National Commerce Corporation Announces Fourth Quarter and

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News Desk 2018

Jan 27, 2016 at 1:30 AM

National Commerce Corporation Announces Fourth Quarter and FYE 2015 Earnings

BIRMINGHAM, Ala., Jan. 26, 2016 (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq: NCOM ) (the “Company” or “NCC”), the parent company of National Bank of Commerce, today reported fourth quarter 2015 net income to common shareholders of $2.9 million, compared to $1.7 million for the fourth quarter of 2014. Diluted net earnings per share were $0.28 in the 2015 fourth quarter, compared to $0.27 in the 2015 third quarter.

For the full year, NCC reported net income of $9.6 million, up from $5.4 million in 2014, and diluted net earnings per share of $1.02, compared to $0.91 in 2014.

On October 31, 2015, the Company completed the acquisition of Reunion Bank of Florida, incurring approximately $395 thousand in merger-related expenses. Also, as previously announced, the Company closed its Kissimmee, Florida and English Village (Birmingham), Alabama branch banking offices, effective December 31, 2015. In connection with these closings, the Company incurred approximately $165 thousand in closing and severance costs in the fourth quarter of 2015.

“We are pleased to welcome the Reunion team and its customers to our company,” said John H. Holcomb, III, Chairman and Chief Executive Officer of the Company. “Our team’s work in 2015 has National Commerce Corporation well-positioned for 2016 and beyond. We will continue our focus on asset quality, customer service and growing our profitability, and we look forward to 2016.”

Several important measures from the fourth quarter of 2015 are as follows:

Net Interest Margin (tax-effected) of 4.06%, down from 4.58% for the fourth quarter of 2014. The margin increased 0.04% compared to the 2015 third quarter. During the fourth quarter of 2015, average cash and federal funds balances were $191.1 million, compared to $48.6 million in the 2014 fourth quarter and $166.7 million in the 2015 third quarter. The 2014 fourth quarter margin was also higher than the 2015 fourth quarter due to the proportionately larger size of factoring revenues as a percentage of total revenues, resulting from the higher yields in the factoring division.
Return on Average Assets of 0.72% for both the 2015 and 2014 fourth quarters. Return on Average Assets was impacted by the larger average balances in cash and federal funds during the fourth quarter of 2015.
Return on Average Tangible Common Equity of 7.48%, compared to 7.86% for the fourth quarter of 2014.
Fourth quarter 2015 loan growth (excluding mortgage loans held-for-sale) of $304.3 million. The fourth quarter loan growth includes loans acquired in the October 31, 2015 Reunion acquisition totaling approximately $258.4 million.
Fourth quarter 2015 deposit growth of $372.6 million. The fourth quarter deposit growth includes deposits acquired in the October 31, 2015 Reunion acquisition totaling approximately $277.7 million.
$58.9 million in mortgage production, compared to $55.9 million for the fourth quarter of 2014.
$172.1 million in purchased volume in the factoring division, compared to $198.7 million for the 2014 fourth quarter.
A slight decrease in non-acquired non-performing assets to $4.3 million from $4.5 million at September 30, 2015, and an increase compared to $3.3 million at December 31, 2014.
Annualized net charge-offs of 0.06%, compared to 0.02% for the fourth quarter of 2014.
Ending tangible book value per share of $15.03.
Ending book value per share of $20.01.

The Company will host a live audio webcast conference call beginning at 9:00 a.m. Central Time on January 27, 2016 to discuss earnings and operating results for the fourth quarter and year ended December 31, 2015. Investors may call in (toll free) by dialing (855) 871-0559 (conference ID 30845889). A replay of the conference call will be available beginning two hours after the completion of the call until 10:59 p.m. Central Time on January 29, 2016 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, allowance for loan losses to nonacquired loans, efficiency ratio and operating efficiency ratio. The Company’s management uses the non-GAAP financial measures set forth below in its analysis of the Company’s performance.

