National Commerce Corporation Announces Fourth Quarter and Fiscal Year End 2017 Earnings


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

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

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

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

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

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

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

  • Net Interest Margin (taxable equivalent) of 4.63% for the fourth quarter of 2017 and 4.44% for the year ended December 31, 2017.  The fourth quarter 2017 margin increased 0.05% compared to 4.58% reported for the third quarter of 2017, and increased 0.64% compared to 3.99% reported for the fourth quarter of 2016.  For the year ended December 31, 2017, the margin increased by 0.29% compared to the year ended December 31, 2016.
     
  • Return on Average Assets (“ROAA”) of 0.15% for the fourth quarter of 2017, compared to 1.05% for the fourth quarter of 2016.  For the year, ROAA was 0.81%, compared to 1.00% in 2016.  The 2017 ROAA figures were negatively impacted by the DTA write-down.
     
  • Return on Average Equity (“ROAE”) of 0.99% for the fourth quarter of 2017, compared to 8.33% for the fourth quarter of 2016.  For the year, ROAE was 5.65%, compared to 7.89% in 2016.  The 2017 ROAE figures were negatively impacted by the DTA write-down.
     
  • Return on Average Tangible Common Equity (“ROATCE”) of 1.41% for the fourth quarter of 2017 and 8.10% for the year ended December 31, 2017, compared to 10.78% for the fourth quarter of 2016 and 10.32% for the year ended December 31, 2016.  The 2017 ROATCE figures were negatively impacted by the DTA write-down.
     
  • Fourth quarter and full year 2017 loan growth (excluding mortgage loans held-for-sale) of $81.7 million and $652.6 million, respectively; non-acquired loans grew $106.1 million during the fourth quarter of 2017 and $379.2 million during the year ended December 31, 2017.  Factored receivables declined $0.4 million during the fourth quarter of 2017 and increased $34.8 million during the year ended December 31, 2017.  The full year loan growth figures for 2017 include loans acquired in the Company’s acquisitions of Private Bancshares, Inc. and Patriot Bank.  
     
  • Increase in deposits of $188.5 million during the 2017 fourth quarter and $618.1 million during the year ended December 31, 2017.  The full year deposit growth figures for 2017 include deposits acquired in the Company’s acquisitions of Private Bancshares, Inc. and Patriot Bank.
     
  • For the fourth quarter of 2017, mortgage production volume totaled $121.0 million, compared to $76.0 million for the fourth quarter of 2016.  For the year ended December 31, 2017, mortgage production volume totaled $507.6 million, compared to $322.9 million for the year ended December 31, 2016.  The 2017 mortgage production volume benefitted from the addition of the PrivatePlus Mortgage division added in the Private Bancshares, Inc. acquisition.
     
  • For the fourth quarter of 2017, purchased volume in the factoring division totaled $267.2 million, compared to $187.7 million for the fourth quarter of 2016.   For the year ended December 31, 2017, purchase volume totaled $1.03 billion, compared to $705.9 million for the year ended December 31, 2016.
     
  • Decrease in non-acquired non-performing assets to $0.8 million at December 31, 2017, from $1.9 million at September 30, 2017.
     
  • Annualized net charge-offs of 0.14% of average loans outstanding for the fourth quarter of 2017 and 0.05% for the year ended December 31, 2017.
     
  • Provision for loan losses of $1.5 million for the fourth quarter of 2017, compared to $0.4 million for the fourth quarter of 2016.  Provision for loan losses for the year ended December 31, 2017 totaled $3.9 million, compared to $3.2 million for the year ended December 31, 2016.
     
  • Ending tangible book value per share of $19.05.
     
  • Ending book value per share of $27.05.

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on January 25, 2018 to discuss earnings and operating results for the 2017 fourth quarter and full year.  Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 5036417).  A replay of the conference call will be available until January 27, 2018 and can be accessed by dialing (855) 859-2056.

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

Use of Non-GAAP Financial Measures

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

  • “Tangible common equity” is defined as total shareholders’ equity less goodwill, other intangible assets and minority interest not included in intangible assets.

  • “Average tangible common equity” is defined as the average of tangible common equity for the applicable period.

  • “Return on average tangible common equity,” or ROATCE, is defined as net income available to common shareholders divided by average tangible common equity.

  • “Tangible book value per share” is defined as tangible common equity divided by total common shares outstanding.  This measure is important to investors interested in changes from period to period in book value per share, exclusive of changes in intangible assets.

