UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, ~~2017~~2018

Commission file number: 001-36878

NATIONAL COMMERCE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	20-8627710
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
813 Shades Creek Parkway, Suite 100 Birmingham, AL	35209
600 Luckie Drive, Suite 350 Birmingham, AL	35223
(Address of principal executive offices)	(Zip Code)

(205) 313-8100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Exchange on Which Registered
Common Stock, par value $0.01 per share	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Table of Contents

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $~~466~~693,~~166~~191,~~872~~145

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class of Common Stock		Outstanding at March 71, ~~2018~~2019
Common stock, par value $0.01 per share		1720,~~220~~813,~~188~~165 shares

DOCUMENTS INCORPORATED BY REFERENCE: None

Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its 2018 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

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NATIONAL COMMERCE CORPORATION

FORM 10-K

INDEX

	General	1
	Forward – Looking Statements	1
PART I.
Item 1.	Business	2
Item 1A.	Risk Factors	1213
Item 1B.	Unresolved Staff Comments	3034
Item 2.	Properties	3034
Item 3.	Legal Proceedings	3135
Item 4.	Mine Safety Disclosure	3135
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3236
Item 6.	Selected Financial Data	3438
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3842
Item 8.	Financial Statements and Supplementary Data	6872
Item 9.	Changes in and Disagreements with ~~Accountants on~~ Accounting and Financial ~~Disclosure~~Disclosures	~~114~~121
Item 9A.	Controls and Procedures	~~114~~121
Item 9B.	Other Information	~~115~~121
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	~~116~~122
Item 11.	Executive Compensation	~~116~~127
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~116~~145
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~116~~148
Item 14.	Principal Accounting Fees and Services	~~116~~148
Part IV.
Item 15.	Exhibits and Financial Statement Schedules	~~117~~151
Signatures		159

Table of Contents

GENERAL

Unless the context otherwise indicates or requires, references in this Annual Report on Form 10-K to “NCC,” the “Company,” “we,” “us” and “our” refer to National Commerce Corporation, a Delaware corporation, and our consolidated affiliates as of December 31, ~~2017~~2018.

On October 28, 2014, the Company’s Registration Statement on Form S-4 (File No. 333-198219) became effective, and the Company became subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company subsequently filed a Registration Statement on Form S-1 (File No. 333-201371) in connection with the initial public offering of the Company’s common stock. The Company’s common stock became listed on the Nasdaq Global Select Market at the time of the initial public offering.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance, which involve substantial risks and uncertainties. Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Forward-looking statements include any statement that, without limitation, may predict, forecast, indicate or imply future results, performance or achievements instead of historical or current facts and may contain words like “anticipates,” “approximately,” “believes,” “budget,” “can,” “could,” “continues,” “contemplates,” “estimates,” “expects,” “forecast,” “intends,” “may,” “might,” “objective,” “outlook,” “predicts,” “probably,” “plans,” “potential,” “project,” “seeks,” “shall,” “should,” “target,” “will,” or the negative of these terms and other words, phrases or expressions with similar meaning.

Any forward-looking statements contained in this Annual Report on Form 10-K are based on our historical performance and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements, and we cannot give assurances that such statements will prove to be correct. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information or otherwise. Given these uncertainties, the reader should not place undue reliance on forward-looking statements as a prediction of actual results. Factors that could cause actual results to differ materially from those projected or estimated by us include those that are discussed herein under “Part I, Item 1A – Risk Factors,” as well as other unknown risks and uncertainties.

Table of Contents

PART I

Item 1.

Business.

Overview

We are a bank holding company headquartered in Birmingham, Alabama, that has elected to become a “financial holding company” under the Bank Holding Company Act of 1956, as amended (the “BHCA”). We engage in the business of banking through our wholly-owned banking subsidiary, National Bank of Commerce, which we may refer to as “the Bank” or “NBC.”

Through the Bank, we provide a broad array of financial services to businesses, business owners, and professionals. We operate seven full-service banking offices in Alabama, located in Birmingham, Huntsville, Auburn-Opelika, and Baldwin County, twenty‐~~one~~four full‐service banking offices in central and northeast Florida (including under the trade names United Legacy Bank, Reunion Bank of Florida, Patriot Bank, FirstAtlantic Bank and ~~FirstAtlantic~~Premier Community Bank of Florida) and ~~two~~five full‐service banking offices in the Atlanta, Georgia metro area (including under the trade names Private Bank of Buckhead, Private Bank of Decatur, ~~and~~ PrivatePlus Mortgage and Landmark Bank).

We engage in the business of factoring commercial receivables through the Bank’s ownership of a 70% equity interest in CBI Holding Company, LLC (“CBI”). CBI owns Corporate Billing, LLC (“Corporate Billing”), 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 throughout the United States and parts of Canada.

In January 2017, we completed our previously announced acquisition of Private Bancshares, Inc. (“Private Bancshares”), as result of which we acquired our two full-service banking offices in Georgia. In June 2017, we closed an underwritten public offering of 1,104,000 shares of our common stock at a price to the public of $37.00 per share, resulting in net proceeds of approximately $38.7 million after deducting underwriting discounts and commissions and estimated offering expenses. In August 2017, we acquired Patriot Bank, a Florida banking corporation headquartered in Trinity, Florida. As a result of the Patriot Bank transaction, we acquired four full-service banking offices in the Tampa, Florida metro area. Also in August 2017, we entered into a definitive agreement to acquire FirstAtlantic Financial Holdings, Inc. (“FirstAtlantic”), the holding company of FirstAtlantic Bank, headquartered in Jacksonville, Florida. As a result of the FirstAtlantic transaction, which became effective on January 1, 2018, we acquired eight full-service banking offices in the Jacksonville, Florida metro area.

AsOn ofJuly ~~December 31~~1, ~~2017~~2018, wethe ~~had~~Company ~~total~~closed ~~assets~~the previously-announced merger of ~~approximately~~Premier $2Community Bank of Florida (“Premier”) with and into NBC.74 ~~billion~~As a result of the Premier transaction, ~~total~~we ~~net~~acquired ~~loans~~four offull-service ~~approximately~~banking $2offices in Florida.12 ~~billion,~~NBC ~~total~~continues ~~deposits~~to operate the former offices of ~~approximately~~Premier ~~$2.29~~under ~~billion,~~the ~~and~~trade ~~total~~name ~~shareholders’~~“Premier ~~equity~~Community Bank of ~~approximately~~Florida, ~~$400~~a ~~million~~division of National Bank of Commerce.”

~~Our~~Effective ~~Products~~August 1, 2018, the Company completed its merger with Landmark Bancshares, Inc. (“Landmark”). Landmark was the parent company of First Landmark Bank, headquartered in Marietta, Georgia, and ~~Services~~was merged with and into NCC. Immediately following the holding company merger, First Landmark Bank merged with and into NBC, but NBC continues to operate the former offices of First Landmark Bank under the trade name “First Landmark Bank, a division of National Bank of Commerce.” As a result of the Landmark transaction, we acquired three full-service banking offices in Georgia.

~~Through~~As ~~the Bank, we engage in the business~~ of ~~banking~~December 31, ~~which consists primarily of accepting deposits from the public and making loans and other investments. Through Corporate Billing~~2018, we ~~provide~~had ~~factoring,~~total ~~invoicing,~~assets ~~collection, and accounts receivable management services to transportation companies and automotive parts and service providers throughout the United States and parts~~ of ~~Canada~~approximately $4.21 ~~Our~~billion, ~~principal~~total ~~sources of funds for~~ loans ~~and~~net ~~investments at the Bank are demand, time, savings, and other deposits (including negotiable orders~~ of ~~withdrawal,~~unearned orincome ~~NOW accounts) and the amortization and prepayments~~ of ~~loans~~approximately ~~and investments~~$3.32 ~~Our principal sources of income are interest and fees collected on loans~~billion, ~~interest~~total ~~collected~~deposits ~~on other investments, fees earned from the origination and sale~~ of ~~residential~~approximately ~~mortgage~~$3.43 ~~loans~~billion, and ~~service~~total ~~charges,~~shareholders’ asequity ~~well~~of asapproximately ~~income from factored receivables through Corporate Billing~~$697.1 ~~Our principal expenses are interest paid on savings and other deposits (including NOW accounts), interest paid on other borrowings, employee compensation, office expenses, and other overhead expenses~~million.

2Pending Merger

~~Table~~On November 23, 2018, we entered into an Agreement and Plan of ~~Contents~~Merger (the “Merger Agreement”) with CenterState Bank Corporation, a Florida corporation (“CenterState”), whereby the Company will be merged with and into CenterState (the “Merger”). Pursuant to and simultaneously with entering into the Merger Agreement, NBC and CenterState’s wholly owned subsidiary bank, CenterState Bank, N.A. (“CenterState Bank”), entered into a Plan of Merger and Merger Agreement (the “Bank Plan of Merger”), whereby NBC will be merged with and into CenterState Bank immediately following the merger of NCC with and into CenterState (the “Bank Merger”). CenterState’s and CenterState Bank’s existing charters and bylaws will remain in place following the Merger and the Bank Merger.

~~Deposits~~ 2

~~Our~~Table ~~principal sources~~ of funds are core deposits, including demand deposits, interest-bearing transaction accounts, money market accounts, savings deposits and certificates of deposit. Transaction accounts include checking and NOW accounts, which customers use for cash management and which provide a source of fee income for us, as well as a low-cost source of funds. Time and savings accounts also provide a relatively stable and low-cost source of funding. Our largest source of funds is money market accounts. Certificates of deposit in excess of $100,000 are held primarily by customers in our market areas. We utilize brokered and internet certificates of deposit to supplement our market funding sources when funding needs or pricing warrant the use of wholesale funding. Contents

~~Deposit~~Pursuant ~~rates~~to ~~are~~the ~~reviewed~~Merger ~~weekly~~Agreement, byeach ~~senior~~outstanding ~~management~~share of NCC common stock issued and outstanding immediately prior to the effective time of the Merger will be entitled to receive 1.65 ~~Management~~(the ~~believes~~“Exchange Ratio”) shares of CenterState common stock, provided that cash will be paid in lieu of issuance of any fractional shares of CenterState common stock. Each outstanding share of CenterState common stock shall remain outstanding and unaffected by the ~~rates~~Merger. Each option and warrant to purchase shares of NCC common stock, to the extent that wesuch ~~offer~~option ~~are~~or ~~competitive~~warrant ~~with~~is ~~those~~outstanding ~~offered~~and unexercised as of the effective time of the Merger, will be assumed by ~~other~~CenterState ~~institutions~~and inconverted ~~our~~into ~~market~~an ~~areas.~~option Weor ~~also~~warrant, ~~focus~~as onthe ~~customer~~case ~~service~~may be, to ~~attract~~purchase a number of shares of CenterState common stock equal to the product obtained by multiplying the Exchange Ratio by that number of shares of NCC common stock that such option or warrant entitles the holder thereof to purchase (rounded to the nearest whole share), and ~~retain~~at ~~deposits~~an exercise price equal to the quotient obtained by dividing the exercise price per share of the option or warrant by the Exchange Ratio (rounded to the nearest cent).

~~Lending~~CenterState has filed a registration statement on Form S-4 with the SEC to register the shares of CenterState’s common stock that will be issued to NCC’s stockholders in connection with the proposed merger. The registration statement includes a joint proxy statement of CenterState and NCC and a prospectus of CenterState. A definitive joint proxy statement-prospectus has been provided to the stockholders of each of CenterState and NCC in connection with the proposed merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE JOINT PROXY STATEMENT-PROSPECTUS (AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE INTO THE JOINT PROXY STATEMENT-PROSPECTUS) BECAUSE SUCH DOCUMENTS CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC on its website at www.sec.gov. Investors and security holders may also obtain free copies of the documents filed with the SEC by CenterState on its website at www.centerstatebanks.com and by NCC on its website at www.nationalbankofcommerce.com.

WeThis ~~offer~~report adoes ~~range~~not ofconstitute ~~lending~~an ~~services,~~offer ~~including~~to ~~real~~sell ~~estate,~~or ~~consumer~~the ~~and~~solicitation ~~commercial~~of ~~loans,~~an offer to ~~individuals,~~buy ~~small~~any ~~businesses,~~securities ~~and other organizations located in~~ or ~~conducting~~ a ~~substantial~~solicitation ~~portion~~ of ~~their~~any ~~business~~vote inor ~~our market areas~~approval. Before ~~Our~~making ~~total~~any ~~loans,~~voting ~~net~~or ofinvestment ~~unearned income~~decision, atinvestors ~~December~~and ~~31,~~security ~~2017,~~holders ~~were~~of ~~approximately~~CenterState ~~$2.14~~and ~~billion,~~NCC orare ~~approximately~~urged ~~85.9%~~to ofread ~~total~~carefully ~~earning~~the ~~assets.~~entire ~~The~~registration ~~interest~~statement ~~rates~~and ~~charged~~definitive onjoint ~~loans~~proxy ~~vary~~statement-prospectus, ~~with~~including ~~the~~any ~~degree~~amendments ~~of risk~~thereto, ~~maturity~~because ~~and~~these ~~amount~~documents ofcontain ~~the~~important ~~loan~~information ~~and~~about ~~are~~the ~~further~~proposed ~~subject~~merger. Free tocopies ~~competitive~~of ~~pressures,~~these ~~money~~documents ~~market~~may ~~rates,~~be ~~availability~~obtained ofas ~~funds,~~described ~~and government regulations~~above.

~~Real~~CenterState, ~~Estate~~NCC ~~Loans.~~and ~~Loans~~certain ~~secured~~of bytheir ~~real~~directors ~~estate~~and ~~are~~executive officers may be deemed participants in the ~~primary~~solicitation ~~component~~of proxies from the stockholders of ~~our~~each ~~loan~~of ~~portfolio,~~CenterState ~~constituting~~and ~~approximately~~NCC ~~$1.71~~in ~~billion,~~connection orwith 79the proposed merger.8% Information regarding the directors and executive officers of ~~total~~CenterState ~~loans,~~and ~~net~~NCC and other persons who may be deemed participants in the solicitation of ~~unearned~~the ~~income,~~stockholders atof ~~December~~CenterState ~~31,~~or ~~2017.~~of WeNCC ~~originate~~in ~~consumer~~connection ~~and~~with ~~commercial~~the ~~loans~~proposed ~~for~~merger is included in the ~~purpose~~definitive joint proxy statement-prospectus for each of ~~acquiring~~CenterState’s ~~real~~and ~~estate~~NCC’s ~~that~~special ~~are~~meeting ~~secured~~of stockholders, which has been filed by ~~such~~CenterState ~~real~~and ~~estate~~NCC with the SEC. Information Weabout ~~also~~the ~~often~~directors ~~take~~and ~~real~~officers ~~estate~~of asCenterState anand ~~additional~~their ~~source~~ownership of ~~collateral~~CenterState tocommon ~~secure~~stock ~~commercial~~can ~~and~~also ~~industrial~~be ~~loans.~~found ~~Such~~in ~~loans~~CenterState’s ~~are~~definitive ~~classified~~proxy statement in connection with its 2018 annual meeting of stockholders, as ~~real~~filed ~~estate~~with ~~loans~~the ~~rather~~SEC ~~than~~on ~~commercial~~March 12, 2018, and ~~industrial~~other ~~loans~~documents ifsubsequently filed by CenterState with the ~~real~~SEC. Information ~~estate~~about ~~collateral~~the isdirectors ~~considered~~and ~~significant~~officers asof aNCC ~~secondary~~and ~~source~~their ownership of ~~repayment~~NCC ~~for~~common ~~the~~stock ~~loan.~~can ~~Loans~~also ~~are~~be ~~typically~~found ~~made~~in onthis aAnnual ~~recourse~~Report ~~basis~~on Form 10-K, and ~~are~~other ~~supported~~documents subsequently filed by ~~financial~~NCC ~~statements~~with ~~and~~the aSEC. Additional ~~review~~information ofregarding the ~~repayment~~interests ~~ability~~ of such participants is included in the ~~borrower(s)~~definitive ~~and/or~~joint ~~guarantor(s).~~proxy ~~Origination~~statement-prospectus ~~fees~~and ~~are~~other ~~charged~~relevant ~~for~~documents ~~many~~regarding ~~loans~~the ~~secured~~proposed bymerger ~~real~~filed ~~estate~~with the SEC.

~~Our~~Stockholder ~~real estate lending activities are generally characterized by the following types of loans and loan terms.~~Complaints

●After ~~Commercial~~the ~~real~~mailing ~~estate~~of ~~term~~the ~~loans~~joint ~~accrue~~proxy atstatement-prospectus ~~either~~on ~~variable~~February or4, ~~fixed~~2019 ~~rates~~in connection with the Merger, two lawsuits by purported NCC stockholders (Paul Parshall v. ~~The~~National ~~variable~~Commerce ~~rates~~Corporation, ~~approximate~~et ~~current~~al., ~~market~~No. ~~rates~~1:19-cv-00355-UNA (D. ~~Amortizations~~Del.), and Stephen Bushansky v. National Commerce Corporation, et al., No. 1:19-cv-00379 (D. Del.)) were filed in the United States District Court, District of Delaware against NCC and its directors, alleging inadequate disclosures in the joint proxy statement-prospectus and associated violations of the Securities Exchange Act of 1934. These complaints generally seek, among other things, an injunction enjoining the stockholder vote and the closing of the proposed transaction, rescission of the Merger if it closes, or an award of rescissory damages, an order directing the NCC board of directors to disseminate a new joint proxy statement-prospectus, a declaration that the defendants violated the securities laws and an award of the plaintiffs’ costs of the actions including a reasonable allowance for the plaintiffs’ attorneys’ and experts’ fees. NCC and CenterState believe that the claims in these complaints are ~~typically~~without nomerit ~~more~~and ~~than~~intend 25to ~~years~~defend these actions vigorously.

● The primary type of residential mortgage loan is the single-family first mortgage, typically structured with fixed or adjustable interest rates, based on market conditions. These loans usually have fixed rates for up to five years, with maturities of 15 to 30 years. We also originate home equity lines of credit secured by residential property. These loans are typically made on a variable-rate basis with maturities up to 10 years.3

●Table ~~Construction~~of ~~and land development loans are typically made on a variable-rate basis. Loan terms usually do not exceed 24 months.~~Contents

WeOur ~~originate~~Products residential loans for sale into the secondary market. These loans are made in accordance with underwriting standards set by the purchaser of the loan, normally as to loan-to-value ratio, interest rate, borrower qualification, and ~~documentation.~~Services These loans are originated on both a “best efforts” and a “mandatory delivery” basis. We typically collect from the borrower or purchaser a combination of the origination fee, discount points, and/or a service release fee.

3Through the Bank, we engage in the business of banking, which consists primarily of accepting deposits from the public and making loans and other investments. Through Corporate Billing, we provide 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. Our principal sources of funds for loans and investments at the Bank are demand, time, savings, and other deposits (including negotiable orders of withdrawal, or NOW accounts) and the amortization and prepayments of loans and investments. Our principal sources of income are interest and fees collected on loans, interest collected on other investments, fees earned from the origination and sale of residential mortgage loans, and service charges, as well as income from factored receivables through Corporate Billing. Our principal expenses are interest paid on savings and other deposits (including NOW accounts), interest paid on other borrowings, employee compensation, office expenses, and other overhead expenses.

~~Table~~Deposits ~~of Contents~~

~~Commercial~~Our ~~and~~principal ~~Industrial~~sources ~~Loans. We make loans for commercial purposes in various lines~~ of ~~business.~~funds ~~These loans~~ are ~~typically~~core ~~made~~deposits, onincluding ~~terms~~demand updeposits, tointerest-bearing ~~five~~transaction ~~years~~accounts, atmoney ~~fixed~~market oraccounts, ~~variable~~savings ~~rates.~~deposits ~~The~~and ~~loans~~certificates ~~are~~of ~~secured~~deposit. byTransaction ~~various~~accounts ~~types~~include ofchecking ~~collateral,~~and ~~including~~NOW accounts ~~receivable~~, ~~inventory,~~which ~~or,~~customers inuse ~~the~~for ~~case~~cash ofmanagement ~~equipment~~and ~~loans,~~which ~~the~~provide ~~financed~~a ~~equipment.~~source Weof ~~attempt~~fee toincome ~~reduce~~for ~~our~~us, ~~credit~~as ~~risk~~well onas ~~commercial~~a ~~loans~~low-cost bysource ~~underwriting~~of ~~the~~funds. ~~loan~~Time ~~based on the borrower’s cash flow~~ and ~~ability~~savings toaccounts ~~service~~also ~~the~~provide ~~debt~~a ~~from~~relatively ~~earnings,~~stable and bylow-cost ~~limiting~~source ~~the~~of ~~loan-to-value ratio~~funding. ~~Historically,~~Our welargest ~~have~~source ~~typically~~of ~~loaned~~funds upis tomoney ~~80%~~market ~~on loans secured by~~ accounts. ~~receivable,~~Certificates upof todeposit ~~50%~~in onexcess ~~loans~~of ~~secured~~$100,000 ~~by inventory (which~~ are ~~usually~~held ~~also~~primarily ~~secured~~ by ~~accounts~~customers ~~receivable),~~in ~~and~~our upmarket ~~to 100% on loans secured by equipment~~areas. We ~~also~~utilize ~~make~~brokered ~~some unsecured commercial loans. Commercial~~ and ~~industrial~~internet ~~loans~~certificates ~~constituted~~of ~~$258.6~~deposit ~~million,~~to orsupplement ~~12.1% of~~ our ~~loan~~market ~~portfolio,~~funding atsources ~~December~~when ~~31,~~funding ~~2017.~~needs ~~Interest~~or ~~rates~~pricing ~~are~~warrant ~~negotiable and are based on~~ the ~~borrower’s~~use ~~financial~~of ~~condition,~~wholesale ~~credit history, management stability and collateral~~funding.

