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 November 2, 2015 - 5:30 PM EST
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First NBC Bank Holding Company Announces 2015 Third Quarter Results

NEW ORLEANS, Nov. 02, 2015 (GLOBE NEWSWIRE) -- First NBC Bank Holding Company (NASDAQ:FNBC), the holding company for First NBC Bank (“Company”), today announced financial results for the third quarter of 2015. For the quarter ended September 30, 2015, the Company reported net income available to common shareholders of $17.7 million, or $0.95 per share, as compared to $16.8 million, or $0.90 per share, for the second quarter of 2015 and $14.0 million, or $0.75 per share, for the third quarter of 2014.

The Company’s earnings per share on a diluted basis were $0.92, $0.88, and $0.73 per diluted share, for the third quarter of 2015, second quarter of 2015, and third quarter of 2014, respectively.  This represents an increase of $0.04 per diluted share, or 4.5%, over the second quarter of 2015, and an increase of $0.19 per diluted share, or 26.0%, over the third quarter of 2014.

Performance Highlights

•   The Company had total assets of $4.3 billion at September 30, 2015, an increase of 15.8% from December 31, 2014.

•   Total loans increased $344.6 million, or 12.4%, from December 31, 2014.

•   Total deposits increased $496.1 million, or 15.9%, from December 31, 2014.

•   The Company's investment in tax credit entities increased $30.7 million, or 21.8%, from December 31, 2014, primarily from increased investment in Federal Historic Rehabilitation tax credit projects.

•   Net interest income increased $2.7 million, or 10.3%, from the linked quarter of 2015, and increased $1.0 million, or 3.7%, from the third quarter of 2014.

•   The Company recorded a gain of $1.5 million in other noninterest income from the sale of a portion of its ownership interest in a certain Federal Historic Rehabilitation tax credit project.  The Company retained the Federal Historic Rehabilitation tax credits generated by the project as these were not subject to recapture.

Loans

The Company’s loans totaled $3.1 billion at September 30, 2015, an increase of $185.5 million, or 6.3%, from June 30, 2015, and an increase of $344.6 million, or 12.4%, from December 31, 2014.  Loan growth continues to be driven primarily by increases in construction and commercial loans. The increase in the Company's construction loan portfolio of 18.5% from June 30, 2015 and 40.8% from December 31, 2014 was due primarily to the funding of construction loans related to hotels, residential real estate development, and federal tax credit related projects.

The increase in the Company's commercial loan portfolio of 7.3% from June 30, 2015 and 13.2% from December 31, 2014 was due in part to increases in all segments of the portfolio. The Company does have exposure to the oil and gas industry in its commercial loan portfolio. At September 30, 2015, the Company's direct oil and gas commercial loan portfolio was approximately $142.5 million, or 4.6%, of its total loan portfolio, with an additional $5.7 million in outstanding loan commitments.  Of this amount, the Company's exposure to exploration and production in its oil and gas portfolio was approximately $74.2 million with outstanding commitments of $3.0 million.  The Company also has exposure to indirect oil and gas loans in its portfolio of $93.8 million with outstanding commitments of $5.3 million.  The Company is actively monitoring both its direct and indirect oil and gas related credits.

The following table sets forth the composition of the Company’s loan portfolio as of the dates indicated:

(In thousands)September 30, 2015 June 30, 2015 % Change December 31, 2014 % Change
Construction$461,459  $389,552  18.5% $327,677  40.8%
Commercial real estate1,313,173  1,287,105  2.0  1,264,371  3.9 
Consumer real estate156,498  149,273  4.8  132,950  17.7 
Commercial and industrial1,166,889  1,087,224  7.3  1,030,629  13.2 
Consumer20,835  20,159  3.4  18,637  11.8 
Total loans$3,118,854  $2,933,313  6.3% $2,774,264  12.4%


Asset Quality

Nonperforming assets totaled $43.9 million at September 30, 2015, an increase of $2.5 million from June 30, 2015 and an increase of $15.2 million from December 31, 2014.  During the third quarter of 2015, total nonperforming loans increased $2.3 million, and other real estate owned increased $0.1 million. Nonperforming assets as a percent of total loans, other real estate owned and other assets owned was 1.40% at September 30, 2015, down 1 basis point from June 30, 2015 and up 37 basis points from December 31, 2014.