“Tangible common equity” is total shareholders’ equity less goodwill, other intangible assets and minority interest not included in intangible assets.
“Average tangible common equity” is defined as the average of tangible common equity for the applicable period.
“Return on average tangible common equity,” or ROATCE, is defined as net income available to common shareholders divided by average tangible common equity.
“Tangible book value per share” is defined as tangible common equity divided by total common shares outstanding. This measure is important to investors interested in changes from period to period in book value per share exclusive of changes in intangible assets.
“Allowance for loan losses to nonacquired loans” is defined as the total allowance for loan losses, less the allowance for loan losses attributable to factored receivables, divided by nonacquired loans held for investment, excluding factored receivables at end of period.
“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 NCC’s financial condition, results of operations and cash flows computed in accordance with GAAP; however, NCC acknowledges that the non-GAAP financial measures have a number of limitations. As such, NCC 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 and bank holding company headquartered in Birmingham, Alabama. Substantially all of the operations of NCC 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 (in Birmingham, Huntsville, Auburn-Opelika, and Baldwin County) and ten full-service banking offices in Central Florida (in Vero Beach through National Bank of Commerce; in Longwood, Winter Park, Orlando, and Oviedo through United Legacy Bank, a division of National Bank of Commerce; and in Tavares, Port Orange, St. Augustine and Ormond Beach through Reunion Bank of Florida, a division of National Bank of Commerce). 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 based 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.

NCC 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 NCC 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, 2014 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)

	For the Three Months Ended
	December 31,			September 30,			June 30,				March 31,			December 31,
		2015			2015			2015				2015			2014
Earnings Summary
Interest income	$	16,488		$	13,450		$	12,714			$	12,193		$	10,578
Interest expense		1,507			1,191			1,071				1,027			846
Net interest income		14,981			12,259			11,643				11,166			9,732
Provision for loan losses		631			201			120				161			826
Other noninterest income⁽¹⁾		2,298			2,353			2,206				1,764			1,419
Merger/conversion-related expenses		395			122			168				79			246
Other noninterest expense⁽²⁾		11,211			9,773			9,448				9,211			6,910
Income before income taxes		5,042			4,516			4,113				3,479			3,169
Income tax expense		1,667			1,453			1,264				1,092			1,158
Net income before minority interest		3,375			3,063			2,849				2,387			2,011
Net income attributable to minority interest		437			573			593				466			304
Net income to common shareholders	$	2,938		$	2,490		$	2,256			$	1,921		$	1,707

Weighted average common and diluted shares outstanding
Basic		10,345,146			9,438,541			9,438,541				7,701,663			6,223,377
Diluted		10,552,871			9,594,472			9,569,695				7,801,577			6,305,626

Net earnings per common share
Basic	$	0.28		$	0.26		$	0.24			$	0.25		$	0.27
Diluted	$	0.28		$	0.26		$	0.24			$	0.25		$	0.27

	December 31,			September 30,			June 30,				March 31,			December 31,
Selected Performance Ratios		2015			2015			2015				2015			2014
Return on average assets (ROAA)⁽³⁾		0.72	%		0.75	%		0.75		%		0.67	%		0.72	%
Return on average equity (ROAE)		5.76			5.62			5.22				5.58			6.11
Return on average tangible common equity
(ROATCE)		7.48			6.85			6.35				7.15			7.86
Net interest margin - taxable equivalent		4.06			4.02			4.22				4.25			4.58
Efficiency ratio		67.17			67.72			69.43				71.85			64.17
Operating efficiency ratio⁽²⁾		64.88			66.88			68.22				71.24			61.97
Noninterest income / average assets (annualized)		0.56			0.71			0.73				0.62			0.60
Noninterest expense / average assets (annualized)		2.84			2.99			3.19				3.24			3.01
Yield on loans		5.17			5.13			5.15				5.26			5.37
Cost of total deposits		0.40	%		0.39	%		0.38		%		0.38	%		0.36	%