~~Consumer~~Deposit ~~Loans. Consumer~~rates ~~lending~~are ~~includes~~reviewed ~~installment~~weekly ~~lending~~by tosenior ~~individuals~~management. inManagement ~~our~~believes ~~market~~that ~~areas~~the ~~and~~rates ~~generally~~that ~~consists~~we ofoffer ~~loans~~are tocompetitive ~~purchase~~with ~~automobiles~~those ~~and~~offered by other ~~consumer~~institutions ~~durable~~in ~~goods. Consumer loans constituted $26.3 million, or 1.2% of~~ our ~~loan~~market ~~portfolio, at December 31, 2017~~areas. ~~Consumer~~We ~~loans~~also ~~are~~focus ~~underwritten based~~ on ~~the~~customer ~~borrower’s~~service ~~income, current debt level, past credit history and collateral. Consumer rates are both variable and fixed, with terms negotiable. Terms generally range from one~~ to ~~five~~attract ~~years, depending on the nature~~ and ~~condition~~retain ~~of the collateral~~deposits. ~~Periodic amortization, generally monthly, is typically required.~~

~~Loan~~Lending Approval. Certain credit risks are inherent in making loans. These include repayment risks, risks resulting from uncertainties in the future value of collateral, risks resulting from changes in economic and industry conditions, and risks inherent in dealing with individual borrowers. In particular, longer maturities increase the risk that economic conditions will change and adversely affect collectibility.

We ~~attempt~~offer toa ~~minimize~~range ~~loan~~of ~~losses~~lending ~~through~~services, ~~various~~including ~~means~~real estate, consumer and ~~the~~commercial ~~use~~loans, ofto ~~standardized~~individuals, ~~underwriting~~small ~~criteria.~~businesses, Weand ~~have~~other ~~established~~organizations alocated ~~standardized~~in ~~loan~~or ~~policy~~conducting ~~that~~a ~~may~~substantial beportion ~~modified~~of ~~based~~their onbusiness ~~local~~in our market ~~conditions~~areas. InOur ~~particular~~total loans, onnet ~~larger~~of ~~credits~~unearned income, weat ~~generally~~December ~~rely~~31, on2018, ~~the~~were ~~cash~~approximately ~~flow~~$3.32 ofbillion, aor ~~debtor~~approximately as89.0% ~~the~~of ~~source~~total ofearning ~~repayment~~assets. ~~and~~The ~~secondarily~~interest rates charged on ~~the~~loans ~~value~~vary ofwith the ~~underlying~~degree ~~collateral.~~of ~~In addition~~risk, wematurity ~~attempt~~and toamount ~~utilize~~of ~~shorter~~the loan ~~terms~~and inare ~~order~~further subject to ~~reduce~~competitive ~~the~~pressures, ~~risk~~money ofmarket arates, ~~decline~~availability inof ~~the~~funds, ~~value~~and ofgovernment ~~such collateral~~regulations.

WeReal ~~address~~Estate ~~repayment~~Loans. ~~risks~~Loans secured by ~~adhering~~real toestate ~~internal~~are ~~credit~~the ~~policies~~primary ~~and~~component ~~procedures.~~of ~~These~~our ~~policies~~loan ~~and~~portfolio, ~~procedures~~constituting ~~include~~approximately ~~officer~~$2.73 ~~and customer lending limits~~billion, aor ~~loan~~82.1% ~~committee~~of ~~approval~~total ~~process for larger~~ loans, ~~documentation~~net ~~examination,~~of ~~and~~unearned ~~follow-up~~income, ~~procedures~~at ~~for~~December ~~loan~~31, ~~review~~2018. ~~and~~We ~~any~~originate ~~exceptions~~consumer toand ~~credit~~commercial ~~policies.~~loans ~~The~~for ~~point in~~ the ~~loan~~purpose ~~approval~~of ~~process~~acquiring atreal ~~which~~estate athat ~~loan~~are issecured ~~approved~~by ~~depends~~such onreal ~~the~~estate. ~~size~~We ofalso ~~the~~often ~~borrower’s~~take ~~credit~~real ~~relationship~~estate ~~with~~as ~~the~~an ~~bank~~additional ~~and~~source ~~the loan authority~~ of ~~the~~collateral ~~lending~~to ~~officer~~secure tocommercial ~~whom~~and ~~the~~industrial ~~loan~~loans. ~~request~~Such isloans ~~made.~~are ~~Each~~classified ofas ~~our~~real ~~lending~~estate ~~officers~~loans ~~has~~rather ~~the~~than ~~authority~~commercial toand ~~approve~~industrial loans upif tothe anreal ~~approved~~estate ~~loan~~collateral ~~authority~~is ~~amount,~~considered significant as ~~determined~~a bysecondary ~~the~~source ~~Bank’s~~of ~~board~~repayment offor ~~directors~~the loan. Loans inare ~~excess~~typically ofmade ~~the~~on ~~highest~~a ~~loan~~recourse ~~authority~~basis ~~amount~~and ofare asupported ~~particular~~by ~~lending~~financial ~~officer~~statements ~~must~~and bea ~~approved~~review byof ~~either~~the repayment ability of the ~~Bank’~~borrower(s) ~~loan~~and/or ~~committee~~guarantor(s). orOrigination ~~another~~fees ~~officer~~are ~~with~~charged ~~sufficient~~for ~~loan~~many ~~authority~~loans tosecured ~~approve~~by ~~the~~real ~~request~~estate.

~~Risk~~Our ~~Ratings. Loan~~real ~~officers~~estate ~~are~~lending ~~directly~~activities ~~responsible for monitoring the risk in their respective portfolios. On commercial loans, risk grades~~ are ~~assigned~~generally characterized by the ~~loan officer for the probability of default~~ following antypes ~~analysis~~ of ~~borrower~~loans ~~characteristics~~ and ~~external~~loan ~~economic factors~~terms. ~~However, on consumer loans, risk grades are primarily determined by a borrower’s credit score, personal debt ratio, repayment history, and liquidity.~~

~~Electronic~~● ~~Banking~~Commercial real estate term loans accrue at either variable or fixed rates. The variable rates approximate current market rates. Amortizations are typically no more than 25 years.

We● ~~offer~~The ~~electronic~~primary ~~banking~~type ~~services~~of toresidential ~~our~~mortgage ~~customers~~loan is the single-family first mortgage, ~~including~~typically ~~commercial~~structured ~~and~~with ~~retail~~fixed ~~online~~or ~~banking~~adjustable interest rates, ~~automated~~based ~~bill~~on ~~payment,~~market ~~mobile~~conditions. ~~banking,~~These ~~and~~loans ~~remote~~usually ~~deposit~~have ~~capture~~fixed rates for ~~certain~~up ~~customers~~to five years, with maturities of 15 to 30 years. We also originate home equity lines of credit secured by residential property. These loans are typically made on a variable-rate basis with maturities up to 10 years.

~~Factoring~~● Construction and land development loans are typically made on a variable-rate basis. Loan terms usually do not exceed 24 months.

Since August 29, 2014, NBC has owned a 70% interest in CBI, the holding company of Corporate Billing. Corporate Billing is a transaction-based finance company engaged in the purchase of accounts receivable at a discount from businesses throughout the United States and parts of Canada, a business traditionally known as “factoring.” In a typical factoring transaction, Corporate Billing purchases all of the rights associated with the account receivable and assumes the billing and collection responsibilities. Corporate Billing may purchase a receivable with or without recourse. If an account is purchased without recourse, Corporate Billing bears the loss if the account debtor does not pay the invoice amount. If the receivable is purchased with recourse, however, Corporate Billing has the right to collect the unpaid invoice amount from the seller of the receivable if the account debtor does not pay. Corporate Billing engages in both recourse and non-recourse purchases, with its recourse operations focused primarily in the transportation industry, and its non-recourse operations focused primarily in the automotive dealer and distributor industries. As an operating subsidiary of NBC, Corporate Billing is regulated by the Office of the Comptroller of the Currency (the “OCC”). 4

4Table of Contents

~~Table~~We originate residential loans for sale into the secondary market. These loans are made in accordance with underwriting standards set by the purchaser of ~~Contents~~the loan, normally as to loan-to-value ratio, interest rate, borrower qualification, and documentation. These loans are originated on both a “best efforts” and a “mandatory delivery” basis. We typically collect from the borrower or purchaser a combination of the origination fee, discount points, and/or a service release fee.

~~Market~~Commercial ~~Areas~~and Industrial Loans. We make loans for commercial purposes in various lines of business. These loans are typically made on terms up to five years at fixed or variable rates. The loans are secured by various types of collateral, including accounts receivable, inventory, or, in the case of equipment loans, the financed equipment. We attempt to reduce our credit risk on commercial loans by underwriting the loan based on the borrower’s cash flow and ability to service the debt from earnings, and by limiting the loan-to-value ratio. Historically, we have typically loaned up to 80% on loans secured by accounts receivable, up to 50% on loans secured by inventory (which are usually also secured by accounts receivable), and up to 100% on loans secured by equipment. We also make some unsecured commercial loans. Commercial and industrial loans constituted $408.2 million, or 12.3% of our loan portfolio, at December 31, 2018. Interest rates are negotiable and are based on the borrower’s financial condition, credit history, management stability and collateral.

WeConsumer ~~conduct~~Loans. Consumer ~~our~~lending ~~banking~~includes ~~operations~~installment ~~through~~lending ~~the~~to ~~Bank’s~~individuals ~~seven full-service banking offices~~ in ~~Alabama~~our ~~(in~~market ~~Birmingham,~~areas ~~Huntsville, Auburn-Opelika,~~ and ~~Baldwin~~generally ~~County),~~consists ~~twenty-two~~of ~~full-service~~loans ~~banking~~to ~~offices~~purchase inautomobiles ~~central~~ and ~~northeast~~other ~~Florida~~consumer ~~(including~~durable ingoods. ~~the~~Consumer ~~Orlando,~~loans ~~Tampa~~constituted ~~and~~$31.2 ~~Jacksonville~~million, ~~Florida~~or ~~metro~~0.9% ~~areas)~~of ~~and~~our ~~two full-service banking offices and a~~ loan ~~production~~portfolio, ~~office~~at inDecember ~~the Atlanta~~31, ~~Georgia metro area~~2018. InConsumer ~~addition~~loans toare ~~the~~underwritten ~~“National~~based ~~Bank~~on ~~of Commerce” name, we also use~~ the ~~trade~~borrower’s ~~names “United Legacy Bank~~income,” ~~“Reunion~~current ~~Bank~~debt ~~of Florida~~level,” ~~“Patriot~~past ~~Bank”~~credit history and ~~“FirstAtlantic~~collateral. ~~Bank”~~Consumer ~~for~~rates ~~certain~~are ofboth ~~our~~variable ~~Florida offices~~ and ~~“Private Bank of Buckhead~~fixed,” ~~“Private~~with ~~Bank~~terms ~~of Decatur” and “Private Plus Mortgage” for our operations in Georgia~~negotiable. WeTerms ~~conduct~~generally ~~our~~range ~~factoring~~from ~~business~~one ~~through~~to ~~Corporate~~five ~~Billing’s office in Decatur~~years, ~~Alabama,~~depending ~~with~~on ~~clients located throughout~~ the ~~United~~nature ~~States~~ and ~~parts~~condition of ~~Canada~~the collateral. ~~Technology~~Periodic ~~allows~~amortization, usgenerally ~~to service a national client base in our factoring business~~monthly, ~~with~~is ~~sales~~typically ~~representatives traveling to meet existing and potential clients in their places of business~~required.

~~Competition~~Loan Approval. Certain credit risks are inherent in making loans. These include repayment risks, risks resulting from uncertainties in the future value of collateral, risks resulting from changes in economic and industry conditions, and risks inherent in dealing with individual borrowers. In particular, longer maturities increase the risk that economic conditions will change and adversely affect collectability.

~~The~~We ~~financial~~attempt ~~services~~to ~~industry~~minimize isloan ~~highly~~losses ~~competitive.~~through Wevarious ~~compete~~means ~~for loans, deposits~~ and ~~financial~~the ~~services~~use ~~in all~~ of ~~our~~standardized ~~principal~~underwriting ~~markets~~criteria. We ~~compete~~have ~~directly~~established ~~with~~a ~~other~~standardized ~~bank~~loan ~~and~~policy ~~non-bank~~that ~~institutions~~may ~~located~~be ~~within~~modified ~~our markets, internet-~~based ~~banks,~~on ~~out-of-market~~local ~~banks, and bank holding companies that advertise in or otherwise serve our markets, along with money~~ market ~~and~~conditions. ~~mutual~~In ~~funds~~particular, ~~brokerage~~on ~~houses,~~larger ~~mortgage companies~~credits, ~~and~~we ~~insurance~~generally ~~companies~~rely oron ~~other~~the ~~commercial~~cash ~~entities~~flow ~~that~~of ~~offer~~a ~~financial~~debtor ~~products~~as ~~and services. Competition involves efforts to retain current customers, obtain new loans and deposits, increase~~ the ~~scope~~source ~~and type~~ of ~~services~~repayment ~~that we provide,~~ and ~~offer~~secondarily ~~competitive interest rates paid~~ on ~~deposits~~the ~~and~~value ~~charged on loans. Many~~ of ~~our~~the ~~competitors~~underlying ~~enjoy~~collateral. ~~competitive~~In ~~advantages~~addition, ~~including~~we ~~greater~~attempt ~~financial~~to ~~resources,~~utilize ashorter ~~wider~~loan ~~geographic~~terms ~~presence,~~in ~~more~~order ~~accessible~~to ~~branch~~reduce ~~office locations,~~ the ~~ability~~risk ~~to offer additional services, more favorable pricing alternatives, and lower origination and operating costs. Some~~ of ~~our competitors have been in business for~~ a ~~long~~decline ~~time and have an established customer base and name recognition. We believe that our competitive pricing, personalized service, and community involvement enable us to effectively compete~~ in the ~~communities~~value inof ~~which~~such ~~we operate~~collateral.

~~Employees~~We address repayment risks by adhering to internal credit policies and procedures. These policies and procedures include officer and customer lending limits, a loan committee approval process for larger loans, documentation examination, and follow-up procedures for loan review and any exceptions to credit policies. The point in the loan approval process at which a loan is approved depends on the size of the borrower’s credit relationship with the bank and the loan authority of the lending officer to whom the loan request is made. Each of our lending officers has the authority to approve loans up to an approved loan authority amount, as determined by the Bank’s board of directors. Loans in excess of the highest loan authority amount of a particular lending officer must be approved by either the Bank’s loan committee or another officer with sufficient loan authority to approve the request.

AsRisk ofRatings. Loan ~~December~~officers ~~31,~~are ~~2017~~directly responsible for monitoring the risk in their respective portfolios. On commercial loans, werisk ~~had~~grades ~~approximately~~are ~~433 full-time~~assigned by the loan officer for the probability of default following an analysis of borrower characteristics and ~~full-time~~external ~~equivalent~~economic ~~employees~~factors. ~~None~~However, ofon ~~these~~consumer ~~employees~~loans, isrisk ~~party~~grades toare primarily determined by a ~~collective~~borrower’s ~~bargaining~~credit ~~agreement~~score, personal debt ratio, repayment history, and liquidity.

~~SUPERVISION~~Electronic ~~AND~~Banking ~~REGULATION~~

~~General~~We offer electronic banking services to our customers, including commercial and retail online banking, automated bill payment, mobile banking, and remote deposit capture for certain customers.

We are extensively regulated under both federal and state law. These laws restrict permissible activities and investments and require compliance with various consumer protection provisions applicable to lending, deposit, brokerage, and fiduciary activities. They also impose capital adequacy requirements and conditions on a bank holding company’s ability to repurchase stock or to receive dividends from its subsidiary banks. NCC and its non-bank subsidiary, National Commerce Risk Management, Inc., are subject to comprehensive examination and supervision by the Board of Governors of the Federal Reserve System (the “Federal Reserve”), and NBC and its operating subsidiary, CBI, are subject to comprehensive examination and supervision by the OCC. These regulatory agencies generally have broad discretion to impose restrictions and limitations on our operations. This supervisory framework could materially impact the conduct and profitability of our activities.5

ToTable ~~the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by reference to the text~~ of such provisions. Proposals to change the laws and regulations governing the banking industry are frequently raised at both the state and federal levels. The likelihood and timing of any changes in these laws and regulations, and the impact that such changes may have on us, are difficult to ascertain. A change in applicable laws or regulations, or in the manner in which such laws or regulations are interpreted by regulatory agencies or courts, may have a material effect on our business, operations, and earnings. Contents

5Factoring

~~Table~~Since August 29, 2014, NBC has owned a 70% interest in CBI, the holding company of ~~Contents~~Corporate Billing. Corporate Billing is a transaction-based finance company engaged in the purchase of accounts receivable at a discount from businesses throughout the United States and parts of Canada, a business traditionally known as “factoring.” In a typical factoring transaction, Corporate Billing purchases all of the rights associated with the account receivable and assumes the billing and collection responsibilities. Corporate Billing may purchase a receivable with or without recourse. If an account is purchased without recourse, Corporate Billing bears the loss if the account debtor does not pay the invoice amount. If the receivable is purchased with recourse, however, Corporate Billing has the right to collect the unpaid invoice amount from the seller of the receivable if the account debtor does not pay. Corporate Billing engages in both recourse and non-recourse purchases, with its recourse operations focused primarily in the transportation industry, and its non-recourse operations focused primarily in the automotive dealer and distributor industries. As an operating subsidiary of NBC, Corporate Billing is regulated by the Office of the Comptroller of the Currency (the “OCC”).

~~Regulation~~Market ~~of NCC~~ Areas

~~NCC~~We isconduct aour ~~registered~~banking ~~bank~~operations ~~holding~~through ~~company~~the ~~that~~Bank’s ~~has~~seven ~~elected~~full-service tobanking ~~become~~offices ain ~~financial~~Alabama ~~holding~~(in ~~company~~Birmingham, ~~under~~Huntsville, ~~the~~Auburn-Opelika, ~~BHCA~~ and isBaldwin ~~subject~~County), totwenty-four ~~the~~full-service ~~examination~~banking ~~authority~~offices ~~and~~in ~~the~~central ~~regulatory~~ and ~~periodic~~northeast ~~reporting~~Florida ~~requirements~~(including ofin the ~~Federal~~Bradenton, ~~Reserve.~~Orlando, ~~Under~~Tampa ~~the~~and ~~BHCA~~Jacksonville, ~~bank~~Florida ~~holding~~metro ~~companies~~areas) and ~~their~~five ~~non~~full-~~bank~~service ~~subsidiaries generally may engage in activities that the Federal Reserve determines to be so closely related to~~ banking asoffices toand be a ~~proper~~loan ~~incident~~production ~~thereto,~~office ~~and may,~~ in ~~some~~the ~~cases and subject to certain restrictions~~Atlanta, ~~invest~~Georgia inmetro ~~companies~~area. ~~not~~In ~~engaged~~addition ~~in activities closely related~~ to ~~banking.~~the As“National aBank ~~financial~~of ~~holding~~Commerce” ~~company~~name, we ~~are~~also ~~permitted~~use ~~to (i) engage in other activities that~~ the ~~Federal~~trade ~~Reserve~~names ~~determines~~“United toLegacy ~~be financial in nature~~Bank,” ~~incidental~~“Reunion toBank anof ~~activity~~Florida,” ~~that~~“Patriot ~~is financial in nature~~Bank,” or“Premier ~~complementary~~Community toBank aof ~~financial~~Florida” ~~activity~~ and ~~that~~“FirstAtlantic doBank” ~~not~~for ~~pose~~certain aof ~~substantial~~our ~~risk~~Florida tooffices ~~the safety~~ and ~~soundness~~“Private Bank of ~~depository~~Buckhead,” ~~institutions~~“Private orBank ~~the~~of ~~financial system generally~~Decatur,” ~~and~~“Private ~~(ii)~~Plus ~~acquire~~Mortgage” anand ~~equity~~“First ~~stake~~Landmark inBank” ~~companies~~for ~~engaged~~our operations in ~~such activities~~Georgia. We ~~may~~conduct ~~not,~~our ~~however,~~factoring ~~directly~~business orthrough ~~indirectly~~Corporate ~~acquire~~Billing’s ~~the~~office ~~ownership~~in orDecatur, ~~control of more than 5% of any class of voting shares~~Alabama, orwith ~~substantially~~clients ~~all~~located ofthroughout the ~~assets,~~United ofStates aand ~~bank~~parts ~~holding company or a bank without the prior approval~~ of ~~the Federal Reserve~~Canada. InTechnology ~~order~~allows us to ~~maintain~~service ~~our status as~~ a ~~financial~~national ~~holding~~client ~~company,~~base ~~NBC~~in ~~must~~our ~~remain~~factoring ~~“well~~business, ~~capitalized”~~with ~~and~~sales ~~“well~~representatives ~~managed”~~traveling ~~under~~to ~~applicable~~meet ~~regulations~~existing and ~~maintain~~potential atclients ~~least~~in atheir ~~“satisfactory”~~places ~~rating under the Community Reinvestment Act. Failure to meet one or more~~ of the requirements would mean, depending on the requirements not met, that we could not undertake new activities, make acquisitions other than those permitted generally for bank holding companies, or continue certain activitiesbusiness.