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

  • “Efficiency ratio” is defined as noninterest expense divided by operating revenue (which is equal to net interest income plus noninterest income), excluding one-time gains and losses on sales of securities.  This measure is important to investors looking for a measure of efficiency in productivity based on the amount of revenue generated for each dollar spent.

  • “Operating efficiency ratio” is defined as noninterest expense divided by operating revenue, excluding one-time gains and losses on sales of securities and one-time gains and expenses related to merger and acquisition activities.  This measure is important to investors looking for a measure of efficiency in productivity based on the amount of revenue generated for each dollar spent.

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

About National Commerce Corporation

National Commerce Corporation (Nasdaq:NCOM), a Delaware corporation, is a financial holding company headquartered in Birmingham, Alabama.  Substantially all of the operations of National Commerce Corporation are conducted through the company’s wholly owned subsidiary, National Bank of Commerce.  National Bank of Commerce currently operates seven full-service banking offices in Alabama, twenty-one full-service banking offices in central and northeast Florida (including under the trade names United Legacy Bank, Reunion Bank of Florida, Patriot Bank and FirstAtlantic Bank) and two full-service banking offices in Atlanta, Georgia (including under the trade names Private Bank of Buckhead, Private Bank of Decatur and PrivatePlus Mortgage).  National Bank of Commerce provides a broad array of financial services for commercial and consumer customers.

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

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

Forward-Looking Statements

Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements for which NCC claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such.  In addition, certain statements may be contained in NCC’s future filings with the SEC, in press releases and in oral and written statements made by NCC or with NCC’s approval that are not statements of historical fact and that constitute forward-looking statements within the meaning of the Act.  Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of NCC’s plans, objectives and expectations or those of its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements.  Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.  Forward-looking statements are subject to various risks and uncertainties, including those risks and uncertainties described under the heading “Risk Factors” in NCC’s Annual Report on Form 10-K for the year ended December 31, 2016 and described in any subsequent reports that NCC has filed with the SEC.  Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements, and these statements should not be relied upon as predictions of future events.  NCC undertakes no obligation to update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.  In that respect, NCC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.

 

NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages or as otherwise noted)
            
  For the Three Months Ended
  December 31, September 30, June 30, March 31, December 31, 
   2017   2017  2017  2017   2016  
Earnings Summary           
Interest income $30,224  $28,202 $26,466 $24,899  $19,032  
Interest expense  2,824   2,561  2,513  2,469   2,042  
Net interest income  27,400   25,641  23,953  22,430   16,990  
Provision for loan losses  1,478   1,105  1,155  156   441  
(Loss) gain on sale of securities  (119)  -  28  -   -  
Other noninterest income (1)  4,984   4,630  5,072  5,440   3,472  
Merger/conversion-related expenses (2)  1,172   417  344  387   169  
Other noninterest expense (3)  18,078   17,654  17,393  18,074   11,971  
Income before income taxes  11,537   11,095  10,161  9,253   7,881  
Income tax expense  3,890   3,828  3,281  2,841   2,600  
Deferred tax asset write-down  6,231   -  -  -   -  
Total income tax expense  10,121   3,828  3,281  2,841   2,600  
Net income before minority interest  1,416   7,267  6,880  6,412   5,281  
Net income attributable to minority interest  413   570  431  493   374  
Net income to common shareholders $1,003  $6,697 $6,449 $5,919  $4,907  
            
Weighted average common and diluted shares outstanding          
Basic  14,783,597   14,300,974  13,190,582  12,901,040   10,930,309  
Diluted  15,173,984   14,679,546  13,551,745  13,283,075   11,173,733  
            
Net earnings per common share           
Basic $0.07  $0.47 $0.49 $0.46  $0.45  
Diluted $0.07  $0.46 $0.48 $0.45  $0.44  
            
            
  December 31, September 30, June 30, March 31, December 31, 
Selected Performance Ratios  2017   2017  2017  2017   2016  
Return on average assets (ROAA) (4)  0.15 % 1.08% 1.06% 1.00 % 1.05 %
Return on average equity (ROAE)  0.99   7.06  7.86  7.67   8.33  
Return on average tangible common equity           
(ROATCE)  1.41   9.94  11.49  11.45   10.78  
Net interest margin - taxable equivalent  4.63   4.58  4.34  4.18   3.99  
Efficiency ratio  59.44   59.70  61.11  66.24   59.33  
Operating efficiency ratio (3)  55.82   58.32  59.92  64.85   58.50  
Noninterest income / average assets (annualized)  0.76   0.75  0.83  0.92   0.74  
Noninterest expense / average assets (annualized)  2.92   2.92  2.91  3.11   2.60  
Yield on loans  5.45   5.45  5.38  5.29   4.95  
Cost of total deposits  0.43 % 0.41% 0.40% 0.40 % 0.40 %
            
