BIRMINGHAM, Ala., July 25, 2017 (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq:NCOM) (“NCC” or the “Company”), the parent company of National Bank of Commerce (“NBC”), today reported second quarter 2017 net income to common shareholders of $6.4 million, compared to $4.4 million for the second quarter of 2016.  Diluted net earnings per share were $0.48 in the second quarter of 2017, compared to $0.45 in the first quarter of 2017 and $0.39 in the second quarter of 2016.

During the second quarter of 2017, the Company successfully completed an underwritten public offering of 1,104,000 shares of its common stock at a price of $37.00 per share and announced the execution of a definitive agreement to acquire Patriot Bank, headquartered in Trinity, Florida.  “We are pleased to report these second quarter results, which reflect the hard work by our team during the quarter,” said President and Chief Executive Officer Richard Murray, IV.  “We also know that the year is only half complete, so we need to stay focused on our work to grow the business while maintaining an emphasis on asset quality.”

Several important measures from the second quarter of 2017 are as follows:

• Net Interest Margin (taxable equivalent) of 4.34% for the second quarter of 2017, compared to 4.18% for the first quarter of 2017 and 4.23% for the second quarter of 2016.  The second quarter 2017 margin increased 0.16% compared to the 2017 first quarter due primarily to an increased yield on loans during the second quarter of 2017 compared to the 2017 first quarter.
  
  
• Return on Average Assets of 1.06% for the second quarter of 2017, compared to 1.00% for the second quarter of 2016. 
  
  
• Return on Average Tangible Common Equity of 11.49% for the second quarter of 2017, compared to 10.31% for the second quarter of 2016.
  
  
• Second quarter 2017 loan growth (excluding mortgage loans held-for-sale) of $63.9 million. Excluding factored receivables in the Company’s factoring subsidiary, Corporate Billing, LLC, second quarter 2017 loan growth was approximately $48.8 million.
  
  
• Deposits decreased $75.8 million during the 2017 second quarter, primarily due to a decline in a few large deposit relationships and the maturity of a $25.0 million certificate of deposit.
  
  
• $133.1 million in 2017 second quarter mortgage production, compared to $130.9 million for the first quarter of 2017 and $91.5 million during the 2016 second quarter.  The first and second quarter of 2017 production includes mortgages closed by the mortgage division that the Company acquired in the Private Bancshares, Inc. transaction.
  
  
• $251.0 million in 2017 second quarter purchased volume in the factoring division, compared to $253.6 million for the first quarter of 2017 and $167.1 million during the second quarter of 2016.
  
  
• A decrease in non-acquired non-performing assets to $1.2 million at June 30, 2017, from $2.5 million at March 31, 2017.
  
  
• Annualized net charge-offs of 0.07% of average loans for the second quarter of 2017, compared to net charge-offs of 0.05% for the second quarter of 2016.
  
  
• Provision for loan losses of $1.2 million during the second quarter of 2017, compared to $156 thousand in the 2017 first quarter and $901 thousand in the second quarter of 2016.  The increase during the 2017 second quarter was attributable in part to net charge-offs during the 2017 second quarter and loan growth.
  
  
• Ending tangible book value per share of $18.45.
  
  
• Ending book value per share of $25.82.

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on July 26, 2017 to discuss earnings and operating results for the 2017 second quarter. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 55354529).  A replay of the conference call will be available until July 28, 2017 and can be accessed by dialing (855) 859-2056.

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

Use of Non-GAAP Financial Measures

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

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

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

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

The Company’s management believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to 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, ten full-service banking offices in central and northeast Florida (including under the trade names United Legacy Bank and Reunion Bank of Florida) and two full-service banking offices in Atlanta, Georgia (including under the trade names Private Bank of Buckhead, Private Bank of Decatur and PrivatePlus Mortgage).  National Bank of Commerce provides a broad array of financial services for commercial and consumer customers.