~~Subject~~Competition to various exceptions, the BHCA and the Change in Bank Control Act, together with related regulations, require approval from the Federal Reserve before any person or company may acquire “control” of a bank holding company. Control is conclusively presumed to exist if an individual or company acquires 25% or more of any class of voting securities of the bank holding company. A rebuttable presumption arises if a person or company acquires 10% or more, but less than 25%, of any class of voting securities and either: (i) the bank holding company has a registered class of securities under Section 12 of the Securities Act or (ii) no other person owns a greater percentage of that class of voting securities immediately after the transaction.

~~There~~The ~~are~~financial aservices ~~number~~industry ofis ~~restrictions~~highly ~~imposed~~competitive. onWe ~~NCC~~compete byfor ~~law~~loans, deposits and ~~regulatory~~financial ~~policy~~services ~~that~~in ~~are~~all ~~designed~~of toour ~~minimize~~principal ~~potential~~markets. ~~loss~~We tocompete ~~depositors~~directly with other bank and tonon-bank ~~the~~institutions ~~Deposit~~located ~~Insurance~~within ~~Fund~~our ~~maintained~~markets, byinternet-based ~~the~~banks, ~~Federal~~out-of-market ~~Deposit~~banks, ~~Insurance~~and ~~Corporation~~bank ~~(the~~holding ~~“FDIC”)~~companies that advertise in ~~the~~or ~~event~~otherwise ~~that~~serve aour ~~subsidiary~~markets, ~~depository~~along ~~institution~~with ~~should~~money ~~become~~market ~~insolvent.~~and ~~For~~mutual ~~example~~funds, ~~federal~~brokerage ~~law~~houses, ~~requires~~mortgage acompanies, ~~bank~~and ~~holding~~insurance ~~company~~companies toor ~~serve~~other ascommercial aentities ~~source~~that ofoffer financial ~~strength~~products and services. Competition involves efforts to ~~its~~retain ~~subsidiary~~current ~~depository~~customers, ~~institutions~~obtain new loans and todeposits, ~~commit~~increase ~~resources~~the toscope ~~support~~and ~~such~~type ~~institutions~~of inservices ~~circumstances~~that inwe ~~which~~provide, itand ~~might~~offer ~~not~~competitive ~~otherwise~~interest dorates sopaid on deposits and charged on loans. ~~The~~Many ~~Federal~~of ~~Reserve~~our ~~also~~competitors ~~has~~enjoy ~~the~~competitive ~~authority~~advantages, toincluding ~~require~~greater financial resources, a ~~bank~~wider ~~holding~~geographic ~~company~~presence, tomore ~~terminate~~accessible ~~any~~branch ~~activity~~office orlocations, the ability to ~~relinquish~~offer ~~control~~additional ofservices, amore ~~non-bank~~favorable ~~subsidiary~~pricing ~~upon~~alternatives, ~~the~~and ~~Federal~~lower ~~Reserve’s~~origination ~~determination~~and ~~that~~operating ~~such~~costs. ~~activity~~Some orof ~~control~~our ~~constitutes~~competitors have been in business for a ~~serious~~long ~~risk~~time toand ~~the~~have ~~financial~~an ~~soundness~~established customer base and ~~stability~~name ofrecognition. ~~any~~We ~~bank~~believe ~~subsidiary~~that ofour competitive pricing, personalized service, and community involvement enable us to effectively compete in the ~~bank~~communities ~~holding~~in ~~company~~which we operate.

~~Any~~ Employees capital loan by a bank holding company to a subsidiary depository institution is subordinate in right of payment to deposits and certain other indebtedness of the institution. In addition, in the event of the holding company’s bankruptcy, any commitment made by the bank holding company to a federal banking regulatory agency to maintain the capital of its subsidiary depository institution(s) will be assumed by the bankruptcy trustee and entitled to a priority of payment.

~~The~~As ~~Federal~~of ~~Deposit~~December ~~Insurance Act provides that~~31, ~~in the event of the “liquidation or other resolution” of an insured depository institution~~2018, ~~the~~we ~~claims~~had ofapproximately ~~depositors~~632 offull-time ~~the institution (including the claims of the FDIC as a subrogee of insured depositors)~~ and ~~certain~~full-time ~~claims~~equivalent ~~for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the institution~~employees. IfNone ~~an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead~~ of ~~unsecured,~~these ~~non-deposit~~employees ~~creditors,~~is ~~including~~party ~~the institution’s holding company, with respect~~ to ~~any~~a ~~extensions~~collective ofbargaining ~~credit that they have made to such insured depository institution~~agreement.

Table of Contents

~~Regulation~~SUPERVISION ofAND ~~NBC~~REGULATION

~~NBC’s~~General operations and investments are subject to the supervision, examination and reporting requirements of the National Bank Act, the regulations of the OCC and other federal banking statutes and regulations, including with respect to the level of reserves that NBC must maintain against deposits, restrictions on the types, amount, and terms and conditions of loans that it may originate and limits on the types of other activities in which it may engage and the investments that it may make. The OCC also has the power to prevent unsafe or unsound banking practices or other violations of law. Because NBC’s deposits are insured by the FDIC to the maximum extent provided by law, it is also subject to certain FDIC regulations, and the FDIC has backup examination authority and some enforcement powers over NBC. NBC is also subject to numerous state and federal statutes and regulations that affect its business, activities and operations.

~~Transactions~~We are extensively regulated under both federal and state law. These laws restrict permissible activities and investments and require compliance with ~~Affiliates~~various consumer protection provisions applicable to lending, deposit, brokerage, and fiduciary activities. They also impose capital adequacy requirements and conditions on a bank holding company’s ability to repurchase stock or to receive dividends from its subsidiary banks. NCC and its non-bank subsidiary, National Commerce Risk Management, Inc., are subject to comprehensive examination and supervision by the Board of Governors of the Federal Reserve System (the “Federal Reserve”), and NBC and its operating subsidiary, CBI, are subject to comprehensive examination and supervision by the OCC. These regulatory agencies generally have broad discretion to impose restrictions and limitations on our operations. This supervisory framework could materially impact the conduct and profitability of our activities.

WeTo ~~are subject to federal laws, such as Sections 23A and 23B of~~ the ~~Federal~~extent ~~Reserve Act,~~ that ~~limit~~ the ~~size~~following ~~and~~information ~~number~~describes ofstatutory ~~the~~and ~~transactions~~regulatory ~~that depository institutions may engage in with their affiliates. Under these~~ provisions, ~~transactions~~it ~~(such~~is asqualified ~~loans~~in orits ~~investments)~~entirety by areference ~~bank~~to ~~with~~the ~~non-bank~~text ~~affiliates~~of ~~are~~such ~~generally~~provisions. ~~limited~~Proposals to ~~10%~~change of the ~~bank’s~~laws ~~capital~~ and ~~surplus~~regulations ~~for~~governing ~~all~~the ~~covered~~banking ~~transactions~~industry ~~with~~are ~~any~~frequently ~~one~~raised ~~affiliate~~at ~~and~~both ~~20%~~the ofstate ~~capital~~ and ~~surplus~~federal ~~for~~levels. ~~all~~The ~~covered~~likelihood ~~transactions~~and ~~with~~timing ~~all~~of ~~affiliates.~~any ~~Any~~changes ~~extensions~~in ofthese ~~credit~~laws toand ~~affiliates~~regulations, ~~with~~and ~~limited~~the ~~exceptions,~~impact ~~must~~that besuch ~~secured~~changes bymay ~~eligible~~have ~~collateral~~on inus, ~~specified amounts. Banks~~ are ~~also~~difficult ~~prohibited~~to ~~from purchasing any “low quality” assets from an affiliate~~ascertain. ~~The~~A ~~Dodd-Frank~~change ~~Wall~~in ~~Street~~applicable ~~Reform~~laws ~~and~~or ~~Consumer~~regulations, ~~Protection~~or ~~Act~~in (the ~~“Dodd-Frank~~manner ~~Act”)~~in ~~imposed~~which ~~additional~~such ~~requirements~~laws onor ~~transactions~~regulations ~~with~~are ~~affiliates,~~interpreted by, ~~among~~regulatory ~~other~~agencies ~~things~~or courts, ~~expanding~~may ~~the~~have ~~definition~~a ofmaterial ~~“covered~~effect ~~transactions”~~on ~~and~~our ~~increasing~~business, ~~the~~operations, ~~amount~~and ~~of time for which collateral requirements regarding covered transactions must be maintained~~earnings.

We are also subject to restrictions on extensions of credit to our executive officers, directors, principal stockholders and their related interests under Sections 22(g) and 22(h) of the Federal Reserve Act, as implemented by Regulation O of ~~the~~NCC Federal Reserve. These extensions of credit must be made on substantially the same terms, including with respect to interest rates and collateral, as those prevailing at the time for comparable transactions with third parties, and they must not involve more than the normal risk of repayment or present other unfavorable features. Furthermore, we are prohibited from engaging in asset purchase or sale transactions with our officers, directors or principal stockholders unless the transaction is on market terms and, if the transaction represents more than 10% of the capital and surplus of the Bank, a majority of the Bank’s disinterested directors has approved the transaction.

~~Monetary~~NCC ~~Policy~~is a registered bank holding company that has elected to become a financial holding company under the BHCA and is subject to the examination authority and the regulatory and periodic reporting requirements of the Federal Reserve. Under the BHCA, bank holding companies and their non-bank subsidiaries generally may engage in activities that the Federal Reserve determines to be so closely related to banking as to be a proper incident thereto, and may, in some cases and subject to certain restrictions, invest in companies not engaged in activities closely related to banking. As a financial holding company, we are permitted to (i) engage in other activities that the Federal Reserve determines to be financial in nature, incidental to an activity that is financial in nature, or complementary to a financial activity and that do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally, and (ii) acquire an equity stake in companies engaged in such activities. We may not, however, directly or indirectly acquire the ownership or control of more than 5% of any class of voting shares, or substantially all of the assets, of a bank holding company or a bank without the prior approval of the Federal Reserve. In order to maintain our status as a financial holding company, we must remain “well capitalized” and “well managed” under applicable regulations. Failure to meet one or more of the requirements would mean, depending on the requirements not met, that we could not undertake new activities, make acquisitions other than those permitted generally for bank holding companies, or continue certain activities.

~~Our~~Subject ~~earnings~~to ~~are~~various exceptions, the BHCA and ~~will~~the beChange ~~affected~~in byBank ~~domestic~~Control ~~economic~~Act, ~~conditions~~together ~~and~~with related regulations, require approval from the ~~monetary~~Federal ~~and~~Reserve ~~fiscal~~before ~~policies~~any ofperson ~~the~~or ~~United~~company ~~States~~may ~~government~~acquire ~~and~~“control” ~~its~~of ~~agencies~~a bank holding company. ~~The~~Control ~~monetary~~is ~~policies~~conclusively ofpresumed ~~the~~to ~~Federal~~exist ~~Reserve~~if ~~have~~an aindividual ~~significant~~or ~~effect~~company onacquires ~~the~~25% ~~operating~~or ~~results,~~more ~~lending~~of ~~practices,~~any ~~investments~~class ~~and~~of ~~deposits~~voting securities of ~~commercial~~the ~~banks~~bank ~~through~~holding ~~its~~company. ~~open~~A ~~market~~rebuttable ~~operations~~presumption inarises ~~United~~if ~~States~~a ~~government~~person ~~securities~~or ~~and~~company ~~through~~acquires ~~its~~10% ~~regulation~~or ofmore, ~~among~~but ~~other~~less ~~things~~than 25%, ~~the~~of ~~discount~~any ~~rate~~class onof ~~bank~~voting ~~borrowings~~securities and either: (i) the ~~reserve~~bank ~~requirements~~holding ~~against~~company ~~bank~~has ~~deposits.~~a Itregistered isclass ~~not~~of ~~possible~~securities tounder ~~predict~~Section 12 of the ~~nature~~Securities ~~and~~Act ~~impact~~or (ii) no other person owns a greater percentage of ~~future~~that ~~changes~~class inof ~~monetary~~voting ~~and~~securities ~~fiscal~~immediately ~~policies~~after the transaction.

There are a number of restrictions imposed on NCC by law and regulatory policy that are designed to minimize potential loss to depositors and to the Deposit Insurance Fund maintained by the Federal Deposit Insurance Corporation (the “FDIC”) in the event that a subsidiary depository institution should become insolvent. For example, federal law requires a bank holding company to serve as a source of financial strength to its subsidiary depository institutions and to commit resources to support such institutions in circumstances in which it might not otherwise do so. The Federal Reserve also has the authority to require a bank holding company to terminate any activity or to relinquish control of a non-bank subsidiary upon the Federal Reserve’s determination that such activity or control constitutes a serious risk to the financial soundness and stability of any bank subsidiary of the bank holding company.

~~The~~Any ~~Bank’s~~capital ~~deposits~~loan ~~are insured up to applicable limits~~ by ~~the~~a ~~Deposit~~bank ~~Insurance~~holding ~~Fund~~company ~~maintained~~to ~~by the FDIC. As~~ a ~~result,~~subsidiary ~~the~~depository ~~Bank~~institution is ~~required~~subordinate toin ~~pay~~right ~~periodic~~of ~~assessments~~payment to ~~maintain~~deposits ~~insurance~~and ~~coverage~~certain ~~for~~other ~~its~~indebtedness ~~deposits.~~of ~~Under~~ the ~~FDIC’s~~institution. ~~assessment~~In ~~system~~addition, ~~for banks with less than $10 billion~~ in ~~assets,~~ the ~~assessment~~event ~~rate is determined based on a number~~ of ~~factors, including~~ the ~~Bank~~holding company’s ~~CAMELS (supervisory) rating~~bankruptcy, ~~leverage~~any ~~ratio,~~commitment ~~net~~made ~~income,~~by ~~non-performing~~the ~~loan~~bank ~~ratios,~~holding ~~OREO~~company ~~ratios,~~to ~~core deposit ratios, one-year organic asset growth and~~ a ~~loan~~federal ~~mix~~banking ~~index.~~regulatory ~~The~~agency ~~FDIC has authority~~ to ~~increase~~maintain ~~insurance~~the ~~assessments.~~capital ~~A significant increase in insurance assessments would likely have an adverse effect on our operating expense, results~~ of ~~operations,~~its ~~and~~subsidiary ~~cash~~depository ~~flows.~~institution(s) ~~Management cannot predict what insurance assessment rates~~ will be inassumed ~~the future. Furthermore, deposit insurance may be terminated~~ by the ~~FDIC~~bankruptcy ~~upon~~trustee aand ~~finding~~entitled ~~that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition~~ to ~~continue~~a ~~operations,~~priority orof ~~has violated any applicable law, regulation, rule, order or condition imposed by the FDIC~~payment.

Table of Contents

~~Dividend~~The ~~Restrictions~~Federal Deposit Insurance Act provides that, in the event of the “liquidation or other resolution” of an insured depository institution, the claims of depositors of the institution (including the claims of the FDIC as a subrogee of insured depositors) and certain claims for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the institution. If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the institution’s holding company, with respect to any extensions of credit they have made to such insured depository institution.

~~NCC~~Regulation ~~is a legal entity separate and distinct from NBC. NCC’s ability to pay dividends and make other distributions depends in part on the receipt~~ of ~~dividends from~~ NBC and is limited by federal and state law. The specific limits depend on a number of factors, including NBC’s recent earnings, recent dividends, level of capital and regulatory status. The regulators are authorized, and under certain circumstances are required, to determine that the payment of dividends or other distributions by a bank would be an unsafe or unsound practice and to prohibit that payment. For example, federal law generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its parent holding company if the depository institution would thereafter be undercapitalized.

ANBC’s ~~national~~operations ~~bank~~and ~~generally~~investments ~~may~~are ~~not~~subject ~~withdraw~~to the supervision, ~~either~~examination inand ~~the~~reporting ~~form~~requirements of athe ~~dividend~~National orBank ~~otherwise~~Act, ~~any~~the ~~portion~~regulations of ~~its~~the ~~permanent~~OCC ~~capital~~and other federal banking statutes and ~~may~~regulations, ~~not~~including ~~declare~~with arespect ~~dividend~~to inthe ~~excess~~level of ~~its~~reserves ~~retained~~that ~~net~~NBC ~~profits.~~must ~~Further~~maintain against deposits, ~~dividends~~restrictions ~~that~~on ~~may~~the betypes, ~~paid~~amount, byand aterms ~~national~~and ~~bank~~conditions ~~without~~of ~~the~~loans ~~express~~that ~~approval~~it ofmay ~~the~~originate ~~OCC~~and ~~are~~limits ~~limited~~on tothe antypes ~~amount~~of ~~equal~~other toactivities ~~the~~in ~~bank’s~~which ~~retained~~it ~~net~~may ~~profits~~engage ~~for~~and the ~~preceding~~investments ~~two~~that ~~calendar~~it ~~years~~may ~~plus~~make. ~~retained~~The ~~net~~OCC ~~profits~~also uphas the power to ~~the~~prevent ~~date~~unsafe ofor ~~any~~unsound ~~dividend~~banking ~~declaration~~practices inor ~~the~~other ~~current~~violations ~~calendar~~of ~~year~~law. ~~Retained~~Because ~~net~~NBC’s ~~profits,~~deposits asare ~~defined~~insured by the ~~OCC,~~FDIC ~~consist~~to ofthe ~~net~~maximum ~~income~~extent provided by law, ~~less~~it ~~dividends~~is ~~declared~~also ~~during~~subject to certain FDIC regulations, and the ~~period.~~FDIC ~~Dividend~~has ~~payments~~backup byexamination ~~NBC~~authority inand ~~the~~some ~~future~~enforcement ~~will~~powers ~~require~~over ~~the~~NBC. ~~generation~~NBC ofis ~~net~~also ~~income~~subject ~~and~~to ~~could~~numerous ~~require~~state ~~regulatory~~and ~~approval~~federal ifstatutes ~~any~~and ~~proposed~~regulations ~~dividends~~that ~~are~~affect inits ~~excess~~business, ofactivities ~~prescribed~~and ~~guidelines~~operations.

~~The~~Transactions ability of a bank holding company to pay dividends and make distributions can also be limited by other laws or regulations. The Federal Reserve, which has authority to prohibit a bank holding company from paying dividends or making other distributions, has issued a Supervisory Letter stating that a bank holding company should not pay cash dividends unless, among other things, (i) its net income available to common stockholders for the past four quarters, net of dividends paid during that period, is sufficient to fully fund the dividends, (ii) the prospective rate of earnings retention appears to be consistent with ~~the~~Affiliates holding company’s capital needs, asset quality and overall financial condition and (iii) the dividend will not cause the company to fail to meet, or be in danger of failing to meet, its minimum regulatory capital adequacy ratios. Accordingly, a bank holding company should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken its financial health, such as by borrowing. Federal regulations relating to capital adequacy create additional restrictions on the ability of banking institutions to pay dividends.

~~Capital~~We ~~Adequacy~~are subject to federal laws, such as Sections 23A and 23B of the Federal Reserve Act, that limit the size and number of the transactions that depository institutions may engage in with their affiliates. Under these provisions, transactions (such as loans or investments) by a bank with non-bank affiliates are generally limited to 10% of the bank’s capital and surplus for all covered transactions with any one affiliate and 20% of capital and surplus for all covered transactions with all affiliates. Any extensions of credit to affiliates, with limited exceptions, must be secured by eligible collateral in specified amounts. Banks are also prohibited from purchasing any “low quality” assets from an affiliate. The Dodd–Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) imposed additional requirements on transactions with affiliates, by, among other things, expanding the definition of “covered transactions” and increasing the amount of time for which collateral requirements regarding covered transactions must be maintained.

InWe ~~July~~are ~~2013,~~also ~~the~~subject ~~federal~~to ~~banking~~restrictions ~~regulatory~~on ~~agencies~~extensions ~~adopted~~of ~~regulations~~credit to ~~implement~~our ~~the~~executive ~~framework~~officers, ~~developed~~directors, byprincipal ~~the~~stockholders ~~Basel~~and ~~Committee~~their onrelated ~~Banking~~interests ~~Supervision~~under ~~for~~Sections ~~strengthening~~22(g) ~~international capital~~ and ~~liquidity,~~22(h) ~~known~~of ~~as “Basel III” (~~the ~~“Basel~~Federal ~~III~~Reserve ~~Rule”).~~Act, ~~The~~as ~~Basel~~implemented ~~III~~by ~~Rule~~Regulation ~~provides~~O ~~risk-based~~of ~~capital~~the ~~guidelines~~Federal ~~designed~~Reserve. toThese ~~make~~extensions ~~regulatory~~of ~~capital~~credit ~~requirements~~must ~~more~~be ~~sensitive~~made toon ~~differences~~substantially inthe ~~risk~~same ~~profiles among banks~~terms, toincluding ~~account~~with ~~for~~respect ~~off-balance~~to ~~sheet~~interest ~~exposures,~~rates and ~~to minimize disincentives for holding liquid assets. Under these guidelines~~collateral, ~~assets~~as ~~and~~those ~~off-balance~~prevailing ~~sheet~~at ~~items~~the ~~are~~time ~~assigned~~for tocomparable ~~broad~~transactions ~~risk categories, each~~ with ~~appropriate~~third ~~risk-weights.~~parties, ~~The~~and ~~net~~they ~~amount~~must ofnot ~~assets~~involve ~~remaining~~more ~~after~~than ~~applying~~ the normal risk~~-weights~~ toof ~~the~~repayment ~~gross~~or ~~asset~~present ~~values~~other ~~comprises~~unfavorable ~~the institution’s total risk-weighted assets~~features. AnFurthermore, ~~institution’s~~we ~~total risk-weighted assets~~ are ~~used~~prohibited tofrom ~~calculate~~engaging ~~its~~in ~~regulatory~~asset ~~capital~~purchase ~~ratios.~~or ~~The~~sale ~~Basel~~transactions ~~III~~with ~~Rule~~our ~~establishes~~officers, ~~minimum~~directors ~~capital~~or ~~and~~principal ~~leverage~~stockholders ~~ratios~~unless ~~that~~the ~~supervised~~transaction ~~financial~~is ~~institutions~~on ~~are~~market ~~required~~terms ~~to maintain~~and, ~~while~~if ~~also~~the ~~providing~~transaction ~~countercyclical~~represents ~~capital~~more ~~requirements~~than so10% ~~that~~of the ~~required amount of~~ capital ~~increases in times of economic expansion~~ and ~~decreases~~surplus ~~in times~~ of ~~economic contraction, consistent with safety and soundness. Under~~ the ~~Basel III Rule~~Bank, ~~banks must maintain~~ a ~~specified~~majority ~~capital conservation buffer above each~~ of the ~~required~~Bank’s ~~minimum~~disinterested ~~capital~~directors ~~levels~~has inapproved ~~order~~the ~~to avoid limitations on paying dividends, engaging in share repurchases, and paying certain discretionary bonuses~~transaction.

