BIRMINGHAM, Ala., April 24, 2018 (GLOBE NEWSWIRE) --
National Commerce Corporation (Nasdaq:NCOM) (“NCC” or the “Company”), the parent company of National Bank of Commerce (“NBC”), today reported first quarter 2018 net income to common shareholders of $9.1 million, compared to $5.9 million for the first quarter of 2017. Diluted net earnings per share were $0.52 in the first quarter of 2018, compared to $0.45 in the first quarter of 2017.
“We are pleased with our first quarter performance, which provides us with a good start to 2018,” said Richard Murray, IV, President and Chief Executive Officer of the Company. “Our first quarter loan and deposit growth was somewhat muted compared to our very strong fourth quarter 2017 growth, consistent with our prior growth history and some degree of seasonality. We look forward to the remainder of the year.”
During the first quarter of 2018, the Company successfully completed its acquisition of FirstAtlantic Financial Holdings, Inc. (“FirstAtlantic”) through a merger of the companies, followed by the merger of their respective bank subsidiaries, FirstAtlantic Bank and NBC. During the first quarter of 2018, the Company recognized $2.4 million in merger-related expenses ($1.8 million after-tax), reducing diluted net earnings per share by $0.10.
Several important measures from the first quarter of 2018 are as follows:
- Net Interest Margin (taxable equivalent) of 4.80% for the first quarter of 2018, compared to 4.63% for the fourth quarter of 2017 and 4.18% for the first quarter of 2017. The first quarter 2018 margin increased 0.17% compared to the 2017 fourth quarter due primarily to higher loan yields, which were driven by higher accretion income and an increase in interest rates during the first quarter of 2018. If accretion is excluded from both periods, the 2018 first quarter margin would have been 4.45%, or 0.03% higher than the 2017 fourth quarter margin excluding accretion.
- Return on Average Assets (“ROAA”) of 1.18% for the first quarter of 2018, compared to 1.00% for the first quarter of 2017.
- Return on Average Tangible Common Equity (“ROATCE”) of 11.27% for the first quarter of 2018, compared to 11.45% for the first quarter of 2017.
- First quarter 2018 loan growth (excluding mortgage loans held-for-sale) of $342.5 million, including $303.9 million acquired in the FirstAtlantic transaction. Excluding loans acquired in the FirstAtlantic transaction, first quarter 2018 loan growth was approximately $38.6 million.
- First quarter 2018 deposit growth of $265.7 million. Excluding $374.3 million in deposits acquired in the FirstAtlantic transaction, deposits declined by $108.6 million, reflecting the loss of some deposits associated with the 2017 fourth quarter’s seasonal deposit growth.
- 2018 first quarter mortgage production volume totaled $114.9 million, compared to $130.9 million for the first quarter of 2017, reflecting a higher interest rate environment.
- 2018 first quarter purchased volume in the factoring division totaled $283.0 million, compared to $253.6 million for the first quarter of 2017.
- Non-acquired non-performing assets of $1.1 million at March 31, 2018, an increase from $759 thousand at December 31, 2017 and a decrease from $2.5 million at March 31, 2017.
- Annualized net charge-offs of 0.08% of average loans outstanding for the first quarter of 2018, compared to net recoveries of 0.07% for the first quarter of 2017.
- Provision for loan losses of $1.3 million for the first quarter of 2018, compared to $1.5 million for the 2017 fourth quarter and $156 thousand for the first quarter of 2017.
- Ending tangible book value per share of $19.21.
- Ending book value per share of $29.35.
On March 20, 2018, the Company signed a definitive agreement to acquire Premier Community Bank of Florida (“Premier”), headquartered in Bradenton, Florida, through a merger of Premier with and into NBC. As of March 31, 2018, Premier had total loans and deposits of approximately $161.0 million and $194.3 million, respectively. The acquisition of Premier is currently pending and remains subject to customary regulatory and shareholder approvals; accordingly, Premier’s assets, liabilities and results of operations are not included in the Company’s totals for the first quarter of 2018.
The Company will host a live audio webcast conference call beginning at 8:00 a.m. Central Time on April 25, 2018 to discuss earnings and operating results for the 2018 first quarter. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 2179627). A replay of the conference call will be available until April 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, return on average tangible common equity, tangible book value per share, efficiency ratio and operating efficiency ratio. The Company’s management uses the non-GAAP financial measures set forth below in its analysis of the Company’s performance.