            
  December 31, September 30, June 30, March 31, December 31, 
Factoring Metrics  2017   2017  2017  2017   2016  
Recourse purchased volume $108,628  $104,304 $101,295 $127,882  $82,923  
Non-recourse purchased volume  158,565   155,157  149,740  125,751   104,797  
Total purchased volume $267,193  $259,461 $251,035 $253,633  $187,720  
Average turn (days)  43.59   41.11  38.47  35.61   38.35  
Net charge-offs / total purchased volume  0.18 % 0.05% 0.12% 0.03 % 0.12 %
Average discount rate  1.59 % 1.58% 1.52% 1.44 % 1.67 %
            
            
  December 31, September 30, June 30, March 31, December 31, 
Mortgage Metrics  2017   2017  2017  2017   2016  
Total production ($) $120,969  $122,656 $133,063 $130,875  $76,028  
Refinance (%)  22.1 % 23.6% 24.0% 27.4 % 40.2 %
Purchases (%)  77.9 % 76.4% 76.0% 72.6 % 59.8 %
            
  As of
  December 31, September 30, June 30, March 31, December 31, 
Balance Sheet Highlights  2017   2017  2017  2017   2016  
Cash and cash equivalents $235,288  $134,549 $224,760 $318,730  $217,293  
Total investment securities  111,396   111,158  101,569  98,390   99,709  
Mortgage loans held-for-sale  29,191   15,278  19,482  19,517   15,373  
Acquired purchased credit-impaired loans  25,696   26,924  21,065  22,465   11,975  
Acquired non-purchased credit-impaired loans  538,276   561,118  490,198  539,056   313,399  
Nonacquired loans held for investment (5)  1,455,376   1,349,254  1,252,970  1,153,897   1,076,209  
CBI loans (factoring receivables)  118,710   119,110  114,361  99,317   83,901  
Total gross loans held for investment  2,138,058   2,056,406  1,878,594  1,814,735   1,485,484  
Allowance for loan losses  14,985   14,264  13,407  12,565   12,113  
Total intangibles  117,849   119,688  103,270  103,519   52,803  
Total assets  2,737,676   2,549,134  2,418,052  2,445,149   1,950,784  
Total deposits  2,285,831   2,097,373  2,004,528  2,080,307   1,667,710  
FHLB and other borrowings  7,000   7,941  7,000  7,000   7,000  
Subordinated debt  24,553   24,540  24,527  24,513   24,500  
Total liabilities  2,337,718   2,150,541  2,054,792  2,127,727   1,713,740  
Minority interest  7,348   7,504  7,366  7,427   7,309  
Common stock  148   148  141  129   109  
Total shareholders' equity  399,958   398,593  363,260  317,422   237,044  
Tangible common equity $281,695  $278,335 $259,558 $213,410  $183,866  
End of period common shares outstanding  14,788,436   14,777,230  14,070,528  12,948,778   10,934,541  
            
            
  As of and For the Three Months Ended
  December 31, September 30, June 30, March 31, December 31, 
Asset Quality Analysis  2017   2017  2017  2017   2016  
Nonacquired            
Nonaccrual loans $82  $70 $50 $68  $69  
Other real estate and repossessed assets  -   150  -  1,849   2,068  
Loans past due 90 days or more and still accruing  677   1,690  1,172  538   581  
Total nonacquired nonperforming assets $759  $1,910 $1,222 $2,455  $2,718  
            
Acquired           
Nonaccrual loans $2,640  $2,625 $2,827 $2,949  $2,768  
Other real estate and repossessed assets  1,094   1,021  -  -   -  
Loans past due 90 days or more and still accruing  -   -  -  -   -  
Total acquired nonperforming assets $3,734  $3,646 $2,827 $2,949  $2,768  
            