	December 31,			September 30,			June 30,				March 31,			December 31,
Factoring Metrics		2015			2015			2015				2015			2014
Recourse purchased volume	$	74,922		$	82,661		$	89,009			$	84,725		$	107,891
Non-recourse purchased volume		97,142			100,055			99,614				90,402			90,791
Total purchased volume	$	172,064		$	182,716		$	188,623			$	175,127		$	198,682
Average turn (days)		39.68			37.97			37.66				41.57			40.08
Net charge-offs / total purchased volume		0.12	%		0.06	%		(0.04	)	%		0.09	%		0.02
Average discount rate		1.73	%		1.74	%		1.67		%		1.65	%		1.65

	December 31,			September 30,			June 30,				March 31,			December 31,
Mortgage Metrics		2015			2015			2015				2015			2014
Total production ($)	$	58,903		$	82,276		$	84,796			$	55,731		$	55,931
Refinance (%)		26.0	%		19.1	%		18.6		%		26.9	%		22.6	%
Purchases (%)		74.0	%		80.9	%		81.4		%		73.1	%		77.4	%



NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
	As of
	December 31,			September 30,			June 30,				March 31,			December 31,
Balance Sheet Highlights		2015			2015			2015				2015			2014
Cash and cash equivalents	$	212,457		$	192,882		$	142,393			$	149,907		$	123,435
Total securities		80,863			45,911			42,586				37,631			34,932
Mortgage loans held-for-sale		15,020			7,926			13,750				13,804			9,329
Acquired purchased credit-impaired loans		10,443			5,615			5,724				8,852			9,077
Acquired non-purchased credit-impaired loans		370,872			123,730			131,953				138,040			143,981
Nonacquired loans held for investment ⁽⁴⁾		870,471			811,011			757,976				704,307			653,063
CBI loans (factoring receivables)		67,628			74,780			75,000				69,541			82,600
Total gross loans held for investment		1,319,414			1,015,136			970,653				920,740			888,721
Allowance for loan losses		9,842			9,391			9,274				9,522			9,802
Total intangibles		53,474			31,291			31,310				30,560			30,591
Total assets		1,764,607			1,350,781			1,256,614				1,206,667			1,138,426
Total deposits		1,514,458			1,141,837			1,051,483				1,000,217			971,060
Borrowings		22,000			22,000			22,000				22,000			22,000
Total liabilities		1,547,971			1,173,358			1,081,985				1,034,495			1,002,265
Minority interest		7,372			7,508			7,527				7,166			7,239
Common stock		108			94			94				94			75
Total shareholders' equity		216,636			177,423			174,629				172,172			136,161
Tangible common equity	$	162,724		$	145,558		$	142,726			$	141,380		$	105,265
End of period common shares outstanding		10,824,969			9,438,541			9,438,541				9,438,541			7,541,541

	As of and For the Three Months Ended
	December 31,			September 30,			June 30,				March 31,			December 31,
Asset Quality Analysis		2015			2015			2015				2015			2014
*Nonacquired*
Nonaccrual loans	$	187		$	829		$	2,688			$	618		$	2,276
Other real estate and repossessed assets		3,873			3,562			1,494				1,494			823
Loans past due 90 days or more and still accruing		252			148			44				168			217
Total nonacquired nonperforming assets	$	4,312		$	4,539		$	4,226			$	2,280		$	3,316

*Acquired*
Nonaccrual loans	$	3,508		$	2,829		$	2,795			$	2,576		$	2,589
Other real estate and repossessed assets		92			72			142				542			557
Loans past due 90 days or more and still accruing		-			-			-				-			80
Total acquired nonperforming assets	$	3,600		$	2,901		$	2,937			$	3,118		$	3,226