AsMonetary anPolicy additional means of identifying problems in the financial management of depository institutions, the federal banking regulatory agencies have established certain non-capital safety and soundness standards for institutions for which they are the primary federal regulator. The standards relate generally to operations and management, asset quality, interest rate exposure and executive compensation. The agencies are authorized to take action against institutions that fail to meet such standards.

8Our earnings are and will be affected by domestic economic conditions and the monetary and fiscal policies of the United States government and its agencies. The monetary policies of the Federal Reserve have a significant effect on the operating results, lending practices, investments and deposits of commercial banks through its open market operations in United States government securities and through its regulation of, among other things, the discount rate on bank borrowings and the reserve requirements against bank deposits. It is not possible to predict the nature and impact of future changes in monetary and fiscal policies.

~~Table of Contents~~8

~~Prompt~~Table ~~Corrective~~of ~~Action~~ Contents

InDeposit ~~addition~~Insurance to the required minimum capital levels described above, federal law establishes a system of “prompt corrective actions” that federal banking agencies are required to take, and certain actions that they have discretion to take, based on the capital category into which a federally regulated depository institution falls. Regulations set forth detailed procedures and criteria for implementing prompt corrective action in the case of any institution that is not adequately capitalized. Each institution is assigned to one of five categories based on its capital ratios: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Institutions categorized as “undercapitalized” or worse become subject to increasing levels of regulatory oversight and restrictions, which may include, among other things, limitations on growth and activities and payment of dividends.

~~Community~~The ~~Reinvestment~~Bank’s ~~Act~~deposits are insured up to applicable limits by the Deposit Insurance Fund maintained by the FDIC. As a result, the Bank is required to pay periodic assessments to maintain insurance coverage for its deposits. Under the FDIC’s assessment system for banks with less than $10 billion in assets, the assessment rate is determined based on a number of factors, including the Bank’s CAMELS (supervisory) rating, leverage ratio, net income, non-performing loan ratios, OREO ratios, core deposit ratios, one-year organic asset growth and a loan mix index. The FDIC has authority to increase insurance assessments. A significant increase in insurance assessments would likely have an adverse effect on our operating expense, results of operations, and cash flows. Management cannot predict what insurance assessment rates will be in the future. Furthermore, deposit insurance may be terminated by the FDIC upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

~~The~~Dividend ~~Community~~Restrictions Reinvestment Act (the “CRA”) requires the federal banking regulatory agencies to assess all financial institutions that they regulate to determine whether these institutions are meeting the credit needs of the communities that they serve, including their assessment area(s) (as established for these purposes in accordance with applicable regulations based principally on the location of the institution’s branch offices). Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve” or “unsatisfactory.” An institution’s record in meeting the requirements of the CRA is made publicly available and is taken into consideration in connection with any applications it files with federal regulators to engage in certain activities, including approval of a branch or other deposit facility, mergers and acquisitions, office relocations or expansions into non-banking activities. NBC received a “satisfactory” rating in its most recent CRA evaluation.

~~Anti-Money~~NCC ~~Laundering~~is ~~Laws~~ a legal entity separate and distinct from NBC. NCC’s ability to pay dividends and make other distributions depends in part on the receipt of dividends from NBC and is limited by federal and state law. The specific limits depend on a number of factors, including NBC’s recent earnings, recent dividends, level of capital and regulatory status. The regulators are authorized, and under certain circumstances are required, to determine that the payment of dividends or other distributions by a bank would be an unsafe or unsound practice and to prohibit that payment. For example, federal law generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its parent holding company if the depository institution would thereafter be undercapitalized.

~~Under~~A ~~various~~national ~~federal~~bank ~~laws~~generally may not withdraw, ~~including~~either in the ~~Currency~~form ~~and~~of ~~Foreign~~a ~~Transactions~~dividend ~~Reporting~~or ~~Act~~otherwise, ~~(also~~any ~~known~~portion asof ~~the~~its ~~“Bank~~permanent ~~Secrecy~~capital ~~Act~~and ofmay ~~1970”),~~not asdeclare ~~amended~~a bydividend ~~the~~in ~~Uniting~~excess ~~and~~of ~~Strengthening~~its ~~America~~retained bynet ~~Providing~~profits. ~~Appropriate~~Further, ~~Tools~~dividends ~~Required~~that tomay ~~Intercept~~be ~~and~~paid ~~Obstruct~~by ~~Terrorism~~a ~~(USA~~national ~~PATRIOT)~~bank ~~Act,~~without ~~financial~~the ~~institutions~~express approval of the OCC are ~~subject~~limited to ~~prohibitions~~an ~~against~~amount ~~specified~~equal ~~financial~~to ~~transactions~~the ~~and~~bank’s ~~account~~retained ~~relationships,~~net asprofits ~~well~~for asthe ~~enhanced~~preceding ~~due~~two ~~diligence~~calendar ~~and~~years ~~“know~~plus ~~your~~retained ~~customer”~~net ~~requirements,~~profits inup ~~their~~to ~~dealings~~the ~~with~~date ~~foreign~~of ~~financial~~any ~~institutions~~dividend ~~and~~declaration ~~foreign~~in ~~customers~~the current calendar year. ~~These~~Retained ~~laws~~net ~~also~~profits, ~~mandate~~as ~~that~~defined ~~financial~~by ~~institutions~~the ~~establish~~OCC, ~~anti-money~~consist ~~laundering~~of ~~programs~~net ~~meeting~~income, ~~certain~~less ~~standards~~dividends ~~and~~declared ~~require~~during the ~~federal~~period. ~~banking~~Dividend ~~regulators~~payments toby ~~consider~~NBC in the ~~effectiveness~~future will require the generation of anet ~~financial~~income ~~institution’s~~and ~~anti-money~~could ~~laundering~~require ~~activities~~regulatory ~~when~~approval ~~reviewing~~if ~~applications~~any ~~for~~proposed ~~bank~~dividends ~~merger~~are ~~and~~in ~~acquisition~~excess ~~activities.~~of prescribed guidelines.

~~Privacy~~The ability of ~~Customer~~a ~~Information~~bank holding company to pay dividends and make distributions can also be limited by other laws or regulations. The Federal Reserve, which has authority to prohibit a bank holding company from paying dividends or making other distributions, has issued a Supervisory Letter stating that a bank holding company should not pay cash dividends unless, among other things, (i) its net income available to common stockholders for the past four quarters, net of dividends paid during that period, is sufficient to fully fund the dividends, (ii) the prospective rate of earnings retention appears to be consistent with the holding company’s capital needs, asset quality and overall financial condition and (iii) the dividend will not cause the company to fail to meet, or be in danger of failing to meet, its minimum regulatory capital adequacy ratios. Accordingly, a bank holding company should not pay cash dividends that exceed its net income or that can only be funded in ways that weaken its financial health, such as by borrowing. Federal regulations relating to capital adequacy create additional restrictions on the ability of banking institutions to pay dividends.

~~The~~Capital ~~Financial~~Adequacy Services Modernization Act of 1999 (also known as the “Gramm-Leach-Bliley Act” or “GLBA”) and the implementing regulations issued by federal banking regulatory agencies require financial institutions (including banks, insurance agencies and broker/dealers) to adopt policies and procedures regarding the disclosure of nonpublic personal information about their customers to non-affiliated third parties. In general, financial institutions are required to explain to customers their policies and procedures regarding the disclosure of such nonpublic personal information, and, unless otherwise required or permitted by law, financial institutions are prohibited from disclosing such information except as provided in their policies and procedures. Specifically, the GLBA established certain information security guidelines that require each financial institution, under the supervision and ongoing oversight of its board of directors or an appropriate committee thereof, to develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against anticipated threats or hazards to the security or integrity of such information and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.

9In July 2013, the federal banking regulatory agencies adopted regulations to implement the framework developed by the Basel Committee on Banking Supervision for strengthening international capital and liquidity, known as “Basel III” (the “Basel III Rule”). The Basel III Rule provides risk-based capital guidelines designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks, to account for off-balance sheet exposures, and to minimize disincentives for holding liquid assets. Under these guidelines, assets and off-balance sheet items are assigned to broad risk categories, each with appropriate risk-weights. The net amount of assets remaining after applying the risk-weights to the gross asset values comprises the institution’s total risk-weighted assets. An institution’s total risk-weighted assets are used to calculate its regulatory capital ratios. The Basel III Rule establishes minimum capital and leverage ratios that supervised financial institutions are required to maintain, while also providing countercyclical capital requirements so that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction, consistent with safety and soundness. Under the Basel III Rule, banks must maintain a specified capital conservation buffer above each of the required minimum capital levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying certain discretionary bonuses.

~~Table of Contents~~9

~~Regulation~~Table of ~~Lending Practices~~Contents

~~Our~~In ~~lending~~addition ~~practices~~to ~~are~~meeting the minimum capital requirements, under the U.S. Basel III capital rules, NCC and the Bank must also maintain the required Capital Conservation Buffer to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management. The Capital Conservation Buffer is calculated as a ~~number~~ratio of ~~federal~~Common ~~and~~Equity ~~state~~Tier ~~laws~~1 capital to risk-weighted assets, asand ~~supplemented~~it byeffectively increases the ~~rules~~required minimum risk-based capital ratios. The Capital Conservation Buffer requirement was phased in over a three-year period that began on January 1, 2016. The phase-in period ended on January 1, 2019, and ~~regulations~~the Capital Conservation Buffer is now at its fully phased-in level of 2.5%. Throughout 2018, the ~~various~~required ~~agencies~~Capital ~~charged~~Conservation ~~with~~Buffer was 1.875%. The Tier 1 Leverage Ratio is not impacted by the ~~responsibility~~Capital Conservation Buffer, and a banking institution may be considered well-capitalized while remaining out of ~~implementing~~compliance ~~these~~with ~~laws~~the Capital Conservation Buffer. ~~These~~In ~~include~~April 2018, the Federal Reserve issued a proposal that would, among ~~others~~other things, replace the ~~following:~~Capital Conservation Buffer with stress buffer requirements for certain large bank holding companies, including NCC.

●As ~~Truth~~an additional means of identifying problems in the financial management of depository institutions, the federal banking regulatory agencies have established certain non-~~In-Lending~~capital ~~Act~~safety and soundness standards for institutions for which they are the primary federal regulator. The standards relate generally to operations and management, ~~governing~~asset ~~disclosures~~quality, ofinterest ~~credit~~rate ~~terms~~exposure and executive compensation. The agencies are authorized to ~~consumer~~take ~~borrowers;~~action against institutions that fail to meet such standards.

●Prompt ~~Home~~Corrective ~~Mortgage~~Action Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the communities that it serves;

●In ~~Equal~~addition ~~Credit~~to ~~Opportunity~~the ~~Act~~required minimum capital levels described above, ~~prohibiting~~federal ~~discrimination~~law establishes a system of “prompt corrective actions” that federal banking agencies are required to take, and certain actions that they have discretion to take, based on the ~~basis~~capital category into which a federally regulated depository institution falls. Regulations set forth detailed procedures and criteria for implementing prompt corrective action in the case of ~~race~~any institution that is not adequately capitalized. Each institution is assigned to one of five categories based on its capital ratios: “well capitalized,” ~~creed~~“adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Institutions categorized as “undercapitalized” or worse become subject to increasing levels of regulatory oversight and restrictions, which may include, among other ~~specified~~things, ~~factors~~limitations inon ~~extending~~growth ~~credit;~~and activities and payment of dividends.

●Community ~~Fair~~Reinvestment ~~Credit Reporting~~ Act of 1978, as amended by the Fair and Accurate Credit Transactions Act, governing the use and provision of information to credit reporting agencies, certain identity theft protections, and certain credit and other disclosures;

●The ~~Fair~~Community ~~Debt~~Reinvestment ~~Collection~~Act ~~Practices~~(the ~~Act~~“CRA”) requires the federal banking regulatory agencies to assess all financial institutions that they regulate to determine whether these institutions are meeting the credit needs of the communities that they serve, ~~governing~~including their assessment area(s) (as established for these purposes in accordance with applicable regulations based principally on the ~~manner~~location of the institution’s branch offices). Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve” or “unsatisfactory.” An institution’s record in ~~which~~meeting ~~consumer~~the ~~debts~~requirements ~~may~~of bethe ~~collected~~CRA byis ~~collection~~made ~~agencies;~~publicly available and is taken into consideration in connection with any applications it files with federal regulators to engage in certain activities, including approval of a branch or other deposit facility, mergers and acquisitions, office relocations or expansions into non-banking activities. NBC received a “satisfactory” rating in its most recent CRA evaluation.

● Real Estate Settlement Procedures Act, requiring certain disclosures concerning loan closing costs and escrows, and governing transfers of loan servicing and the amounts of escrows in connection with loans secured by oneAnti-~~to-four~~Money ~~family~~Laundering ~~residential properties;~~Laws

●Under ~~Military~~various ~~Lending~~federal ~~Act~~laws, ~~governing~~including the ~~extension~~Currency ofand ~~consumer~~Foreign ~~credit~~Transactions toReporting ~~members~~Act (also known as the “Bank Secrecy Act of 1970”), as amended by the ~~United~~Uniting ~~States~~and ~~armed~~Strengthening ~~forces~~America onby ~~active~~Providing ~~duty~~Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act, financial institutions are subject to prohibitions against specified financial transactions and account relationships, as well as enhanced due diligence and “know your customer” requirements, in their ~~dependents;~~dealings with foreign financial institutions and foreign customers. These laws also mandate that financial institutions establish anti-money laundering programs meeting certain standards and require the federal banking regulators to consider the effectiveness of a financial institution’s anti-money laundering activities when reviewing applications for bank merger and acquisition activities.

~~● Servicemembers Civil Relief Act, which restricts or limits civil actions with respect to certain financial transactions against military servicemembers who are called to active duty; and~~10

●Table ~~rules~~of ~~and regulations established by the National Flood Insurance Program.~~Contents

InPrivacy addition, the Dodd-Frank Act created the Consumer Financial Protection Bureau (the “CFPB”), an independent bureau with broad authority to regulate the consumer finance industry, including regulated financial institutions, non-banks and others involved in extending credit to consumers. The CFPB has authority through rulemaking, orders, policy statements, guidance and enforcement actions to administer and enforce federal consumer financial laws. Although the CFPB has the power to interpret, administer and enforce federal consumer financial laws, the Dodd-Frank Act provides that the federal banking regulatory agencies continue to have examination and enforcement powers over the financial institutions that they supervise relating to the matters within the jurisdiction of ~~the~~Customer ~~CFPB~~Information if the supervised institutions have less than $10 billion in assets. The CFPB has adopted a number of rules that impact our lending practices, including, among other things, (i) requiring financial institutions to make a “reasonable and good faith determination” that a consumer has a “reasonable ability” to repay a residential mortgage loan before making such a loan, (ii) requiring sponsors of asset-backed securities to retain at least 5% of the credit risk of the assets underlying the securities (and generally prohibiting sponsors from transferring or hedging that credit risk), and (iii) imposing a number of new and enhanced requirements on the mortgage servicing industry, including rules regarding communications with borrowers, maintenance of customer account records, procedures for responding to written borrower requests and complaints of errors, servicing delinquent loans, and conducting foreclosure proceedings, among other measures.

10The Financial Services Modernization Act of 1999 (also known as the “Gramm-Leach-Bliley Act” or “GLBA”) and the implementing regulations issued by federal banking regulatory agencies require financial institutions (including banks, insurance agencies and broker/dealers) to adopt policies and procedures regarding the disclosure of nonpublic personal information about their customers to non-affiliated third parties. In general, financial institutions are required to explain to customers their policies and procedures regarding the disclosure of such nonpublic personal information, and, unless otherwise required or permitted by law, financial institutions are prohibited from disclosing such information except as provided in their policies and procedures. Specifically, the GLBA established certain information security guidelines that require each financial institution, under the supervision and ongoing oversight of its board of directors or an appropriate committee thereof, to develop, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against anticipated threats or hazards to the security or integrity of such information and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.

~~Table~~Regulation of ~~Contents~~Lending Practices

~~Regulation~~Our lending practices are subject to a number of ~~Deposit~~federal ~~Operations~~and state laws, as supplemented by the rules and regulations of the various agencies charged with the responsibility of implementing these laws. These include, among others, the following:

~~Our~~● ~~deposit~~Truth-In-Lending ~~operations~~Act, ~~are~~governing ~~subject~~disclosures toof ~~federal~~credit ~~laws~~terms ~~applicable~~ to ~~depository~~consumer ~~accounts, including, among others, the following:~~borrowers;

● ~~Right~~Home toMortgage ~~Financial~~Disclosure ~~Privacy~~ Act of 1975, ~~which~~requiring ~~imposes~~financial ainstitutions ~~duty~~to provide information to ~~maintain~~enable the ~~confidentiality~~public ofand ~~consumer~~public officials to determine whether a financial ~~records~~institution ~~and~~is ~~prescribes~~fulfilling ~~procedures~~its ~~for~~obligation ~~complying~~to ~~with~~help ~~administrative~~meet ~~subpoenas~~the housing needs of ~~financial~~the ~~records~~communities that it serves;

● ~~Truth-In-Savings~~Equal Credit Opportunity Act, ~~requiring~~prohibiting ~~certain~~discrimination ~~disclosures~~on ~~for~~the ~~consumer~~basis ~~deposit~~of ~~accounts~~race, creed, or other specified factors in extending credit;

● ~~Electronic~~Fair ~~Funds~~Credit ~~Transfer~~Reporting Act ~~and~~of ~~Regulation E~~1978, ~~which~~as ~~govern~~amended ~~automatic~~by ~~deposits~~the toFair and ~~withdrawals~~Accurate ~~from~~Credit ~~deposit~~Transactions ~~accounts~~Act, ~~and~~governing ~~customers’~~the ~~rights~~use and ~~liabilities~~provision ~~arising~~of ~~from~~information ~~the~~to ~~use~~credit ofreporting ~~automated~~agencies, ~~teller~~certain ~~machines~~identity ~~and~~theft ~~other~~protections, ~~electronic~~and ~~banking~~certain ~~services;~~credit and other disclosures;

● ~~rules~~Fair ~~and~~Debt ~~regulations~~Collection ofPractices Act, governing the ~~various~~manner ~~agencies~~in ~~charged~~which ~~with~~consumer ~~the~~debts ~~responsibility~~may ofbe ~~implementing~~collected ~~these~~by ~~laws.~~collection agencies;

~~Federal~~● ~~Home~~Real ~~Loan~~Estate ~~Bank~~Settlement ~~Membership~~Procedures Act, requiring certain disclosures concerning loan closing costs and escrows, and governing transfers of loan servicing and the amounts of escrows in connection with loans secured by one-to-four family residential properties;

~~NBC~~● isMilitary aLending ~~member~~Act, ofgoverning the ~~Federal~~extension ~~Home Loan Bank~~ of ~~Atlanta~~consumer ~~(the~~credit ~~“FHLB”). Each member of the FHLB is required~~ to ~~maintain~~members ~~a minimum investment in the Class B stock~~ of the ~~FHLB.~~United ~~The~~States ~~Board~~armed offorces Directors of the FHLB can increase the minimum investment requirements if it concludes that additional capital is required to allow the FHLB to meet its own regulatory capital requirements. Any increase in the minimum investment requirements outside of specified ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation on ~~the~~active ~~part~~duty ofand ~~NBC~~their to increase the level of its investment in the FHLB depends entirely on the occurrence of a future event, we are currently unable to determine the extent of future required potential payments to the FHLB. Additionally, in the event that a member financial institution fails, the right of the FHLB to seek repayment of funds loaned to that institution will take priority over the rights of all other creditors. dependents;

~~Future~~● ~~Legislation~~Servicemembers ~~and~~Civil ~~Regulation~~Relief Act, which restricts or limits civil actions with respect to certain financial transactions against military servicemembers who are called to active duty; and

We● ~~are~~rules ~~heavily regulated by regulatory agencies at the federal~~ and ~~state~~regulations ~~levels. Since~~established ~~the~~by ~~2008 financial crisis, regulators have increased their focus on~~ the ~~regulation~~National ofFlood ~~the~~Insurance ~~financial services industry, leading in many cases to greater uncertainty and compliance costs for regulated entities~~Program. For example, the provisions of the Dodd-Frank Act have required us to make material expenditures, particularly in the form of personnel training costs and additional compliance expenses. Recently, however, we have seen an effort at the federal level to provide some relief from the regulatory burdens placed on banks as a result of Dodd-Frank Act. A number of bills have been introduced in early 2018 in both the House of Representatives and the U.S. Senate that would scale back the regulatory burdens placed on banks in recent years. It is impossible to know at this time what practical impact these bills will have on our business, if enacted. In addition to the legislative changes, there have been leadership changes at all of the federal banking agencies, including the FDIC, the OCC, the CFPB, and the Federal Reserve. These legislative proposals and the changes in the key regulators who implement the banking laws are likely to impact our business; however, we cannot predict the actual effect that these proposals would have on our business, consolidated results of operations, financial condition, or cash flows.