Selected asset quality ratios           
Nonperforming assets / Assets  0.16 % 0.22% 0.17% 0.22 % 0.28 %
Nonperforming assets / (Loans + OREO + repossessed assets) 0.21   0.27  0.22  0.30   0.37  
Net charge-offs (recoveries) to average loans (annualized) 0.14   0.05  0.07  (0.07)  0.08  
Allowance for loan losses to total loans  0.70   0.69  0.71  0.69   0.82  
Nonacquired nonperforming assets / (Nonacquired loans +          
nonacquired OREO + nonacquired repossessed assets) (5) 0.05   0.14  0.10  0.21   0.25  
Allowance for loan losses / (Nonacquired nonaccrual loans +           
nonacquired loans past due 90 days or more and still accruing)  1,974.31   810.45  1,097.14  2,073.43   1,863.54  
            
            
  As of
  December 31, September 30, June 30, March 31, December 31, 
Additional Information - Allowance for Loan Losses 2017   2017  2017  2017   2016  
Allowance for loan losses excluding CBI loans (factoring receivables) 14,385   13,764  12,907  12,065   11,613  
Nonacquired loans held for investment (5)  1,455,376   1,349,254  1,252,970  1,153,897   1,076,209  
Allowance for loan losses allocated to CBI loans (factoring receivables) 600   500  500  500   500  
CBI loans (factoring receivables)  118,710   119,110  114,361  99,317   83,901  
            
  For the Three Months Ended
  December 31, September 30, June 30, March 31, December 31, 
Taxable Equivalent Yields/Rates  2017   2017  2017  2017   2016  
Interest income:           
Loans  5.45 % 5.45% 5.38% 5.29 % 4.95 %
Mortgage loans held-for-sale  2.96   3.56  3.72  4.13   2.99  
Interest on securities:           
Taxable  3.09   3.03  2.98  2.63   2.52  
Non-taxable  4.81   4.86  4.91  4.98   4.90  
Cash balances in other banks  1.37   1.32  1.09  0.84   0.63  
Total interest-earning assets  5.10   5.04  4.79  4.64   4.47  
            
Interest expense:           
Interest on deposits  0.62   0.59  0.57  0.56   0.55  
Interest on FHLB and other borrowings  3.82   3.95  4.01  3.19   4.04  
Interest on subordinated debt  6.27   6.27  6.36  6.42   6.30  
Total interest-bearing liabilities  0.73   0.70  0.68  0.68   0.69  
Net interest spread  4.37   4.34  4.11  3.96   3.78  
Net interest margin  4.63 % 4.58% 4.34% 4.18 % 3.99 %
            
  As of
  December 31, September 30, June 30, March 31, December 31, 
   2017   2017  2017  2017   2016  
Shareholders' Equity and Capital Ratios           
Tier 1 Leverage Ratio  10.89 % 11.42% 10.69% 8.86 % 9.57 %
Tier 1 Common Capital Ratio  12.31   12.78  13.17  11.06   11.46  
Tier 1 Risk-based Capital Ratio  12.31   12.78  13.17  11.06   11.46  
Total Risk-based Capital Ratio  14.10   14.64  15.18  13.07   13.90  
Equity / Assets  14.61   15.64  15.02  12.98   12.15  
Tangible common equity to tangible assets  10.75 % 11.46% 11.21% 9.11 % 9.69 %
Book value per share $27.05  $26.97 $25.82 $24.51  $21.68  
Tangible book value per share $19.05  $18.84 $18.45 $16.48  $16.82  
            
  For the Three Months Ended
  December 31, September 30, June 30, March 31, December 31, 
   2017   2017  2017  2017   2016  
Detail of noninterest income           
Service charges and fees on deposit accounts $733  $671 $640 $667  $523  
Mortgage origination and fee income  2,450   2,780  3,154  3,145   1,711  
Merchant sponsorship revenue  592   622  602  744   613  
Income from bank-owned life insurance  210   210  219  216   196  
Rental income  240   84  -  -   -  
Wealth management fees  11   12  14  10   10  
(Loss) gain on sale of other real estate  (66)  6  105  (1)  (31) 
(Loss) gain on sale of investments  (119)  -  28  -   -  
Other noninterest income    814     245    338    659     450  
Total noninterest income $  4,865  $  4,630 $  5,100 $  5,440  $  3,472  
                    