*Selected asset quality ratios*
Nonperforming assets / assets		0.45	%		0.55	%		0.57		%		0.45	%		0.57	%
Nonperforming assets / (loans + OREO + repossessed assets)		0.60			0.73			0.74				0.58			0.73
Net charge-offs (recoveries) to average loans (annualized)		0.06			0.03			0.16				0.20			0.02
Allowance for loan losses to total loans		0.75			0.93			0.96				1.03			1.10
Nonacquired nonperforming assets / (Nonacquired loans +
nonacquired OREO + nonacquired repossessed assets) ⁽⁴⁾		0.49			0.56			0.56				0.32			0.51
Allowance for loan losses to nonacquired nonperforming
loans		2,241.91			961.21			339.46				1,211.45			393.18
Allowance for loan losses to nonacquired loans⁽⁴⁾		1.07	%		1.10	%		1.13		%		1.22	%		1.35	%

	For the Three Months Ended
	December 31,			September 30,			June 30,				March 31,			December 31,
Taxable Equivalent Yields/Rates		2015			2015			2015				2015			2014
Interest income:
Loans		5.17	%		5.13	%		5.15		%		5.26	%		5.37	%
Mortgage loans held-for-sale		3.44			4.17			4.02				3.63			4.32
Interest on securities:
Taxable		3.34			3.34			3.33				2.92			3.17
Non-taxable		4.18			4.88			5.08				5.72			5.73
Cash balances in other banks		0.35			0.31			0.38				0.36			0.26
Total interest-earning assets		4.46			4.41			4.60				4.64			4.97

Interest expense:
Interest on deposits		0.54			0.50			0.50				0.49			0.46
Interest on FHLB and other borrowings		2.01			2.00			2.01				2.01			2.02
Total interest-bearing liabilities		0.57			0.54			0.54				0.53			0.52
Net interest spread		3.89			3.87			4.06				4.11			4.45
Net interest margin		4.06	%		4.02	%		4.22		%		4.25	%		4.58	%


	NATIONAL COMMERCE CORPORATION
	Unaudited Financial Highlights
	(In thousands, except share and per share amounts and percentages)
	As of
	December 31,			September 30,			June 30,				March 31,			December 31,
		2015			2015			2015				2015			2014
Shareholders' Equity and Capital Ratios
Tier 1 Leverage Ratio		9.65	%		10.39	%		11.09		%		11.41	%		10.68	%
Tier 1 Common Capital Ratio		11.02			12.88			12.86				13.54			10.66
Tier 1 Risk-based Capital Ratio		11.02			12.88			12.86				13.54			10.66
Total Risk-based Capital Ratio		11.74			13.79			13.78				14.55			11.75
Equity / Assets		12.28			13.13			13.90				14.27			11.96
Tangible common equity to tangible assets		9.51	%		11.03	%		11.65		%		12.02	%		9.50	%
Book value per share	$	20.01		$	18.80		$	18.50			$	18.24		$	18.05
Tangible book value per share	$	15.03		$	15.42		$	15.12			$	14.98		$	13.96

	For the Three Months Ended
	December 31,			September 30,			June 30,				March 31,			December 31,
		2015			2015			2015				2015			2014
Detail of other noninterest expense
Salaries and employee benefits	$	6,077		$	5,186		$	5,114			$	4,987		$	3,717
Commission-based compensation		844			1,048			1,056				796			900
Occupancy and equipment expense		1,048			871			829				836			572
Data processing expenses		511			464			487				425			291
Advertising and marketing expenses		19			124			125				173			126
Legal fees		173			177			135				167			222
FDIC insurance assessments		242			205			152				206			151
Accounting and audit expenses		332			211			212				223			208
Consulting and other professional expenses		387			238			164				105			109
Telecommunications expenses		132			144			135				128			79
ORE, Repo asset and other collection expenses		256			79			71				122			102
Core deposit intangible amortization		175			111			111				111			18
Other noninterest expense		1,410			1,037			1,025				1,011			661
Total noninterest expense	$	11,606		$	9,895		$	9,616			$	9,290		$	7,156