- “Tangible common equity” is 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-two full-service banking offices in 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, 2017 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.
| 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 | |
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 | |||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||
| 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||
| Earnings Summary | |||||||||||||||||
| Interest income | $ | 36,320 | $ | 30,224 | $ | 28,202 | $ | 26,466 | $ | 24,899 | |||||||
| Interest expense | 3,420 | 2,824 | 2,561 | 2,513 | 2,469 | ||||||||||||
| Net interest income | 32,900 | 27,400 | 25,641 | 23,953 | 22,430 | ||||||||||||
| Provision for loan losses | 1,318 | 1,478 | 1,105 | 1,155 | 156 | ||||||||||||
| Gain (loss) on sale of securities | 191 | (119 | ) | - | 28 | - | |||||||||||
| Other noninterest income (1) | 4,793 | 4,984 | 4,630 | 5,072 | 5,440 | ||||||||||||
| Merger/conversion-related expenses (2) | 2,396 | 1,172 | 417 | 344 | 387 | ||||||||||||
| Other noninterest expense (3) | 21,855 | 18,078 | 17,654 | 17,393 | 18,074 | ||||||||||||
| Income before income taxes | 12,315 | 11,537 | 11,095 | 10,161 | 9,253 | ||||||||||||
| Income tax expense | 2,776 | 3,890 | 3,828 | 3,281 | 2,841 | ||||||||||||
| Deferred tax asset write-down | - | 6,231 | - | - | - | ||||||||||||
| Total income tax expense | 2,776 | 10,121 | 3,828 | 3,281 | 2,841 | ||||||||||||
| Net income before minority interest | 9,539 | 1,416 | 7,267 | 6,880 | 6,412 | ||||||||||||
| Net income attributable to minority interest | 456 | 413 | 570 | 431 | 493 | ||||||||||||
| Net income to common shareholders | $ | 9,083 | $ | 1,003 | $ | 6,697 | $ | 6,449 | $ | 5,919 | |||||||
| Weighted average common and diluted shares outstanding | |||||||||||||||||
| Basic | 17,209,551 | 14,783,597 | 14,300,974 | 13,190,582 | 12,901,040 | ||||||||||||
| Diluted | 17,612,298 | 15,173,984 | 14,679,546 | 13,551,745 | 13,283,075 | ||||||||||||
| Net earnings per common share | |||||||||||||||||
| Basic | $ | 0.53 | $ | 0.07 | $ | 0.47 | $ | 0.49 | $ | 0.46 | |||||||
| Diluted | $ | 0.52 | $ | 0.07 | $ | 0.46 | $ | 0.48 | $ | 0.45 | |||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||
| Selected Performance Ratios | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||
| Return on average assets (ROAA) (4) | 1.18 | % | 0.15 | % | 1.08 | % | 1.06 | % | 1.00 | % | |
| Return on average equity (ROAE) | 7.35 | 0.99 | 7.06 | 7.86 | 7.67 | ||||||
| Return on average tangible common equity | |||||||||||
| (ROATCE) | 11.27 | 1.41 | 9.94 | 11.49 | 11.45 | ||||||
| Net interest margin - taxable equivalent | 4.80 | 4.63 | 4.58 | 4.34 | 4.18 | ||||||
| Efficiency ratio | 64.34 | 59.44 | 59.70 | 61.11 | 66.24 | ||||||
| Operating efficiency ratio (3) | 57.98 | 55.82 | 58.32 | 59.92 | 64.85 | ||||||
| Noninterest income / average assets (annualized) | 0.62 | 0.76 | 0.75 | 0.83 | 0.92 | ||||||
| Noninterest expense / average assets (annualized) | 3.16 | 2.92 | 2.92 | 2.91 | 3.11 | ||||||
| Yield on loans | 5.66 | 5.45 | 5.45 | 5.38 | 5.29 | ||||||
| Cost of total deposits | 0.47 | % | 0.43 | % | 0.41 | % | 0.40 | % | 0.40 | % | |
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| Factoring Metrics | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
| Recourse purchased volume | $ | 115,970 | $ | 108,628 | $ | 104,304 | $ | 101,295 | $ | 127,882 | ||||||
| Non-recourse purchased volume | 167,015 | 158,565 | 155,157 | 149,740 | 125,751 | |||||||||||
| Total purchased volume | $ | 282,985 | $ | 267,193 | $ | 259,461 | $ | 251,035 | $ | 253,633 | ||||||
