National Commerce Corporation Announces Second Quarter 2015 Earnings
BIRMINGHAM, AL (July 23, 2015) (GLOBE NEWSWIRE) – National Commerce Corporation (NASDAQ:NCOM) (the "Company") today reported second quarter 2015 net income to common shareholders of $2.3 million, compared with $1.1 million for the second quarter of 2014. Diluted net earnings per share were $0.24 for the second quarter of 2015, compared with $0.20 for the second quarter of 2014, representing a 20% increase.
"We are pleased with the first six months of the year," said John H. Holcomb, III, Chairman and CEO of the Company. "Our growth continues to meet our expectations, and I am also encouraged by the growth we are experiencing in our United Legacy market area following the March conversion of United Legacy to our core operating system. While the year is off to a good start, we again remind ourselves that we have a lot of work ahead of us to continue to achieve our goals."
Several important measures from the second quarter of 2015 are as follows:
- Net Interest Margin (tax-effected) of 4.22%, compared with 3.29% for the second quarter of 2014.
- Return on Average Assets of 0.75%, compared with 0.61% for the second quarter of 2014.
- Return on Average Tangible Common Equity of 6.35%, compared with 5.00% for the second quarter of 2014.
- Second quarter 2015 loan growth (excluding mortgage loans held for sale) of $49.9 million, representing a 21.7% annualized growth rate. Excluding factoring receivables, loans grew $44.5 million, representing a 20.9% annualized growth rate.
- Second quarter 2015 deposit growth of $51.3 million, representing a 20.6% annualized growth rate.
- $84.8 million in mortgage production, compared with $56.5 million for the second quarter of 2014.
- $189 million in purchased volume in the factoring division. Note that, because the Company entered the factoring business in the third quarter of 2014, no comparable figure is available for the second quarter of 2014.
- Increase in non-acquired non-performing assets to $4.2 million from $2.3 million at March 31, 2015.
- Annualized net charge-offs of 0.16%, compared to 0.13% for the second quarter of 2014.
- Ending tangible book value per share of $15.12.
- Ending book value per share of $18.50.
"I am also pleased about our recent announcement with Reunion Bank of Florida," continued Holcomb. "We believe the cultural fit between our organizations is outstanding, and we are excited about adding the Reunion team and shareowners to the National Commerce family."
The Company will host a live audio webcast conference call beginning at 9:00 a.m. Central Time on July 24, 2015 to discuss second quarter 2015 results. Investors may call in (toll free) by dialing (855) 871-0559 (conference ID 82247899). 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 Sunday, July 26, 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 this press 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. 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 the 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
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 (in Birmingham, Huntsville, Auburn-Opelika and Baldwin County) and seven full-service banking offices in central Florida (in Vero Beach through National Bank of Commerce and in Longwood, Winter Park, Orlando, Oviedo and Kissimmee through United Legacy Bank, a division of National Bank of Commerce). The company also 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 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.
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, which are accessible on the SEC's website at www.sec.gov. 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.
William E. Matthews, V
Vice Chairman and Chief Financial Officer
National Commerce Corporation