (2) 64.88 66.88 68.22 71.24 61.97
Noninterest income / average assets (annualized) 0.56 0.71 0.73 0.62 0.60
Noninterest expense / average assets (annualized) 2.84 2.99 3.19 3.24 3.01
Yield on loans 5.17 5.13 5.15 5.26 5.37
Cost of total deposits 0.40 % 0.39 % 0.38 % 0.38 % 0.36 %
December 31, September 30, June 30, March 31, December 31,
Factoring Metrics 2015 2015 2015 2015 2014
Recourse purchased volume$ 74,922 $ 82,661 $ 89,009 $ 84,725 $ 107,891
Non-recourse purchased volume 97,142 100,055 99,614 90,402 90,791
Total purchased volume$ 172,064 $ 182,716 $ 188,623 $ 175,127 $ 198,682
Average turn (days) 39.68 37.97 37.66 41.57 40.08
Net charge-offs / total purchased volume 0.12 % 0.06 % (0.04)% 0.09 % 0.02
Average discount rate 1.73 % 1.74 % 1.67 % 1.65 % 1.65
December 31, September 30, June 30, March 31, December 31,
Mortgage Metrics 2015 2015 2015 2015 2014
Total production ($)$ 58,903 $ 82,276 $ 84,796 $ 55,731 $ 55,931
Refinance (%) 26.0 % 19.1 % 18.6 % 26.9 % 22.6 %
Purchases (%) 74.0 % 80.9 % 81.4 % 73.1 % 77.4 %
NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
As of
December 31, September 30, June 30, March 31, December 31,
Balance Sheet Highlights 2015 2015 2015 2015 2014
Cash and cash equivalents$ 212,457 $ 192,882 $ 142,393 $ 149,907 $ 123,435
Total securities 80,863 45,911 42,586 37,631 34,932
Mortgage loans held-for-sale 15,020 7,926 13,750 13,804 9,329
Acquired purchased credit-impaired loans 10,443 5,615 5,724 8,852 9,077
Acquired non-purchased credit-impaired loans 370,872 123,730 131,953 138,040 143,981
Nonacquired loans held for investment (4) 870,471 811,011 757,976 704,307 653,063
CBI loans (factoring receivables) 67,628 74,780 75,000 69,541 82,600
Total gross loans held for investment 1,319,414 1,015,136 970,653 920,740 888,721
Allowance for loan losses 9,842 9,391 9,274 9,522 9,802
Total intangibles 53,474 31,291 31,310 30,560 30,591
Total assets 1,764,607 1,350,781 1,256,614 1,206,667 1,138,426
Total deposits 1,514,458 1,141,837 1,051,483 1,000,217 971,060
Borrowings 22,000 22,000 22,000 22,000 22,000
Total liabilities 1,547,971 1,173,358 1,081,985 1,034,495 1,002,265
Minority interest 7,372 7,508 7,527 7,166 7,239
Common stock 108 94 94 94 75
Total shareholders' equity 216,636 177,423 174,629 172,172 136,161
Tangible common equity$ 162,724 $ 145,558 $ 142,726 $ 141,380 $ 105,265
End of period common shares outstanding 10,824,969 9,438,541 9,438,541 9,438,541 7,541,541
As of and For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
Asset Quality Analysis 2015 2015 2015 2015 2014
Nonacquired
Nonaccrual loans$ 187 $ 829 $ 2,688 $ 618 $ 2,276
Other real estate and repossessed assets 3,873 3,562 1,494 1,494 823
Loans past due 90 days or more and still accruing 252 148 44 168 217
Total nonacquired nonperforming assets $ 4,312 $ 4,539 $ 4,226 $ 2,280 $ 3,316
Acquired
Nonaccrual loans$ 3,508 $ 2,829 $ 2,795 $ 2,576 $ 2,589
Other real estate and repossessed assets 92 72 142 542 557
Loans past due 90 days or more and still accruing - - - - 80
Total acquired nonperforming assets $ 3,600 $ 2,901 $ 2,937 $ 3,118 $ 3,226
Selected asset quality ratios
Nonperforming assets / assets 0.45 % 0.55 % 0.57 % 0.45 % 0.57 %
Nonperforming assets / (loans + OREO + repossessed assets) 0.60 0.73 0.74 0.58 0.73
Net charge-offs (recoveries) to average loans (annualized) 0.06 0.03 0.16 0.20 0.02
Allowance for loan losses to total loans 0.75 0.93 0.96 1.03 1.10
Nonacquired nonperforming assets / (Nonacquired loans +
nonacquired OREO + nonacquired repossessed assets) (4) 0.49 0.56 0.56 0.32 0.51
Allowance for loan losses to nonacquired nonperforming
loans 2,241.91 961.21 339.46 1,211.45 393.18
Allowance for loan losses to nonacquired loans (4) 1.07 % 1.10 % 1.13 % 1.22 % 1.35 %
For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
Taxable Equivalent Yields/Rates 2015 2015 2015 2015 2014