The allowance for loan losses totaled $53.1 million at September 30, 2015, an increase of $2.7 million from June 30, 2015, and $10.7 million from December 31, 2014.  The increase in the allowance for loan losses compared to the linked quarter of 2015 was attributable to a $3.0 million provision for loan loss, partially offset by $0.3 million in net charge-offs during the third quarter of 2015. The ratio of allowance for loan losses to period-end loans was 1.70% at September 30, 2015, compared to 1.72% at June 30, 2015 and 1.53% at December 31, 2014.

Deposits

Total deposits at September 30, 2015 were $3.6 billion, an increase of $220.2 million, or 6.5%, from June 30, 2015 and an increase of $496.1 million, or 15.9%, from December 31, 2014.  Total deposits increased compared to the linked quarter due to an increase in NOW accounts primarily from a new public funds relationship during the third quarter of 2015.  The growth in the Company's deposits of 15.9% from December 31, 2014 is due primarily to organic deposit growth of 14.1% across all deposit categories and 1.8% from assumption of deposit liabilities from the Crestview bank transaction in the first quarter of 2015. The Company's tiered pricing strategy continues to be the catalyst for the Company's continued deposit growth.

The following table sets forth the composition of the Company’s deposits as of the dates indicated:             

(In thousands)September 30, 2015 June 30, 2015 % Change December 31, 2014 % Change
Noninterest-bearing$416,405  $390,001  6.8% $364,534  14.2%
NOW accounts691,261  586,596  17.8  476,825  45.0 
Money market accounts1,175,184  1,118,679  5.1  1,055,505  11.3 
Savings deposits57,079  55,982  2.0  49,634  15.0 
Certificates of deposit1,276,989  1,245,487  2.5  1,174,352  8.7 
Total deposits$3,616,918  $3,396,745  6.5% $3,120,850  15.9%


Net Interest Income

Net interest income for the third quarter ended September 30, 2015 totaled $28.8 million, an increase of $2.7 million, or 10.3%, from the second quarter of 2015, and an increase of $1.0 million, or 3.7%, from the third quarter of 2014. The increase in net interest income compared to the linked quarter was due primarily to the increase in interest income on loans of $3.6 million offset by an increase in interest expense of $0.8 million. The Company’s net interest margin was 3.04% for the quarter ended September 30, 2015, 18 basis points higher than the second quarter of 2015 and 33 basis points lower than the third quarter of 2014. The increase in the average yield on loans of 33 basis points compared to the linked quarter is due primarily to an increase in the average loan balance of $60.6 million, specifically, average commercial loans, which were at higher rates compared to the linked quarter.  The decrease of 13 basis points compared to the same period of 2014 is due to the composition of the Company's loan portfolio which has been more heavily weighted to variable rate loans than fixed rate loans and the timing of the execution of Prime rate hedges to mitigate this shift compared to the third quarter of 2014.  As the Company's loan portfolio continues to grow at a double digit pace, the Company has had to increase the notional amount of its Prime rate cash flow hedges.  The Company currently has $325.0 million in notional amount of Prime rate swaps compared to $250.0 million in notional amount during the third quarter of 2014, an increase of $75.0 million in notional amounts.  These Prime rate hedges are designed to mitigate the shift in the Company's loan portfolio to a more evenly balanced portfolio. The Company issued subordinated debentures during the first quarter of 2015 due to the favorable rates in the market and as a good source of capital to continue its growth.  Until the funds from the subordinated debenture offering are fully deployed in future periods, they will continue to be a drag on the net interest margin. Excluding the impact of the subordinated debt issuance, the Company's net interest margin for the third quarter of 2015 would have been 3.09%, compared to 2.91% in the linked quarter of 2015. The Company did invest the excess funds in higher rate accounts during the second quarter of 2015 which increased the average yield by 1 basis point compared to the linked quarter and 8 basis points compared to the third quarter of 2014.  Average interest-earning assets increased $100.4 million over the second quarter of 2015 and $489.8 million over the third quarter of 2014.  The cost of interest-bearing deposits increased 1 basis point compared to the second quarter of 2015 due to an increase in average NOW deposits in the higher balance tiers and decreased 9 basis points over the third quarter of 2014 due to the tiered pricing on all of its deposit products (including certificates of deposit).