~~Website Information~~11

~~The~~Table Bank maintains a website at www.nationalbankofcommerce.com. The Company does not maintain a separate website at this time; however, certain corporate governance information, SEC filings and other information of potential interest to our stockholders are available free of charge through the “Investor Relations” page of the Bank’s website. These include, for example, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. These documents are made available as soon as reasonably practicable after they are filed with, or furnished to, the Securities and Exchange Commission (the “SEC”). Information on, or accessible through, the Bank’s website is not part of or incorporated into this Annual Report on Form 10-K. We have included the website address only as an inactive textual reference and do not intend for it to be an active link to the website. We will provide paper copies of our periodic and current reports to stockholders free of charge upon written request to: National Commerce Corporation, Attention: Corporate Secretary, 813 Shades Creek Parkway, Suite 100, Birmingham, Alabama 35209. Contents

11In addition, the Dodd-Frank Act created the Consumer Financial Protection Bureau (the “CFPB”), an independent bureau with broad authority to regulate the consumer finance industry, including regulated financial institutions, non-banks and others involved in extending credit to consumers. The CFPB has authority through rulemaking, orders, policy statements, guidance and enforcement actions to administer and enforce federal consumer financial laws. Although the CFPB has the power to interpret, administer and enforce federal consumer financial laws, the Dodd-Frank Act provides that the federal banking regulatory agencies continue to have examination and enforcement powers over the financial institutions that they supervise relating to the matters within the jurisdiction of the CFPB if the supervised institutions have less than $10 billion in assets. The CFPB has adopted a number of rules that impact our lending practices, including, among other things, (i) requiring financial institutions to make a “reasonable and good faith determination” that a consumer has a “reasonable ability” to repay a residential mortgage loan before making such a loan, (ii) requiring sponsors of asset-backed securities to retain at least 5% of the credit risk of the assets underlying the securities (and generally prohibiting sponsors from transferring or hedging that credit risk), and (iii) imposing a number of new and enhanced requirements on the mortgage servicing industry, including rules regarding communications with borrowers, maintenance of customer account records, procedures for responding to written borrower requests and complaints of errors, servicing delinquent loans, and conducting foreclosure proceedings, among other measures.

~~Table~~Regulation of ~~Contents~~Deposit Operations

~~Item~~Our ~~1A.~~deposit ~~Risk~~operations ~~Factors.~~are subject to federal laws applicable to depository accounts, including, among others, the following:

~~Making~~● orRight ~~continuing~~to anFinancial ~~investment~~Privacy inAct, ~~our~~which ~~common~~imposes ~~stock involves certain risks that you should carefully consider. The risks and uncertainties described below are not the only risks that may have~~ a ~~material~~duty ~~adverse~~to ~~effect~~maintain on the ~~Company.~~confidentiality ~~Additional risks and uncertainties also could adversely affect our business and results~~ of ~~operations.~~consumer ~~If any of the following risks actually occur, our business,~~ financial ~~condition~~records ~~or results of operations could be negatively affected, the market price of your common stock could decline~~ and ~~you~~prescribes ~~could~~procedures ~~lose~~for ~~all~~complying orwith aadministrative ~~part~~subpoenas of ~~your~~financial investment. Further, to the extent that any of the information contained in this Annual Report on Form 10-K constitutes a forward-looking statement, the risk factors set forth below also are cautionary statements identifying important factors that could cause the Company’s actual results to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company.records;

~~Risks~~● ~~Relating~~Truth-In-Savings toAct, ~~Our~~requiring ~~Business~~certain disclosures for consumer deposit accounts;

~~Our~~● ~~business~~Electronic isFunds ~~concentrated~~Transfer inAct and Regulation E, which govern automatic deposits to and ~~largely~~withdrawals ~~dependent~~from ~~on,~~deposit ~~the~~accounts ~~continued~~and ~~growth~~customers’ rights and ~~welfare~~liabilities ofarising from the ~~general~~use ~~geographic~~of ~~markets~~automated inteller ~~which~~machines weand ~~operate.~~other electronic banking services; and

~~Our~~● ~~commercial~~rules ~~banking operations are concentrated in the southeastern United States, particularly in Alabama, in central~~ and ~~northeast~~regulations ~~Florida, and in the Atlanta, Georgia metro area. As~~ of December 31, 2017, approximately 91.5% of our total loans were to borrowers located in Alabama, Florida and Georgia. As a result, our financial condition and results of operations and cash flows are affected by changes in the ~~economic~~various ~~conditions~~agencies ofcharged ~~those~~with ~~states or~~ the ~~regions~~responsibility of ~~which~~implementing ~~they are a part. Our success depends to a significant extent on the business activity, population, income levels, deposits and real estate activity in~~ these ~~markets~~laws. Although our customers’ business and financial interests may extend well beyond these market areas, adverse conditions that affect these market areas could reduce our growth rate, affect the ability of our customers to repay their loans, affect the value of collateral underlying loans, impact our ability to attract deposits and generally affect our financial condition and results of operations. Because of our geographic concentration, we may be less able than other regional or national financial institutions to diversify our credit risks across multiple markets.

AFederal ~~return~~Home ofLoan ~~recessionary~~Bank ~~conditions~~Membership ~~could result in increases in our level of nonperforming loans and/or reduced demand for our products and services, which could have an adverse effect on our results of operations.~~

~~Economic~~NBC ~~recession~~is ora ~~other~~member ~~economic~~of ~~problems,~~the ~~including~~Federal ~~those~~Home ~~affecting~~Loan ~~our~~Bank ~~markets~~of ~~and~~Atlanta ~~regions,~~(the ~~but~~“FHLBA”). ~~also~~Each ~~those~~member ~~affecting~~of the ~~United~~FHLBA ~~States~~is orrequired ~~world~~to ~~economies,~~maintain ~~could have~~ a ~~material~~minimum ~~adverse~~investment ~~impact~~in on the ~~demand~~Class ~~for~~B ~~banking~~stock ~~products~~of ~~and~~the ~~services~~FHLBA. ~~Since~~The ~~the~~Board ~~conclusion~~of Directors of the ~~last~~FHLBA ~~recession,~~can ~~economic~~increase ~~growth~~the ~~has~~minimum ~~been~~investment ~~uneven.~~requirements Ifif ~~economic~~it ~~conditions~~concludes ~~deteriorate,~~that oradditional ifcapital ~~there~~is ~~are~~required ~~negative~~to ~~developments~~allow ~~affecting~~ the ~~domestic~~FHLBA ~~and~~to ~~international~~meet ~~credit~~its ~~markets,~~own regulatory capital requirements. Any increase in the ~~value~~minimum investment requirements outside of ~~our~~specified ~~loans~~ranges ~~and~~requires ~~investments~~the ~~may~~approval beof ~~harmed,~~the ~~which~~Federal inHousing ~~turn~~Finance ~~would~~Agency. ~~have~~Because anthe ~~adverse~~extent ~~effect~~of any obligation on ~~our~~the ~~financial~~part ~~performance~~of ~~and~~NBC ~~condition,~~to asincrease itthe ~~would~~level ~~for~~of ~~other~~its ~~banks.~~investment Inin ~~addition,~~the ~~although~~FHLBA ~~deteriorating~~depends ~~market~~entirely ~~conditions~~on ~~could~~the ~~adversely~~occurrence ~~affect~~of ~~our~~a ~~financial~~future ~~condition~~event, ~~results~~we are currently unable to determine the extent of ~~operations~~future ~~and~~required ~~cash~~potential ~~flows,~~payments ~~there~~to ~~can~~the beFHLBA. noAdditionally, ~~assurance~~in the event that wea ~~would~~member ~~benefit~~financial ~~from~~institution ~~any~~fails, ~~market~~the ~~growth~~right orof ~~favorable~~the ~~economic~~FHLBA ~~conditions,~~to ~~either~~seek inrepayment ~~our~~of ~~primary~~funds ~~market~~loaned ~~areas~~to orthat ~~nationally,~~institution ~~even~~will iftake ~~they~~priority doover ~~occur~~the rights of all other creditors.

~~Our~~Future ~~small~~Legislation ~~to medium-sized business~~ and ~~entrepreneurial~~Regulation customers may have fewer financial resources than larger entities to weather a downturn in the economy, which may impair their ability to repay their loans, and such impairment could adversely affect our financial condition and results of operations.

We ~~focus~~are ~~our~~heavily ~~business~~regulated ~~development~~by regulatory agencies at the federal and ~~marketing~~state ~~strategy~~levels. ~~primarily~~In torecent ~~serve~~years, regulators have increased their focus on the ~~banking~~regulation ~~and~~of the financial services ~~needs~~industry, ofleading ~~small~~in many cases to ~~medium-sized~~greater ~~businesses~~uncertainty and ~~entrepreneurs~~compliance costs for regulated entities. ~~These~~For ~~small~~example, tothe ~~medium-sized~~provisions ~~businesses~~of ~~and~~the ~~entrepreneurs~~Dodd-Frank ~~may~~Act have ~~fewer~~required ~~financial~~us ~~resources~~to make material expenditures, particularly in ~~terms~~the form of ~~capital~~personnel ortraining ~~borrowing~~costs ~~capacity~~and ~~than~~additional ~~larger~~compliance ~~entities~~expenses. IfFurthermore, ~~economic~~proposals ~~conditions~~that ~~negatively~~could ~~impact~~substantially ~~our~~intensify ~~primary~~the ~~market~~regulation ~~areas~~of the financial services industry have been and may continue to be introduced in ~~Alabama~~the United States Congress, ~~central~~in state legislatures, and ~~northeast~~by ~~Florida,~~applicable regulatory authorities. These proposals may change banking statutes and regulations and the ~~Atlanta~~operating environment for financial services firms in substantial and unpredictable ways. If enacted, ~~Georgia~~these ~~metro~~proposals ~~area~~could ~~generally~~increase the cost of doing business, ~~and~~limit ~~small~~permissible toactivities ~~medium-sized~~or ~~businesses~~affect ~~are~~the ~~adversely~~competitive ~~affected~~balance among banks, ~~then~~savings ~~our~~associations, credit unions, and other financial ~~condition~~institutions. We cannot predict whether any of these proposals will be enacted and, if enacted, the effect that these proposals would have on our business, consolidated results of operations, ~~may~~financial becondition, ~~negatively~~or ~~affected~~cash flows.

Table of Contents

~~Our~~Website ~~financial performance will be negatively impacted if we are unable to execute our growth strategy.~~Information

~~Our~~The ~~current~~Bank ~~growth~~maintains ~~strategy~~a iswebsite toat ~~grow~~www.nationalbankofcommerce.com. ~~organically~~The ~~and~~Company todoes ~~supplement~~not ~~that~~maintain ~~growth~~a ~~with~~separate ~~select~~website ~~acquisitions.~~at ~~Our~~this ~~ability~~time; tohowever, ~~grow~~certain ~~organically~~corporate ~~depends~~governance ~~primarily~~information, onSEC ~~our~~filings ~~ability~~and other information of potential interest to ~~generate~~our ~~loans~~stockholders ~~and~~are ~~deposits~~available free of ~~acceptable~~charge ~~risk~~through ~~and~~the ~~expense~~“Investor Relations” page of the Bank’s website. This includes our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and weour ~~may~~Current ~~not~~Reports beon ~~successful~~Form in8-K. ~~continuing~~We make this ~~organic~~information ~~growth.~~available ~~Our~~on ~~ability~~our towebsite ~~identify~~as ~~appropriate~~soon ~~markets~~as ~~for~~reasonably ~~expansion,~~practicable ~~recruit~~after ~~and~~we ~~retain~~electronically ~~qualified~~file ~~personnel~~the ~~and~~information ~~fund~~with, ~~growth~~or atfurnish ait ~~reasonable~~to, ~~cost~~the ~~depends~~SEC. Information on, ~~prevailing~~or ~~economic~~accessible ~~conditions~~through, ~~maintenance~~the ofBank’s ~~sufficient~~website ~~capital,~~is ~~competitive~~not ~~factors~~part ~~and~~of ~~changes~~or inincorporated ~~banking~~into ~~laws,~~this ~~among~~Annual ~~other~~Report ~~factors~~on Form 10-K. ~~Conversely,~~We ifhave weincluded ~~grow~~the ~~too~~website ~~quickly~~address ~~and~~only ~~are~~as ~~unable~~an toinactive ~~control~~textual ~~costs~~reference and ~~maintain~~do ~~asset~~not ~~quality,~~intend ~~such~~for ~~growth,~~it ~~whether~~to ~~organic~~be oran ~~through~~active ~~select~~link ~~acquisitions,~~to ~~could~~the ~~materially~~website. ~~and~~We ~~adversely~~will ~~affect~~provide ~~our~~paper ~~financial~~copies ~~condition~~of our periodic and ~~results~~current reports to stockholders free of ~~operations~~charge upon written request to: National Commerce Corporation, Attention: Corporate Secretary, 600 Luckie Drive, Suite 350, Birmingham, Alabama 35223.

~~External~~Item ~~economic~~1A. ~~factors,~~Risk ~~such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations~~Factors.

~~Our~~Making ~~financial~~or ~~condition~~continuing ~~and~~an ~~results~~investment ofin ~~operations~~our ~~are~~common ~~affected~~stock byinvolves ~~credit~~certain ~~policies~~risks ofthat ~~monetary~~you ~~authorities,~~should ~~particularly~~carefully ~~the Federal Reserve~~consider. ~~Actions~~The byrisks ~~monetary~~ and ~~fiscal~~uncertainties ~~authorities,~~described ~~including~~below are not the ~~Federal~~only ~~Reserve,~~risks ~~could~~that ~~lead~~may tohave ~~inflation,~~a ~~deflation~~material oradverse ~~other~~effect ~~economic~~on ~~phenomena~~the ~~that~~Company. Additional risks and uncertainties also could adversely affect our ~~financial~~business ~~performance.~~and ~~The~~results ~~primary~~of ~~impact~~operations. If any of ~~inflation~~the onfollowing risks actually occur, our ~~operations~~business, ~~most~~financial ~~likely~~condition ~~will~~or beresults ~~reflected~~of inoperations ~~increased~~could ~~operating~~be ~~costs.~~negatively ~~Conversely~~affected, ~~deflation~~the ~~generally~~market ~~will~~price ~~tend~~of toyour ~~erode~~common ~~collateral~~stock ~~values~~could decline and ~~diminish~~you ~~loan~~could ~~quality.~~lose ~~Virtually~~ all or a part of ~~our~~your ~~assets~~investment. ~~and~~Further, ~~liabilities~~to ~~are~~the ~~monetary~~extent that any of the information contained in ~~nature.~~this AsAnnual Report on Form 10-K constitutes a ~~result~~forward-looking statement, ~~interest~~the ~~rates~~risk ~~have~~factors aset ~~significant~~forth ~~impact~~below onalso ~~our~~are ~~performance.~~cautionary ~~Interest~~statements ~~rates~~identifying doimportant ~~not~~factors ~~necessarily~~that ~~move~~could incause the ~~same~~Company’s ~~direction~~actual orresults byto ~~the~~differ ~~same~~materially ~~magnitude~~from asthose ~~the~~expressed ~~prices~~in ofany ~~goods~~forward-looking ~~and~~statement ~~services~~made by or on behalf of the Company.

~~Our~~Risks ~~profitability~~Relating ~~is vulnerable~~ to ~~interest~~the ~~rate fluctuations.~~Merger

~~Our~~NCC ~~profitability~~faces ~~depends~~litigation ~~substantially~~risks ~~on our net interest income. Net interest income is the difference between the interest earned on assets (such as loans and securities held~~ in ~~our~~connection ~~investment~~with ~~portfolio) and~~ the ~~interest paid for liabilities (such as interest paid on savings and money market accounts and time deposits)~~Merger.

~~Income~~As ~~associated~~is ~~with~~common ~~interest-earning assets and costs associated with interest-bearing liabilities may not be affected uniformly by fluctuations~~ in ~~interest~~public ~~rates.~~company ~~The~~mergers ~~magnitude~~ and ~~duration of changes in interest rates are events over which we have no control~~acquisitions, ~~and~~NCC ~~such~~faces ~~changes~~a ~~may~~risk ~~have~~of anpotential ~~adverse~~lawsuits ~~effect on our net interest income. Prepayment and early withdrawal levels, which are also impacted by changes~~ in ~~interest~~connection ~~rates,~~with ~~can significantly affect our assets and liabilities. For example, an increase in interest rates could, among other things, reduce~~ the ~~demand for loans and decrease loan repayment rates~~Merger. Such anpotential ~~increase~~lawsuits could ~~also~~prevent ~~adversely~~or ~~affect~~delay ~~the~~completion ~~ability~~ of ~~our~~the ~~floating-rate~~Merger ~~borrowers~~and toresult ~~meet their higher payment obligations, which could~~ in ~~turn~~substantial ~~lead~~costs to ~~an increase in non-performing assets and net charge-offs. Conversely~~NCC, aincluding ~~decrease~~any incosts ~~the~~associated ~~general~~with ~~level~~indemnification obligations of interest rates could affect us by, among other things, leading to greater competition for deposits and incentivizing borrowers to prepay or refinance their loans more quickly or frequently than they otherwise wouldNCC. The ~~primary~~defense ~~tool~~or ~~that~~settlement ~~management uses to measure interest rate risk is a simulation model that evaluates the impact~~ of ~~varying~~any ~~levels~~lawsuit ofor ~~prevailing~~claim ~~interest rates on net interest income and the economic value of equity. As of December 31, 2017, this simulation analysis indicated~~ that, ifremains ~~prevailing~~unresolved ~~interest~~at ~~rates immediately decreased by 300 basis points, we would expect net interest income to decrease by approximately $20.6 million, or 18.0%, over~~ the ~~next~~time ~~12 months, and a decline in~~ the ~~economic~~Merger ~~value of equity of $77.8 million, or 14.8%. We believe that this~~ is ~~unlikely~~consummated ~~based~~may onadversely ~~current~~affect interest rate levels. Conversely, if prevailing interest rates immediately increased by 300 basis points, we would expect net interest income to increase by approximately $15.0 million, or 13.2%, over the ~~next~~continuing 12corporation’s ~~months~~business, ~~and~~financial ~~the economic value of equity to increase by $28.0 million~~condition, ~~or 5.3%. However, fluctuations in interest rates affect different classes of income-earning assets differently, and there can be no assurance as to the actual effect on our~~ results of operations, ~~should~~cash ~~such~~flows anand ~~increase~~market ~~or decrease occur~~price.

~~Generally,~~After the ~~interest~~mailing ~~rates~~of onthe ~~our~~joint ~~interest~~proxy statement-~~earning~~prospectus ~~assets~~on ~~and~~February ~~interest-bearing~~4, ~~liabilities~~2019 doin ~~not~~connection ~~change~~with at the ~~same rate~~Merger, totwo ~~the~~lawsuits ~~same~~by ~~extent~~purported orNCC onstockholders ~~the~~(Paul ~~same~~Parshall ~~basis~~v. ~~Even~~National ~~assets~~Commerce ~~and~~Corporation, ~~liabilities~~et ~~with~~al., ~~similar~~No. ~~maturities~~1:19-cv-00355-UNA or(D. ~~re-pricing~~Del.), ~~periods~~and ~~may~~Stephen ~~react~~Bushansky inv. ~~different~~National ~~degrees~~Commerce toCorporation, ~~changes~~et inal., ~~market~~No. ~~interest~~1:19-cv-00379 ~~rates~~(D. ~~Interest~~Del.)) ~~rates~~were onfiled ~~certain~~in ~~types~~the United States District Court, District of ~~assets~~Delaware against NCC and ~~liabilities~~its ~~may~~directors, ~~fluctuate~~alleging inadequate disclosures in ~~advance~~the joint proxy statement-prospectus and associated violations of ~~changes~~the inSecurities ~~general~~Exchange ~~market~~Act ~~interest~~of ~~rates,~~1934. These ~~while~~complaints ~~interest~~generally ~~rates~~seek, onamong other ~~types~~things, ofan ~~assets~~injunction enjoining the stockholder vote and ~~liabilities~~the ~~may~~closing ~~lag~~of ~~behind~~the ~~changes~~proposed intransaction, ~~general~~rescission ~~market~~of ~~rates.~~the ~~Certain~~Merger ~~assets,~~if ~~such~~it ascloses, ~~fixed~~or ~~and~~an ~~adjustable~~award ~~rate~~of ~~mortgage~~rescissory ~~loans~~damages, ~~have~~an ~~features~~order ~~that~~directing ~~limit~~the ~~changes~~NCC inboard ~~interest~~of ~~rates~~directors onto disseminate a ~~short~~new joint proxy statement-~~term~~prospectus, ~~basis~~a declaration that the defendants violated the securities laws and ~~over~~an award of the ~~life~~plaintiffs’ costs of the ~~asset.~~actions ~~Changes~~including ina ~~interest~~reasonable ~~rates~~allowance ~~could~~for ~~materially~~the plaintiffs’ attorneys’ and ~~adversely~~experts’ ~~affect~~fees. NCC ~~our~~and ~~financial~~CenterState ~~condition~~believe that the claims in these complaints are without merit and ~~results~~intend ofto ~~operations~~defend these actions vigorously.