Interest income:
Loans 5.17 % 5.13 % 5.15 % 5.26 % 5.37 %
Mortgage loans held-for-sale 3.44 4.17 4.02 3.63 4.32
Interest on securities:
Taxable 3.34 3.34 3.33 2.92 3.17
Non-taxable 4.18 4.88 5.08 5.72 5.73
Cash balances in other banks 0.35 0.31 0.38 0.36 0.26
Total interest-earning assets 4.46 4.41 4.60 4.64 4.97
Interest expense:
Interest on deposits 0.54 0.50 0.50 0.49 0.46
Interest on FHLB and other borrowings 2.01 2.00 2.01 2.01 2.02
Total interest-bearing liabilities 0.57 0.54 0.54 0.53 0.52
Net interest spread 3.89 3.87 4.06 4.11 4.45
Net interest margin 4.06 % 4.02 % 4.22 % 4.25 % 4.58 %
NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
As of
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
Shareholders' Equity and Capital Ratios
Tier 1 Leverage Ratio 9.65 % 10.39 % 11.09 % 11.41 % 10.68 %
Tier 1 Common Capital Ratio 11.02 12.88 12.86 13.54 10.66
Tier 1 Risk-based Capital Ratio 11.02 12.88 12.86 13.54 10.66
Total Risk-based Capital Ratio 11.74 13.79 13.78 14.55 11.75
Equity / Assets 12.28 13.13 13.90 14.27 11.96
Tangible common equity to tangible assets 9.51 % 11.03 % 11.65 % 12.02 % 9.50 %
Book value per share$ 20.01 $ 18.80 $ 18.50 $ 18.24 $ 18.05
Tangible book value per share$ 15.03 $ 15.42 $ 15.12 $ 14.98 $ 13.96
For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
Detail of other noninterest expense
Salaries and employee benefits$ 6,077 $ 5,186 $ 5,114 $ 4,987 $ 3,717
Commission-based compensation 844 1,048 1,056 796 900
Occupancy and equipment expense 1,048 871 829 836 572
Data processing expenses 511 464 487 425 291
Advertising and marketing expenses 19 124 125 173 126
Legal fees 173 177 135 167 222
FDIC insurance assessments 242 205 152 206 151
Accounting and audit expenses 332 211 212 223 208
Consulting and other professional expenses 387 238 164 105 109
Telecommunications expenses 132 144 135 128 79
ORE, Repo asset and other collection expenses 256 79 71 122 102
Core deposit intangible amortization 175 111 111 111 18
Other noninterest expense 1,410 1,037 1,025 1,011 661
Total noninterest expense$ 11,606 $ 9,895 $ 9,616 $ 9,290 $ 7,156
NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
As of
December 31, September 30, June 30, March 31, December 31,
Non-GAAP Reconciliation 2015 2015 2015 2015 2014
Total shareholders' equity$ 216,636 $ 177,423 $ 174,629 $ 172,172 $ 136,161
Less: intangible assets 53,474 31,291 31,310 30,560 30,591
Less: minority interest not included in intangible assets 438 574 593 232 305
Tangible common equity$ 162,724 $ 145,558 $ 142,726 $ 141,380 $ 105,265
Common shares outstanding at year or period end 10,824,969 9,438,541 9,438,541 9,438,541 7,541,541
Tangible book value per share$ 15.03 $ 15.42 $ 15.12 $ 14.98 $ 13.96
Total assets at end of period$ 1,764,607 $ 1,350,781 $ 1,256,614 $ 1,206,667 $ 1,138,426
Less: intangible assets 53,474 31,291 31,310 30,560 30,591
Adjusted total assets at end of period$ 1,711,133 $ 1,319,490 $ 1,225,304 $ 1,176,107 $ 1,107,835
Tangible common equity to tangible assets 9.51 % 11.03 % 11.65 % 12.02 % 9.50 %
Total allowance for loan losses$ 9,842 $ 9,391 $ 9,274 $ 9,522 $ 9,802
Less: allowance for loan losses attributable to
CBI (factoring receivables) 500 500 715 956 955
Adjusted allowance for loan losses at end of period$ 9,342 $ 8,891 $ 8,559 $ 8,566 $ 8,847
Nonacquired loans held for investment (4) 870,471 811,011 757,976 704,307 653,063
Allowance for loan losses to nonacquired loans (4) 1.07 % 1.10 % 1.13 % 1.22 % 1.35 %
For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
Non-GAAP Reconciliation
Total average shareholders' equity$ 202,299 $ 175,821 $ 173,354 $ 139,618 $ 110,855
Less: average intangible assets 46,116 31,158 30,555 30,553 24,417
Less: average minority interest not included
in intangible assets 331 371 315 46 277
Average tangible common equity$ 155,852 $ 144,292 $ 142,484 $ 109,019 $ 86,161