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

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

Forward-Looking Statements

Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements for which NCC claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such.  In addition, certain statements may be contained in NCC’s future filings with the SEC, in press releases and in oral and written statements made by NCC or with NCC’s approval that are not statements of historical fact and that constitute forward-looking statements within the meaning of the Act.  Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of NCC’s plans, objectives and expectations or those of its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  Forward-looking statements are subject to various risks and uncertainties, including those risks and uncertainties described under the heading “Risk Factors” in NCC’s Annual Report on Form 10-K for the year ended December 31, 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.

Additional Information about the Proposed Merger with Patriot Bank and Where to Find It

NCC has filed with the SEC a proxy statement-prospectus included within a Registration Statement on Form S-4 (File No. 333-218826) in connection with the previously announced proposed merger of Patriot Bank, a Florida banking corporation, with and into NBC. Investors and security holders of Patriot Bank are urged to carefully read the important information contained in the proxy statement-prospectus regarding the proposed transaction. Copies of the proxy statement-prospectus and other relevant documents are available free of charge at the SEC’s website at www.sec.gov, and on NCC’s website at www.nationalbankofcommerce.com under the “Investor Relations” tab. The materials may also be obtained by writing to NCC at: National Commerce Corporation, c/o Investor Relations, 813 Shades Creek Parkway, Suite 100, Birmingham, Alabama 35209, or by calling (205) 313-8100.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Patriot Bank, NCC, NBC and their respective directors, executive officers, employees and agents may be deemed to be participants in the solicitation of proxies from Patriot Bank’s shareholders with respect to the proposed merger. Additional information regarding the interests of such potential participants is included in the proxy statement-prospectus and other relevant documents filed with the SEC.

