National Commerce Corporation Announces Third Quarter 2015

BIRMINGHAM, Ala., Oct. 21, 2015 (GLOBE NEWSWIRE) -- National Commerce Corporation (NASDAQ:NCOM) (the “Company” or “NCC”) today reported third quarter 2015 net income to common shareholders of $2.5 million, compared with $1.5 million for the third quarter of 2014. Diluted net earnings per share were $0.26 in both the 2015 and 2014 third quarters.

“We are pleased with our progress in the third quarter,” said John H. Holcomb, III, Chairman and CEO of the Company. “Our team continues to do a great job serving our customers and growing the bank. As always, we need to maintain our focus on continued profitability and performance.”

Several important measures from the third quarter are as follows:

Net Interest Margin (tax-effected) of 4.02%, compared with 3.87% for the third quarter of 2014. The margin declined from the 2015 second quarter by 0.20%, largely due to increased cash and fed funds balances. During the third quarter of 2015, average cash and fed funds balances increased $54.6 million as compared to second quarter 2015 average balances.
Return on Average Assets of 0.75%, compared with 0.73% for the third quarter of 2014. Return on Average Assets was also impacted by the larger average balances in cash and fed funds during the third quarter of 2015.
Return on Average Tangible Common Equity of 6.85%, compared with 6.76% for the third quarter of 2014.
Third quarter 2015 loan growth (excluding mortgage loans held for sale) of $44.5 million, representing an 18.2% annualized growth rate. Excluding factoring receivables, loans grew at a 19.8% annualized growth rate.
Third quarter 2015 deposit growth of $90.4 million, representing a 34.1% annualized growth rate.
$82.3 million in mortgage production, compared with $53.5 million for the third quarter of 2014.
$182.7 million in purchased volume in the factoring division. Note that, because the Company entered the factoring business on August 29, 2014, the figure for the 2014 third quarter is not comparable since it only represents one month’s activity.
Increase in non-acquired non-performing assets to $4.5 million from $4.2 million at June 30, 2015 and $2.1 million at September 30, 2014.
Annualized net charge-offs of 0.03%, compared to 0.07% for the third quarter of 2014.
Ending tangible book value per share of $15.42.
Ending book value per share of $18.80.

The Company also announced the closing of its Kissimmee, Florida and English Village (Birmingham), Alabama branch banking offices effective December 31, 2015. The Company’s mortgage division will continue to operate out of the English Village location. In association with these closings, the Company expects to incur approximately $160 thousand in closing and severance costs in the fourth quarter of 2015, with a reduction in annualized operating expenses of approximately $500 thousand in 2016 from the reduced overhead expense associated with these offices. Following these closings, the Company will still have five branch offices in the Orlando area and two in the Birmingham area, one of which is approximately two miles from the English Village location.

The Company will host a live audio webcast conference call beginning at 3:00 p.m. Central Time on October 22, 2015 to discuss third quarter 2015 results. Investors may call in (toll free) by dialing (855) 871-0559 (conference ID 55748335). 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 Saturday, October 24, 2015 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 the Company’s Investor Relations Page located at www.nationalbankofcommerce.com. 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. Our 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 our 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 our 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 our productivity measured by the amount of revenue generated for each dollar spent.
“Operating efficiency ratio” is defined as noninterest expense divided by our operating revenue, excluding one-time gains and losses on sales of securities and one-time gains and expenses related to merger and acquisition-related activities. This measure is important to investors looking for a measure of efficiency in our productivity measured by the amount of revenue generated for each dollar spent.

We believe that these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they 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
NCC is a bank holding company headquartered in Birmingham, Alabama. Through its subsidiary bank, National Bank of Commerce, NCC provides a broad array of financial services to businesses, business owners and professionals through eight full-service banking offices in Alabama and seven full-service banking offices in Central Florida. The company also owns a majority stake in 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 nationwide.