| Average turn (days) | 42.25 | 43.59 | 41.11 | 38.47 | 35.61 | |||||||||||
| Net charge-offs / total purchased volume | 0.14 | % | 0.18 | % | 0.05 | % | 0.12 | % | 0.03 | % | ||||||
| Average discount rate | 1.64 | % | 1.59 | % | 1.58 | % | 1.52 | % | 1.44 | % | ||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| Mortgage Metrics | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
| Total production ($) | $ | 114,850 | $ | 120,969 | $ | 122,656 | $ | 133,063 | $ | 130,875 | ||||||
| Refinance (%) | 27.8 | % | 22.1 | % | 23.6 | % | 24.0 | % | 27.4 | % | ||||||
| Purchases (%) | 72.2 | % | 77.9 | % | 76.4 | % | 76.0 | % | 72.6 | % | ||||||
| As of | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| Balance Sheet Highlights | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
| Cash and cash equivalents | $ | 132,825 | $ | 235,288 | $ | 134,549 | $ | 224,760 | $ | 318,730 | ||||||
| Total investment securities | 169,868 | 111,396 | 111,158 | 101,569 | 98,390 | |||||||||||
| Mortgage loans held-for-sale | 21,077 | 29,191 | 15,278 | 19,482 | 19,517 | |||||||||||
| Acquired purchased credit-impaired loans | 29,359 | 25,696 | 26,924 | 21,065 | 22,465 | |||||||||||
| Acquired non-purchased credit-impaired loans | 783,556 | 538,276 | 561,118 | 490,198 | 539,056 | |||||||||||
| Nonacquired loans held for investment (5) | 1,531,475 | 1,455,376 | 1,349,254 | 1,252,970 | 1,153,897 | |||||||||||
| CBI loans (factoring receivables) | 136,194 | 118,710 | 119,110 | 114,361 | 99,317 | |||||||||||
| Total gross loans held for investment | 2,480,584 | 2,138,058 | 2,056,406 | 1,878,594 | 1,814,735 | |||||||||||
| Allowance for loan losses | 15,839 | 14,985 | 14,264 | 13,407 | 12,565 | |||||||||||
| Total intangibles | 174,225 | 117,849 | 119,688 | 103,270 | 103,519 | |||||||||||
| Total assets | 3,113,766 | 2,737,676 | 2,549,134 | 2,418,052 | 2,445,149 | |||||||||||
| Total deposits | 2,551,517 | 2,285,831 | 2,097,373 | 2,004,528 | 2,080,307 | |||||||||||
| FHLB and other borrowings | 7,000 | 7,000 | 7,941 | 7,000 | 7,000 | |||||||||||
| Subordinated debt | 24,567 | 24,553 | 24,540 | 24,527 | 24,513 | |||||||||||
| Total liabilities | 2,608,040 | 2,337,718 | 2,150,541 | 2,054,792 | 2,127,727 | |||||||||||
| Minority interest | 7,391 | 7,348 | 7,504 | 7,366 | 7,427 | |||||||||||
| Common stock | 172 | 148 | 148 | 141 | 129 | |||||||||||
| Total shareholders' equity | 505,726 | 399,958 | 398,593 | 363,260 | 317,422 | |||||||||||
| Tangible common equity | $ | 331,044 | $ | 281,695 | $ | 278,335 | $ | 259,558 | $ | 213,410 | ||||||
| End of period common shares outstanding | 17,229,043 | 14,788,436 | 14,777,230 | 14,070,528 | 12,948,778 | |||||||||||
| As of and For the Three Months Ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| Asset Quality Analysis | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
| Nonacquired | ||||||||||||||||
| Nonaccrual loans | $ | 367 | $ | 82 | $ | 70 | $ | 50 | $ | 68 | ||||||
| Other real estate and repossessed assets | - | - | 150 | - | 1,849 | |||||||||||
| Loans past due 90 days or more and still accruing | 723 | 677 | 1,690 | 1,172 | 538 | |||||||||||
| Total nonacquired nonperforming assets | $ | 1,090 | $ | 759 | $ | 1,910 | $ | 1,222 | $ | 2,455 | ||||||
| Acquired | ||||||||||||||||
| Nonaccrual loans | $ | 2,412 | $ | 2,640 | $ | 2,625 | $ | 2,827 | $ | 2,949 | ||||||
| Other real estate and repossessed assets | 999 | 1,094 | 1,021 | - | - | |||||||||||
| Loans past due 90 days or more and still accruing | - | - | - | - | - | |||||||||||
| Total acquired nonperforming assets | $ | 3,411 | $ | 3,734 | $ | 3,646 | $ | 2,827 | $ | 2,949 | ||||||
