National Commerce 8-K National Commerce Corporation AnnouncesThird Quarter 2016 Earnings

Exhibit 99.1

National Commerce Corporation AnnouncesThird Quarter 2016 Earnings

BIRMINGHAM, AL (October 25, 2016) (GLOBE NEWSWIRE) -- National Commerce Corporation (Nasdaq: NCOM) (the “Company” or “NCC”), the parent company of National Bank of Commerce, today reported third quarter 2016 net income to common shareholders of $4.8 million, compared to $2.5 million for the third quarter of 2015. Diluted net earnings per share were $0.43 in the third quarter of 2016, compared to $0.39 in the second quarter of 2016 and $0.26 in the third quarter of 2015. For the nine months ended September 30, 2016, NCC earned $12.9 million, or $1.17 in diluted earnings per share, up from $6.7 million, or $0.74 per diluted share, for the nine months ended September 30, 2015.

“I am pleased with the continued growth in our profitability in 2016, with another quarter of Return on Average Assets above 1.0% and year-to-date diluted earnings per share growth of 58%,” said John H. Holcomb, III, Chairman and Chief Executive Officer of the Company. “Our asset quality, which is very important to the company’s ability to achieve its long term goals, also remains good, though we can never lose our focus on continued vigilance in that very critical component of our business. Our third quarter loan growth was below our long term expectations for ourselves, in part due to some expected payoffs, so we need to continue our focus on attracting additional high quality customer relationships to our bank.”

Several important measures from the third quarter of 2016 are as follows:

● Net Interest Margin (taxable equivalent) of 4.18%, up 0.16% from the 4.02% reported for the third quarter of 2015. The margin decreased 0.05% compared to the 2016 second quarter.

● Return on Average Assets of 1.08%, compared to 0.75% for the third quarter of 2015 and 1.00% for the second quarter of 2016.

● Return on Average Equity of 8.36%, compared to 5.62% for the third quarter of 2015 and 7.84% for the second quarter of 2016.

● Return on Average Tangible Common Equity of 10.90%, compared to 6.85% for the third quarter of 2015 and 10.31% for the 2016 second quarter.

● Third quarter 2016 loan growth (excluding mortgage loans held-for-sale) of $5.8 million; non-acquired loans grew $30.8 million in the quarter.

● Increase in deposits of $39.0 million.

● $91.6 million in mortgage production, compared to $82.3 million for the third quarter of 2015.

● $172.4 million in purchased volume in the factoring division, compared to $182.7 million for the third quarter of 2015.

● Decrease in non-acquired non-performing assets to $2.4 million, from $2.7 million at June 30, 2016.

● Annualized net charge-offs of 0.02% of average loans, compared to 0.03% for the third quarter of 2015.

● Provision for loan losses of $0.4 million, compared to $0.9 million in the 2016 second quarter and $0.2 million in the third quarter of 2015.

● Ending tangible book value per share of $16.37.

● Ending book value per share of $21.26.

The Company will host a live audio webcast conference call beginning at 8:30 a.m. Central Time on October 26, 2016 to discuss earnings and operating results for the third quarter of 2016. Investors may call in (toll free) by dialing (844) 296-8205 (conference ID 90904212).  A replay of the conference call will be available until October 28, 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.

The Company’s management believes these above 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.

● “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 the end of the period. This measure is important to investors because it disaggregates the acquired and non-acquired loans and provides a measure that may be more comparable to a bank that has no acquired loans.   This measure also excludes the allowance and factored receivable balances at our Corporate Billing subsidiary, which is helpful to investors because of the somewhat unique nature of that business and the very rapid turnover of those receivables, and provides a measure that is more comparable to a bank that does not have a receivables factoring business.

● “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 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 (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), as well as a loan production office in Atlanta, Georgia. 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.