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 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. You should not rely upon forward-looking statements 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
	September 30,			June 30,				March 31,			December 31,			September 30,
		2015			2015				2015			2014			2014
Earnings Summary
Interest income	$	13,450		$	12,714			$	12,193		$	10,578		$	8,107
Interest expense		1,191			1,071				1,027			846			730
Net interest income		12,259			11,643				11,166			9,732			7,377
Provision for loan losses		201			120				161			826			152
Gain (loss) on sale of securities		-			-				-			-			(33	)
Other noninterest income⁽¹⁾		2,353			2,206				1,764			1,419			1,353
Merger/conversion-related expenses		122			168				79			246			262
Other noninterest expense⁽²⁾		9,773			9,448				9,211			6,910			5,719
Income before income taxes		4,516			4,113				3,479			3,169			2,564
Income tax expense		1,453			1,264				1,092			1,158			841
Net income before minority interest		3,063			2,849				2,387			2,011			1,723
Net income attributable to minority interest		573			593				466			304			208
Net income to common shareholders	$	2,490		$	2,256			$	1,921		$	1,707		$	1,515

Weighted average common and diluted shares outstanding
Basic		9,438,541			9,438,541				7,701,663			6,223,377			5,855,276
Diluted		9,594,472			9,569,695				7,801,577			6,305,626			5,929,386

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

	September 30,			June 30,				March 31,			December 31,			September 30,
Selected Performance Ratios		2015			2015				2015			2014			2014
Return on average assets (ROAA)⁽³⁾		0.75	%		0.75		%		0.67	%		0.72	%		0.73		%
Return on average equity (ROAE)		5.62			5.22				5.58			6.11			6.17
Return on average tangible common equity (ROATCE)		6.85			6.35				7.15			7.86			6.76
Net interest margin - taxable equivalent		4.02			4.22				4.25			4.58			3.87
Efficiency ratio		67.72			69.43				71.85			64.17			68.51
Operating efficiency ratio⁽²⁾		66.88			68.22				71.24			61.97			65.51
Noninterest income / average assets (annualized)		0.71			0.73				0.62			0.60			0.65
Noninterest expense / average assets (annualized)		2.99			3.19				3.24			3.01			2.87
Yield on loans		5.13			5.15				5.26			5.37			4.73
Cost of total deposits		0.39	%		0.38		%		0.38	%		0.36	%		0.35		%

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

	September 30,			June 30,				March 31,			December 31,			September 30,
Mortgage Metrics		2015			2015				2015			2014			2014
Total production ($)	$	82,276		$	84,796			$	55,731		$	55,931		$	53,542
Refinance (%)		19.1	%		18.6		%		26.9	%		22.6	%		19.0		%
Purchases (%)		80.9	%		81.4		%		73.1	%		77.4	%		81.0		%

	As of
	September 30,			June 30,				March 31,			December 31,			September 30,
Balance Sheet Highlights		2015			2015				2015			2014			2014
Cash and cash equivalents	$	192,882		$	142,393			$	149,907		$	123,435		$	90,909
Total securities		45,911			42,586				37,631			34,932			34,439
Mortgage loans held for sale		7,926			13,750				13,804			9,329			11,329
Acquired purchased credit-impaired loans		5,615			5,724				8,852			9,077			-
Acquired non-purchased credit-impaired loans		123,730			131,953				138,040			143,981			-
Nonacquired loans held for investment ⁽⁴⁾		811,011			757,976				704,307			653,063			623,958
CBI loans (factoring receivables)		74,780			75,000				69,541			82,600			81,926
Total gross loans held for investment		1,015,136			970,653				920,740			888,721			705,884
Allowance for loan losses		9,391			9,274				9,522			9,802			9,018
Total intangibles		31,291			31,310				30,560			30,591			23,115
Total assets		1,350,781			1,256,614				1,206,667			1,138,426			897,982
Total deposits		1,141,837			1,051,483				1,000,217			971,060			763,509
Borrowings		22,000			22,000				22,000			22,000			22,000
Total liabilities		1,173,358			1,081,985				1,034,495			1,002,265			793,931
Minority interest		7,508			7,527				7,166			7,239			7,142
Common stock		94			94				94			75			59
Total shareholders' equity		177,423			174,629				172,172			136,161			104,051
Tangible common equity	$	145,558		$	142,726			$	141,380		$	105,265		$	80,728
End of period common shares outstanding		9,438,541			9,438,541				9,438,541			7,541,541			5,924,579