The following tables set forth the Company’s average volume and rates on its interest-earning assets and interest-bearing liabilities for the periods indicated:  

 For the Three Months Ended
 September 30, 2015 June 30, 2015 September 30, 2014
(In thousands)Average
Balance
 Average
Yield/Rate
 Average
Balance
 Average
Yield/Rate
 Average
Balance
 Average
Yield/Rate
Interest-earning assets:           
Short-term investments$187,282  0.28% $140,189  0.27% $12,804  0.20%
Investment in short-term receivables223,728  2.54% 229,804  2.64% 233,044  2.85%
Investment securities337,805  2.58% 339,041  2.62% 367,135  2.51%
Loans3,007,096  5.05% 2,946,483  4.72% 2,653,083  5.18%
            
Total interest-earning assets$3,755,911  4.44% $3,655,517  4.23% $3,266,066  4.70%
            
Interest-bearing liabilities:           
Savings$54,512  0.64% $55,475  0.63% $51,360  0.75%
Money market deposits1,143,464  1.21% 1,114,547  1.20% 909,405  1.35%
NOW accounts669,915  1.08% 568,084  1.03% 485,143  1.17%
Certificates of deposit1,040,785  1.83% 1,002,521  1.82% 979,988  1.81%
CDARS®227,315  2.23% 221,870  2.24% 211,028  2.20%
            
Total interest-bearing deposits$3,135,991  1.45% $2,962,497  1.44% $2,636,924  1.54%
            
Fed funds purchased and repurchase agreements108,205  1.40% 118,935  1.40% 110,594  1.42%
Borrowings103,392  5.26% 103,392  5.14% 61,143  1.58%
            
Total interest-bearing liabilities$3,347,588  1.57% $3,184,824  1.56% $2,808,661  1.54%
            
Net interest spread  2.87%   2.67%   3.16%
Net interest margin  3.04%   2.86%   3.37%


 For the Nine Months Ended
 September 30, 2015 September 30, 2014
(In thousands)Average
Balance
 Average
Yield/Rate
 Average
Balance
 Average
Yield/Rate
Interest-earning assets:       
Short-term investments$145,835  0.26% $32,056  0.20%
Investment in short-term receivables229,037  2.71% 227,924  2.79%
Investment securities340,632  2.56% 370,000  2.55%
Loans2,933,935  4.93% 2,535,956  5.23%
        
Total interest-earning assets$3,649,439  4.38% $3,165,936  4.69%
        
Interest-bearing liabilities:       
Savings$54,452  0.63% $53,091  0.80%
Money market deposits1,117,171  1.21% 809,025  1.37%
NOW accounts589,705  1.04% 505,247  1.14%
Certificates of deposit1,006,763  1.82% 1,009,622  1.82%
CDARS®222,941  2.24% 197,553  2.19%
        
Total interest-bearing deposits$2,991,032  1.45% $2,574,538  1.55%
        
Fed funds purchased and repurchase agreements116,278  1.41% 100,776  1.48%
Borrowings92,550  5.07% 58,345  1.90%
        
Total interest-bearing liabilities$3,199,860  1.55% $2,733,659  1.56%
        
Net interest spread  2.83%   3.13%
Net interest margin  3.02%   3.34%


Noninterest Income

Noninterest income for the third quarter of 2015 totaled $3.1 million, a decrease of $0.4 million, or 11.5%, compared to the linked quarter, and an increase of $0.1 million, or 3.8%, compared to the third quarter of 2014.  The decrease in noninterest income for the linked quarter was due primarily to decreases in state tax credits earned of $0.2 million and loss on the sale on other assets of $0.2 million from the sale of an acquired branch. 