NATIONAL COMMERCE CORPORATION
Unaudited Financial Highlights
(In thousands, except share and per share amounts and percentages)
	As of
	December 31,			September 30,			June 30,				March 31,			December 31,
Non-GAAP Reconciliation		2015			2015			2015				2015			2014
Total shareholders' equity	$	216,636		$	177,423		$	174,629			$	172,172		$	136,161
Less: intangible assets		53,474			31,291			31,310				30,560			30,591
Less: minority interest not included in intangible assets		438			574			593				232			305
Tangible common equity	$	162,724		$	145,558		$	142,726			$	141,380		$	105,265
Common shares outstanding at year or period end		10,824,969			9,438,541			9,438,541				9,438,541			7,541,541
Tangible book value per share	$	15.03		$	15.42		$	15.12			$	14.98		$	13.96
Total assets at end of period	$	1,764,607		$	1,350,781		$	1,256,614			$	1,206,667		$	1,138,426
Less: intangible assets		53,474			31,291			31,310				30,560			30,591
Adjusted total assets at end of period	$	1,711,133		$	1,319,490		$	1,225,304			$	1,176,107		$	1,107,835
Tangible common equity to tangible asset s		9.51	%		11.03	%		11.65		%		12.02	%		9.50	%
Total allowance for loan losses	$	9,842		$	9,391		$	9,274			$	9,522		$	9,802
Less: allowance for loan losses attributable to
CBI (factoring receivables)		500			500			715				956			955
Adjusted allowance for loan losses at end of period	$	9,342		$	8,891		$	8,559			$	8,566		$	8,847
Nonacquired loans held for investment ⁽⁴⁾		870,471			811,011			757,976				704,307			653,063
Allowance for loan losses to nonacquired l oans ⁽⁴⁾		1.07	%		1.10	%		1.13		%		1.22	%		1.35	%

	For the Three Months Ended
	December 31,			September 30,			June 30,				March 31,			December 31,
		2015			2015			2015				2015			2014
Non-GAAP Reconciliation
Total average shareholders' equity	$	202,299		$	175,821		$	173,354			$	139,618		$	110,855
Less: average intangible assets		46,116			31,158			30,555				30,553			24,417
Less: average minority interest not included
in intangible assets		331			371			315				46			277
Average tangible common equity	$	155,852		$	144,292		$	142,484			$	109,019		$	86,161
Net income to common shareholders		2,938			2,490			2,256				1,921			1,707
Return on average tangible common equity (ROATCE)		7.48	%		6.85	%		6.35		%		7.15	%		7.86	%
Efficiency ratio:
Net interest income	$	14,981		$	12,259		$	11,643			$	11,166		$	9,732
Total noninterest income		2,298			2,353			2,206				1,764			1,419
Less: gain (loss) on sale of securities		-			-			-				-			-
Operating revenue	$	17,279		$	14,612		$	13,849			$	12,930		$	11,151
Expenses:
Total noninterest expenses	$	11,606		$	9,895		$	9,616			$	9,290		$	7,156
Efficiency ratio		67.17	%		67.72	%		69.43		%		71.85	%		64.17	%
Operating efficiency ratio:
Net interest income	$	14,981		$	12,259		$	11,643			$	11,166		$	9,732
Total noninterest income		2,298			2,353			2,206				1,764			1,419
Less: gain (loss) on sale of securities		-			-			-				-			-
Operating revenue	$	17,279		$	14,612		$	13,849			$	12,930		$	11,151
Expenses:
Total noninterest expenses	$	11,606		$	9,895		$	9,616			$	9,290		$	7,156
Less: merger/conversion-related expenses		395			122			168				79			246
Adjusted noninterest expenses	$	11,211		$	9,773		$	9,448			$	9,211		$	6,910
Operating efficiency ratio		64.88	%		66.88	%		68.22		%		71.24	%		61.97	%

(1) Excludes securities gains
(2) Excludes merger/conversion-related expenses
(3) Net income to common shareholders / average assets
(4) Excludes CBI loans

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Balance Sheets
(In thousands, except share and per share data)