	As of and For the Three Months Ended
	September 30,			June 30,				March 31,			December 31,			September 30,
Asset Quality Analysis		2015			2015				2015			2014			2014
*Nonacquired*
Nonaccrual loans	$	829		$	2,688			$	618		$	2,276		$	1,087
Other real estate and repossessed assets		3,562			1,494				1,494			823			830
Loans past due 90 days or more and still accruing		148			44				168			217			176
Total nonacquired nonperforming assets	$	4,539		$	4,226			$	2,280		$	3,316		$	2,093

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

*Selected asset quality ratios*
Nonperforming assets / assets		0.55	%		0.57		%		0.45	%		0.57	%		0.23		%
Nonperforming assets / loans + OREO + repossessed assets		0.73			0.74				0.58			0.73			0.30
Net charge-offs (recoveries) to average loans (annualized)		0.03			0.16				0.20			0.02			0.07
Allowance for loan losses to total loans		0.93			0.96				1.03			1.10			1.28
Nonacquired nonperforming assets / Nonacquired loans + nonacquired OREO + nonacquired repossessed assets (4)		0.56			0.56				0.32			0.51			0.33
Allowance for loan losses to nonacquired nonperforming loans		961.21			339.46				1,211.45			393.18			714.01
Allowance for loan losses to nonacquired loans⁽⁴⁾		1.10	%		1.13		%		1.22	%		1.35	%		1.42		%

	For the Three Months Ended
	September 30,			June 30,				March 31,			December 31,			September 30,
Taxable Equivalent Yields/Rates		2015			2015				2015			2014			2014
Interest income:
Loans		5.13	%		5.15		%		5.26	%		5.37	%		4.73		%
Mortgage loans held for sale		4.17			4.02				3.63			4.32			4.26
Interest on securities:
Taxable		3.34			3.33				2.92			3.17			3.04
Non-taxable		4.88			5.08				5.72			5.73			5.97
Cash balances in other banks		0.31			0.38				0.36			0.26			0.26
Total interest-earning assets		4.41			4.60				4.64			4.97			4.25

Interest expense:
Interest on deposits		0.50			0.50				0.49			0.46			0.44
Interest on FHLB & other borrowings		2.00			2.01				2.01			2.02			2.00
Total interest-bearing liabilities		0.54			0.54				0.53			0.52			0.50
Net interest spread		3.87			4.06				4.11			4.45			3.75
Net interest margin		4.02	%		4.22		%		4.25	%		4.58	%		3.87		%

	As of
	September 30,			June 30,				March 31,			December 31,			September 30,
		2015			2015				2015			2014			2014
Shareholders' Equity and Capital Ratios
Tier 1 Leverage Ratio		10.39	%		11.09		%		11.41	%		10.68	%		9.87		%
Tier 1 Common Capital Ratio		12.88			12.86				13.54			10.66			11.12
Tier 1 Risk-based Capital Ratio		12.88			12.86				13.54			10.66			11.12
Total Risk-based Capital Ratio		13.79			13.78				14.55			11.75			12.37
Equity / Assets		13.13			13.90				14.27			11.96			11.59
Tangible common equity to tangible assets		11.03	%		11.65		%		12.02	%		9.50	%		9.23		%
Book value per share	$	18.80		$	18.50			$	18.24		$	18.05		$	17.56
Tangible book value per share	$	15.42		$	15.12			$	14.98		$	13.96		$	13.63