  For the Three Months Ended
  December 31, September 30, June 30, March 31, December 31, 
   2017   2017  2017  2017   2016  
Detail of noninterest expense           
Salaries and employee benefits $10,016  $9,804 $9,663 $10,073  $6,935  
Commission-based compensation  1,700   1,748  1,684  1,723   1,076  
Occupancy and equipment expense  1,889   1,692  1,479  1,473   1,193  
Data processing expenses  1,437   976  1,007  948   568  
Advertising and marketing expenses  349   309  327  468   156  
Legal fees  219   204  193  233   163  
FDIC insurance assessments  145   351  408  258   234  
Property and casualty insurance premiums  253   229  209  143   95  
Accounting and audit expenses  209   288  294  318   211  
Consulting and other professional expenses  888   510  517  497   201  
Telecommunications expenses  217   203  169  186   114  
ORE, Repo asset and other collection expenses  75   26  49  272   41  
Core deposit intangible amortization  393   366  348  348   182  
Other noninterest expense    1,460     1,365    1,390    1,521     971  
Total noninterest expense $  19,250  $  18,071 $  17,737 $  18,461  $  12,140  
                    
  As of
  December 31, September 30, June 30, March 31, December 31, 
Non-GAAP Reconciliation  2017   2017  2017  2017   2016  
Total shareholders' equity $399,958  $398,593 $363,260 $317,422  $237,044  
Less: intangible assets  117,849   119,688  103,270  103,519   52,803  
Less: minority interest not included in intangible assets    414     570    432    493     375  
Tangible common equity $281,695  $278,335 $259,558 $213,410  $183,866  
Common shares outstanding at year or period end  14,788,436   14,777,230  14,070,528  12,948,778   10,934,541  
Tangible book value per share $  19.05  $  18.84 $  18.45 $  16.48  $  16.82  
Total assets at end of period $2,737,676  $2,549,134 $2,418,052 $2,445,149  $1,950,784  
Less: intangible assets    117,849     119,688    103,270    103,519     52,803  
Adjusted total assets at end of period $2,619,827  $2,429,446 $2,314,782 $2,341,630  $1,897,981  
Tangible common equity to tangible assets    10.75 %   11.46%   11.21%   9.11 %   9.69 %
                    
  For the Three Months Ended
  December 31, September 30, June 30, March 31, December 31, 
   2017   2017  2017  2017   2016  
Non-GAAP Reconciliation           
Total average shareholders' equity $402,317  $376,129 $328,886 $312,971  $234,249  
Less: average intangible assets  119,415   108,553  103,403  103,004   52,872  
Less: average minority interest not included           
in intangible assets    357     356    318    295     262  
Average tangible common equity $282,545  $267,220 $225,165 $209,672  $181,115  
Net income to common shareholders  1,003   6,697  6,449  5,919   4,907  
Return on average tangible common equity (ROATCE)    1.41 %   9.94%   11.49%   11.45 %   10.78 %
Efficiency ratio:                   
Net interest income $27,400  $25,641 $23,953 $22,430  $16,990  
Total noninterest income  4,865   4,630  5,100  5,440   3,472  
Less:  gain (loss) on sale of securities    (119)    -    28    -     -  
Operating revenue $  32,384  $  30,271 $  29,025 $  27,870  $  20,462  
Expenses:                   
Total noninterest expenses $  19,250  $  18,071 $  17,737 $  18,461  $  12,140  
Efficiency ratio    59.44 %   59.70%   61.11%   66.24 %   59.33 %
Operating efficiency ratio:                   
Net interest income $27,400  $25,641 $23,953 $22,430  $16,990  
Total noninterest income  4,865   4,630  5,100  5,440   3,472  
Less:  (Loss) gain on sale of securities    (119)    -    28    -     -  
Operating revenue $  32,384  $  30,271 $  29,025 $  27,870  $  20,462  
Expenses:                   
Total noninterest expenses $19,250  $18,071 $17,737 $18,461  $12,140  
Less: merger/conversion-related expenses    1,172     417    344    387     169  
Adjusted noninterest expenses $  18,078  $  17,654 $  17,393 $  18,074  $  11,971  
Operating efficiency ratio    55.82 %   58.32%   59.92%   64.85 %   58.50 %
                    
(1) Excludes securities gains           
(2) After-tax impact of merger conversion-related expenses of $815, $340, $248, $300, and $168, respectively, for the periods presented 
(3) Excludes merger/conversion-related expenses           
(4) Net income to common shareholders / average assets          
(5) Excludes CBI loans (factoring receivables)           
            


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


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


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


        
NATIONAL COMMERCE CORPORATION 
Average Balance Sheets and Net Interest Analysis 
        
(Dollars in thousands)December 31, 2017
 December 31, 2016
 
Interest-earning assetsAverage
Balance

 Interest Income/
Expense

 Average Yield/
Rate

 Average
Balance

 Interest Income/
Expense

 Average Yield/
Rate

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

            

Coordonnées