The increase in noninterest income for the third quarter of 2015 compared to the third quarter of 2014 resulted primarily from an increase of $0.9 million in other noninterest income primarily from the $1.5 million gain from the sale of a portion of the Company's ownership interest in a certain Federal Rehabilitation Historic tax credit project and  $0.4 million in rental income from its real estate subsidiary offset by a decrease in other noninterest income primarily due to a decrease of  $0.9 million from the realized loss on a SBIC investment.  The increase in noninterest income was offset by decreases of $0.5 million from the gain on sale of loans related to the guaranteed portion of SBA/USDA loans sold in the third quarter of 2014, $0.2 million from the loss on sale of other assets from the sale of an acquired branch, and $0.1 million in state tax credits earned.

Noninterest Expense

Noninterest expense for the three month period ended September 30, 2015 totaled $26.0 million, an increase of $2.9 million, or 12.4%, compared to the linked quarter, and an increase of $5.9 million, or 29.5%, compared to the same three month period of 2014. The increase over the linked quarter was due primarily to increases in impairment of investment in tax credit entities of $3.5 million, occupancy and equipment expenses of $0.4 million, and professional fees of $0.3 million, offset by decreases in salaries and employee benefits of $0.6 million due primarily to the increase in deferred salary expenses associated with the growth in new loan originations, taxes, licenses and FDIC assessments of $0.2 million, and other noninterest expense of $0.6 million due primarily to expenses related to the Company's real estate subsidiary.

The increase over the prior year three month period was due to increases in all components of noninterest expense due to the organic growth of the Company, its increased investment in federal tax credit programs, as well as the Crestview bank transaction in the first quarter of 2015.

Taxes

The Company’s tax benefit for the quarter ended September 30, 2015 was $14.8 million, an increase of $1.4 million compared to the second quarter of 2015, and $8.2 million compared to the third quarter of 2014. The increase continues to be driven by the Company's increased investment in projects that generate Federal Historic Rehabilitation tax credits.

The Company expects to experience an effective tax rate below the statutory rate of 35% due primarily to its receipt of Federal New Markets Tax Credits, Low-Income Housing Tax Credits and Federal Historic Rehabilitation Tax Credits.

Shareholders’ Equity

Shareholders’ equity totaled $486.2 million at September 30, 2015, an increase of $49.8 million from year-end 2014. The increase was primarily attributable to the Company's earnings over the period.

About First NBC Bank Holding Company

First NBC Bank Holding Company, headquartered in New Orleans, Louisiana, offers a broad range of financial services through its wholly-owned banking subsidiary, First NBC Bank, a Louisiana state non-member bank. The Company’s primary markets are the New Orleans metropolitan area, Mississippi Gulf Coast, and the Florida panhandle. The Company operates 35 full service banking offices located throughout its markets, along with a loan production office in Gulfport, Mississippi, and had 525 employees at September 30, 2015.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures typically adjust GAAP performance measures to adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature.   Management believes these non-GAAP financial measures provide information useful to investors in understanding the Company’s financial results, and the Company believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting the Company’s business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators.  These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and the Company strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.  A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2014, and other reports and statements the Company has filed with Securities and Exchange Commission ("SEC"), which are available at the SEC’s website (www.sec.gov).