	For the Three Months Ended
	September 30,			June 30,				March 31,			December 31,			September 30,
		2015			2015				2015			2014			2014
Detail of other noninterest expense
Salaries and employee benefits	$	5,186		$	5,114			$	4,987		$	3,717		$	3,547
Commission-based compensation		1,048			1,056				796			900			459
Occupancy and equipment expense		871			829				836			572			477
Data processing expenses		464			487				425			291			295
Advertising and marketing expenses		124			125				173			126			79
Legal fees		177			135				167			222			267
FDIC insurance assessments		205			152				206			151			131
Accounting and audit expenses		211			212				223			208			102
Consulting and other professional expenses		238			164				105			109			54
Telecommunications expenses		144			135				128			79			67
ORE, Repo asset and other collection expenses		79			71				122			102			32
Core deposit intangible amortization		111			111				111			18			-
Other noninterest expense		1,037			1,025				1,011			661			471
Total noninterest expense	$	9,895		$	9,616			$	9,290		$	7,156		$	5,981

	As of
	September 30,			June 30,				March 31,			December 31,			September 30,
Non-GAAP Reconciliation		2015			2015				2015			2014			2014
Total shareholders' equity	$	177,423		$	174,629			$	172,172		$	136,161		$	104,051
Less: intangible assets		31,291			31,310				30,560			30,591			23,115
Less: minority interest not included in intangible assets		574			593				232			305			208
Tangible common equity	$	145,558		$	142,726			$	141,380		$	105,265		$	80,728
Common shares outstanding at year or period end		9,438,541			9,438,541				9,438,541			7,541,541			5,924,579
Tangible book value per share	$	15.42		$	15.12			$	14.98		$	13.96		$	13.63
Total assets at end of period	$	1,350,781		$	1,256,614			$	1,206,667		$	1,138,426		$	897,982
Less: intangible assets		31,291			31,310				30,560			30,591			23,115
Adjusted total assets at end of period	$	1,319,490		$	1,225,304			$	1,176,107		$	1,107,835		$	874,867
Tangible common equity to tangible assets		11.03	%		11.65		%		12.02	%		9.50	%		9.23		%
Total allowance for loan losses	$	9,391		$	9,274			$	9,522		$	9,802		$	9,018
Less: allowance for loan losses attributable to CBI (factoring receivables)		500			715				956			955			175
Adjusted allowance for loan losses at end of period	$	8,891		$	8,559			$	8,566		$	8,847		$	8,843
Nonacquired loans held for investment ⁽⁴⁾		811,011			757,976				704,307			653,063			623,958
Allowance for loan losses to nonacquired loans⁽⁴⁾		1.10	%		1.13		%		1.22	%		1.35	%		1.42		%

	For the Three Months Ended
	September 30,			June 30,				March 31,			December 31,			September 30,
		2015			2015				2015			2014			2014
Non-GAAP Reconciliation
Total average shareholders' equity	$	175,821		$	173,354			$	139,618		$	110,855		$	97,344
Less: average intangible assets		31,158			30,555				30,553			24,417			8,291
Less: average minority interest not included in intangible assets		371			315				46			277			188
Average tangible common equity	$	144,292		$	142,484			$	109,019		$	86,161		$	88,865
Net income to common shareholders		2,490			2,256				1,921			1,707			1,515
Return on average tangible common equity (ROATCE)		6.85	%		6.35		%		7.15	%		7.86	%		6.76		%
Efficiency ratio:
Net interest income	$	12,259		$	11,643			$	11,166		$	9,732		$	7,377
Total noninterest income		2,353			2,206				1,764			1,419			1,320
Less: gain (loss) on sale of securities		-			-				-			-			(33	)
Operating revenue	$	14,612		$	13,849			$	12,930		$	11,151		$	8,730
Expenses:
Total noninterest expenses	$	9,895		$	9,616			$	9,290		$	7,156		$	5,981
Efficiency ratio		67.72	%		69.43		%		71.85	%		64.17	%		68.51		%
Operating efficiency ratio:
Net interest income	$	12,259		$	11,643			$	11,166		$	9,732		$	7,377
Total noninterest income		2,353			2,206				1,764			1,419			1,320
Less: gain (loss) on sale of securities		-			-				-			-			(33	)
Operating revenue	$	14,612		$	13,849			$	12,930		$	11,151		$	8,730
Expenses:
Total noninterest expenses	$	9,895		$	9,616			$	9,290		$	7,156		$	5,981
Less: merger/conversion expenses		122			168				79			246			262
Adjusted noninterest expenses	$	9,773		$	9,448			$	9,211		$	6,910		$	5,719
Operating efficiency ratio		66.88	%		68.22		%		71.24	%		61.97	%		65.51		%