Net income to common shareholders 2,938 2,490 2,256 1,921 1,707
Return on average tangible common equity (ROATCE) 7.48 % 6.85 % 6.35 % 7.15 % 7.86 %
Efficiency ratio:
Net interest income$ 14,981 $ 12,259 $ 11,643 $ 11,166 $ 9,732
Total noninterest income 2,298 2,353 2,206 1,764 1,419
Less: gain (loss) on sale of securities - - - - -
Operating revenue$ 17,279 $ 14,612 $ 13,849 $ 12,930 $ 11,151
Expenses:
Total noninterest expenses$ 11,606 $ 9,895 $ 9,616 $ 9,290 $ 7,156
Efficiency ratio 67.17 % 67.72 % 69.43 % 71.85 % 64.17 %
Operating efficiency ratio:
Net interest income$ 14,981 $ 12,259 $ 11,643 $ 11,166 $ 9,732
Total noninterest income 2,298 2,353 2,206 1,764 1,419
Less: gain (loss) on sale of securities - - - - -
Operating revenue$ 17,279 $ 14,612 $ 13,849 $ 12,930 $ 11,151
Expenses:
Total noninterest expenses$ 11,606 $ 9,895 $ 9,616 $ 9,290 $ 7,156
Less: merger/conversion-related expenses 395 122 168 79 246
Adjusted noninterest expenses$ 11,211 $ 9,773 $ 9,448 $ 9,211 $ 6,910
Operating efficiency ratio 64.88 % 66.88 % 68.22 % 71.24 % 61.97 %
(1) Excludes securities gains
(2) Excludes merger/conversion-related expenses
(3) Net income to common shareholders / average assets
(4) Excludes CBI loans

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Balance Sheets
(In thousands, except share and per share data)
Assets
December 31, 2015 December 31, 2014
Cash and due from banks $ 27,173 $ 14,236
Interest-bearing deposits with banks 185,284 109,199
Cash and cash equivalents 212,457 123,435
Investment securities held-to-maturity (fair value of $27,843 at December 31, 2015) 27,458 -
Investment securities available-for-sale 53,405 34,932
Other investments 6,235 5,421
Mortgage loans held-for-sale 15,020 9,329
Loans, net of unearned income 1,319,414 888,721
Less: allowance for loan losses 9,842 9,802
Loans, net 1,309,572 878,919
Premises and equipment, net 31,432 27,560
Accrued interest receivable 3,510 2,193
Bank owned life insurance 27,223 10,641
Other real estate 3,965 1,008
Deferred tax assets, net 14,190 11,444
Goodwill 50,686 28,834
Core deposit intangible, net 2,788 1,757
Other assets 6,666 2,953
Total assets $ 1,764,607 $ 1,138,426
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand $ 382,946 $ 217,643
Interest-bearing demand 202,649 154,816
Savings and money market 611,887 392,394
Time 316,976 206,207
Total deposits 1,514,458 971,060
Federal Home Loan Bank advances 22,000 22,000
Accrued interest payable 627 431
Other liabilities 10,886 8,774
Total liabilities 1,547,971 1,002,265
Commitments
Shareholders’ equity:
Preferred stock, 250,000 shares authorized, no shares issued or outstanding - -
Common stock, at December 31, 2015, $0.01 par value, 30,000,000 shares authorized and
10,824,969 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 108 75
Additional paid-in capital 202,456 131,455
Retained earnings (deficit) 6,152 (3,453)
Accumulated other comprehensive income 548 845
Total shareholders' equity attributable to National Commerce Corporation 209,264 128,922
Noncontrolling interest 7,372 7,239
Total shareholders' equity 216,636 136,161
Total liabilities and shareholders' equity $ 1,764,607 $ 1,138,426



NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except per share data)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2015 2014 2015 2014
Interest and dividend income:
Interest and fees on loans$ 15,777 $ 10,229 $ 52,720 $ 29,812
Interest and dividends on taxable investment securities 370 275 1,154 1,178
Interest on non-taxable investment securities 173 42 466 169
Interest on interest-bearing deposits and federal funds sold 168 32 505 183
Total interest income 16,488 10,578 54,845 31,342
Interest expense:
Interest on deposits 1,395 734 4,354 2,427
Interest on borrowings 112 112 442 442
Total interest expense 1,507 846 4,796 2,869
Net interest income 14,981 9,732 50,049 28,473
