NEW ORLEANS, July 28, 2014 (GLOBE NEWSWIRE) -- First NBC Bank Holding Company (Nasdaq:NBCB), the holding company for First NBC Bank ("Company"), today announced financial results for the second quarter of 2014. For the quarter ended June 30, 2014, the Company reported net income available to common shareholders of $12.4 million, or $0.67 per share, as compared to $12.5 million, or $0.68 per share, for the first quarter of 2014, and $8.1 million, or $0.51 per share, for the second quarter of 2013. The Company's earnings per share on a diluted basis were $0.65, $0.66, and $0.49 per diluted share, for the second quarter of 2014, first quarter of 2014, and second quarter of 2013, respectively. This was a decrease of $0.01 per diluted share, or 1.1%, over the first quarter of 2014, and an increase of $0.16 per diluted share, or 31.6%, over the second quarter of 2013.

For the six months ended June 30, 2014, the Company reported net income available to common shareholders of $24.8 million, or $1.34 per share, generating a return on average shareholders' equity of 13.02% and a return on average assets of 1.50%. For the six months ended June 30, 2013, the Company reported net income available to common shareholders of $15.7 million, or $1.09 per share, generating a return on average shareholders' equity of 12.25% and return on average assets of 1.21%. For the six months ended June 30, 2014, the Company reported earnings per share on a diluted basis of $1.31 per diluted share compared to $1.06 per diluted share, for the prior year six month period, an increase of $0.25 per diluted share, or 23.6%.

Performance Highlights

• The Company continues to experience strong asset growth, with total assets of $3.6 billion at June 30, 2014, an increase of 8.6% from December 31, 2013 and 17.9% from June 30, 2013.
   
• The Company's total loans increased $219.1 million, or 9.3%, from December 31, 2013 and $482.6 million, or 23.1%, from June 30, 2013.
   
• The Company's total deposits increased $226.7 million, or 8.3%, from December 31, 2013 and $443.9 million, or 17.7%, from June 30, 2013.
   
• Net interest income for the second quarter of 2014 totaled $26.5 million, an increase of $1.7 million, or 6.9% over the linked quarter, and an increase of $7.3 million, or 37.9% over the second quarter of 2013.
   
• The net interest margin for the quarter ended June 30, 2014 was 3.35%, an increase of five basis points on a linked-quarter basis, and an increase of 47 basis points from the second quarter of 2013.
   
• The Company's cost of deposits for the second quarter of 2014 was 1.55%, a decrease of two basis points on a linked-quarter basis, and a decrease of seven basis points from the second quarter of 2013.

Loans

The Company's loans totaled $2.6 billion at June 30, 2014, an increase of $105.9 million, or 4.3%, from March 31, 2014, and $219.1 million, or 9.3%, from December 31, 2013. Loan growth continued to be driven primarily by increases in construction, commercial real estate and commercial loans due to favorable economic market conditions in the New Orleans trade area.  The increase in consumer loans was driven primarily by the Company's seasonal tuition loan program. The Company has experienced strong loan demand in the markets it services as evidenced by the increase in loans and its loan pipeline quarter over quarter. The growth in the Company's commercial loan portfolio was due in part to the growth in the oil and gas industry, specifically with respect to oil and gas service companies. With the exception of consumer lending, the Company expects these positive growth trends to continue through the remainder of 2014.

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

Deposits

Total deposits at June 30, 2014 were $3.0 billion, an increase of $68.1 million, or 2.4%, from March 31, 2014, and $226.7 million, or 8.3% from December 31, 2013.  The increase was driven primarily by increases in noninterest-bearing demand deposits of $10.3 million, or 3.1%, and money market deposit accounts of $101.8 million, or 13.4%, from March 31, 2014.  The increase in noninterest-bearing demand deposits was primarily due to an increase in commercial customer deposits which has occurred with the expansion of the Company's commercial lending.  The Company has experienced a shift by some customers from NOW accounts to money market deposits due to the Company lowering NOW account rates in the spring of 2014, especially in the lower balance tiers.

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

Investment in Tax Credit Entities

During the second quarter of 2014, the Company was notified by the Community Development Financial Institutions Fund (CDFI) of the U.S. Treasury that it did not receive an allocation of Federal New Markets Tax Credits. The lack of an allocation will not preclude the Company from investing in Federal New Markets Tax Credits projects and utilizing Federal New Markets Tax Credits allocations of other CDE's as was common practice for the Company when it began its tax credit investment program. The Company generates 50% of its total tax credit investment from Federal New Markets Tax Credits projects, which consists of 57% invested in outside CDEs and 43% invested in the Company's CDE, and the remaining 50% is invested in federal Historic Tax Credits and Low-Income Housing Tax Credits. 