13Failure to complete the Merger could negatively impact NCC.

~~Table~~If the Merger is not completed, the ongoing business of ~~Contents~~NCC may be adversely affected, and NCC will be subject to several risks, including the following:

~~Market~~• ~~interest~~NCC ~~rates~~may ~~for~~be ~~loans~~required, ~~investments~~under ~~and~~certain ~~deposits~~circumstances, ~~are~~to ~~highly~~pay ~~sensitive~~CenterState toa ~~many~~termination ~~factors~~fee ~~beyond~~of ~~our control~~$31.8 million under the Merger Agreement;

~~Generally,~~• ~~interest~~NCC ~~rate~~will ~~spreads~~be ~~(the~~required ~~difference~~to ~~between~~pay ~~interest~~certain ~~rates~~costs ~~earned~~relating onto ~~assets~~the ~~and~~Merger, ~~interest~~whether ~~rates~~or ~~paid~~not onthe ~~liabilities)~~Merger ~~have~~is ~~narrowed~~completed, insuch ~~recent years~~ as ~~a result of changing market conditions~~legal, ~~policies of various government and regulatory authorities and competitive pricing pressures~~accounting, ~~and we cannot predict whether these rate spreads will narrow even further. This narrowing of interest rate spreads could adversely affect our~~ financial ~~condition~~advisor and ~~results~~printing of operations. In addition, we cannot predict whether interest rates will continue to remain at present levels. Changes in interest rates may cause significant changes, up or down, in our net interest income.fees;

We• ~~attempt~~under tothe ~~minimize~~Merger ~~the~~Agreement, ~~adverse~~NCC ~~effects~~is ofsubject ~~changes~~to incertain ~~interest~~restrictions ~~rates~~on bythe ~~structuring~~conduct ~~our~~of ~~asset-liability~~the ~~composition~~Company’s inbusiness ~~order~~prior to ~~obtain~~completing the ~~maximum spread between interest income and interest expense. However~~Merger, ~~there~~which ~~can~~may beadversely noaffect ~~assurance that we will be successful in minimizing~~ the ~~adverse~~Company’s ~~effects~~ability ofto ~~changes~~execute incertain ~~interest rates. Depending on our portfolio~~ of ~~loans~~its ~~and~~business ~~investments,~~strategies; ~~our financial condition~~ and ~~results of operations may be adversely affected by changes in interest rates.~~

We• matters relating to the Merger may require substantial commitments of time and resources by NCC management, which could ~~suffer~~otherwise ~~losses~~have ~~from~~been adevoted ~~decline~~to inother opportunities that may have been beneficial to NCC as an independent company. For example, NCC’s business may be impacted adversely by the ~~credit~~failure ~~quality~~to pursue other beneficial opportunities due to the focus of management on the ~~assets~~Merger, ~~that~~without werealizing ~~hold~~any of the anticipated benefits of completing the Merger.

We could sustain losses if borrowers, guarantors and related parties fail to perform in accordance with the terms of their loans. We have adopted underwriting and credit monitoring procedures and policies that we believe are appropriate to minimize this risk, including the establishment and review of the allowance for credit losses, periodic assessment of the likelihood of nonperformance, tracking loan performance and diversifying our credit portfolio. These policies and procedures, however, may not prevent unexpected losses that could materially adversely affect our financial condition and results of operations. In particular, we face credit quality risks presented by past, current, and potential economic and real estate market conditions. 13

ATable ~~significant portion~~ of ~~our loan portfolio is secured by real estate, and events that negatively impact the real estate market could negatively impact our business.~~Contents

AIn ~~significant~~addition, ~~portion~~if ofthe ~~our~~Merger ~~loan portfolio~~ is ~~secured~~not bycompleted, ~~either~~NCC ~~residential~~may orexperience ~~commercial~~negative ~~real~~reactions ~~estate.~~from Asthe offinancial ~~December~~markets ~~31,~~and ~~2017,~~from weits ~~had~~customers ~~approximately~~and ~~$508~~employees.9 ~~million~~NCC inalso ~~residential~~could ~~real~~be ~~estate~~subject ~~loans~~to ~~and~~litigation ~~$888.3~~related to any failure to complete the Merger or to proceedings commenced against NCC to perform its ~~million~~obligations inunder ~~commercial~~the ~~real~~Merger ~~estate~~Agreement. ~~loans~~If ~~outstanding~~the Merger is not completed, ~~representing~~NCC ~~approximately~~cannot ~~23.8%~~assure its stockholders that the risks described above will not materialize and ~~41.5%,~~will ~~respectively,~~not ofmaterially ~~our~~affect ~~total~~the ~~loans~~business, ~~outstanding~~financial onresults ~~that~~and ~~date~~stock prices of NCC.

~~There~~The ~~are~~termination ~~significant~~fees ~~risks~~and ~~associated with real estate-based lending. Real estate collateral may deteriorate in value during~~ the ~~time~~restrictions that credit is extended, in which case we might not be able to sell such collateral for an amount necessary to satisfy a defaulting borrower’s obligation to us. In such an event, there could be a material adverse effect on ~~our~~third ~~financial~~party ~~condition~~proposals ~~and~~set ~~results~~forth of operations. Additionally, commercial real estate loans are subject to unique risks. These types of loans are often viewed as having more risks than residential real estate or other consumer loans, primarily because relatively large amounts are loaned to a relatively small number of borrowers. Thus, the deterioration of even a small number of these loans could cause a significant increase in our loan loss allowance or loan charge-offs, which in turn could have a material adverse effect on our financial condition and results of operations. Furthermore, commercial real estate loans depend on cash flows from the ~~property~~Merger ~~securing~~Agreement ~~the debt. Cash flows~~ may bediscourage ~~affected~~others ~~significantly~~from bytrying ~~general~~to ~~economic~~acquire ~~conditions, and a downturn in a local economy in one of our markets or in occupancy rates where a property is located could increase the likelihood of default~~NCC.

The ~~foregoing~~Merger ~~risks~~Agreement ~~are~~contains ~~enhanced~~provisions asthat amake ~~result~~it ofmore ~~the~~difficult ~~limited~~for ~~geographic~~NCC ~~scope~~to ofsell ~~our~~its ~~principal~~business ~~markets~~to a party other than CenterState. ~~Most~~Until the completion of the ~~real~~Merger, ~~estate~~with ~~securing~~some ~~our~~exceptions, ~~loans~~NCC is ~~located~~prohibited infrom ~~Alabama~~initiating, insoliciting, ~~central~~inducing, ~~and~~knowingly ~~northeast Florida~~encouraging, ~~and~~or participating in ~~the~~any ~~Atlanta,~~discussion ~~Georgia~~of ~~metro~~or ~~area.~~otherwise ~~Because~~considering ~~the~~any ~~value~~inquiries ofor ~~this~~proposals ~~collateral~~that ~~depends~~may onlead ~~local~~to ~~real~~a ~~estate~~proposal ~~market~~to ~~conditions~~acquire ~~and~~NCC, issuch ~~affected~~as ~~by,~~a ~~among~~merger or other ~~things,~~business ~~neighborhood~~combination ~~characteristics~~transaction, ~~real~~with ~~estate~~any ~~tax~~person ~~rates~~other than CenterState. In addition, ~~the~~NCC ~~cost~~has ofagreed ~~operating~~to ~~the~~pay ~~properties~~to CenterState in certain circumstances a termination fee equal to approximately $31.8 million and ~~local~~has ~~governmental~~agreed ~~regulation,~~to ~~adverse~~submit ~~changes~~the inMerger ~~any~~proposal to a vote of ~~these~~NCC’s ~~factors~~stockholders ineven ~~Alabama,~~if ~~central~~the ~~and~~NCC ~~northeast~~board ~~Florida~~of ordirectors changes its recommendation regarding of the ~~Atlanta,~~Merger ~~Georgia~~proposal ~~metro~~in ~~area~~a manner adverse to CenterState. These provisions could ~~cause~~discourage a ~~decline~~potential incompeting ~~the~~acquiror from trying to acquire NCC even though this third party might be willing to offer greater value ofto NCC stockholders than CenterState has offered in the ~~collateral~~Merger. ~~securing~~Similarly, such a ~~significant~~competing ~~portion~~company ofmight ~~our~~propose ~~loan~~a ~~portfolio.~~price ~~Further,~~lower ~~the~~than ~~concentration~~it might otherwise have been willing to offer because of ~~real~~the ~~estate~~potential ~~collateral~~added inexpense ~~these markets~~of ~~limits~~the ~~our~~termination ~~ability~~fee that may become payable to ~~diversify~~CenterState in certain circumstances under the ~~risk~~Merger Agreement. The payment of ~~such~~any ~~occurrences~~termination fee could also have a material adverse effect on NCC’s financial condition.

14NCC will be subject to business uncertainties and contractual restrictions while the Merger is pending.

~~Table~~Uncertainty about the effect of ~~Contents~~the Merger on employees, customers, suppliers and vendors may have an adverse effect on the business, financial condition and results of operations of NCC, which could negatively affect CenterState’s and NCC’s combined business operations. These uncertainties may impair NCC’s ability to attract, retain and motivate key personnel, depositors and borrowers pending the consummation of the Merger, as such personnel, depositors and borrowers may experience uncertainty about their future roles following the consummation of the Merger. Additionally, these uncertainties could cause customers (including depositors and borrowers), suppliers, vendors and others who deal with NCC to seek to change existing business relationships with NCC or fail to extend an existing relationship with NCC. In addition, competitors may target each party’s existing customers by highlighting potential uncertainties and integration difficulties that may result from the Merger.

~~Our~~The ~~allowance~~pursuit of the Merger and the preparation for ~~loan~~the ~~losses~~integration may ~~not~~place a burden on each company’s management and internal resources. Any significant diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on NCC’s business, financial condition and results of operations. Retention of certain employees by NCC also may be ~~adequate~~challenging towhile ~~cover~~the ~~actual~~Merger ~~loan~~is ~~losses~~pending, ~~which~~as certain employees may ~~require~~experience usuncertainty about their future roles with CenterState after the Merger. If key employees depart because of issues relating to ~~take~~the uncertainty and difficulty of integration or a ~~charge~~desire not to ~~earnings~~remain with NCC, NCC’s business could be harmed. In addition, in the Merger Agreement, NCC has agreed to operate its business in the ordinary course prior to closing and ~~adversely~~is ~~impact~~restricted ~~our~~from taking certain actions without CenterState’s consent or non-objection while the Merger is pending. These restrictions may, among other matters, prevent NCC from pursuing otherwise attractive business opportunities, selling assets, incurring indebtedness, engaging in significant capital expenditures in excess of certain limits set forth in the Merger Agreement, entering into other transactions or making other changes to NCC’s business prior to consummation of the Merger or termination of the Merger Agreement. These restrictions could have a material adverse effect on NCC’s business, financial condition and results of operations.

We maintain an allowance for estimated loan losses that we believe is adequate to absorb any probable losses in our loan portfolio. Management determines the amount of the allowance based on an analysis of general market conditions, the credit quality of our loan portfolio and the performance of our customers relative to their financial obligations to us. We periodically evaluate the loan portfolio for risk grading, which can result in changes in the allowance. The amount of future losses is affected by changes in economic, operating and other conditions, including changes in interest rates, that may be beyond our control, and such losses may exceed the allowance for estimated loan losses. Although we believe that our allowance for estimated loan losses is adequate to absorb any probable losses on existing loans that may become uncollectible, there can be no assurance that the allowance will prove sufficient to cover actual loan losses in the future. If actual losses exceed the estimate, the excess losses could adversely affect our net income and capital. Such excess could also lead to larger allowances for loan losses in future periods, which could in turn adversely affect new income and capital in those periods. If economic conditions differ substantially from the assumptions used in the estimate, or if the performance of our loan portfolio deteriorates, future losses may occur, and increases in the allowance may be necessary, either of which would have a negative effect on our financial condition and results of operations.14

~~Additionally,~~Table ~~federal banking regulators periodically review the adequacy~~ of our allowance for estimated loan losses. These agencies may require additional allowances based on their judgment of the information available at the time of their examinations. If these regulatory agencies require us to increase our allowance for estimated loan losses, our financial condition and results of operations would be negatively affected. Contents

WeFailure ~~may~~of bethe ~~required~~Merger to ~~increase~~be ~~our~~consummated, ~~allowance~~the ~~for~~termination ~~loan~~of ~~losses~~the asMerger Agreement or a ~~result~~significant ofdelay ain ~~recent~~the ~~change~~consummation toof anthe ~~accounting~~Merger ~~standard~~could negatively impact NCC.

~~The~~If ~~measure of our allowance for loan losses depends in part on~~ the ~~adoption~~Merger ~~and~~is ~~interpretation~~not ~~of accounting standards. The Financial Accounting Standards Board~~consummated, ~~or FASB, recently issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses. This ASU provides a new credit impairment model,~~ the ~~Current~~ongoing ~~Expected Credit Loss~~business, orfinancial ~~CECL~~condition ~~model,~~and ~~which~~results ~~will~~of ~~apply~~operations toof usNCC ~~beginning on January 1, 2020, though we~~ may ~~choose, or may~~ be ~~encouraged~~materially byadversely ~~our~~affected ~~regulators,~~and tothe ~~adopt~~market ~~CECL~~price onof ~~January~~the 1,Company’s ~~2019.~~common ~~CECL~~stock ~~will~~may ~~require~~decline ~~financial~~significantly, ~~institutions~~particularly to ~~estimate and develop a provision for credit losses at origination for~~ the ~~lifetime~~extent ofthat the ~~loan,~~current asmarket ~~opposed~~price toreflects ~~reserving~~a ~~for~~market ~~incurred~~assumption orthat ~~probable losses up to~~ the ~~balance~~Merger ~~sheet~~will ~~date. Under the CECL model, credit deterioration would~~ be ~~reflected~~consummated. inIf the ~~income~~consummation ~~statement~~of in the ~~period~~Merger ofis ~~origination~~delayed, ~~or acquisition of~~ the ~~loan~~business, ~~with~~financial ~~changes~~condition inand ~~expected~~results ~~credit~~of ~~losses~~operations ~~due~~of toNCC ~~further~~may ~~credit~~be ~~deterioration~~materially oradversely ~~improvement reflected in the periods in which the expectation changes~~affected. ~~Accordingly,~~If ~~implementation of~~ the ~~CECL~~Merger ~~model~~Agreement ~~will~~is ~~change~~terminated ~~our~~and ~~current~~NCC’s ~~method~~board of ~~providing~~directors ~~allowances~~seeks ~~for~~another ~~loan~~merger ~~losses,~~or ~~which~~business ~~would likely require us to increase our allowance for loan losses. Moreover~~combination, ~~the~~NCC’s ~~CECL~~stockholders cannot ~~model~~be ~~likely~~certain ~~would~~that ~~create~~NCC will ~~more~~be ~~volatility~~able into ~~our~~find ~~level~~a ofparty ~~allowance~~willing ~~for~~to ~~loan~~engage ~~losses. A material increase~~ in ~~our~~a ~~level~~transaction ofon ~~allowance~~similar ~~for~~or ~~loan~~more ~~losses~~attractive ~~could~~terms ~~adversely~~than ~~affect~~the ~~our business, financial condition and results of operations~~Merger.

~~Our~~Risks ~~use~~Relating ~~of appraisals in deciding whether~~ to ~~make~~Our ~~a loan secured by real property does not ensure the value of the real property collateral.~~Business

InOur ~~considering~~business ~~whether~~is toconcentrated ~~make a loan secured by real property~~in, weand ~~generally~~largely ~~require~~dependent ~~an appraisal. However~~on, anthe ~~appraisal~~continued isgrowth ~~only~~and anwelfare ~~estimate~~ of the ~~value~~general ofgeographic ~~the~~markets ~~property~~in atwhich ~~the time that the appraisal is made. If the appraisal does not reflect the amount that may be obtained upon any sale or foreclosure of the property, then~~ we ~~may not realize an amount equal to the indebtedness secured by the property~~operate.

15Our commercial banking operations are concentrated in the southeastern United States, particularly in Alabama, in central and northeast Florida, and in the Atlanta, Georgia metro area. As of December 31, 2018, approximately 92.4% of our total loans were to borrowers located in Alabama, Florida and Georgia. As a result, our financial condition and results of operations and cash flows are affected by changes in the economic conditions of those states or the regions of which they are a part. Our success depends to a significant extent on the business activity, population, income levels, deposits and real estate activity in these markets. Although our customers’ business and financial interests may extend well beyond these market areas, adverse conditions that affect these market areas could reduce our growth rate, affect the ability of our customers to repay their loans, affect the value of collateral underlying loans, impact our ability to attract deposits and generally affect our financial condition and results of operations. Because of our geographic concentration, we may be less able than other regional or national financial institutions to diversify our credit risks across multiple markets.

~~Table~~A return of ~~Contents~~recessionary conditions could result in increases in our level of nonperforming loans and/or reduced demand for our products and services, which could have an adverse effect on our results of operations.

~~Any~~ Economic ~~expansion~~recession ~~into~~or ~~new~~other economic problems, including those affecting our markets and regions, but also those affecting the United States or ~~new~~world ~~lines~~economies, could have a material adverse impact on the demand for banking products and services. Since the conclusion of ~~business~~the ~~might~~last ~~not~~recession, economic growth has been uneven. If economic conditions deteriorate, or if there are negative developments affecting the domestic and international credit markets, the value of our loans and investments may be ~~successful~~harmed, which in turn would have an adverse effect on our financial performance and condition, as it would for other banks. In addition, although deteriorating market conditions could adversely affect our financial condition, results of operations and cash flows, there can be no assurance that we would benefit from any market growth or favorable economic conditions, either in our primary market areas or nationally, even if they do occur.

AsOur ~~part~~small ofto ~~our~~medium-sized ~~ongoing~~business ~~strategic~~and ~~plan,~~entrepreneurial wecustomers may ~~consider~~have ~~expansion~~fewer ~~into~~financial ~~new~~resources ~~geographic~~than ~~markets.~~larger ~~Such~~entities expansion might take the form of the establishment of de novo branches or the acquisition of existing banks or bank branches. There are considerable costs associated with opening new branches, and new branches generally do not generate sufficient revenues to ~~offset~~weather ~~costs~~a ~~until~~downturn ~~they have been~~ in ~~operation~~the ~~for some time. Additionally~~economy, wewhich may ~~consider~~impair ~~expansion~~our ~~into new lines of business through the acquisition of third parties or organic growth and development. There are substantial risks associated with such efforts, including risks that (i)~~customers’ ~~revenues~~ability ~~from such activities might not be sufficient~~ to ~~offset~~repay ~~the~~their ~~development~~loans, ~~compliance~~ and ~~other~~which ~~implementation~~could costs; (ii) competing products and services and shifting market preferences might affect the profitability of such activities; and (iii) our internal controls might be inadequate to manage the risks associated with new activities. Furthermore, it is possible that our unfamiliarity with new markets or lines of business might adversely affect ~~the success of such actions. If any such expansion into a new geographic or product market is not successful, there could be an adverse effect on~~ our financial condition and results of operations.

We focus our business development and marketing strategy primarily to serve the banking and financial services needs of small to medium-sized businesses and entrepreneurs. These small to medium-sized businesses and entrepreneurs may have ~~incurred~~fewer financial resources in terms of capital or borrowing capacity than larger entities. If economic conditions negatively impact our primary market areas in Alabama, central and ~~expect~~northeast toFlorida, ~~continue~~and ~~incurring~~the Atlanta, ~~substantial~~Georgia ~~expenses~~metro ~~related~~area generally, and small to medium-sized businesses are adversely affected, then our ~~recent~~financial ~~acquisitions~~condition and results of operations may be negatively affected.

We have incurred, and expect to continue incurring, substantial expenses in connection with completing our recent acquisitions and integrating the operations of the acquired businesses with our operations. A number of factors beyond our control could affect the total amount or the timing of our transaction and integration expenses, and such expenses may exceed our initial projections. Many of the expenses that will be incurred by their nature are difficult to estimate accurately at the present time. As a result, the transaction and integration expenses associated with our recent acquisitions could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the acquired businesses.15

~~Acquisitions~~Table ~~may~~of ~~disrupt our business and dilute stockholder value, and integrating acquired companies may be more difficult, costly, or time-consuming than expected.~~ Contents

Our ~~business strategy focuses on both organic growth and growth through acquisitions of~~ financial ~~institutions~~performance ~~located~~will inbe ~~the~~negatively ~~southeastern~~impacted ~~United~~if ~~States. Our pursuit of acquisitions may disrupt our business, and common stock that~~ we ~~issue~~are asunable ~~merger consideration may have the effect of diluting the value of your investment. In addition, we may fail~~ to ~~realize~~execute ~~some or all of the anticipated benefits of completed acquisitions, including~~ our ~~acquisitions~~growth ~~of Private Bancshares and Patriot in 2017 and of FirstAtlantic in January 2018~~strategy. We anticipate that the continued integration process for these entities and any other businesses that we may acquire in the future will be a time-consuming and expensive process, even if the integration process is effectively planned and implemented.