(1) Excludes securities gains
(2) Excludes merger and 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
	September 30, 2015		December 31, 2014
Cash and due from banks	$	23,221	$	14,236
Interest-bearing deposits with banks		169,661		109,199
Cash and cash equivalents		192,882		123,435
Investment securities held-to-maturity (fair value of $17,051 at September 30, 2015)		17,172		-
Investment securities available-for-sale		28,739		34,932
Other investments		5,844		5,421
Mortgage loans held-for-sale		7,926		9,329
Loans, net of unearned income		1,015,136		888,721
Less: allowance for loan losses		9,391		9,802
Loans, net		1,005,745		878,919
Premises and equipment, net		27,331		27,560
Accrued interest receivable		2,331		2,193
Bank owned life insurance		11,934		10,641
Other real estate		3,562		1,008
Deferred tax assets, net		12,381		11,444
Goodwill		29,867		28,834
Core deposit intangible, net		1,424		1,757
Other assets		3,643		2,953
Total assets	$	1,350,781	$	1,138,426

Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	271,202	$	217,643
Interest-bearing demand		193,771		154,816
Savings and money market		446,726		392,394
Time		230,138		206,207
Total deposits		1,141,837		971,060
Federal Home Loan Bank advances		22,000		22,000
Accrued interest payable		479		431
Other liabilities		9,042		8,774
Total liabilities		1,173,358		1,002,265
Commitments
Shareholders’ equity:
Preferred stock, 250,000 shares authorized, no shares issued or outstanding		-		-
Common stock, at September 30, 2015, $0.01 par value, 30,000,000 shares authorized and 9,438,541 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		94		75
Additional paid-in capital		165,914		131,455
Retained earnings (deficit)		3,214		(3,453	)
Accumulated other comprehensive income		693		845
Total shareholders' equity attributable to National Commerce Corporation		169,915		128,922
Noncontrolling interest		7,508		7,239
Total shareholders' equity		177,423		136,161
Total liabilities and shareholders' equity	$	1,350,781	$	1,138,426


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

	For the Three Months Ended					For the Nine Months Ended
	September 30,					September 30,
		2015		2014			2015			2014
Interest and dividend income:
Interest and fees on loans	$	12,925	$	7,744		$	36,943		$	19,583
Interest and dividends on taxable investment securities		259		276			784			903
Interest on non-taxable investment securities		137		43			293			127
Interest on interest-bearing deposits and federal funds sold		129		44			337			151
Total interest income		13,450		8,107			38,357			20,764
Interest expense:
Interest on deposits		1,080		619			2,959			1,693
Interest on borrowings		111		111			330			330
Total interest expense		1,191		730			3,289			2,023
Net interest income		12,259		7,377			35,068			18,741
Provision for loan losses		201		152			482			152
Net interest income after provision for loan losses		12,058		7,225			34,586			18,589
Other income:
Service charges and fees on deposit accounts		311		174			886			512
Mortgage origination and fee income		1,439		1,013			4,215			2,766
Merchant sponsorship revenue		305		-			496			-
Income from bank owned life insurance		86		59			251			179
Wealth management fees		11		14			43			43
(Loss) gain on other real estate		-		-			(24	)		5
(Loss) gain on sale of investment securities available-for-sale		-		(33	)		-			(33	)
Other		201		93			456			141
Total other income		2,353		1,320			6,323			3,613
Other expense:
Salaries and employee benefits		5,186		3,547			15,287			9,662
Commission-based compensation		1,048		459			2,900			1,236
Occupancy and equipment		871		477			2,536			1,372
Core deposit intangible amortization		111		-			333			-
Other operating expense		2,679		1,498			7,745			4,027
Total other expense		9,895		5,981			28,801			16,297
Earnings before income taxes		4,516		2,564			12,108			5,905
Income tax expense		1,453		841			3,809			2,001
Net earnings		3,063		1,723			8,299			3,904
Less: Net earnings attributable to noncontrolling interest		573		208			1,632			208
Net earnings attributable to National Commerce Corporation	$	2,490	$	1,515		$	6,667		$	3,696