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
		June 30,			March 31,				December 31,			September 30,			June 30,
			2017			2017				2016			2016			2016
Earnings Summary
Interest income		$	26,466		$	24,899			$	19,032		$	18,836		$	18,382
Interest expense			2,513			2,469				2,042			1,959			1,730
Net interest income			23,953			22,430				16,990			16,877			16,652
Provision for loan losses			1,155			156				441			373			901
Gain on sale of securities			28			-				-			-			-
Other noninterest income (1)			5,072			5,440				3,472			4,002			3,357
Merger/conversion-related expenses			344			387				169			160			12
Other noninterest expense (2)			17,393			18,074				11,971			12,472			12,242
Income before income taxes			10,161			9,253				7,881			7,874			6,854
Income tax expense			3,281			2,841				2,600			2,639			2,072
Net income before minority interest			6,880			6,412				5,281			5,235			4,782
Net income attributable to minority interest			431			493				374			422			428
Net income to common shareholders		$	6,449		$	5,919			$	4,907		$	4,813		$	4,354
Weighted average common and diluted shares outstanding
Basic			13,190,582			12,901,040				10,930,309			10,890,860			10,866,788
Diluted			13,551,745			13,283,075				11,173,733			11,115,134			11,067,972
Net earnings per common share
Basic		$	0.49		$	0.46			$	0.45		$	0.44		$	0.40
Diluted		$	0.48		$	0.45			$	0.44		$	0.43		$	0.39
		June 30,			March 31,				December 31,			September 30,			June 30,
Selected Performance Ratios			2017			2017				2016			2016			2016
Return on average assets (ROAA) (3)			1.06	%		1.00		%		1.05	%		1.08	%		1.00	%
Return on average equity (ROAE)			7.86			7.67				8.33			8.36			7.84
Return on average tangible common equity
(ROATCE)			11.49			11.45				10.78			10.90			10.31
Net interest margin - taxable equivalent			4.34			4.18				3.99			4.18			4.23
Efficiency ratio			61.11			66.24				59.33			60.50			61.24
Operating efficiency ratio (2)			59.92			64.85				58.50			59.73			61.18
Noninterest income / average assets (annualized)			0.83			0.92				0.74			0.90			0.77
Noninterest expense / average assets (annualized)			2.91			3.11				2.60			2.85			2.83
Yield on loans			5.38			5.29				4.95			5.08			5.06
Cost of total deposits			0.40	%		0.40		%		0.40	%		0.40	%		0.40	%
		June 30,			March 31,				December 31,			September 30,			June 30,
Factoring Metrics			2017			2017				2016			2016			2016
Recourse purchased volume		$	101,295		$	127,882			$	82,923		$	71,872		$	68,567
Non-recourse purchased volume			149,740			125,751				104,797			100,486			98,550
Total purchased volume		$	251,035		$	253,633			$	187,720		$	172,358		$	167,117
Average turn (days)			38.47			35.61				38.35			38.13			39.92
Net charge-offs / total purchased volume			0.12	%		0.03		%		0.12	%		0.05	%		0.07	%
Average discount rate			1.52	%		1.44		%		1.67	%		1.70	%		1.69	%
			June 30,			March 31,				December 31,			September 30,			June 30,
Mortgage Metrics			2017			2017				2016			2016			2016
Total production ($)		$	133,063		$	130,875			$	76,028		$	91,613		$	91,466
Refinance (%)			24.0	%		27.4		%		40.2	%		30.4	%		17.2	%
Purchases (%)			76.0	%		72.6		%		59.8	%		69.6	%		82.8	%
		As of
		June 30,			March 31,				December 31,			September 30,			June 30,
Balance Sheet Highlights			2017			2017				2016			2016			2016
Cash and cash equivalents		$	224,760		$	318,730			$	217,293		$	122,920		$	86,163
Total investment securities			101,569			98,390				99,709			102,848			89,495
Mortgage loans held-for-sale			19,482			19,517				15,373			7,810			19,468
Acquired purchased credit-impaired loans			21,065			22,465				11,975			11,995			12,900
Acquired non-purchased credit-impaired loans			490,198			539,056				313,399			320,630			344,167
Nonacquired loans held for investment (4)			1,252,970			1,153,897				1,076,209			1,009,677			978,836
CBI loans (factoring receivables)			114,361			99,317				83,901			70,066			70,673
Total gross loans held for investment			1,878,594			1,814,735				1,485,484			1,412,368			1,406,576
Allowance for loan losses			13,407			12,565				12,113			11,950			11,642
Total intangibles			103,270			103,519				52,803			52,962			53,154
Total assets			2,418,052			2,445,149				1,950,784			1,779,278			1,735,782
