IPO Report: National Commerce (NCOM)

Francis Gaskins |

National Commerce IPO, National Commerce IPO date, National Commerce IPO price, IPOs this week, stocks to buy now, small-cap stocksNational Commerce (NCOM) is a bank holding company headquartered in Birmingham, Alabama.

Three other new IPOs are scheduled for this week, listing available at IPOpremium.

NCOM scheduled a $31 million IPO on Nasdaq with a market capitalization of $177 million. The price range midpoint of $19.50. 

The scheduled IPO date is Thursday, March 19, 2015. NCOM is based in Birmingham, AL SEC files  

The manager and joint-managers are Keefe, Bruyette (A Stifel Company). The co-managers are Raymond James; Sterne Agee; FIG Partners:

National Commerce IPO Overview

Through NBC, a wholly owned banking subsidiary, NCOM provides a broad array of financial services to businesses, business owners and professionals through eight full-service banking offices in Alabama (Birmingham, Huntsville, Auburn-Opelika, and Baldwin County) and seven full-service banking offices in Central Florida (Longwood, Winter Park, Orlando, Oviedo, Kissimmee, and Vero Beach).

National Commerce IPO Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Net interest inc

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

             

National Commerce (NCOM)

$177

6.2

30.1

1.1

1.3

17%

             

SCORECARD

.

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

.

.

Grwth

mination

tary

rating

20 is perfect

.

2

1.5

1.5

1

C+, 6

National Commerce IPO: Conclusion

Neutral

Small $31mm IPO

P/E of 30 seems high, rev +38%, income +48%

Price to-book of 1.1; price-to-tangible book of 1.3

National Commerce Business

Through NBC, a wholly owned banking subsidiary, NCOM provides a broad array of financial services to businesses, business owners and professionals through eight full-service banking offices in Alabama (Birmingham, Huntsville, Auburn-Opelika, and Baldwin County) and seven full-service banking offices in Central Florida (Longwood, Winter Park, Orlando, Oviedo, Kissimmee, and Vero Beach).

Receivables factoring business

NCOM also owns a 70% equity interest in CBI, which owns Corporate Billing, a transaction-based finance company operating a receivables factoring business headquartered 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 Canada.

National Commerce 2014 Acquisitions

CBI Holding Company, LLC

On August 29, 2014, NCOM acquired, through NBC, 70% of the outstanding units of CBI, a transaction-based finance company operating a receivables factoring business headquartered in Decatur, Alabama. CBI now operates as a subsidiary of NBC.

NCOM has an option to purchase the remaining 30% equity interest for a price based on a multiple of CBI’s earnings.

The option is exercisable at any time beginning on August 29, 2019, and expires on August 29, 2022. NBC paid $16.2 million in cash for the 70% equity interest in CBI.

NCOM consolidated financial statements include all of the assets and liabilities of CBI as well as a minority interest representing the 30% equity interest that was not purchased. As a result, at acquisition, NCOM recorded $23.1 million of goodwill and a non-controlling interest of $6.9 million.

NCOM marked the assets acquired and liabilities assumed to fair value based on information available, and these fair value adjustments are subject to change for up to one year after the closing date as additional information becomes available.

Given an average life for CBI’s receivables of 35 to 40 days, the assets and liabilities of CBI are very short-term in nature, and the book value was deemed to be the fair value, with the exception of a $174 thousand discount on the purchased factored receivables, which was accreted into income during September 2014 in accordance with the average life of the related receivables.

United Group Banking Company of Florida, Inc. acquisition

On December 15, 2014, NCOM completed the acquisition of United, a bank holding company headquartered in Longwood, Florida. At that time, United’s wholly owned non-banking subsidiary, RBCF Holdings Inc., became a wholly owned subsidiary of NCOM.

National Commerce Competition

NCOM competes for loans, deposits, and financial services in all of principal markets.

NCOM competes directly with other bank and nonbank institutions located within our markets, internet-based banks, out-of-market banks, and bank holding companies that advertise in or otherwise serve NCOM's markets, along with money market and mutual funds, brokerage houses, mortgage companies, and insurance companies or other commercial entities that offer financial services products.

National Commerce 5% shareholders pre-IPO

Charles Phillip McWane
2011 Grantor Retained Annuity Trust 13%

NBC Holdings, LLC 7.5%

National Commerce Dividends

No dividends planned

National Commerce IPO Use of proceeds

NCOM expects to net $27.3mm from its IPO.  Funds are allocated as follows:

To support growth, for working capital, and for other general corporate purposes, including to finance organic growth and expand business through investments in or acquisitions of bank and non-bank financial services companies that NCOM believes are complementary to the business and consistent with the growth strategy.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
NCOM National Commerce Corporation 35.05 1.60 4.78 21,458

Comments

Emerging Growth

Immunovaccine Inc.

Immunovaccine Inc is clinical stage biopharmaceutical company. The Company develops products based on its proprietary vaccine enhancement platform in T cell activating therapies for cancer.

Private Markets

Airbnb

Airbnb is a community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone. Whether an apartment for a night,…

Pinterest

Pinterest is a visual discovery and planning tool. Users ("Pinners") use the site and apps to get ideas for their future, such as recipes, places to travel, and products to…