Assets

		December 31, 2015		December 31, 2014
Cash and due from banks	$	27,173	$	14,236
Interest-bearing deposits with banks		185,284		109,199
Cash and cash equivalents		212,457		123,435
Investment securities held-to-maturity (fair value of $27,843 at December 31, 2015)		27,458		-
Investment securities available-for-sale		53,405		34,932
Other investments		6,235		5,421
Mortgage loans held-for-sale		15,020		9,329
Loans, net of unearned income		1,319,414		888,721
Less: allowance for loan losses		9,842		9,802
Loans, net		1,309,572		878,919
Premises and equipment, net		31,432		27,560
Accrued interest receivable		3,510		2,193
Bank owned life insurance		27,223		10,641
Other real estate		3,965		1,008
Deferred tax assets, net		14,190		11,444
Goodwill		50,686		28,834
Core deposit intangible, net		2,788		1,757
Other assets		6,666		2,953
Total assets	$	1,764,607	$	1,138,426


Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	382,946	$	217,643
Interest-bearing demand		202,649		154,816
Savings and money market		611,887		392,394
Time		316,976		206,207
Total deposits		1,514,458		971,060
Federal Home Loan Bank advances		22,000		22,000
Accrued interest payable		627		431
Other liabilities		10,886		8,774
Total liabilities		1,547,971		1,002,265

Commitments
Shareholders’ equity:
Preferred stock, 250,000 shares authorized, no shares issued or outstanding		-		-
Common stock, at December 31, 2015, $0.01 par value, 30,000,000 shares authorized and
10,824,969 shares issued and outstanding; at December 31, 2014, $0.01 par value,
12,500,000 shares authorized and 7,541,541 shares issued and outstanding		108		75
Additional paid-in capital		202,456		131,455
Retained earnings (deficit)		6,152		(3,453	)
Accumulated other comprehensive income		548		845
Total shareholders' equity attributable to National Commerce Corporation		209,264		128,922
Noncontrolling interest		7,372		7,239
Total shareholders' equity		216,636		136,161
Total liabilities and shareholders' equity	$	1,764,607	$	1,138,426

NATIONAL COMMERCE CORPORATION
Unaudited Consolidated Statements of Earnings
(In thousands, except per share data)

	For the Three Months Ended				For the Twelve Months Ended
	December 31,				December 31,
		2015		2014		2015			2014
Interest and dividend income:
Interest and fees on loans	$	15,777	$	10,229	$	52,720		$	29,812
Interest and dividends on taxable investment securities		370		275		1,154			1,178
Interest on non-taxable investment securities		173		42		466			169
Interest on interest-bearing deposits and federal funds sold		168		32		505			183
Total interest income		16,488		10,578		54,845			31,342
Interest expense:
Interest on deposits		1,395		734		4,354			2,427
Interest on borrowings		112		112		442			442
Total interest expense		1,507		846		4,796			2,869
Net interest income		14,981		9,732		50,049			28,473
Provision for loan losses		631		826		1,113			978
Net interest income after provision for loan losses		14,350		8,906		48,936			27,495
Other income:
Service charges and fees on deposit accounts		402		202		1,288			714
Mortgage origination and fee income		1,063		986		5,278			3,752
Merchant sponsorship revenue		365		-		861			-
Income from bank owned life insurance		182		63		433			242
Wealth management fees		10		15		53			58
(Loss) gain on other real estate		-		8		(24	)		13
(Loss) gain on sale of investment securities available-for-sale		-		-		-			(33	)
Other		276		145		732			286
Total other income		2,298		1,419		8,621			5,032

Other expense:
Salaries and employee benefits		6,077		3,717		21,364			13,379
Commission-based compensation		844		900		3,744			2,136
Occupancy and equipment		1,048		572		3,584			1,944
Core deposit intangible amortization		175		18		508			18
Other operating expense		3,462		1,949		11,207			5,976
Total other expense		11,606		7,156		40,407			23,453
Earnings before income taxes		5,042		3,169		17,150			9,074
Income tax expense		1,667		1,158		5,476			3,159
Net earnings		3,375		2,011		11,674			5,915
Less: Net earnings attributable to noncontrolling interest		437		304		2,069			512
Net earnings attributable to National Commerce Corporation	$	2,938	$	1,707	$	9,605		$	5,403