Total deposits			2,004,528			2,080,307				1,667,710			1,499,879			1,460,877
FHLB and other borrowings			7,000			7,000				7,000			7,000			7,000
Subordinated debt			24,527			24,513				24,500			24,487			24,540
Total liabilities			2,054,792			2,127,727				1,713,740			1,547,105			1,509,662
Minority interest			7,366			7,427				7,309			7,357			7,362
Common stock			141			129				109			109			109
Total shareholders' equity			363,260			317,422				237,044			232,173			226,120
Tangible common equity		$	259,558		$	213,410			$	183,866		$	178,788		$	172,538
End of period common shares outstanding			14,070,528			12,948,778				10,934,541			10,920,423			10,870,033
		As of and For the Three Months Ended
		June 30,			March 31,				December 31,			September 30,			June 30,
Asset Quality Analysis			2017			2017				2016			2016			2016
Nonacquired
Nonaccrual loans		$	50		$	68			$	69		$	19		$	248
Other real estate and repossessed assets			-			1,849				2,068			2,068			2,068
Loans past due 90 days or more and still accruing			1,172			538				581			358			406
Total nonacquired nonperforming assets		$	1,222		$	2,455			$	2,718		$	2,445		$	2,722
Acquired
Nonaccrual loans		$	2,827		$	2,949			$	2,768		$	2,982		$	3,099
Other real estate and repossessed assets			-			-				-			92			92
Loans past due 90 days or more and still accruing			-			-				-			-			-
Total acquired nonperforming assets		$	2,827		$	2,949			$	2,768		$	3,074		$	3,191
Selected asset quality ratios
Nonperforming assets / Assets			0.17	%		0.22		%		0.28	%		0.31	%		0.34	%
Nonperforming assets / (Loans + OREO + repossessed assets)			0.22			0.30				0.37			0.39			0.42
Net charge-offs (recoveries) to average loans (annualized)			0.07			(0.07	)			0.08			0.02			0.05
Allowance for loan losses to total loans			0.71			0.69				0.82			0.85			0.83
Nonacquired nonperforming assets / (Nonacquired loans +
nonacquired OREO + nonacquired repossessed assets) (4)			0.10			0.21				0.25			0.24			0.28
Allowance for loan losses to nonacquired nonperforming
loans			1,097.14			2,073.43				1,863.54			3,169.76			1,780.12
Allowance for loan losses to nonacquired loans (4)			1.03	%		1.05		%		1.08	%		1.13	%		1.14	%
		For the Three Months Ended
		June 30,			March 31,				December 31,			September 30,			June 30,
Taxable Equivalent Yields/Rates			2017			2017				2016			2016			2016
Interest income:
Loans			5.38	%		5.29		%		4.95	%		5.08	%		5.06	%
Mortgage loans held-for-sale			3.72			4.13				2.99			4.12			3.51
Interest on securities:
Taxable			2.98			2.63				2.52			2.55			1.95
Non-taxable			4.91			4.98				4.90			4.85			4.93
Cash balances in other banks			1.09			0.84				0.63			0.60			0.65
Total interest-earning assets			4.79			4.64				4.47			4.66			4.67
Interest expense:
Interest on deposits			0.57			0.56				0.55			0.54			0.54
Interest on FHLB and other borrowings			4.01			3.19				4.04			4.04			4.08
Interest on subordinated debt			6.36			6.42				6.30			6.32			6.34
Total interest-bearing liabilities			0.68			0.68				0.69			0.68			0.62
Net interest spread			4.11			3.96				3.78			3.98			4.05
Net interest margin			4.34	%		4.18		%		3.99	%		4.18	%		4.23	%
		As of
		June 30,			March 31,				December 31,			September 30,			June 30,
			2017			2017				2016			2016			2016
Shareholders' Equity and Capital Ratios
Tier 1 Leverage Ratio			10.69	%		8.86		%		9.57	%		9.74	%		9.51	%
Tier 1 Common Capital Ratio			13.17			11.06				11.46			11.64			11.25
Tier 1 Risk-based Capital Ratio			13.17			11.06				11.46			11.64			11.25
Total Risk-based Capital Ratio			15.18			13.07				13.90			14.19			13.79
Equity / Assets			15.02			12.98				12.15			13.05			13.03
Tangible common equity to tangible assets			11.21	%		9.11		%		9.69	%		10.36	%		10.25	%
Book value per share		$	25.82		$	24.51			$	21.68		$	21.26		$	20.80
Tangible book value per share		$	18.45		$	16.48			$	16.82		$	16.37		$	15.87
		For the Three Months Ended
		June 30,			March 31,				December 31,			September 30,			June 30,
			2017			2017				2016			2016			2016
Detail of other noninterest expense
Salaries and employee benefits		$	9,663		$	10,073			$	6,935		$	6,948		$	6,907
Commission-based compensation			1,684			1,723				1,076			1,104			1,036
Occupancy and equipment expense			1,479			1,473				1,193			1,181			1,131