| Selected asset quality ratios | ||||||||||||||||
| Nonperforming assets / Assets | 0.14 | % | 0.16 | % | 0.22 | % | 0.17 | % | 0.22 | % | ||||||
| Nonperforming assets / (Loans + OREO + repossessed assets) | 0.18 | 0.21 | 0.27 | 0.22 | 0.30 | |||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.08 | 0.14 | 0.05 | 0.07 | (0.07 | ) | ||||||||||
| Allowance for loan losses to total loans | 0.64 | 0.70 | 0.69 | 0.71 | 0.69 | |||||||||||
| Nonacquired nonperforming assets / (Nonacquired loans + | ||||||||||||||||
| nonacquired OREO + nonacquired repossessed assets) (5) | 0.07 | 0.05 | 0.14 | 0.10 | 0.21 | |||||||||||
| Allowance for loan losses / (Nonacquired nonaccrual loans + | ||||||||||||||||
| nonacquired loans past due 90 days or more and still accruing) | 1,453.12 | 1,974.31 | 810.45 | 1,097.14 | 2,073.43 | |||||||||||
| As of | |||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||
| Additional Information - Allowance for Loan Losses | 2018 | 2017 | 2017 | 2017 | 2017 | ||||
| Allowance for loan losses excluding CBI loans (factoring receivables) | 15,239 | 14,385 | 13,764 | 12,907 | 12,065 | ||||
| Nonacquired loans held for investment (5) | 1,531,475 | 1,455,376 | 1,349,254 | 1,252,970 | 1,153,897 | ||||
| Allowance for loan losses allocated to CBI loans (factoring receivables) | 600 | 600 | 500 | 500 | 500 | ||||
| CBI loans (factoring receivables) | 136,194 | 118,710 | 119,110 | 114,361 | 99,317 | ||||
| For the Three Months Ended | |||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||
| Taxable Equivalent Yields/Rates | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||
| Interest income: | |||||||||||
| Loans | 5.66 | % | 5.45 | % | 5.45 | % | 5.38 | % | 5.29 | % | |
| Mortgage loans held-for-sale | 4.85 | 2.96 | 3.56 | 3.72 | 4.13 | ||||||
| Interest on securities: | |||||||||||
| Taxable | 3.11 | 3.09 | 3.03 | 2.98 | 2.63 | ||||||
| Non-taxable | 4.06 | 4.81 | 4.86 | 4.91 | 4.98 | ||||||
| Cash balances in other banks | 1.55 | 1.37 | 1.32 | 1.09 | 0.84 | ||||||
| Funds sold | 1.38 | - | - | - | - | ||||||
| Total interest-earning assets | 5.29 | 5.10 | 5.04 | 4.79 | 4.64 | ||||||
| Interest expense: | |||||||||||
| Interest on deposits | 0.67 | 0.62 | 0.59 | 0.57 | 0.56 | ||||||
| Interest on FHLB and other borrowings | 4.00 | 3.82 | 3.95 | 4.01 | 3.19 | ||||||
| Interest on subordinated debt | 6.41 | 6.27 | 6.27 | 6.36 | 6.42 | ||||||
| Total interest-bearing liabilities | 0.76 | 0.73 | 0.70 | 0.68 | 0.68 | ||||||
| Net interest spread | 4.53 | 4.37 | 4.34 | 4.11 | 3.96 | ||||||
| Net interest margin | 4.80 | % | 4.63 | % | 4.58 | % | 4.34 | % | 4.18 | % | |
| As of | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||
| Shareholders' Equity and Capital Ratios | ||||||||||||||||
| Tier 1 Leverage Ratio | 10.91 | % | 10.89 | % | 11.42 | % | 10.69 | % | 8.86 | % | ||||||
| Tier 1 Common Capital Ratio | 12.93 | 12.54 | 12.78 | 13.17 | 11.06 | |||||||||||
| Tier 1 Risk-based Capital Ratio | 12.93 | 12.54 | 12.78 | 13.17 | 11.06 | |||||||||||
| Total Risk-based Capital Ratio | 14.56 | 14.37 | 14.64 | 15.18 | 13.07 | |||||||||||
| Equity / Assets | 16.24 | 14.61 | 15.64 | 15.02 | 12.98 | |||||||||||
| Tangible common equity to tangible assets | 11.26 | % | 10.75 | % | 11.46 | % | 11.21 | % | 9.11 | % | ||||||
| Book value per share | $ | 29.35 | $ | 27.05 | $ | 26.97 | $ | 25.82 | $ | 24.51 | ||||||
| Tangible book value per share | $ | 19.21 | $ | 19.05 | $ | 18.84 | $ | 18.45 | $ | 16.48 | ||||||
| For the Three Months Ended | |||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||
| 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||
| Detail of Noninterest Income | |||||||||||||||||