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, 2015 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

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,
	2016		2016		2016		2015		2015
Earnings Summary
Interest income	$	18,836	$	18,382	$	18,313	$	16,488	$	13,450
Interest expense		1,959		1,730		1,650		1,507		1,191
Net interest income		16,877		16,652		16,663		14,981		12,259
Provision for loan losses		373		901		1,533		631		201
Other noninterest income (1)		4,002		3,357		3,125		2,136		2,353
Merger/conversion-related expenses		160		12		138		395		122
Other noninterest expense (2)		12,472		12,242		11,915		11,049		9,773
Income before income taxes		7,874		6,854		6,202		5,042		4,516
Income tax expense		2,639		2,072		2,083		1,667		1,453
Net income before minority interest		5,235		4,782		4,119		3,375		3,063
Net income attributable to minority interest		422		428		340		437		573
Net income to common shareholders	$	4,813	$	4,354	$	3,779	$	2,938	$	2,490
Weighted average common and diluted shares outstanding
Basic		10,890,860		10,866,788		10,855,871		10,345,146		9,438,541
Diluted		11,115,134		11,067,972		11,039,208		10,552,871		9,594,472
Net earnings per common share
Basic	$	0.44	$	0.40	$	0.35	$	0.28	$	0.26
Diluted	$	0.43	$	0.39	$	0.34	$	0.28	$	0.26

	September 30,			June 30,			March 31,			December 31,			September 30,
Selected Performance Ratios	2016			2016			2016			2015			2015
Return on average assets (ROAA) (3)		1.08	%		1.00	%		0.86	%		0.72	%		0.75	%
Return on average equity (ROAE)		8.36			7.84			6.95			5.76			5.62
Return on average tangible common equity(ROATCE)		10.90			10.31			9.21			7.48			6.85
Net interest margin - taxable equivalent		4.18			4.23			4.21			4.06			4.02
Efficiency ratio		60.50			61.24			60.91			66.86			67.72
Operating efficiency ratio (2)		59.73			61.18			60.21			64.55			66.88
Noninterest income / average assets (annualized)		0.90			0.77			0.71			0.52			0.71
Noninterest expense / average assets (annualized)		2.85			2.83			2.76			2.80			2.99
Yield on loans		5.08			5.06			5.17			5.17			5.13
Cost of total deposits		0.40	%		0.40	%		0.42	%		0.40	%		0.39	%

	September 30,			June 30,			March 31,			December 31,			September 30,
Factoring Metrics	2016			2016			2016			2015			2015
Recourse purchased volume	$	71,872		$	68,567		$	66,554		$	74,922		$	82,661
Non-recourse purchased volume		100,486			98,550			112,196			97,142			100,055
Total purchased volume	$	172,358		$	167,117		$	178,750		$	172,064		$	182,716
Average turn (days)		38.13			39.92			38.16			39.68			37.97
Net charge-offs / total purchased volume		0.05	%		0.07	%		0.27	%		0.12	%		0.06	%
Average discount rate		1.70	%		1.69	%		1.72	%		1.73	%		1.74	%

	September 30,			June 30,			March 31,			December 31,			September 30,
Mortgage Metrics	2016			2016			2016			2015			2015
Total production ($)	$	91,613		$	91,466		$	63,802		$	58,903		$	82,276
Refinance (%)		30.4	%		17.2	%		18.2	%		26.0	%		19.1	%
Purchases (%)		69.6	%		82.8	%		81.8	%		74.0	%		80.9	%

NATIONAL COMMERCE CORPORATION

Unaudited Financial Highlights

(In thousands, except share and per share amounts and percentages)

	As of
	September 30,		June 30,		March 31,		December 31,		September 30,
Balance Sheet Highlights	2016		2016		2016		2015		2015
Cash and cash equivalents	$	122,920	$	86,163	$	123,853	$	212,457	$	192,882
Total securities		102,848		89,495		82,954		80,863		45,911
Mortgage loans held-for-sale		7,810		19,468		12,529		15,020		7,926
Acquired purchased credit-impaired loans		9,500		10,382		10,205		10,443		5,615
Acquired non-purchased credit-impaired loans		323,125		346,685		356,305		370,872		123,730
Nonacquired loans held for investment(4)		1,009,677		978,836		942,781		870,471		811,011
CBI loans (factoring receivables)		70,066		70,673		74,248		67,628		74,780
Total gross loans held for investment		1,412,368		1,406,576		1,383,539		1,319,414		1,015,136
Allowance for loan losses		11,950		11,642		10,927		9,842		9,391
Total intangibles		52,962		53,154		53,312		53,474		31,291
Total assets		1,779,278		1,735,782		1,735,940		1,763,369		1,350,781
Total deposits		1,499,879		1,460,877		1,498,197		1,514,458		1,141,837
FHLB and other borrowings		7,000		7,000		7,000		22,000		22,000
Subordinated debt		24,487		24,540		-		-		-
Total liabilities		1,547,105		1,509,662		1,514,840		1,546,733		1,173,358
Minority interest		7,357		7,362		7,275		7,372		7,508
Common stock		109		109		109		108		94
Total shareholders' equity		232,173		226,120		221,100		216,636		177,423
Tangible common equity	$	178,788	$	172,538	$	167,447	$	162,724	$	145,558
End of period common shares outstanding		10,920,423		10,870,033		10,861,487		10,824,969		9,438,541