Data processing expenses			1,007			948				568			572			618
Advertising and marketing expenses			327			468				156			198			191
Legal fees			193			233				163			182			179
FDIC insurance assessments			408			258				234			246			257
Property and casualty insurance premiums			209			143				95			90			166
Accounting and audit expenses			294			318				211			252			249
Consulting and other professional expenses			517			497				201			330			184
Telecommunications expenses			169			186				114			146			140
ORE, Repo asset and other collection expenses			49			272				41			142			89
Core deposit intangible amortization			348			348				182			191			192
Other noninterest expense			1,390			1,521				971			1,050			915
Total noninterest expense		$	17,737		$	18,461			$	12,140		$	12,632		$	12,254
		As of
		June 30,			March 31,				December 31,			September 30,			June 30,
Non-GAAP Reconciliation			2017			2017				2016			2016			2016
Total shareholders' equity		$	363,260		$	317,422			$	237,044		$	232,173		$	226,120
Less: intangible assets			103,270			103,519				52,803			52,962			53,154
Less: minority interest not included in intangible assets			432			493				375			423			428
Tangible common equity		$	259,558		$	213,410			$	183,866		$	178,788		$	172,538
Common shares outstanding at year or period end			14,070,528			12,948,778				10,934,541			10,920,423			10,870,033
Tangible book value per share		$	18.45		$	16.48			$	16.82		$	16.37		$	15.87
Total assets at end of period		$	2,418,052		$	2,445,149			$	1,950,784		$	1,779,278		$	1,735,782
Less: intangible assets			103,270			103,519				52,803			52,962			53,154
Adjusted total assets at end of period		$	2,314,782		$	2,341,630			$	1,897,981		$	1,726,316		$	1,682,628
Tangible common equity to tangible assets			11.21	%		9.11		%		9.69	%		10.36	%		10.25	%
Total allowance for loan losses		$	13,407		$	12,565			$	12,113		$	11,950		$	11,642
Less: allowance for loan losses attributable to
CBI (factoring receivables)			500			500				500			500			500
Adjusted allowance for loan losses at end of period		$	12,907		$	12,065			$	11,613		$	11,450		$	11,142
Nonacquired loans held for investment (4)			1,252,970			1,153,897				1,076,209			1,009,677			978,836
Allowance for loan losses to nonacquired loans (4)			1.03	%		1.05		%		1.08	%		1.13	%		1.14	%
		For the Three Months Ended
		June 30,			March 31,				December 31,			September 30,			June 30,
			2017			2017				2016			2016			2016
Non-GAAP Reconciliation
Total average shareholders' equity		$	328,886		$	312,971			$	234,249		$	228,953		$	223,357
Less: average intangible assets			103,403			103,004				52,872			53,056			53,234
Less: average minority interest not included
in intangible assets			318			295				262			282			284
Average tangible common equity		$	225,165		$	209,672			$	181,115		$	175,615		$	169,839
Net income to common shareholders			6,449			5,919				4,907			4,813			4,354
Return on average tangible common equity (ROATCE)			11.49	%		11.45		%		10.78	%		10.90	%		10.31	%
Efficiency ratio:
Net interest income		$	23,953		$	22,430			$	16,990		$	16,877		$	16,652
Total noninterest income			5,100			5,440				3,472			4,002			3,357
Less:  gain (loss) on sale of securities			28			-				-			-			-
Operating revenue		$	29,025		$	27,870			$	20,462		$	20,879		$	20,009
Expenses:
Total noninterest expenses		$	17,737		$	18,461			$	12,140		$	12,632		$	12,254
Efficiency ratio			61.11	%		66.24		%		59.33	%		60.50	%		61.24	%
Operating efficiency ratio:
Net interest income		$	23,953		$	22,430			$	16,990		$	16,877		$	16,652
Total noninterest income			5,100			5,440				3,472			4,002			3,357
Less:  gain (loss) on sale of securities			28			-				-			-			-
Operating revenue		$	29,025		$	27,870			$	20,462		$	20,879		$	20,009
Expenses:
Total noninterest expenses		$	17,737		$	18,461			$	12,140		$	12,632		$	12,254
Less: merger/conversion-related expenses			344			387				169			160			12
Adjusted noninterest expenses		$	17,393		$	18,074			$	11,971		$	12,472		$	12,242
Operating efficiency ratio			59.92	%		64.85		%		58.50	%		59.73	%		61.18	%
(1) Excludes securities gains
(2) Excludes merger/conversion-related expenses
(3) Net income to common shareholders / average assets
(4) Excludes CBI loans (factoring receivables)