| Service charges and fees on deposit accounts | $ | 1,012 | $ | 733 | $ | 671 | $ | 640 | $ | 667 | |||||||
| Mortgage origination and fee income | 1,895 | 2,450 | 2,780 | 3,154 | 3,145 | ||||||||||||
| Merchant sponsorship revenue | 720 | 592 | 622 | 602 | 744 | ||||||||||||
| Income from bank-owned life insurance | 286 | 210 | 210 | 219 | 216 | ||||||||||||
| Rental income | 276 | 240 | 84 | - | - | ||||||||||||
| Wealth management fees | 15 | 11 | 12 | 14 | 10 | ||||||||||||
| Gain (loss) on sale of other real estate | 171 | (66 | ) | 6 | 105 | (1 | ) | ||||||||||
| Gain (loss) on sale of investments | 191 | (119 | ) | - | 28 | - | |||||||||||
| Other noninterest income | 418 | 814 | 245 | 338 | 659 | ||||||||||||
| Total noninterest income | $ | 4,984 | $ | 4,865 | $ | 4,630 | $ | 5,100 | $ | 5,440 | |||||||
| For the Three Months Ended | |||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||
| 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||
| Detail of Noninterest Expense | |||||||||||||||||
| Salaries and employee benefits | $ | 12,460 | $ | 10,016 | $ | 9,804 | $ | 9,663 | $ | 10,073 | |||||||
| Commission-based compensation | 1,501 | 1,700 | 1,748 | 1,684 | 1,723 | ||||||||||||
| Occupancy and equipment expense | 2,270 | 1,889 | 1,692 | 1,479 | 1,473 | ||||||||||||
| Data processing expenses | 3,356 | 1,437 | 976 | 1,007 | 948 | ||||||||||||
| Advertising and marketing expenses | 268 | 349 | 309 | 327 | 468 | ||||||||||||
| Legal fees | 160 | 219 | 204 | 193 | 233 | ||||||||||||
| FDIC insurance assessments | 281 | 145 | 351 | 408 | 258 | ||||||||||||
| Property and casualty insurance premiums | 224 | 253 | 229 | 209 | 143 | ||||||||||||
| Accounting and audit expenses | 335 | 209 | 288 | 294 | 318 | ||||||||||||
| Consulting and other professional expenses | 538 | 888 | 510 | 517 | 497 | ||||||||||||
| Telecommunications expenses | 229 | 217 | 203 | 169 | 186 | ||||||||||||
| ORE, Repo asset and other collection expenses | 69 | 75 | 26 | 49 | 272 | ||||||||||||
| Core deposit intangible amortization | 739 | 393 | 366 | 348 | 348 | ||||||||||||
| Other noninterest expense | 1,821 | 1,460 | 1,365 | 1,390 | 1,521 | ||||||||||||
| Total noninterest expense | $ | 24,251 | $ | 19,250 | $ | 18,071 | $ | 17,737 | $ | 18,461 | |||||||
| As of | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| Non-GAAP Reconciliation | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
| Total shareholders' equity | $ | 505,726 | $ | 399,958 | $ | 398,593 | $ | 363,260 | $ | 317,422 | ||||||
| Less: intangible assets | 174,225 | 117,849 | 119,688 | 103,270 | 103,519 | |||||||||||
| Less: minority interest not included in intangible assets | 457 | 414 | 570 | 432 | 493 | |||||||||||
| Tangible common equity | $ | 331,044 | $ | 281,695 | $ | 278,335 | $ | 259,558 | $ | 213,410 | ||||||
| Common shares outstanding at year or period end | 17,229,043 | 14,788,436 | 14,777,230 | 14,070,528 | 12,948,778 | |||||||||||
| Tangible book value per share | $ | 19.21 | $ | 19.05 | $ | 18.84 | $ | 18.45 | $ | 16.48 | ||||||
| Total assets at end of period | $ | 3,113,766 | $ | 2,737,676 | $ | 2,549,134 | $ | 2,418,052 | $ | 2,445,149 | ||||||
| Less: intangible assets | 174,225 | 117,849 | 119,688 | 103,270 | 103,519 | |||||||||||
| Adjusted total assets at end of period | $ | 2,939,541 | $ | 2,619,827 | $ | 2,429,446 | $ | 2,314,782 | $ | 2,341,630 | ||||||
| Tangible common equity to tangible assets | 11.26 | % | 10.75 | % | 11.46 | % | 11.21 | % | 9.11 | % | ||||||
| For the Three Months Ended | ||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||
| Non-GAAP Reconciliation | ||||||||||||||||