Weighted average common and diluted shares outstanding
Basic		10,345,146		6,223,377		9,238,784			5,888,862
Diluted		10,552,871		6,305,626		9,395,741			5,960,199

Basic earnings per common share	$	0.28	$	0.27	$	1.04		$	0.92
Diluted earnings per common share	$	0.28	$	0.27	$	1.02		$	0.91

NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis


	For the Three Months Ended
(Dollars in thousands)	December 31, 2015							September 30, 2015							June 30, 2015							March 31, 2015							December 31, 2014
Interest-earning assets	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate
Loans	$	1,204,437	$	15,699		5.17	%	$	992,223	$	12,826		5.13	%	$	944,373	$	12,116		5.15	%	$	903,563	$	11,709		5.26	%	$	748,373	$	10,124		5.37	%
Mortgage loans held-for-sale		9,697		84		3.44			9,890		104		4.17			11,180		112		4.02			9,487		85		3.63			9,914		108		4.32
Securities:
Taxable securities		43,960		370		3.34			30,728		259		3.34			32,402		269		3.33			35,540		256		2.92			34,366		275		3.17
Tax-exempt securities		26,119		275		4.18			17,649		217		4.88			14,297		181		5.08			4,750		67		5.72			4,640		67		5.73
Cash balances in other banks		191,077		168		0.35			166,715		129		0.31			112,081		105		0.38			114,579		103		0.36			48,646		32		0.26
Total interest-earning assets		1,475,291	$	16,596		4.46			1,217,205	$	13,535		4.41			1,114,333	$	12,783		4.60			1,067,919	$	12,220		4.64			845,939	$	10,606		4.97
Non-interest-earning assets		146,557							96,824							95,949							94,118							96,203
Total assets	$	1,621,848						$	1,314,029						$	1,210,282						$	1,162,037						$	942,142

Interest-bearing liabilities
Interest-bearing transaction accounts	$	196,140	$	129		0.26	%	$	182,056	$	118		0.26	%	$	157,261	$	97		0.25	%	$	159,706	$	99		0.25	%	$	135,882	$	96		0.28	%
Savings and money market deposits		542,631		612		0.45			443,306		486		0.43			408,117		417		0.41			391,321		377		0.39			330,459		309		0.37
Time deposits		291,399		654		0.89			228,298		476		0.83			208,388		447		0.86			209,016		442		0.86			161,368		329		0.81
Federal Home Loan Bank and other borrowed money		22,104		112		2.01			22,000		111		2.00			22,000		110		2.01			22,000		109		2.01			22,027		112		2.02
Total interest-bearing liabilities		1,052,274	$	1,507		0.57			875,660	$	1,191		0.54			795,766	$	1,071		0.54			782,043	$	1,027		0.53			649,736	$	846		0.52
Non-interest-bearing deposits		354,812							254,402							233,136							232,497							172,290
Total funding sources		1,407,086							1,130,062							1,028,902							1,014,540							822,026
Non-interest-bearing liabilities		12,463							8,146							8,026							7,879							9,261
Shareholders' equity		202,299							175,821							173,354							139,618							110,855
	$	1,621,848						$	1,314,029						$	1,210,282						$	1,162,037						$	942,142
Net interest rate spread						3.89	%						3.87	%						4.06	%						4.11	%						4.45	%
Net interest income/margin (taxable equivalent)				15,089		4.06	%				12,344		4.02	%				11,712		4.22	%				11,193		4.25	%				9,760		4.58	%
Tax equivalent adjustment				108							85							69							27							28
Net interest income/margin			$	14,981		4.03	%			$	12,259		4.00	%			$	11,643		4.19	%			$	11,166		4.24	%			$	9,732		4.56	%