FIRST NBC BANK HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)September 30, 2015 December 31, 2014
Assets   
Cash and due from banks$33,759  $32,484 
Short-term investments179,526  18,404 
Investment in short-term receivables182,945  237,135 
Investment securities available for sale, at fair value273,702  247,647 
Investment securities held to maturity83,319  89,076 
Mortgage loans held for sale2,647  1,622 
Loans, net of allowance for loan losses of $53,076 and $42,336, respectively3,065,778  2,731,928 
Bank premises and equipment, net58,549  52,881 
Accrued interest receivable11,919  11,451 
Goodwill and other intangible assets8,942  7,831 
Investment in real estate properties51,727  12,771 
Investment in tax credit entities171,609  140,913 
Cash surrender value of bank-owned life insurance48,342  47,289 
Other real estate4,575  5,549 
Deferred tax asset127,855  83,461 
Other assets39,852  30,175 
Total assets$4,345,046  $3,750,617 
Liabilities and equity   
Deposits:   
Noninterest-bearing$416,405  $364,534 
Interest-bearing3,200,513  2,756,316 
Total deposits3,616,918  3,120,850 
Repurchase agreements93,775  117,991 
Long-term borrowings103,392  40,000 
Accrued interest payable7,503  6,650 
Other liabilities37,267  28,752 
Total liabilities3,858,855  3,314,243 
Shareholders’ equity:   
Preferred stock   
Convertible preferred stock Series C – no par value; 1,680,219 shares authorized; No shares outstanding at September 30, 2015 and 364,983 shares issued and outstanding at December 31, 2014  4,471 
Preferred stock Series D – no par value; 37,935 shares authorized, issued and outstanding at September 30, 2015 and December 31, 201437,935  37,935 
Common stock- par value $1 per share; 100,000,000 shares authorized; 19,068,301 shares issued and outstanding at September 30, 2015 and 18,576,488 shares issued and outstanding at December 31, 201419,068  18,576 
Additional paid-in capital242,376  239,528 
Accumulated earnings206,353  155,599 
Accumulated other comprehensive loss, net(19,543) (19,737)
Total shareholders’ equity486,189  436,372 
Noncontrolling interest2  2 
Total equity486,191  436,374 
Total liabilities and equity$4,345,046  $3,750,617 



FIRST NBC BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 For the Three Months Ended For the Nine Months Ended
 September 30, September 30,
(In thousands, except per share data)2015 2014 2015 2014
Interest income:       
Loans, including fees$38,270  $34,664  $108,203  $99,160 
Investment securities2,193  2,323  6,512  7,053 
Investment in short-term receivables1,434  1,675  4,638  4,761 
Short-term investments130  6  288  48 
 42,027  38,668  119,641  111,022 
Interest expense:       
Deposits11,476  10,268  32,382  29,921 
Borrowings and securities sold under repurchase agreements1,752  640  4,732  1,943 
 13,228  10,908  37,114  31,864 
Net interest income28,799  27,760  82,527  79,158 
Provision for loan losses3,000  3,000  11,600  9,000 
Net interest income after provision for loan losses25,799  24,760  70,927  70,158 
Noninterest income:       
Service charges on deposit accounts596  548  1,740  1,605 
Investment securities gain (loss), net  79  (50) 135 
Gain (loss) on assets sold, net(273) (76) (262) 63 
Gain on sale of loans, net31  579  147  649 
Cash surrender value income on bank-owned life insurance349  352  1,054  748 
State tax credits earned495  597  1,682  2,358 
Community Development Entity fees earned183  109  439  984 
ATM fee income529  490  1,553  1,468 
Other1,238  356  2,912  1,316 
 3,148  3,034  9,215  9,326 
Noninterest expense:       
Salaries and employee benefits7,122  6,456  21,718  17,795 
Occupancy and equipment expenses3,377  2,737  9,314  8,005 
Professional fees2,002  1,628  5,844  5,038 
Taxes, licenses and FDIC assessments1,536  1,240  4,468  3,782 
Impairment of investment in tax credit entities6,160  3,974  13,659  10,178 
Write-down of foreclosed assets29  1  129  187 
Data processing1,554  1,207  4,557  3,446 
Advertising and marketing727  685  2,418  1,819 
Other3,451  2,119  9,454  5,702 
 25,958  20,047  71,561  55,952 
Income before income taxes2,989  7,747  8,581  23,532 
Income tax benefit(14,790) (6,612) (42,458) (16,354)
Net income attributable to Company17,779  14,359  51,039  39,886 
Less preferred stock dividends(95) (95) (285) (285)
Less earnings allocated to participating securities  (275) (299) (764)
Income available to common shareholders$17,684  $13,989  $50,455  $38,837 
Earnings per common share – basic$0.95  $0.75  $2.69  $2.10 
Earnings per common share – diluted$0.92  $0.73  $2.62  $2.04 