| Total average shareholders' equity | $ | 500,901 | $ | 402,317 | $ | 376,129 | $ | 328,886 | $ | 312,971 | ||||||
| Less: average intangible assets | 173,766 | 119,415 | 108,553 | 103,403 | 103,004 | |||||||||||
| Less: average minority interest not included | ||||||||||||||||
| in intangible assets | 326 | 357 | 356 | 318 | 295 | |||||||||||
| Average tangible common equity | $ | 326,809 | $ | 282,545 | $ | 267,220 | $ | 225,165 | $ | 209,672 | ||||||
| Net income to common shareholders | 9,083 | 1,003 | 6,697 | 6,449 | 5,919 | |||||||||||
| Return on average tangible common equity (ROATCE) | 11.27 | % | 1.41 | % | 9.94 | % | 11.49 | % | 11.45 | % | ||||||
| Efficiency ratio: | ||||||||||||||||
| Net interest income | $ | 32,900 | $ | 27,400 | $ | 25,641 | $ | 23,953 | $ | 22,430 | ||||||
| Total noninterest income | 4,984 | 4,865 | 4,630 | 5,100 | 5,440 | |||||||||||
| Less: Gain (loss) on sale of securities | 191 | (119 | ) | - | 28 | - | ||||||||||
| Operating revenue | $ | 37,693 | $ | 32,384 | $ | 30,271 | $ | 29,025 | $ | 27,870 | ||||||
| Expenses: | ||||||||||||||||
| Total noninterest expenses | $ | 24,251 | $ | 19,250 | $ | 18,071 | $ | 17,737 | $ | 18,461 | ||||||
| Efficiency ratio | 64.34 | % | 59.44 | % | 59.70 | % | 61.11 | % | 66.24 | % | ||||||
| Operating efficiency ratio: | ||||||||||||||||
| Net interest income | $ | 32,900 | $ | 27,400 | $ | 25,641 | $ | 23,953 | $ | 22,430 | ||||||
| Total noninterest income | 4,984 | 4,865 | 4,630 | 5,100 | 5,440 | |||||||||||
| Less: Gain (loss) on sale of securities | 191 | (119 | ) | - | 28 | - | ||||||||||
| Operating revenue | $ | 37,693 | $ | 32,384 | $ | 30,271 | $ | 29,025 | $ | 27,870 | ||||||
| Expenses: | ||||||||||||||||
| Total noninterest expenses | $ | 24,251 | $ | 19,250 | $ | 18,071 | $ | 17,737 | $ | 18,461 | ||||||
| Less: merger/conversion-related expenses | 2,396 | 1,172 | 417 | 344 | 387 | |||||||||||
| Adjusted noninterest expenses | $ | 21,855 | $ | 18,078 | $ | 17,654 | $ | 17,393 | $ | 18,074 | ||||||
| Operating efficiency ratio | 57.98 | % | 55.82 | % | 58.32 | % | 59.92 | % | 64.85 | % | ||||||
| (1) Excludes securities gains |
| (2) After-tax impact of merger conversion-related expenses of $1,826, $815, $340, $248 and $300, 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 | |||||
| March 31, 2018 | December 31, 2017 | ||||
| Cash and due from banks | $ | 26,683 | $ | 36,246 | |
| Interest-bearing deposits with banks | 106,142 | 199,042 | |||
| Cash and cash equivalents | 132,825 | 235,288 | |||
| Investment securities held-to-maturity (fair value of $25,182 and $25,932 at March 31, 2018 | |||||
| and December 31, 2017, respectively) | 25,383 | 25,562 | |||
| Investment securities available-for-sale | 144,485 | 85,834 | |||
| Other investments | 12,021 | 11,350 | |||
| Mortgage loans held-for-sale | 21,077 | 29,191 | |||
| Loans, net of unearned income | 2,480,584 | 2,138,058 | |||
| Less: allowance for loan losses | 15,839 | 14,985 | |||
| Loans, net | 2,464,745 | 2,123,073 | |||
| Premises and equipment, net | 65,500 | 52,455 | |||
| Accrued interest receivable | 7,300 | 6,157 | |||
| Bank-owned life insurance | 42,142 | 31,584 | |||
| Other real estate | 999 | 1,094 | |||
| Deferred tax assets, net | 14,834 | 12,041 | |||
| Goodwill | 164,257 | 113,394 | |||
| Core deposit intangible, net | 9,968 | 4,455 | |||
| Other assets | 8,230 | 6,198 | |||
| Total assets | $ | 3,113,766 | $ | 2,737,676 | |
| Liabilities and Shareholders’ Equity | |||||
| Deposits: | |||||
| Noninterest-bearing demand | $ | 711,278 | $ | 697,144 | |
| Interest-bearing demand | 520,208 | 362,266 | |||
| Savings and money market | 953,692 | 951,846 | |||