Net Interest Income

Net interest income for the second quarter of 2014 totaled $26.6 million, an increase of $1.7 million, or 6.9%, from the linked-quarter and an increase of $7.3 million, or 37.9%, from the three month period ended June 30, 2013.  The Company's net interest margin was 3.35% for the quarter ended June 30, 2014, which was five basis points higher than the linked-quarter, and 47 basis points higher than the second quarter of 2013.  The five basis points increase in the net interest margin over the linked-quarter was due to an increase in the loan yield of six basis points, together with an increase in average loans of $0.1 million, and a decrease in the cost of interest-bearing liabilities of three basis points, which was primarily due to the decrease of two basis points in the cost of interest-bearing deposits. The 47 basis point increase in the net interest margin over the same period in 2013 was due primarily to an increase of 17 basis points from the impact of the hedge, an increase of 12 basis points in average loans of $0.5 million, a decrease of seven basis points in the cost of interest-bearing deposits, and a decrease of 12 basis points in the cost of borrowings from the refinancing of $40.0 million of the Company's long term borrowings during the latter part of the first quarter.  The Company expects these positive net interest margin trends to continue in 2014 due to the implementation of tiered pricing on all of its deposit products in the third and fourth quarters of 2013 as well as the tiered pricing of its certificate of deposit products, which are expected to reduce the average yield as they begin to mature in 2014.

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

Noninterest Income

Noninterest income for the second quarter of 2014 totaled $2.9 million, a decrease of $0.4 million, or 12.7%, compared to the first quarter of 2014, and an increase of $0.2 million, or 7.1% compared to the second quarter of 2013.  The decrease in noninterest income for the second quarter of 2014 compared to the linked-quarter resulted primarily from the decrease of $0.3 million in income from sales of state tax credits, and $0.5 million in CDE fees earned.  During the first quarter of 2014, the Company recorded $0.6 million in income from sales of state tax credits, primarily related to the receipt of qualified equity investment authority from the State of Louisiana under the Louisiana New Markets Jobs Act in 2013. The $0.5 million decrease in CDE fee income is due to the closing of several projects during the first quarter of 2014, as the Company recognizes its fee as each project closes; the fee is based on a percentage of the Federal New Markets Tax Credits allocation award. The Company expects its CDE fee income to be lower during the third and fourth quarter of 2014 due to the Company not receiving an allocation of Federal New Markets Tax Credits. The Company receives CDE fees on an annual basis for projects which are still within the compliance period. 

Noninterest income increased $0.2 million, or 7.1%, compared to the second quarter of 2013.  The increase was driven by increases in all components of noninterest income, other than CDE fees, which experienced a decrease of $0.8 million.  The most significant components of noninterest income contributing to the increase were income from sales of state tax credits of $0.4 million and other noninterest income of $0.3 million.

Noninterest Expense

Noninterest expense for the three month period ended June 30, 2014 totaled $18.6 million, an increase of $1.2 million, or 7.1%, compared to the linked-quarter, and an increase of $3.4 million, or 22.3%, compared to three month period ended June 30, 2013. The increase over linked-quarter was due primarily to increases in tax credit amortization of $0.6 million and salaries and benefits of $0.5 million offset by a decrease in professional fees of $0.4 million.

The increase in noninterest expense compared to the second quarter of 2013 resulted primarily from increases in tax credit amortization of $1.3 million, salaries and benefits expense of $0.9 million, and taxes, licenses and FDIC assessments of $0.5 million.

Taxes

The Company's tax benefit for the quarter ended June 30, 2014 was $4.8 million, a decrease of $0.2 million compared to the first quarter of 2014, and an increase of $0.6 million compared to the second quarter of 2013. The increase compared to the prior year second quarter was due to the increase in the Company's investment in various tax credit programs.  

The Company expects to experience an effective tax rate below the statutory rate of 35% due primarily to its receipt of Federal New Markets Tax Credits, Low-Income Housing Tax Credits and Federal Historic Rehabilitation Tax Credits.

Shareholders' Equity

Shareholders' equity totaled $409.2 million at June 30, 2014, an increase of $13.8 million from March 31, 2014. The increase was primarily attributable to the Company's retained earnings over the period.

About First NBC Bank Holding Company

First NBC Bank Holding Company, headquartered in New Orleans, Louisiana, offers a broad range of financial services through its wholly-owned banking subsidiary, First NBC Bank, a Louisiana state non-member bank. The Company's primary market is the New Orleans metropolitan area and the Mississippi Gulf Coast. The Company operates 32 full service banking offices located throughout its market and a loan production office in Gulfport, Mississippi and had 501 employees at June 30, 2014.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. Among other things, management utilizes a non-GAAP performance measure to adjust noninterest income to reflect the effect of the federal income tax credits generated from the Company's investment in tax credit entities, offset by the direct costs associated with the tax credit investments, to derive at an adjusted income before income taxes non-GAAP measure.   Management believes this non-GAAP financial measure provides information useful to investors in understanding the Company's financial results, and the Company believes that its presentation, together with the accompanying reconciliation, provides a more complete understanding of factors and trends affecting the Company's business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators.  This non-GAAP measure should not be considered a substitute for GAAP basis measures and results, and the Company strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare this financial measure with other companies' non-GAAP financial measure having the same or similar name.  A reconciliation of the non-GAAP financial measure disclosed in this press release to the comparable GAAP financial measure is included at the end of the financial statement tables.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company's current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company's current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company's operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, the Company's actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company's Annual Report on Form 10-K for the fiscal year end December 31, 2013, and other reports and statements the Company has subsequently filed with Securities and Exchange Commission which are available at the SEC's website (www.sec.gov).