	As of and For the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
Asset Quality Analysis	2016			2016			2016			2015			2015
Nonacquired
Nonaccrual loans	$	19		$	248		$	184		$	187		$	829
Other real estate and repossessed assets		2,068			2,068			2,792			3,873			3,562
Loans past due 90 days or more and still accruing		358			406			452			252			148
Total nonacquired nonperforming assets	$	2,445		$	2,722		$	3,428		$	4,312		$	4,539
Acquired
Nonaccrual loans	$	2,982		$	3,099		$	3,617		$	3,508		$	2,829
Other real estate and repossessed assets		92			92			92			92			72
Loans past due 90 days or more and still accruing		-			-			-			-			-
Total acquired nonperforming assets	$	3,074		$	3,191		$	3,709		$	3,600		$	2,901
Selected asset quality ratios
Nonperforming assets / Assets		0.31	%		0.34	%		0.41	%		0.45	%		0.55	%
Nonperforming assets / (Loans + OREO + repossessed assets)		0.39			0.42			0.51			0.60			0.73
Net charge-offs (recoveries) to average loans (annualized)		0.02			0.05			0.13			0.06			0.03
Allowance for loan losses to total loans		0.85			0.83			0.79			0.75			0.93
Nonacquired nonperforming assets / (Nonacquired loans +nonacquired OREO + nonacquired repossessed assets)(4)		0.24			0.28			0.36			0.49			0.56
Allowance for loan losses to nonacquired nonperformingloans		3,169.76			1,780.12			1,718.08			2,241.91			961.21
Allowance for loan losses to nonacquired loans (4)		1.13	%		1.14	%		1.11	%		1.07	%		1.10	%

	For the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
Taxable Equivalent Yields/Rates	2016			2016			2016			2015			2015
Interest income:
Loans		5.08	%		5.06	%		5.17	%		5.17	%		5.13	%
Mortgage loans held-for-sale		4.12			3.51			4.40			3.44			4.17
Interest on securities:
Taxable		2.55			1.95			2.68			3.05			3.30
Non-taxable		4.85			4.93			4.90			4.96			4.99
Cash balances in other banks		0.60			0.65			0.58			0.35			0.31
Total interest-earning assets		4.66			4.67			4.63			4.46			4.41
Interest expense:
Interest on deposits		0.54			0.54			0.56			0.54			0.50
Interest on FHLB and other borrowings		4.04			4.08			2.97			2.01			2.00
Interest on subordinated debt		6.32			6.34			-			-			-
Total interest-bearing liabilities		0.68			0.62			0.58			0.57			0.54
Net interest spread		3.98			4.05			4.05			3.89			3.87
Net interest margin		4.18	%		4.23	%		4.21	%		4.06	%		4.02	%

NATIONAL COMMERCE CORPORATION

Unaudited Financial Highlights

(In thousands, except share and per share amounts and percentages)

	As of
	September 30,			June 30,			March 31,			December 31,			September 30,
	2016			2016			2016			2015			2015
Shareholders' Equity and Capital Ratios
Tier 1 Leverage Ratio		9.74	%		9.51	%		9.13	%		9.68	%		10.39	%
Tier 1 Common Capital Ratio		11.63			11.25			11.18			11.18			12.88
Tier 1 Risk-based Capital Ratio		11.63			11.25			11.18			11.18			12.88
Total Risk-based Capital Ratio		14.18			13.79			11.97			11.91			13.79
Equity / Assets		13.05			13.03			12.74			12.29			13.13
Tangible common equity to tangible assets		10.36	%		10.25	%		9.95	%		9.52	%		11.03	%
Book value per share	$	21.26		$	20.80		$	20.36		$	20.01		$	18.80
Tangible book value per share	$	16.37		$	15.87		$	15.42		$	15.03		$	15.42