InOur ~~addition,~~current growth strategy is to grow organically and to supplement that growth with select acquisitions. Our ability to grow organically depends primarily on our ~~acquisition~~ability ~~activities~~to ~~could~~generate loans and deposits of acceptable risk and expense, and we may not be ~~material~~successful in continuing this organic growth. Our ability to ~~our~~identify ~~business~~appropriate markets for expansion, recruit and ~~involve~~retain qualified personnel and fund growth at a ~~number~~reasonable cost depends on prevailing economic conditions, maintenance of ~~significant~~sufficient ~~risks~~capital, ~~including~~competitive ~~the~~factors ~~following:~~and changes in banking laws, among other factors. Conversely, if we grow too quickly and are unable to control costs and maintain asset quality, such growth, whether organic or through select acquisitions, could materially and adversely affect our financial condition and results of operations.

●External ~~incurring~~economic ~~time~~factors, ~~and~~such ~~expense~~as ~~associated~~changes ~~with~~in ~~identifying~~monetary policy and ~~evaluating~~inflation ~~potential acquisitions~~ and ~~negotiating potential transactions~~deflation, ~~resulting~~may inhave ~~management’s~~an ~~attention~~adverse ~~being~~effect ~~diverted~~on ~~from~~our ~~the~~business, ~~operation~~financial ofcondition ~~our~~and ~~existing~~results ~~business;~~of operations.

●Our ~~using~~financial ~~inaccurate~~condition ~~estimates~~ and ~~judgments~~results toof ~~evaluate~~operations are affected by credit policies of monetary authorities, ~~operations~~particularly the Federal Reserve. Actions by monetary and fiscal authorities, ~~management~~including the Federal Reserve, ~~and~~could ~~market~~lead ~~risks~~to ~~with~~inflation, ~~respect~~deflation or other economic phenomena that could adversely affect our financial performance. The primary impact of inflation on our operations most likely will be reflected in increased operating costs. Conversely, deflation generally will tend to ~~the~~erode ~~target~~collateral ~~company~~values orand ~~the~~diminish loan quality. Virtually all of our assets and liabilities ~~that~~are wemonetary ~~seek~~in tonature. ~~acquire;~~As a result, interest rates have a significant impact on our performance. Interest rates do not necessarily move in the same direction or by the same magnitude as the prices of goods and services.

●Our ~~exposure~~profitability tois ~~potential~~vulnerable ~~asset~~to ~~quality~~interest ~~issues~~rate ~~of the target company;~~fluctuations.

●Our ~~intense~~profitability ~~competition~~depends ~~from~~substantially ~~other~~on ~~banking~~our ~~organizations~~net interest income. Net interest income is the difference between the interest earned on assets (such as loans and ~~other~~securities ~~potential~~held ~~acquirers,~~in ~~many~~our ofinvestment ~~which~~portfolio) ~~have~~and ~~substantially~~the ~~greater~~interest ~~resources~~paid ~~than~~for weliabilities ~~do;~~(such as interest paid on savings and money market accounts and time deposits).

●Income ~~potential~~associated ~~exposure~~with interest-earning assets and costs associated with interest-bearing liabilities may not be affected uniformly by fluctuations in interest rates. The magnitude and duration of changes in interest rates are events over which we have no control, and such changes may have an adverse effect on our net interest income. Prepayment and early withdrawal levels, which are also impacted by changes in interest rates, can significantly affect our assets and liabilities. For example, an increase in interest rates could, among other things, reduce the demand for loans and decrease loan repayment rates. Such an increase could also adversely affect the ability of our floating-rate borrowers to ~~unknown~~meet their higher payment obligations, which could in turn lead to an increase in non-performing assets and net charge-offs. Conversely, a decrease in the general level of interest rates could affect us by, among other things, leading to greater competition for deposits and incentivizing borrowers to prepay or ~~contingent~~refinance ~~liabilities~~their loans more quickly or frequently than they otherwise would. The primary tool that management uses to measure interest rate risk is a simulation model that evaluates the impact of ~~banks~~varying levels of prevailing interest rates on net interest income and ~~businesses~~the economic value of equity. As of December 31, 2018, this simulation analysis indicated that, if prevailing interest rates immediately decreased by 300 basis points, we ~~acquire~~would expect net interest income to decrease by approximately $23.4 million, ~~including~~or 13.4%, ~~without~~over ~~limitation~~the next 12 months, ~~liabilities~~and ~~for~~a ~~regulatory~~decline in the economic value of equity of $85.6 million, or 9.2%. We believe that this is unlikely based on current interest rate levels. Conversely, if prevailing interest rates immediately increased by 300 basis points, we would expect net interest income to increase by approximately $12.5 million, or 7.2%, over the next 12 months, and ~~compliance~~the ~~issues;~~economic value of equity to decrease by $774 thousand, or 0.08%. However, fluctuations in interest rates affect different classes of income-earning assets differently, and there can be no assurance as to the actual effect on our results of operations should such an increase or decrease occur.

16Generally, the interest rates on our interest-earning assets and interest-bearing liabilities do not change at the same rate, to the same extent or on the same basis. Even assets and liabilities with similar maturities or re-pricing periods may react in different degrees to changes in market interest rates. Interest rates on certain types of assets and liabilities may fluctuate in advance of changes in general market interest rates, while interest rates on other types of assets and liabilities may lag behind changes in general market rates. Certain assets, such as fixed and adjustable rate mortgage loans, have features that limit changes in interest rates on a short-term basis and over the life of the asset. Changes in interest rates could materially and adversely affect our financial condition and results of operations.

~~Table of Contents~~16

●Table ~~inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and other projected benefits~~ of ~~the acquisition;~~Contents

●Market ~~incurring~~interest ~~time~~rates ~~and~~for ~~expense~~loans, ~~required~~investments toand ~~integrate~~deposits ~~the~~are ~~operations~~highly ~~and~~sensitive ~~personnel~~to ofmany ~~the~~factors ~~combined~~beyond ~~businesses;~~our control.

●Generally, ~~inconsistencies~~interest rate spreads (the difference between interest rates earned on assets and interest rates paid on liabilities) have narrowed in ~~standards~~recent years as a result of changing market conditions, ~~procedures~~policies of various government and regulatory authorities and competitive pricing pressures, and ~~policies~~we ~~that~~cannot ~~would~~predict whether these rate spreads will narrow even further. This narrowing of interest rate spreads could adversely affect our ~~ability~~financial condition and results of operations. In addition, we cannot predict whether interest rates will continue to ~~maintain~~remain ~~relationships~~at ~~with~~present ~~customers~~levels. ~~and~~Changes ~~employees;~~in interest rates may cause significant changes, up or down, in our net interest income.

●We ~~experiencing~~attempt ~~higher~~to ~~operating~~minimize ~~expenses~~the ~~relative~~adverse effects of changes in interest rates by structuring our asset-liability composition in order to ~~operating~~obtain the maximum spread between interest income ~~from~~and interest expense. However, there can be no assurance that we will be successful in minimizing the ~~new~~adverse effects of changes in interest rates. Depending on our portfolio of loans and investments, our financial condition and results of operations; may be adversely affected by changes in interest rates.

●We ~~creating~~could ansuffer ~~adverse~~losses ~~short-term~~from ~~effect~~a ondecline ~~our~~in ~~results~~the credit quality of ~~operations;~~the assets that we hold.

●We ~~losing~~could ~~key~~sustain ~~employees~~losses if borrowers, guarantors and ~~customers;~~related parties fail to perform in accordance with the terms of their loans. We have adopted underwriting and credit monitoring procedures and policies that we believe are appropriate to minimize this risk, including the establishment and review of the allowance for credit losses, periodic assessment of the likelihood of nonperformance, tracking loan performance and diversifying our credit portfolio. These policies and procedures, however, may not prevent unexpected losses that could materially adversely affect our financial condition and results of operations. In particular, we face credit quality risks presented by past, current, and potential economic and real estate market conditions.

●A significant ~~problems~~portion ~~relating~~of toour ~~the~~loan ~~conversion~~portfolio ofis ~~the~~secured ~~financial~~by real estate, and ~~customer~~events ~~data~~that ofnegatively impact the ~~acquired~~real ~~entity;~~estate market could negatively impact our business.

●A ~~difficulties~~significant ~~with~~portion ~~integrating~~of ~~acquired~~our ~~customers~~loan ~~into~~portfolio ~~our~~is ~~financial~~secured by either residential or commercial real estate. As of December 31, 2018, we had approximately $724.6 million in residential real estate loans and ~~customer~~$1.53 billion ~~product~~in ~~systems;~~commercial real estate loans outstanding, representing approximately 21.8% and 46.0%, respectively, of our total loans outstanding on that date.

●There ~~potential~~are ~~changes~~significant risks associated with real estate-based lending. Real estate collateral may deteriorate in ~~banking~~value during the time that credit is extended, in which case we might not be able to sell such collateral for an amount necessary to satisfy a defaulting borrower’s obligation to us. In such an event, there could be a material adverse effect on our financial condition and results of operations. Additionally, commercial real estate loans are subject to unique risks. These types of loans are often viewed as having more risks than residential real estate or ~~tax~~other ~~laws~~consumer loans, primarily because relatively large amounts are loaned to a relatively small number of borrowers. Thus, the deterioration of even a small number of these loans could cause a significant increase in our loan loss allowance or ~~regulations~~loan ~~that~~charge-offs, ~~may~~which ~~affect~~in turn could have a material adverse effect on our financial condition and results of operations. Furthermore, commercial real estate loans depend on cash flows from the ~~target~~property ~~company;~~securing the debt. Cash flows may be affected significantly by general economic conditions, and a downturn in a local economy in one of our markets or in occupancy rates where a property is located could increase the likelihood of default.

●The foregoing risks are enhanced as a result of ~~impairment~~the tolimited ~~goodwill~~geographic orscope of our principal markets. Most of the real estate securing our loans is located in Alabama, in central and northeast Florida, and in the Atlanta, Georgia metro area. Because the value of this collateral depends on local real estate market conditions and is affected by, among other~~-than-temporary~~ ~~impairment~~things, neighborhood characteristics, real estate tax rates, the cost of ~~investment~~operating ~~securities~~the properties and local governmental regulation, adverse changes in any of these factors in Alabama, central and northeast Florida or the Atlanta, Georgia metro area could cause a decline in the value of the collateral securing a significant portion of our loan portfolio. Further, the concentration of real estate collateral in these markets limits our ability to diversify the risk of such occurrences.

If difficulties arise with respect to the integration process, then the economic benefits expected to result from an acquisition might not occur. As with any merger of financial institutions, there also may be business disruptions that cause customers to move their business to other financial institutions. Failure to successfully integrate businesses that we acquire could have an adverse effect on our profitability, return on equity, return on assets or ability to implement our strategy, any of which, in turn, could have a material adverse effect on our business, financial condition and results of operation.17

~~Our~~Table ~~liquidity needs might adversely affect our financial condition and results~~ of ~~operations.~~ Contents

~~The~~Our ~~primary~~allowance ~~sources of funds~~ for ~~the Bank are customer deposits and~~ loan ~~repayments.~~losses ~~Loan repayments are subject to the credit risks described above. In addition, deposit levels~~ may not be ~~affected~~adequate ~~by a number of factors, including interest rates paid by competitors, general interest rate levels, returns available~~ to ~~customers~~cover onactual ~~alternative~~loan ~~investments and general economic conditions. Therefore~~losses, wewhich may berequire ~~required~~us to ~~rely~~take ~~from~~a ~~time~~charge to ~~time~~earnings ~~on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations or support growth. The Bank has lines of credit in place with the FHLB~~ and ~~correspondent~~adversely ~~banks~~impact ~~that management believes are adequate to meet~~ our ~~liquidity~~financial ~~needs.~~condition ~~However,~~and ~~there~~results ~~can~~of ~~be no assurance that these arrangements will be sufficient to meet future liquidity needs, particularly if loan demand grows faster than anticipated~~operations.

AsWe amaintain ~~bank~~an ~~holding~~allowance ~~company~~for estimated loan losses that we believe is adequate to absorb any probable losses in our loan portfolio. Management determines the amount of the allowance based on an analysis of general market conditions, the ~~sources~~credit quality of ~~funds~~our ~~available~~loan portfolio and the performance of our customers relative to ~~NCC~~their ~~are~~financial ~~limited~~obligations to us. We periodically evaluate the loan portfolio for risk grading, which can result in changes in the allowance. The amount of future losses is affected by changes in economic, operating and other conditions, including changes in interest rates, that may be beyond our control, and such losses may exceed the allowance for estimated loan losses. Although we believe that our allowance for estimated loan losses is adequate to absorb any probable losses on existing loans that may become uncollectible, there can be no assurance that the allowance will prove sufficient to cover actual loan losses in the future. If actual losses exceed the estimate, the excess losses could adversely affect our net income and capital. Such excess could also lead to larger allowances for loan losses in future periods, which could in turn adversely affect new income and capital in those periods. If economic conditions differ substantially from the assumptions used in the estimate, or if the performance of our loan portfolio deteriorates, future losses may occur, and increases in the allowance may be necessary, either of which would have a negative effect on our financial condition and results of operations.

~~Any~~Additionally, ~~future~~federal ~~constraints~~banking onregulators ~~liquidity~~periodically atreview the ~~holding~~adequacy ~~company~~of ~~level~~our ~~could~~allowance ~~impair~~for ~~NCC’s~~estimated ~~ability~~loan ~~to declare and pay dividends on its common stock~~losses. InThese ~~some~~agencies ~~instances, notice to, or approval from, the Federal Reserve~~ may berequire ~~required~~additional ~~prior~~allowances tobased ~~NCC’s~~on ~~declaration~~their orjudgment ~~payment~~ of ~~dividends.~~the ~~Further,~~information ~~our~~available ~~banking~~at ~~operations are conducted by NBC, which is subject to significant regulation. Federal banking laws restrict~~ the ~~payment~~time of ~~dividends by banks to~~ their ~~holding~~examinations. ~~companies,~~If ~~and NBC is subject to~~ these ~~restrictions~~regulatory ~~with~~agencies ~~respect~~require tous ~~paying dividends~~ to ~~NCC.~~increase ~~For~~our ~~example,~~allowance ~~NBC’s ability to pay dividends on its common stock to NCC without OCC approval is limited under federal banking laws such that the amount available~~ for ~~payment~~estimated ~~may~~loan ~~not~~losses, ~~exceed~~our ~~NBC’s~~financial ~~retained~~condition ~~net~~and ~~income~~results ~~available to holders~~ of ~~its~~operations ~~common~~would ~~stock~~be tonegatively ~~date for the then-current fiscal year, plus retained net income from the prior two fiscal years~~affected. ~~Because NCC’s ability to receive dividends~~ ~~from NBC is restricted, its ability to pay dividends to its own stockholders is also restricted.~~

~~Additionally,~~We ~~the~~may ~~right~~be ofrequired ~~a bank holding company~~ to ~~participate~~increase inour ~~the~~allowance ~~assets~~for ofloan ~~its~~losses ~~subsidiary~~as ~~bank~~a inresult ~~the event~~ of a ~~bank-level~~recent ~~liquidation~~change ~~or reorganization is subject~~ to ~~the~~an ~~claims~~accounting ~~of the bank’s creditors, including depositors, which take priority, except to the extent that the holding company may be a creditor with a recognized claim~~standard.

17The measure of our allowance for loan losses depends in part on the adoption and interpretation of accounting standards. The Financial Accounting Standards Board, or FASB, recently issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses. This ASU provides a new credit impairment model, the Current Expected Credit Loss, or CECL model, which will apply to us beginning on January 1, 2020. CECL will require financial institutions to estimate and develop a provision for credit losses at origination for the lifetime of the loan, as opposed to reserving for incurred or probable losses up to the balance sheet date. Under the CECL model, credit deterioration would be reflected in the income statement in the period of origination or acquisition of the loan, with changes in expected credit losses due to further credit deterioration or improvement reflected in the periods in which the expectation changes. Accordingly, implementation of the CECL model will change our current method of providing allowances for loan losses, which would likely require us to increase our allowance for loan losses. Moreover, the CECL model likely would create more volatility in our level of allowance for loan losses. A material increase in our level of allowance for loan losses could adversely affect our business, financial condition and results of operations.

~~Table~~Our use of ~~Contents~~appraisals in deciding whether to make a loan secured by real property does not ensure the value of the real property collateral.

~~Our~~In ~~largest~~considering whether to make a loan ~~relationships~~secured ~~currently~~by ~~make~~real upproperty, awe ~~material~~generally ~~percentage~~require an appraisal. However, an appraisal is only an estimate of ~~our~~the ~~total~~value ~~loan~~of ~~portfolio~~the property at the time that the appraisal is made. If the appraisal does not reflect the amount that may be obtained upon any sale or foreclosure of the property, then we may not realize an amount equal to the indebtedness secured by the property.

AsAny ofexpansion ~~December~~into ~~31,~~new ~~2017,~~markets ~~our ten largest loan relationships totaled more than $122.6 million in loan exposure,~~ or ~~4.7%~~new oflines ~~our total loan portfolio. The concentration risk associated with having a small number~~ of ~~large~~business ~~loan~~might ~~relationships is that, if one or more of these relationships were to become delinquent or suffer default, we could be at serious risk of material losses. Our allowance for loan losses may~~ not be ~~adequate to cover losses associated with any of these relationships, and any loss or increase in the allowance would negatively affect our earnings and capital~~successful. ~~Even if the loans are collateralized, the large increase in classified assets could harm our reputation with our regulators and inhibit our ability to execute our business plan.~~

~~Several~~As part of our ~~large~~ongoing ~~depositors~~strategic ~~have~~plan, ~~relationships~~we ~~with~~may ~~each~~consider ~~other,~~expansion ~~which~~into ~~creates~~new ageographic ~~higher~~markets. ~~risk~~Such ~~that~~expansion ~~one~~might ~~customer’s~~take ~~withdrawal~~the form of ~~its~~the ~~deposit~~establishment ~~could~~of ~~lead~~de novo branches or the acquisition of existing banks or bank branches. There are considerable costs associated with opening new branches, and new branches generally do not generate sufficient revenues to aoffset ~~loss~~costs until they have been in operation for some time. Additionally, we may consider expansion into new lines of ~~other~~business ~~deposits~~through the acquisition of third parties or organic growth and development. There are substantial risks associated with such efforts, including risks that (i) revenues from ~~customers~~such ~~within~~activities might not be sufficient to offset the ~~relationship~~development, ~~which,~~compliance inand ~~turn,~~other ~~could~~implementation ~~force~~costs; us(ii) competing products and services and shifting market preferences might affect the profitability of such activities; and (iii) our internal controls might be inadequate to ~~fund~~manage the risks associated with new activities. Furthermore, it is possible that our unfamiliarity with new markets or lines of business ~~through~~might ~~more~~adversely ~~expensive~~affect the success of such actions. If any such expansion into a new geographic or product market is not successful, there could be an adverse effect on our financial condition and ~~less~~results ~~stable~~of ~~sources~~operations.

As of December 31, 2017, our ten largest non-brokered depositors accounted for $383.3 million in deposits, or approximately 16.8% of our total deposits. Further, our non-brokered deposit account balance was $2.29 billion, or approximately 99.5% of our total deposits, as of December 31, 2017. Several of our large depositors have business, family or other relationships with each other, which creates a risk that any one customer’s withdrawal of its deposit could lead to a loss of other deposits from customers within the relationship. 18

~~Withdrawals~~Table of deposits by any one of our largest depositors or by one of these related customer groups could force us to rely more heavily on borrowings and other sources of funding for our business and withdrawal demands, adversely affecting our net interest margin and results of operations. We may also be forced, as a result of any withdrawal of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources. Consequently, the occurrence of any of these events could have a material adverse effect on our business, results of operations, financial condition and future prospects.Contents

~~Our~~We ~~factoring~~have ~~services~~incurred, ~~are concentrated in the transportation~~ and ~~automotive~~expect ~~parts~~to ~~and~~continue ~~services industry~~incurring, ~~and~~substantial ~~economic~~expenses ~~conditions~~related orto ~~other factors negatively impacting the transportation and automotive parts and services industry could adversely affect~~ our ~~factoring~~recent ~~business~~acquisitions.