FIRST NBC BANK HOLDING COMPANY
EARNINGS PER COMMON SHARE
 
 For the Three Months Ended For the Nine Months Ended
 September 30, September 30,
(In thousands, except per share data)2015 2014 2015 2014
Basic: Income available to common shareholders$17,684  $13,989  $50,455  $38,837 
Weighted-average common shares outstanding18,630  18,556  18,737  18,530 
Basic earnings per share$0.95  $0.75  $2.69  $2.10 
Diluted: Income available to common shareholders$17,684  $13,989  $50,455  $38,837 
Weighted-average common shares outstanding18,630  18,556  18,737  18,530 
Effect of dilutive securities:       
Stock options outstanding420  381  407  382 
Restricted stock awards outstanding6    3   
Warrants115  117  119  118 
Weighted-average common shares outstanding – assuming dilution19,171  19,054  19,266  19,030 
Diluted earnings per share$0.92  $0.73  $2.62  $2.04 


FIRST NBC BANK HOLDING COMPANY
SUMMARY FINANCIAL INFORMATION
 
 For the Three Months Ended
September 30,
   For the Three
Months Ended
June 30,
  
  % Change  % Change
(In thousands)2015 2014  2015 
          
EARNINGS DATA         
Total interest income$42,027  $38,668  8.7% $38,508  9.1%
Total interest expense13,228  10,908  21.3% 12,402  6.7%
Net interest income28,799  27,760  3.7% 26,106  10.3%
Provision for loan losses3,000  3,000  % 5,600  (46.4)%
Total noninterest income3,148  3,034  3.8% 3,557  (11.5)%
Total noninterest expense25,958  20,047  29.5% 23,099  12.4%
Income before income taxes2,989  7,747  (61.4)% 964  210.1%
Income tax (benefit) expense(14,790) (6,612) 123.7% (16,228) (8.9)%
Net income17,779  14,359  23.8% 17,192  3.4%
Preferred stock dividends(95) (95) % (95) %
Earnings allocated to participating securities  (275) (100.0)% (300) (100.0)%
Net income available to common shareholders$17,684  $13,989  26.4% $16,797  5.3%
          
AVERAGE BALANCE SHEET DATA         
Total assets$4,261,539  $3,593,868  18.6% $4,091,331  4.2%
Total interest-earning assets3,755,911  3,266,066  15.0% 3,656,517  2.7%
Total loans3,007,096  2,653,083  13.3% 2,946,483  2.1%
Total interest-bearing deposits3,135,991  2,636,924  18.9% 2,962,497  5.9%
Total interest-bearing liabilities3,347,588  2,808,661  19.2% 3,184,824  5.1%
Total deposits3,532,476  2,968,093  19.0% 3,372,999  4.7%
Total shareholders' equity477,600  414,754  15.2% 457,545  4.4%
          
SELECTED RATIOS(1)         
Return on average common equity16.04% 15.30%   16.59%  
Return on average equity14.77% 13.74%   15.07%  
Return on average assets1.66% 1.59%   1.69%  
Net interest margin3.04% 3.37%   2.86%  
Efficiency ratio(2)81.25% 65.10%   77.87%  
Tier 1 leverage ratio9.50% 11.31%   9.80%  
Tier 1 risk-based capital ratio10.44% 12.37%   10.79%  
Total risk-based capital ratio13.30% 13.62%   13.72%  
Common equity Tier 1 capital ratio10.44%  NA    10.79%  
          
ASSET QUALITY RATIOS(1)         
Nonperforming loans to total loans(3)(5)1.25% 0.90%   1.25%  
Nonperforming assets to total assets(4)1.01% 0.82%   1.00%  
Allowance for loan losses to total loans(5)1.70% 1.49%   1.72%  
Allowance for loan losses to nonperforming loans(3)136.13% 165.47%   137.40%  
Net charge-offs to average loans0.03% 0.03%   0.02%  


(1) With the exception of end-of-period ratios, all ratios are based on average monthly balances during the respective periods.
(2) Efficiency ratio is the ratio of noninterest expense to net interest income and noninterest income.  See the Company's Non-GAAP efficiency ratio calculation which excludes the impact of the noninterest income and expense related to its tax credit investments.
(3) Nonperforming loans consist of nonaccrual loans and restructured loans.
(4) Nonperforming assets consist of nonperforming loans and real estate and other property that has been repossessed.
(5) Total loans are net of unearned discounts and deferred fees and costs.