	For the Three Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,
	2016		2016		2016		2015		2015
Detail of other noninterest expense
Salaries and employee benefits	$	6,948	$	6,907	$	6,945	$	6,077	$	5,186
Commission-based compensation		1,104		1,036		875		844		1,048
Occupancy and equipment expense		1,181		1,131		1,135		1,048		871
Data processing expenses		572		618		667		511		464
Advertising and marketing expenses		198		191		160		19		124
Legal fees		182		179		122		173		177
FDIC insurance assessments		246		257		263		242		205
Property and casualty insurance premiums		90		166		223		169		143
Accounting and audit expenses		252		249		250		332		211
Consulting and other professional expenses		330		184		243		387		238
Telecommunications expenses		146		140		159		132		144
ORE, Repo asset and other collection expenses		142		89		59		256		79
Core deposit intangible amortization		191		192		191		175		111
Other noninterest expense		1,050		915		761		1,079		894
Total noninterest expense	$	12,632	$	12,254	$	12,053	$	11,444	$	9,895

NATIONAL COMMERCE CORPORATION

Unaudited Financial Highlights

(In thousands, except share and per share amounts and percentages)

	As of
	September 30,			June 30,			March 31,			December 31,			September 30,
Non-GAAP Reconciliation	2016			2016			2016			2015			2015
Total shareholders' equity	$	232,173		$	226,120		$	221,100		$	216,636		$	177,423
Less: intangible assets		52,962			53,154			53,312			53,474			31,291
Less: minority interest not included in intangible assets		423			428			341			438			574
Tangible common equity	$	178,788		$	172,538		$	167,447		$	162,724		$	145,558
Common shares outstanding at year or period end		10,920,423			10,870,033			10,861,487			10,824,969			9,438,541
Tangible book value per share	$	16.37		$	15.87		$	15.42		$	15.03		$	15.42
Total assets at end of period	$	1,779,278		$	1,735,782		$	1,735,940		$	1,763,369		$	1,350,781
Less: intangible assets		52,962			53,154			53,312			53,474			31,291
Adjusted total assets at end of period	$	1,726,316		$	1,682,628		$	1,682,628		$	1,709,895		$	1,319,490
Tangible common equity to tangible assets		10.36	%		10.25	%		9.95	%		9.52	%		11.03	%
Total allowance for loan losses	$	11,950		$	11,642		$	10,927		$	9,842		$	9,391
Less: allowance for loan losses attributable to
CBI (factoring receivables)		500			500			500			500			500
Adjusted allowance for loan losses at end of period	$	11,450		$	11,142		$	10,427		$	9,342		$	8,891
Nonacquired loans held for investment(4)		1,009,677			978,836			942,781			870,471			811,011
Allowance for loan losses to nonacquired loans (4)		1.13	%		1.14	%		1.11	%		1.07	%		1.10	%

	For the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2016			2016			2016			2015			2015
Non-GAAP Reconciliation
Total average shareholders' equity	$	228,953		$	223,357		$	218,730		$	202,299		$	175,821
Less: average intangible assets		53,056			53,234			53,388			46,113			31,158
Less: average minority interest not includedin intangible assets		282			284			231			331			371
Average tangible common equity	$	175,615		$	169,839		$	165,111		$	155,855		$	144,292
Net income to common shareholders		4,813			4,354			3,779			2,938			2,490
Return on average tangible common equity (ROATCE)		10.90	%		10.31	%		9.21	%		7.48	%		6.85	%
Efficiency ratio:
Net interest income	$	16,877		$	16,652		$	16,663		$	14,981		$	12,259
Total noninterest income		4,002			3,357			3,125			2,136			2,353
Less: gain (loss) on sale of securities		-			-			-			-			-
Operating revenue	$	20,879		$	20,009		$	19,788		$	17,117		$	14,612
Expenses:
Total noninterest expenses	$	12,632		$	12,254		$	12,053		$	11,444		$	9,895
Efficiency ratio		60.50	%		61.24	%		60.91	%		66.86	%		67.72	%
Operating efficiency ratio:
Net interest income	$	16,877		$	16,652		$	16,663		$	14,981		$	12,259
Total noninterest income		4,002			3,357			3,125			2,136			2,353
Less: gain (loss) on sale of securities		-			-			-			-			-
Operating revenue	$	20,879		$	20,009		$	19,788		$	17,117		$	14,612
Expenses:
Total noninterest expenses	$	12,632		$	12,254		$	12,053		$	11,444		$	9,895
Less: merger/conversion-related expenses		160			12			138			395			122
Adjusted noninterest expenses	$	12,472		$	12,242		$	11,915		$	11,049		$	9,773
Operating efficiency ratio		59.73	%		61.18	%		60.21	%		64.55	%		66.88	%

