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National Commerce Corporation Announces Third Quarter 2015 Earnings

Birmingham, AL (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.