Questions? +1 (202) 540-8337 Login
Trusted News Since 1995
A service for political professionals · Thursday, April 19, 2018 · 442,907,930 Articles · 3+ Million Readers

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)                      
                       

/EIN News/ --

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 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 $ 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 assets Average
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 %  
                                     
Contact:
                    National Commerce Corporation
                    William E. Matthews, V                                                              
                    Vice Chairman and Chief Financial Officer 
                    (205) 313-8122                        
                    
                    Lowell Womack, Jr.
                    Director of Financial Reporting
                    (205) 313-8147

Primary Logo

Powered by EIN News