| Time | 366,339 | 274,575 | |||
| Total deposits | 2,551,517 | 2,285,831 | |||
| Federal Home Loan Bank advances and other borrowings | 7,000 | 7,000 | |||
| Subordinated debt | 24,567 | 24,553 | |||
| Accrued interest payable | 1,260 | 900 | |||
| Other liabilities | 23,696 | 19,434 | |||
| Total liabilities | 2,608,040 | 2,337,718 | |||
| Shareholders’ equity: | |||||
| Preferred stock, 250,000 shares authorized, no shares issued or outstanding | - | - | |||
| Common stock, $0.01 par value, 30,000,000 shares authorized, 17,229,043 and 14,788,436 | |||||
| shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 172 | 148 | |||
| Additional paid-in capital | 446,290 | 347,999 | |||
| Retained earnings | 53,072 | 43,989 | |||
| Accumulated other comprehensive income | (1,199 | ) | 474 | ||
| Total shareholders' equity attributable to National Commerce Corporation | 498,335 | 392,610 | |||
| Noncontrolling interest | 7,391 | 7,348 | |||
| Total shareholders' equity | 505,726 | 399,958 | |||
| Total liabilities and shareholders' equity | $ | 3,113,766 | $ | 2,737,676 | |
| NATIONAL COMMERCE CORPORATION | ||||||
| Unaudited Consolidated Statements of Earnings | ||||||
| (In thousands, except share and per share data) | ||||||
| For the Three Months Ended | ||||||
| March 31, | ||||||
| 2018 | 2017 | |||||
| Interest and dividend income: | ||||||
| Interest and fees on loans | $ | 34,423 | $ | 23,593 | ||
| Interest and dividends on taxable investment securities | 1,170 | 571 | ||||
| Interest on non-taxable investment securities | 188 | 200 | ||||
| Interest on interest-bearing deposits and federal funds sold | 539 | 535 | ||||
| Total interest income | 36,320 | 24,899 | ||||
| Interest expense: | ||||||
| Interest on deposits | 2,961 | 2,010 | ||||
| Interest on borrowings | 71 | 71 | ||||
| Interest on subordinated debt | 388 | 388 | ||||
| Total interest expense | 3,420 | 2,469 | ||||
| Net interest income | 32,900 | 22,430 | ||||
| Provision for loan losses | 1,318 | 156 | ||||
| Net interest income after provision for loan losses | 31,582 | 22,274 | ||||
| Other income: | ||||||
| Service charges and fees on deposit accounts | 1,012 | 667 | ||||
| Mortgage origination and fee income | 1,895 | 3,145 | ||||
| Merchant sponsorship revenue | 720 | 744 | ||||
| Income from bank-owned life insurance | 286 | 216 | ||||
| Rental income | 276 | - | ||||
| Wealth management fees | 15 | 10 | ||||
| Gain (loss) on other real estate | 171 | (1 | ) | |||
| Gain on sale of investment securities available-for-sale | 191 | - | ||||
| Other | 418 | 659 | ||||
| Total other income | 4,984 | 5,440 | ||||
| Other expense: | ||||||
| Salaries and employee benefits | 12,460 | 10,073 | ||||
| Commission-based compensation | 1,501 | 1,723 | ||||
| Occupancy and equipment | 2,270 | 1,473 | ||||
| Core deposit intangible amortization | 739 | 348 | ||||
| Other operating expense | 7,281 | 4,844 | ||||
| Total other expense | 24,251 | 18,461 | ||||
| Earnings before income taxes | 12,315 | 9,253 | ||||
| Income tax expense | 2,776 | 2,841 | ||||
| Net earnings | 9,539 | 6,412 | ||||
| Less: Net earnings attributable to noncontrolling interest | 456 | 493 | ||||
| Net earnings attributable to National Commerce Corporation | $ | 9,083 | $ | 5,919 | ||
| Weighted average common and diluted shares outstanding | ||||||
| Basic | 17,209,551 | 12,901,040 | ||||
| Diluted | 17,612,298 | 13,283,075 | ||||
| Basic earnings per common share | $ | 0.53 | $ | 0.46 | ||
| Diluted earnings per common share | $ | 0.52 | $ | 0.45 | ||
| NATIONAL COMMERCE CORPORATION | ||||||||||||||||||||||||||||||||||||||