FIRST NBC BANK HOLDING COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
IMPACT OF INVESTMENT IN FEDERAL TAX CREDIT PROGRAMS
 
 For the Three Months Ended
 September 30, June 30, September 30,
(In thousands)2015 2015 2014
      
Income before income taxes:     
Income before income taxes (GAAP)$2,989  $964  $7,747 
Income adjustment before income taxes related to the impact of tax credit related activities (Non-GAAP)     
Tax equivalent income associated with investment in federal tax credit programs(1)24,340  25,397  14,057 
Income before income taxes (Non-GAAP)27,329  26,361  21,804 
Income tax expense-adjusted (Non-GAAP)(2)(9,550) (9,169) (7,445)
      
Net income (GAAP)$17,779  $17,192  $14,359 
      
Pro forma income related to investment in tax credit entities:     
Income before income taxes (GAAP)$2,989  $964  $7,747 
Pro forma interest income adjustment     
Pro forma interest income related to investment in tax credit entities(3)2,184  2,051  1,544 
Noninterest expense adjustment(4)     
Impairment of investment in tax credit entities(5)6,160  2,647  3,974 
Other direct expenses(6)727  639  557 
Pro forma income before income taxes (Non-GAAP)12,060  6,301  13,822 
Income tax expense-adjusted (Non-GAAP)(2)(4,215) (2,191) (4,720)
      
Pro forma net income (Non-GAAP)$7,845  $4,110  $9,102 
      
Adjusted Efficiency Ratio:     
Noninterest expense (GAAP)$25,958  $23,099  $20,047 
Adjustments:     
Impairment of investment in tax credit entities(5)6,160  2,647  3,974 
Other direct expenses(6)727  639  557 
Adjusted noninterest expense (Non-GAAP)19,071  19,813  15,516 
Net interest income (GAAP)28,799  26,106  27,760 
Noninterest income (GAAP)3,148  3,557  3,034 
Adjustments:     
State tax credits earned495  668  597 
Community Development Entity fees earned183  133  109 
Adjusted noninterest income (Non-GAAP)2,470  2,756  2,328 
Adjusted total revenue (Non-GAAP)$31,269  $28,862  $30,088 
Adjusted efficiency ratio (Non-GAAP)60.99% 68.65% 51.57%


(1) Tax equivalent income associated with investment in federal tax credit programs represents the gross amount of tax benefit from federal tax credits.
(2) Income tax expense is calculated on the adjusted non-GAAP effective tax rate for the Company at each quarter end period ended September 30, 2015, June 30, 2015, and September 30, 2014, respectively.
(3) Pro forma interest income adjustment related to investment in tax credit entities is calculated based on the average investment in tax credit entities utilizing the average yield on loans had the investment in tax credit entities been invested in loans.
(4) Noninterest expense adjustments related to the Company’s investment in federal tax credit programs are included as adjustments to income as if the Company had invested in loans instead of federal tax credit programs. These expenses are directly related to the Company’s investment in federal tax credit programs. Noninterest expense adjustments for direct expenses related to the Company’s investment in federal tax credit programs exclude general and administrative costs associated with the Company’s investment in federal tax credit programs.
(5) Impairment of investment in tax credit entities represents impairment recorded during the current period, as evaluated by the Company at the end of each reporting period.
(6) Other direct expenses represent fees and expenses incurred as a result of the Company’s investment in federal tax credit programs.

 

For further information contact:
First NBC Bank Holding Company
Ashton J. Ryan, Jr.
President and Chief Executive Officer
(504) 671-3801
aryanjr@firstnbcbank.com

Source: GlobeNewswire (November 2, 2015 - 5:30 PM EST)

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