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Balance Sheets
(In thousands, except share and per share data)
Assets
	June 30, 2017			December 31, 2016
Cash and due from banks	$	27,619		$	35,897
Interest-bearing deposits with banks		197,141			181,396
Cash and cash equivalents		224,760			217,293
Investment securities held-to-maturity (fair value of $26,288 and $25,894 at June 30, 2017
and December 31, 2016, respectively)		26,107			26,329
Investment securities available-for-sale		75,462			73,380
Other investments		10,600			7,879
Mortgage loans held-for-sale		19,482			15,373
Loans, net of unearned income		1,878,594			1,485,484
Less: allowance for loan losses		13,407			12,113
Loans, net		1,865,187			1,473,371
Premises and equipment, net		35,141			31,884
Accrued interest receivable		5,082			4,129
Bank-owned life insurance		31,762			28,034
Other real estate		-			2,068
Deferred tax assets, net		14,809			13,486
Goodwill		98,955			50,771
Core deposit intangible, net		4,315			2,032
Other assets		6,390			4,755
Total assets	$	2,418,052		$	1,950,784
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	608,280		$	429,030
Interest-bearing demand		322,020			262,261
Savings and money market		810,941			703,289
Time		263,287			273,130
Total deposits		2,004,528			1,667,710
Federal Home Loan Bank advances		7,000			7,000
Subordinated debt		24,527			24,500
Accrued interest payable		709			829
Other liabilities		18,028			13,701
Total liabilities		2,054,792			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, 14,070,528 and 10,934,541
shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively		141			109
Additional paid-in capital		318,932			205,372
Retained earnings		36,373			24,005
Accumulated other comprehensive income		448			249
Total shareholders' equity attributable to National Commerce Corporation		355,894			229,735
Noncontrolling interest		7,366			7,309
Total shareholders' equity		363,260			237,044
Total liabilities and shareholders' equity	$	2,418,052		$	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 Six Months Ended
	June 30,						June 30,
		2017			2016			2017			2016
Interest and dividend income:
Interest and fees on loans	$	24,987		$	17,669		$	48,580		$	35,152
Interest and dividends on taxable investment securities		606			383			1,177			795
Interest on non-taxable investment securities		197			201			397			401
Interest on interest-bearing deposits and federal funds sold		676			129			1,211			347
Total interest income		26,466			18,382			51,365			36,695
Interest expense:
Interest on deposits		2,054			1,476			4,064			3,045
Interest on borrowings		70			71			141			152
Interest on subordinated debt		389			183			777			183
Total interest expense		2,513			1,730			4,982			3,380
Net interest income		23,953			16,652			46,383			33,315
Provision for loan losses		1,155			901			1,311			2,434
Net interest income after provision for loan losses		22,798			15,751			45,072			30,881
Other income:
Service charges and fees on deposit accounts		640			505			1,307			985
Mortgage origination and fee income		3,154			1,627			6,299			3,019
Merchant sponsorship revenue		602			491			1,346			1,013
Income from bank-owned life insurance		219			204			435			408
Wealth management fees		14			11			24			24
Gain on other real estate		105			119			104			275
Gain on sale of investment securities available-for-sale		28			-			28			-
Other		338			400			997			758
Total other income		5,100			3,357			10,540			6,482
Other expense:
Salaries and employee benefits		9,663			6,907			19,736			13,852
Commission-based compensation		1,684			1,036			3,407			1,911
Occupancy and equipment		1,479			1,131			2,952			2,266
Core deposit intangible amortization		348			192			696			383
Other operating expense		4,563			2,988			9,407			5,895
Total other expense		17,737			12,254			36,198			24,307
Earnings before income taxes		10,161			6,854			19,414			13,056
Income tax expense		3,281			2,072			6,122			4,155
Net earnings		6,880			4,782			13,292			8,901
Less: Net earnings attributable to noncontrolling interest		431			428			924			768
Net earnings attributable to National Commerce Corporation	$	6,449		$	4,354		$	12,368		$	8,133
Weighted average common and diluted shares outstanding
Basic		13,190,582			10,866,788			13,046,611			10,861,330
Diluted		13,551,745			11,067,972			13,422,704			11,059,906
Basic earnings per common share	$	0.49		$	0.40		$	0.95		$	0.75
Diluted earnings per common share	$	0.48		$	0.39		$	0.92		$	0.74