| Average Balance Sheets and Net Interest Analysis | ||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||||||||||||||||||||
| 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 | $ | 2,451,352 | $ | 34,220 | 5.66 | % | $ | 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 | % | ||||||||
| Mortgage loans held-for-sale | 17,402 | 208 | 4.85 | 18,237 | 136 | 2.96 | 16,811 | 151 | 3.56 | 18,321 | 170 | 3.72 | 21,809 | 222 | 4.13 | |||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||||||||||||||||
| Taxable securities | 152,748 | 1,170 | 3.11 | 97,175 | 756 | 3.09 | 90,969 | 694 | 3.03 | 81,645 | 606 | 2.98 | 88,062 | 571 | 2.63 | |||||||||||||||||||||||
| Tax-exempt securities | 25,169 | 252 | 4.06 | 25,005 | 303 | 4.81 | 25,286 | 310 | 4.86 | 25,573 | 313 | 4.91 | 25,824 | 317 | 4.98 | |||||||||||||||||||||||
| Cash balances in other banks | 138,358 | 529 | 1.55 | 128,606 | 443 | 1.37 | 159,973 | 533 | 1.32 | 249,361 | 676 | 1.09 | 258,672 | 535 | 0.84 | |||||||||||||||||||||||
| Funds sold | 2,946 | 10 | 1.38 | - | - | 0.00 | - | - | 0.00 | - | - | 0.00 | - | - | 0.00 | |||||||||||||||||||||||
| Total interest-earning assets | 2,787,975 | $ | 36,389 | 5.29 | 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 | ||||||||||||||||||
| Noninterest-earning assets | 328,605 | 255,239 | 228,231 | 218,088 | 220,006 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 3,116,580 | $ | 2,615,705 | $ | 2,458,385 | $ | 2,442,246 | $ | 2,407,614 | ||||||||||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||||
| Interest-bearing transaction accounts | $ | 423,537 | $ | 322 | 0.31 | % | $ | 331,876 | $ | 277 | 0.33 | % | $ | 314,925 | $ | 207 | 0.26 | % | $ | 341,238 | $ | 243 | 0.29 | % | $ | 332,361 | $ | 217 | 0.26 | % | ||||||||
| Savings and money market deposits | 1,038,751 | 1,816 | 0.71 | 884,660 | 1,381 | 0.62 | 827,526 | 1,233 | 0.59 | 821,130 | 1,138 | 0.56 | 804,537 | 1,096 | 0.55 | |||||||||||||||||||||||
| Time deposits | 327,011 | 823 | 1.02 | 285,669 | 707 | 0.98 | 273,630 | 661 | 0.96 | 290,097 | 673 | 0.93 | 306,404 | 697 | 0.92 | |||||||||||||||||||||||
| Federal Home Loan Bank and other borrowed money | 7,200 | 71 | 4.00 | 7,381 | 71 | 3.82 | 7,228 | 72 | 3.95 | 7,000 | 70 | 4.01 | 9,016 | |||||||||||||||||||||||||
| Subordinated debt | 24,560 | 388 | 6.41 | 24,547 | 388 | 6.27 | 24,533 | 388 | 6.27 | 24,520 | 389 | 6.36 | 24,507 | 388 | 6.42 | |||||||||||||||||||||||
| Total interest-bearing liabilities | 1,821,059 | $ | 3,420 | 0.76 | 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 | ||||||||||||||||||
| Noninterest-bearing deposits | 772,358 | 657,786 | 615,130 | 612,910 | 600,897 | |||||||||||||||||||||||||||||||||
| Total funding sources | 2,593,417 | 2,191,919 | 2,062,972 | 2,096,895 | 2,077,722 | |||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities | 22,262 | 21,469 | 19,284 | 16,465 | 16,921 | |||||||||||||||||||||||||||||||||
| Shareholders' equity | 500,901 | 402,317 | 376,129 | 328,886 | 312,971 | |||||||||||||||||||||||||||||||||
| $ | 3,116,580 | $ | 2,615,705 | $ | 2,458,385 | $ | 2,442,246 | $ | 2,407,614 | |||||||||||||||||||||||||||||
| Net interest rate spread | 4.53 | % | 4.37 | % | 4.34 | % | 4.11 | % | 3.96 | % | ||||||||||||||||||||||||||||
| Net interest income/margin (taxable equivalent) | 32,969 | 4.80 | % | 27,518 | 4.63 | % | 25,761 | 4.58 | % | 24,075 | 4.34 | % | 22,553 | 4.18 | % | |||||||||||||||||||||||
| Tax equivalent adjustment | 69 | 118 | 120 | 122 | 123 | |||||||||||||||||||||||||||||||||
| Net interest income/margin | $ | 32,900 | 4.79 | % | $ | 27,400 | 4.61 | % | $ | 25,641 | 4.56 | % | $ | 23,953 | 4.32 | % | $ | 22,430 | 4.16 | % | ||||||||||||||||||