Basic earnings per common share	$	0.26	$	0.26		$	0.75		$	0.64
Diluted earnings per common share	$	0.26	$	0.26		$	0.74		$	0.63


NATIONAL COMMERCE CORPORATION
Average Balance Sheets and Net Interest Analysis


	For the Three Months Ended
(Dollars in thousands)	September 30, 2015							June 30, 2015							March 31, 2015							December 31, 2014							September 30, 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	$	992,223	$	12,826		5.13	%	$	944,373	$	12,116		5.15	%	$	903,563	$	11,709		5.26	%	$	748,373	$	10,124		5.37	%	$	640,806	$	7,636		4.73	%
Mortgage loans held for sale		9,890		104		4.17			11,180		112		4.02			9,487		85		3.63			9,914		108		4.32			10,348		111		4.26
Securities:
Taxable securities		30,728		259		3.34			32,402		269		3.33			35,540		256		2.92			34,366		275		3.17			36,011		276		3.04
Tax-exempt securities		17,649		217		4.88			14,297		181		5.08			4,750		67		5.72			4,640		67		5.73			4,584		69		5.97
Cash balances in other banks		166,715		129		0.31			112,081		105		0.38			114,579		103		0.36			48,646		32		0.26			67,191		44		0.26
Total interest-earning assets		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			758,940	$	8,136		4.25
Non-interest-earning assets		96,824							95,949							94,118							96,203							68,521
Total assets	$	1,314,029						$	1,210,282						$	1,162,037						$	942,142						$	827,461

Interest-bearing liabilities
Interest-bearing transaction accounts	$	182,056	$	118		0.26	%	$	157,261	$	97		0.25	%	$	159,706	$	99		0.25	%	$	135,882	$	96		0.28	%	$	125,356	$	89		0.28	%
Savings & money market deposits		443,306		486		0.43			408,117		417		0.41			391,321		377		0.39			330,459		309		0.37			308,942		295		0.38
Time deposits		228,298		476		0.83			208,388		447		0.86			209,016		442		0.86			161,368		329		0.81			118,023		235		0.79
Federal Home Loan Bank & other borrowed money		22,000		111		2.00			22,000		110		2.01			22,000		109		2.01			22,027		112		2.02			22,000		111		2.00
Total interest-bearing liabilities		875,660	$	1,191		0.54			795,766	$	1,071		0.54			782,043	$	1,027		0.53			649,736	$	846		0.52			574,321	$	730		0.50
Non-interest-bearing deposits		254,402							233,136							232,497							172,290							150,566
Total funding sources		1,130,062							1,028,902							1,014,540							822,026							724,887
Non-interest-bearing liabilities		8,146							8,026							7,879							9,261							5,230
Shareholders' equity		175,821							173,354							139,618							110,855							97,344
	$	1,314,029						$	1,210,282						$	1,162,037						$	942,142						$	827,461
Net interest rate spread						3.87	%						4.06	%						4.11	%						4.45	%						3.75	%
Net interest income/margin (taxable equivalent)				12,344		4.02	%				11,712		4.22	%				11,193		4.25	%				9,760		4.58	%				7,406		3.87	%
Tax equivalent adjustment				85							69							27							28							29
Net interest income/margin			$	12,259		4.00	%			$	11,643		4.19	%			$	11,166		4.24	%			$	9,732		4.56	%			$	7,377		3.86	%

National Commerce Corporation Announces Third Quarter 2015 Earnings

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