 

NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis
	For the Three Months Ended
(Dollars in thousands)	June 30, 2017								March 31, 2017								December 31, 2016								September 30, 2016								June 30, 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	$	1,849,258		$	24,823		5.38	%	$	1,793,241		$	23,377		5.29	%	$	1,446,629		$	18,012		4.95	%	$	1,399,016		$	17,853		5.08	%	$	1,391,789		$	17,523		5.06	%
Mortgage loans held-for-sale		18,321			170		3.72			21,809			222		4.13			10,366			78		2.99			13,986			145		4.12			17,288			151		3.51
Securities:
Taxable securities		81,645			606		2.98			88,062			571		2.63			82,881			525		2.52			76,787			493		2.55			78,907			383		1.95
Tax-exempt securities		25,573			313		4.91			25,824			317		4.98			25,910			319		4.90			26,029			317		4.85			26,036			319		4.93
Cash balances in other banks		249,361			676		1.09			258,672			535		0.84			140,813			224		0.63			101,422			152		0.60			80,140			129		0.65
Total interest-earning assets		2,224,158		$	26,588		4.79			2,187,608		$	25,022		4.64			1,706,599		$	19,158		4.47			1,617,240		$	18,960		4.66			1,594,160		$	18,505		4.67
Noninterest-earning assets		218,088								220,006								149,709								148,275								148,959
Total assets	$	2,442,246							$	2,407,614							$	1,856,308							$	1,765,515							$	1,743,119
Interest-bearing liabilities
Interest-bearing transaction accounts	$	341,238		$	243		0.29	%	$	332,361		$	217		0.26	%	$	235,340		$	149		0.25	%	$	214,439		$	125		0.23	%	$	210,776		$	124		0.24	%
Savings and money market deposits		821,130			1,138		0.56			804,537			1,096		0.55			633,765			791		0.50			612,618			713		0.46			603,173			698		0.47
Time deposits		290,097			673		0.93			306,404			697		0.92			273,293			643		0.94			283,022			661		0.93			288,350			654		0.91
Federal Home Loan Bank and other borrowed money		7,000			70		4.01			9,016			71		3.19			7,000			71		4.04			7,000			71		4.04			7,000			71		4.08
Subordinated debt		24,520			389		6.36			24,507			388		6.42			24,494			388		6.30			24,498			389		6.32			11,605			183		6.34
Total interest-bearing liabilities		1,483,985		$	2,513		0.68			1,476,825		$	2,469		0.68			1,173,892		$	2,042		0.69			1,141,577		$	1,959		0.68			1,120,904		$	1,730		0.62
Noninterest-bearing deposits		612,910								600,897								431,253								381,205								388,363
Total funding sources		2,096,895								2,077,722								1,605,145								1,522,782								1,509,267
Noninterest-bearing liabilities		16,465								16,921								16,914								13,780								10,495
Shareholders' equity		328,886								312,971								234,249								228,953								223,357
	$	2,442,246							$	2,407,614							$	1,856,308							$	1,765,515							$	1,743,119
Net interest rate spread							4.11	%							3.96	%							3.78	%							3.98	%							4.05	%
Net interest income/margin (taxable equivalent)					24,075		4.34	%					22,553		4.18	%					17,116		3.99	%					17,001		4.18	%					16,775		4.23	%
Tax equivalent adjustment					122								123								126								124								123
Net interest income/margin				$	23,953		4.32	%				$	22,430		4.16	%				$	16,990		3.96	%				$	16,877		4.15	%				$	16,652		4.20	%

Contact:

National Commerce Corporation

William E. Matthews, V                                             
Vice Chairman and Chief Financial Officer               
(205) 313-8122

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