Provision for loan losses 631 826 1,113 978
Net interest income after provision for loan losses 14,350 8,906 48,936 27,495
Other income:
Service charges and fees on deposit accounts 402 202 1,288 714
Mortgage origination and fee income 1,063 986 5,278 3,752
Merchant sponsorship revenue 365 - 861 -
Income from bank owned life insurance 182 63 433 242
Wealth management fees 10 15 53 58
(Loss) gain on other real estate - 8 (24) 13
(Loss) gain on sale of investment securities available-for-sale - - - (33)
Other 276 145 732 286
Total other income 2,298 1,419 8,621 5,032
Other expense:
Salaries and employee benefits 6,077 3,717 21,364 13,379
Commission-based compensation 844 900 3,744 2,136
Occupancy and equipment 1,048 572 3,584 1,944
Core deposit intangible amortization 175 18 508 18
Other operating expense 3,462 1,949 11,207 5,976
Total other expense 11,606 7,156 40,407 23,453
Earnings before income taxes 5,042 3,169 17,150 9,074
Income tax expense 1,667 1,158 5,476 3,159
Net earnings 3,375 2,011 11,674 5,915
Less: Net earnings attributable to noncontrolling interest 437 304 2,069 512
Net earnings attributable to National Commerce Corporation$2,938 $1,707 $ 9,605 $ 5,403
Weighted average common and diluted shares outstanding
Basic 10,345,146 6,223,377 9,238,784 5,888,862
Diluted 10,552,871 6,305,626 9,395,741 5,960,199
Basic earnings per common share$ 0.28 $ 0.27 $ 1.04 $ 0.92
Diluted earnings per common share$ 0.28 $ 0.27 $ 1.02 $ 0.91




NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
For the Three Months Ended
(Dollars in thousands)December 31, 2015September 30, 2015June 30, 2015March 31, 2015December 31, 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$ 1,204,437 $ 15,699 5.17%$ 992,223 $ 12,826 5.13%$ 944,373 $ 12,116 5.15%$ 903,563 $ 11,709 5.26%$ 748,373 $ 10,124 5.37%
Mortgage loans held-for-sale 9,697 84 3.44 9,890 104 4.17 11,180 112 4.02 9,487 85 3.63 9,914 108 4.32
Securities:
Taxable securities 43,960 370 3.34 30,728 259 3.34 32,402 269 3.33 35,540 256 2.92 34,366 275 3.17
Tax-exempt securities 26,119 275 4.18 17,649 217 4.88 14,297 181 5.08 4,750 67 5.72 4,640 67 5.73
Cash balances in other banks 191,077 168 0.35 166,715 129 0.31 112,081 105 0.38 114,579 103 0.36 48,646 32 0.26
Total interest-earning assets 1,475,291 $ 16,596 4.46 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
Non-interest-earning assets 146,557 96,824 95,949 94,118 96,203
Total assets$ 1,621,848 $ 1,314,029 $ 1,210,282 $ 1,162,037 $ 942,142
Interest-bearing liabilities
Interest-bearing transaction accounts$ 196,140 $ 129 0.26%$ 182,056 $ 118 0.26%$ 157,261 $ 97 0.25%$ 159,706 $ 99 0.25%$ 135,882 $ 96 0.28%
Savings and money market deposits 542,631 612 0.45 443,306 486 0.43 408,117 417 0.41 391,321 377 0.39 330,459 309 0.37
Time deposits 291,399 654 0.89 228,298 476 0.83 208,388 447 0.86 209,016 442 0.86 161,368 329 0.81
Federal Home Loan Bank and other borrowed money 22,104 112 2.01 22,000 111 2.00 22,000 110 2.01 22,000 109 2.01 22,027 112 2.02
Total interest-bearing liabilities 1,052,274 $ 1,507 0.57 875,660 $ 1,191 0.54 795,766 $ 1,071 0.54 782,043 $ 1,027 0.53 649,736 $ 846 0.52
Non-interest-bearing deposits 354,812 254,402 233,136 232,497 172,290
Total funding sources 1,407,086 1,130,062 1,028,902 1,014,540 822,026
Non-interest-bearing liabilities 12,463 8,146 8,026 7,879 9,261
Shareholders' equity 202,299 175,821 173,354 139,618 110,855
$ 1,621,848 $ 1,314,029 $ 1,210,282 $ 1,162,037 $ 942,142
Net interest rate spread 3.89% 3.87% 4.06% 4.11% 4.45%
Net interest income/margin (taxable equivalent) 15,089 4.06% 12,344 4.02% 11,712 4.22% 11,193 4.25% 9,760 4.58%
Tax equivalent adjustment 108 85 69 27 28
Net interest income/margin $ 14,981 4.03% $ 12,259 4.00% $ 11,643 4.19% $ 11,166 4.24% $ 9,732 4.56%



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

Source:National Commerce Corporation