(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)

	September 30, 2016		December 31, 2015
Assets
Cash and due from banks	$	27,187	$	27,173
Interest-bearing deposits with banks		95,733		185,284
Cash and cash equivalents		122,920		212,457
Investment securities held-to-maturity (fair value of $27,594 and $27,843 at September 30, 2016and December 31, 2015, respectively)		26,666		27,458
Investment securities available-for-sale		76,182		53,405
Other investments		7,715		6,235
Mortgage loans held-for-sale		7,810		15,020
Loans, net of unearned income		1,412,368		1,319,414
Less: allowance for loan losses		11,950		9,842
Loans, net		1,400,418		1,309,572
Premises and equipment, net		32,158		31,432
Accrued interest receivable		3,442		3,510
Bank-owned life insurance		27,837		27,223
Other real estate		2,160		3,965
Deferred tax assets, net		13,820		14,190
Goodwill		50,748		50,686
Core deposit intangible, net		2,214		2,788
Other assets		5,188		5,428
Total assets	$	1,779,278	$	1,763,369
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing demand	$	382,924	$	382,946
Interest-bearing demand		220,488		202,649
Savings and money market		618,040		611,887
Time		278,427		316,976
Total deposits		1,499,879		1,514,458
Federal Home Loan Bank advances		7,000		22,000
Subordinated debt		24,487		-
Accrued interest payable		1,083		627
Other liabilities		14,656		9,648
Total liabilities		1,547,105		1,546,733
Commitments and contingencies
Shareholders’ equity:
Preferred stock, 250,000 shares authorized, no shares issued or outstanding		-		-
Common stock, $0.01 par value, 30,000,000 shares authorized, 10,870,033 and 10,824,969shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively		109		108
Additional paid-in capital		204,551		202,456
Retained earnings		19,098		6,152
Accumulated other comprehensive income		1,058		548
Total shareholders' equity attributable to National Commerce Corporation		224,816		209,264
Noncontrolling interest		7,357		7,372
Total shareholders' equity		232,173		216,636
Total liabilities and shareholders' equity	$	1,779,278	$	1,763,369

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,
	2016		2015		2016		2015
Interest and dividend income:
Interest and fees on loans	$	17,991	$	12,925	$	53,143	$	36,943
Interest and dividends on taxable investment securities		493		259		1,288		784
Interest on non-taxable investment securities		200		137		601		293
Interest on interest-bearing deposits and federal funds sold		152		129		499		337
Total interest income		18,836		13,450		55,531		38,357
Interest expense:
Interest on deposits		1,499		1,080		4,544		2,959
Interest on borrowings		71		111		223		330
Interest on subordinated debt		389		-		572		-
Total interest expense		1,959		1,191		5,339		3,289
Net interest income		16,877		12,259		50,192		35,068
Provision for loan losses		373		201		2,807		482
Net interest income after provision for loan losses		16,504		12,058		47,385		34,586
Other income:
Service charges and fees on deposit accounts		511		311		1,496		886
Mortgage origination and fee income		2,245		1,439		5,264		4,215
Merchant sponsorship revenue		542		305		1,555		496
Income from bank-owned life insurance		206		86		614		251
Wealth management fees		15		11		39		43
Gain (loss) on other real estate		-		-		275		(24	)
Other		483		201		1,241		456
Total other income		4,002		2,353		10,484		6,323
Other expense:
Salaries and employee benefits		6,948		5,186		20,800		15,287
Commission-based compensation		1,104		1,048		3,015		2,900
Occupancy and equipment		1,181		871		3,447		2,536
Core deposit intangible amortization		191		111		574		333
Other operating expense		3,208		2,679		9,103		7,745
Total other expense		12,632		9,895		36,939		28,801
Earnings before income taxes		7,874		4,516		20,930		12,108
Income tax expense		2,639		1,453		6,794		3,809
Net earnings		5,235		3,063		14,136		8,299
Less: Net earnings attributable to noncontrolling interest		422		573		1,190		1,632
Net earnings attributable to National Commerce Corporation	$	4,813	$	2,490	$	12,946	$	6,667
Weighted average common and diluted shares outstanding
Basic		10,890,860		9,438,541		10,871,245		8,865,944
Diluted		11,115,134		9,594,472		11,080,746		9,002,885
Basic earnings per common share	$	0.44	$	0.26	$	1.19	$	0.75
Diluted earnings per common share	$	0.43	$	0.26	$	1.17	$	0.74

NATIONAL COMMERCE CORPORATION

Average Balance Sheets and Net Interest Analysis

	For the Three Months Ended
(Dollars in thousands)	September 30, 2016							June 30, 2016							March 31, 2016							December 31, 2015							September 30, 2015
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	$	1,399,016	$	17,853		5.08	%	$	1,391,789	$	17,523		5.06	%	$	1,352,737	$	17,373		5.17	%	$	1,204,437	$	15,699		5.17	%	$	992,223	$	12,826		5.13	%
Mortgage loans held-for-sale		13,986		145		4.12			17,288		151		3.51			10,503		115		4.40			9,697		84		3.44			9,890		104		4.17
Securities:
Taxable securities		76,787		493		2.55			78,907		383		1.95			61,764		412		2.68			48,097		370		3.05			31,132		259		3.30
Tax-exempt securities		26,029		317		4.85			26,036		319		4.93			26,041		317		4.90			21,982		275		4.96			17,245		217		4.99
Cash balances in other banks		101,422		152		0.60			80,140		129		0.65			151,318		218		0.58			191,077		168		0.35			166,715		129		0.31
Total interest-earning assets		1,617,240	$	18,960		4.66			1,594,160	$	18,505		4.67			1,602,363	$	18,435		4.63			1,475,290	$	16,596		4.46			1,217,205	$	13,535		4.41
Noninterest-earning assets		148,275							148,959							156,260							145,791							96,824
Total assets	$	1,765,515						$	1,743,119						$	1,758,623						$	1,621,081						$	1,314,029
Interest-bearing liabilities
Interest-bearing transaction accounts	$	214,439	$	125		0.23	%	$	210,776	$	124		0.24	%	$	204,339	$	123		0.24	%	$	196,140	$	129		0.26	%	$	182,056	$	118		0.26	%
Savings and money market deposits		612,618		713		0.46			603,173		698		0.47			620,429		762		0.49			542,631		612		0.45			443,306		486		0.43
Time deposits		283,022		661		0.93			288,350		654		0.91			306,106		684		0.90			291,399		654		0.89			228,298		476		0.83
Federal Home Loan Bank and other borrowed money		7,000		71		4.04			7,000		71		4.08			10,959		81		2.97			22,104		112		2.01			22,000		111		2.00
Subordinated debt		24,498		389		6.32			11,605		183		6.34			-		-		-			-		-		-			-		-		-
Total interest-bearing liabilities		1,141,577	$	1,959		0.68			1,120,904	$	1,730		0.62			1,141,833	$	1,650		0.58			1,052,274	$	1,507		0.57			875,660	$	1,191		0.54
Noninterest-bearing deposits		381,205							388,363							386,674							354,812							254,402
Total funding sources		1,522,782							1,509,267							1,528,507							1,407,086							1,130,062
Noninterest-bearing liabilities		13,780							10,495							11,386							11,696							8,146
Shareholders' equity		228,953							223,357							218,730							202,299							175,821
	$	1,765,515						$	1,743,119						$	1,758,623						$	1,621,081						$	1,314,029
Net interest rate spread						3.98	%						4.05	%						4.05	%						3.89	%						3.87	%
Net interest income/margin (taxable equivalent)				17,001		4.18	%				16,775		4.23	%				16,785		4.21	%				15,089		4.06	%				12,344		4.02	%
Tax equivalent adjustment				124							123							122							108							85
Net interest income/margin			$	16,877		4.15	%			$	16,652		4.20	%			$	16,663		4.18	%			$	14,981		4.03	%			$	12,259		4.00	%