~~Factoring~~We ~~for~~have ~~transportation~~incurred, and ~~automotive~~expect ~~parts~~to ~~and~~continue ~~services~~incurring, ~~businesses~~substantial ~~constituted~~expenses ~~approximately~~in ~~89%~~connection ofwith completing our ~~total~~recent ~~factoring~~acquisitions ~~business~~and asintegrating ~~of December 31, 2017, calculated based on~~ the ~~gross~~operations ~~purchases~~ of ~~invoices~~the ~~from~~acquired ~~such~~ businesses ~~compared~~with toour ~~total gross purchases of factored receivables for December 2017~~operations. ~~Given~~A ~~the~~number ~~concentration~~ of ~~our factoring business in the transportation and automotive parts and services industries, economic conditions or other~~ factors ~~that~~beyond ~~negatively~~our ~~impact~~control ~~these industries~~ could ~~impact~~affect ~~our factoring revenues, as~~ the ~~revenues~~total ~~earned~~amount ~~from~~or ~~purchasing invoices are directly correlated with~~ the ~~amount~~timing of ~~revenue generated by~~ our ~~factoring~~transaction ~~clients (i.e., the volume of transportation~~ and ~~automotive~~integration ~~parts~~expenses, and ~~services~~such ~~invoices~~expenses ~~that~~may ~~they~~exceed ~~are~~our ~~able~~initial ~~to generate by providing their services)~~projections. ~~Reductions~~Many inof ~~economic activity will typically cause a decrease in~~ the ~~volume~~expenses ofthat ~~goods~~will ~~in commerce available to~~ be ~~transported~~incurred by ~~our~~their ~~factoring~~nature ~~clients. Moreover, the operations of a large number of our factoring clients~~ are ~~susceptible~~difficult to ~~changing~~estimate ~~economic~~accurately ~~conditions~~at in the ~~energy~~present ~~industry~~time. ~~For~~As ~~example~~a result, ~~fluctuations~~the intransaction ~~prices of oil~~ and ~~diesel~~integration ~~fuel~~expenses ~~may~~associated ~~affect~~with ~~demand~~our ~~for~~recent ~~transportation~~acquisitions ~~services~~could, ~~which~~particularly ~~may~~ in ~~turn affect~~ the ~~ability~~near ~~of such factoring clients to satisfy their obligations to us. Additionally~~term, exceed the ~~factoring~~savings ~~industry~~that ~~may not continue its historical growth, and~~ we ~~may~~expect ~~face increased competition. A failure~~ to ~~compete~~achieve ~~effectively~~from inthe ~~our~~elimination ~~market could restrain our growth or cause a loss in market share. Any~~ of ~~these~~duplicative ~~events~~expenses ~~could~~and ~~adversely impact~~ the ~~returns~~realization ~~that~~of weeconomies ~~realize~~of onscale ~~our~~and ~~factoring~~cost ~~activities~~savings orrelated ~~result~~to ~~in a decrease in~~ the ~~overall~~integration ~~amount~~ of ~~our~~the ~~factoring~~acquired ~~activities and could have an adverse effect on our financial condition and results of operations~~businesses.

18Acquisitions may disrupt our business and dilute stockholder value, and integrating acquired companies may be more difficult, costly, or time-consuming than expected.

~~Table~~Our business strategy focuses on both organic growth and growth through acquisitions of ~~Contents~~financial institutions located in the southeastern United States. Our pursuit of acquisitions may disrupt our business, and common stock that we issue as merger consideration may have the effect of diluting the value of your investment. In addition, we may fail to realize some or all of the anticipated benefits of completed acquisitions, including our acquisitions of Private Bancshares, Inc. (“Private Bancshares”) and Patriot Bank (“Patriot”) in 2017, and of FirstAtlantic, Premier and Landmark in 2018. We anticipate that the continued integration process for these entities and any other businesses that we may acquire in the future will be a time-consuming and expensive process, even if the integration process is effectively planned and implemented.

~~Additional~~In ~~regulations~~addition, ~~and~~our ~~rulemaking~~acquisition ~~impacting~~activities ~~the~~could ~~transportation~~be ~~industry~~material ~~may have a disproportionate impact on the small~~ to ~~medium-sized trucking businesses that comprise~~ our ~~primary~~business ~~transportation~~and ~~factoring~~involve ~~clients~~a ~~and~~number ~~adversely~~of ~~affect~~significant ~~our~~risks, ~~factoring~~including ~~business.~~the following:

~~Our~~● ~~primary~~incurring ~~transportation~~time ~~factoring clients are small to medium-sized owner-operators~~ and ~~trucking~~expense ~~fleets. Recently implemented federal regulations, and regulations proposed to be implemented in the future, may significantly increase the costs and expenses~~ associated with ~~owning~~identifying ~~or operating a trucking fleet. These regulations include maximum hours of service limitations~~ and ~~other~~evaluating ~~rules~~potential ~~promulgated~~acquisitions ~~by the Federal Motor Carrier Safety Administration of the United States Department of Transportation, electronic log requirements, regulations proposed by the federal Food~~ and ~~Drug~~negotiating ~~Administration~~potential ~~(the “FDA”) requiring increased labeling and monitoring by carriers of any FDA-regulated commodity~~transactions, ~~and~~resulting ~~regulations~~in ~~regarding~~management’s ~~the~~attention ~~amount~~being ofdiverted ~~combined~~from ~~single-limit liability insurance coverage required of carriers. The costs and burdens of compliance with these requirements will have a disproportionate impact on~~ the ~~small~~operation ~~to medium-sized trucking businesses that comprise our factoring client base and could force some or all~~ of ~~these businesses out of the market. Such an occurrence could adversely impact the returns that we realize on~~ our ~~factoring~~existing ~~activities or result in a decrease in the overall amount of our factoring activities and could have an adverse effect on our~~ business~~, financial condition and results of operations.~~ ;

~~Our~~● ~~asset-based~~using ~~lending~~inaccurate estimates and ~~factoring~~judgments ~~products~~to ~~may~~evaluate ~~expose~~credit, usoperations, management, and market risks with respect to anthe ~~increased~~target ~~risk~~company ofor ~~fraud.~~the assets and liabilities that we seek to acquire;

We● ~~rely~~exposure ~~on the structural features embedded in our asset-based lending and factoring products~~ to ~~mitigate~~potential ~~the credit risk associated with such products. With respect to~~ asset~~-based~~ ~~loans,~~quality weissues ~~limit our lending to a percentage~~ of the ~~customer’s~~target borrowing base assets that we believe can be readily liquidated in the event of financial distress of the borrower. With respect to factoring products, we purchase the underlying invoices of our customers and become the direct payee under such invoices, thus transferring the credit risk in such transactions from our customers to the underlying account debtors on such invoices. In the event that one or more customers fraudulently represents the existence or valuation of borrowing base assets in the case of an asset-based loan, or the existence or validity of a purchased invoice in the case of a factoring transaction, we may advance more funds to such customers than we otherwise would and lose the benefit of the structural protections of our products with respect to such advances. In such event, we could be exposed to material additional losses with respect to such loans or factoring products. Although we believe that we have adequate controls in place to monitor and detect fraud with respect to our asset-based lending and factoring products, there is no guarantee that such controls will be effective. Losses from such fraudulent activity could have a material adverse impact on our financial condition and results of operations. company;

We● ~~may~~intense ~~not~~competition befrom ~~able~~other tobanking ~~adequately~~organizations ~~measure~~ and ~~limit~~other ~~the~~potential ~~credit~~acquirers, ~~risk~~many ~~associated~~of ~~with~~which ~~our~~have ~~loan~~substantially ~~portfolio,~~greater ~~which~~resources ~~could~~than ~~adversely~~we ~~affect our profitability.~~do;

As● apotential ~~part~~exposure ofto ~~the~~unknown ~~products~~or ~~and~~contingent ~~services~~liabilities ~~that~~of webanks ~~offer, we make commercial business~~ and ~~real~~businesses ~~estate~~that ~~loans.~~we ~~The~~acquire, ~~principal economic risk associated with each class of loans is the creditworthiness of the borrower~~including, ~~which~~without ~~is affected by the strength of the relevant business market segment~~limitation, ~~local~~liabilities market conditions and general economic conditions. Additional factors related to the credit quality of commercial loans include the quality of the management of the business and the borrower’s ability both to properly evaluate changes in the supply and demand characteristics affecting the market for ~~its~~regulatory ~~products~~ and ~~services~~compliance and to effectively respond to those changes. Additional factors related to the credit quality of commercial real estate loans include tenant vacancy rates and the quality of management of the property. A failure to effectively measure and limit the credit risk associated with our loan portfolio could have an adverse effect on our business, financial condition and results of operations.issues;

We● ~~operate~~inability into arealize ~~highly~~the ~~competitive~~expected ~~industry~~revenue ~~and~~increases, ~~face~~cost ~~significant~~savings, ~~competition~~increases ~~from~~in ~~other~~geographic ~~financial~~or ~~institutions~~product ~~and financial services providers~~presence, ~~which~~and ~~may~~other ~~decrease~~projected ~~our~~benefits ~~growth~~of orthe ~~profits.~~ acquisition;

~~Consumer~~● ~~and~~incurring ~~commercial~~time ~~banking are highly competitive industries. Our market areas contain not only a large number of community~~ and ~~regional~~expense ~~banks,~~required ~~but~~to ~~also~~integrate ~~a significant presence of~~ the country’s largest commercial banks. We compete with other state and national financial institutions, as well as savings and loan associations, savings banks and credit unions, for deposits and loans. In addition, we compete with financial intermediaries, such as consumer finance companies, commercial finance companies, mortgage banking companies, insurance companies, securities firms, mutual funds and several government agencies, as well as major retailers, all actively engaged in providing various types of loans and other financial services. Some of these competitors may have a long history of successful operations ~~in our market areas, greater ties to local businesses~~ and ~~more~~personnel expansive banking relationships, as well as more established depositor bases, fewer regulatory constraints and lower cost structures, than we do. Competitors with greater resources may possess an advantage through their ability to maintain numerous banking locations in more convenient sites, to conduct more extensive promotional and advertising campaigns, or to operate a more developed technology platform. Due to their size, many competitors may offer a broader range of ~~products and services, as well as better pricing for certain products and services, than we can offer. For example, in~~ the ~~current~~combined low interest rate environment, competitors with lower costs of capital may solicit our customers to refinance their loans with a lower interest rate. Further, increased competition among financial services companies due to the recent consolidation of certain competing financial institutions may adversely affect our ability to market our products and services. Technology has lowered barriers to entry and made it possible for banks to compete in our market areas without a retail footprint by offering competitive rates and for non-banks to offer products and services traditionally provided by banks. businesses;

19● inconsistencies in standards, procedures, and policies that would adversely affect our ability to maintain relationships with customers and employees;

~~Table of Contents~~19

~~The~~Table ~~financial services industry could become even more competitive as a result~~ of legislative, regulatory and technological changes and continued consolidation. Banks, securities firms and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking. Contents

~~Our~~● ~~ability~~experiencing tohigher ~~compete~~operating ~~successfully~~expenses ~~depends~~relative onto aoperating ~~number~~income offrom ~~factors,~~the ~~including:~~ new operations;

● ~~our~~creating ~~ability~~an toadverse ~~develop, maintain, and build upon long~~short-term ~~customer~~effect ~~relationships based~~ on ~~quality~~our ~~service~~results ~~and~~of ~~high ethical standards~~operations;

● ~~our~~losing ~~ability~~key toemployees ~~attract~~ and ~~retain qualified employees to operate our business effectively~~customers;

● ~~our~~significant ~~ability~~problems relating to ~~expand~~the ~~our~~conversion ~~market~~of ~~position~~the financial and customer data of the acquired entity;

● ~~the~~difficulties ~~scope,~~with ~~relevance,~~integrating ~~and~~acquired ~~pricing~~customers ofinto ~~products~~our financial and ~~services~~customer ~~that~~product wesystems; ~~offer~~● tolitigation ~~meet customer needs and demands~~risks;

● ~~the~~potential ~~rate~~changes atin ~~which~~banking weor ~~introduce~~tax ~~new~~laws ~~products~~or ~~and~~regulations ~~services~~that ~~relative~~may toaffect ~~our~~the ~~competitors~~target company; or

● ~~customer~~risks ~~satisfaction~~of ~~with~~impairment ~~our~~to ~~level~~goodwill or other-than-temporary impairment of ~~service;~~investment ~~and~~securities.

●If ~~industry~~difficulties ~~and~~arise ~~general~~with respect to the integration process, then the economic ~~trends~~benefits expected to result from an acquisition might not occur. As with any merger of financial institutions, there also may be business disruptions that cause customers to move their business to other financial institutions. Failure to successfully integrate businesses that we acquire could have an adverse effect on our profitability, return on equity, return on assets or ability to implement our strategy, any of which, in turn, could have a material adverse effect on our business, financial condition and results of operation.

~~Failure~~Our toliquidity ~~perform~~needs inmight ~~any of these areas could significantly weaken our competitive position, which could~~ adversely affect our ~~growth and profitability, which, in turn, could harm our business,~~ financial condition and results of operations.

AsThe primary sources of funds for the Bank are customer deposits and loan repayments. Loan repayments are subject to the credit risks described above. In addition, deposit levels may be affected by a ~~community~~number ~~bank~~of factors, weincluding ~~have~~interest ~~lower~~rates ~~lending~~paid ~~limits~~by competitors, general interest rate levels, returns available to customers on alternative investments and ~~different~~general ~~lending~~economic ~~risks~~conditions. ~~than~~Therefore, ~~certain~~we may be required to rely from time to time on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations or support growth. The Bank has lines of credit in place with the FHLB and correspondent banks that management believes are adequate to meet our ~~larger~~liquidity needs. However, ~~more~~there ~~diversified~~can ~~competitors.~~be no assurance that these arrangements will be sufficient to meet future liquidity needs, particularly if loan demand grows faster than anticipated.

WeAs ~~are~~ a ~~community~~bank ~~banking~~holding ~~institution~~company, ~~that provides banking services to~~ the ~~local~~sources communities in the market areas in which we operate. Our ability to diversify our economic risks is limited by our own local markets and economies. We lend primarily to individuals and small to medium-sized businesses, which may expose us to greater lending risks than those of ~~banks~~funds ~~that~~available ~~lend~~ to ~~larger,~~NCC ~~better-capitalized businesses with longer operating histories. In addition, our legally mandated lending limits~~ are ~~lower than those of certain of our competitors that have more capital than we do~~limited. These lower lending limits may discourage borrowers with lending needs that exceed our limits from doing business with us. We may try to serve such borrowers by selling loan participations to other financial institutions; however, this strategy may not succeed.

~~Our~~Any ~~financial~~future ~~projections~~constraints ~~are~~on ~~based~~liquidity at the holding company level could impair NCC’s ability to declare and pay dividends on ~~numerous~~its ~~assumptions~~common ~~about~~stock. ~~future~~In ~~events~~some instances, ~~and~~notice to, or approval from, the Federal Reserve may be required prior to NCC’s declaration or payment of dividends. Further, our ~~actual~~banking ~~financial~~operations ~~performance~~are conducted by NBC, which is subject to significant regulation. Federal banking laws restrict the payment of dividends by banks to their holding companies, and NBC is subject to these restrictions with respect to paying dividends to NCC. For example, NBC’s ability to pay dividends on its common stock to NCC without OCC approval is limited under federal banking laws such that the amount available for payment may ~~differ~~not ~~materially~~exceed NBC’s retained net income available to holders of its common stock to date for the then-current fiscal year, plus retained net income from the prior two fiscal years. Because NCC’s ability to receive dividends ~~our~~from ~~projections~~NBC ifis ~~our~~restricted, ~~assumptions~~its ~~are~~ability ~~inaccurate~~to pay dividends to its own stockholders is also restricted.

IfAdditionally, the ~~communities~~right inof ~~which~~a webank ~~operate~~holding docompany ~~not~~to ~~grow,~~participate orin if the ~~prevailing~~assets ~~economic~~of ~~conditions~~its ~~locally~~subsidiary orbank ~~nationally~~in ~~are~~the ~~less~~event ~~favorable~~of ~~than~~a webank-level ~~have~~liquidation ~~assumed,~~or ~~then~~reorganization ~~our~~is ~~ability~~subject to ~~reduce~~the ~~our~~claims ~~non-performing~~of ~~loans~~the ~~and~~bank’s ~~other~~creditors, ~~real~~including ~~estate~~depositors, ~~owned~~which ~~portfolios~~take ~~and~~priority, except to ~~implement~~the ~~our~~extent ~~business~~that ~~strategies~~the ~~may~~holding becompany ~~adversely affected, and our actual financial performance~~ may be ~~materially~~a ~~different~~creditor ~~from~~with ~~our~~a ~~projections~~recognized claim.

Table of Contents

~~Moreover,~~Our ~~there~~largest ~~can~~loan berelationships nocurrently ~~assurance~~make ~~that~~up wea ~~will~~material ~~benefit~~percentage from any market growth or favorable economic conditions in our market areas even if they do occur. If our senior management team is unable to provide the effective leadership necessary to implement our strategic plan for the Bank, then our actual financial performance may be materially adversely different from our projections. Additionally, to the extent that any component of our ~~strategic~~total ~~plan~~loan ~~requires regulatory approval, if we are unable to obtain necessary approval, we will be unable to completely implement our strategy, which may adversely affect our actual financial results~~portfolio. ~~A failure to successfully implement our strategic plan could adversely affect the price of our common stock.~~

~~Our~~As ~~recent~~of ~~acquisitions~~December ~~may~~31, ~~make~~2018, itour ~~difficult~~ten ~~for~~largest ~~investors~~loan torelationships ~~evaluate~~totaled more than $129.2 million in loan exposure, or 3.9% of our ~~business~~total loan portfolio. In general, ~~financial~~the ~~condition~~concentration ~~and~~risk ~~results~~associated with having a small number of ~~operations~~large ~~and~~loan relationships is that, if one or more of these relationships were to become delinquent or suffer default, we could be at serious risk of material losses. Our allowance for loan losses may ~~also~~not ~~impair~~be adequate to cover losses associated with any of these relationships, and any loss or increase in the allowance would negatively affect our earnings and capital. Even if the loans are collateralized, the large increase in classified assets could harm our reputation with our regulators and inhibit our ability to ~~accurately~~execute ~~forecast~~ our ~~future~~business ~~performance~~plan.

WeSeveral ~~acquired United Group Banking Company~~ of ~~Florida,~~our ~~Inc.~~large ~~and~~depositors ahave ~~controlling~~relationships ~~interest~~with ineach ~~CBI in 2014~~other, ~~Reunion~~which ~~Bank~~creates ofa ~~Florida~~higher inrisk ~~2015,~~that ~~Private~~one ~~Bancshares~~customer’s ~~and~~withdrawal ~~Patriot in 2017 and FirstAtlantic in January 2018. Our limited history operating these businesses and the lack~~ of ~~combined~~its ~~historical~~deposit ~~financial~~could ~~information~~lead ~~relating~~ to ~~the~~a ~~more~~loss ~~recent acquisitions may not provide an adequate basis for investors to evaluate our business, financial condition and results~~ of ~~operations~~other ordeposits tofrom ~~assess~~customers ~~trends~~within ~~that may be affecting~~ the ~~acquired businesses or our business as a whole. Our future operating results depend on a number of factors~~relationship, ~~including our ability to continue to integrate these acquisitions~~which, ~~manage~~in ~~our growth~~turn, ~~retain~~could ~~the~~force ~~respective~~us ~~customer bases and successfully identify and respond~~ to ~~emerging~~fund ~~trends affecting~~ our ~~primary~~business ~~product~~through ~~lines~~more ~~and~~expensive markets. As a result of these uncertainties, predictions about our future financial performance may not be as accurate as they would be if we had a longer operating history, which in turn may affect the trading price and ~~volatility~~less ofstable ~~our common stock~~sources.

~~Because~~As of December 31, 2018, our ten largest non-brokered depositors accounted for $311.3 million in deposits, or approximately 9.1% of our total deposits. As of December 31, 2018, we had no brokered deposits. Several of our large depositors have business, ~~success~~family ~~depends~~or ~~significantly~~other onrelationships ~~key~~with ~~management~~each ~~personnel~~other, ~~the~~which ~~departure~~creates a risk that any one customer’s withdrawal of ~~such~~its ~~personnel~~deposit could ~~impair~~lead ~~operations~~to a loss of other deposits from customers within the relationship.

WeWithdrawals ~~depend~~of ~~heavily~~deposits onby ~~our~~any ~~senior~~one ~~management~~of ~~team.~~our ~~The~~largest ~~loss~~depositors ofor ~~the~~by ~~services~~one of athese ~~member~~related ofcustomer ~~our~~groups ~~senior~~could ~~management~~force ~~team,~~us orto anrely ~~inability~~more toheavily ~~attract~~on ~~other~~borrowings ~~experienced~~and ~~banking~~other ~~personnel,~~sources ~~could~~of ~~adversely~~funding ~~affect~~for our business. ~~Some~~and ofwithdrawal ~~these~~demands, ~~adverse~~adversely ~~effects~~affecting ~~could~~our ~~include~~net ~~the~~interest ~~loss~~margin ofand ~~personal~~results ~~contacts~~of ~~with~~operations. ~~existing~~We ormay ~~potential~~also ~~customers~~be forced, as ~~well~~a asresult ~~the~~of ~~loss~~any withdrawal of ~~special~~deposits, ~~technical~~to ~~knowledge~~rely more heavily on other, ~~experience~~potentially more expensive and ~~skills~~less stable funding sources. Consequently, the occurrence of ~~such~~any ~~individuals~~of ~~who~~these ~~are~~events ~~responsible~~could ~~for~~have a material adverse effect on our business, results of operations, financial condition and future prospects.

WeOur ~~may~~factoring beservices ~~adversely~~are ~~affected~~concentrated byin the ~~lack~~transportation ofand ~~soundness~~automotive ofparts and services industry, and economic conditions or other ~~financial~~factors ~~institutions~~negatively impacting the transportation and automotive parts and services industry could adversely affect our factoring business.

~~Our~~Factoring ~~ability~~for transportation and automotive parts and services businesses constituted approximately 94.0% of our total factoring business as of December 31, 2018, calculated based on the gross purchases of invoices from such businesses compared to ~~engage~~total gross purchases of factored receivables for December 2018. Given the concentration of our factoring business in ~~routine~~the ~~funding~~transportation and automotive parts and services industries, economic conditions or other ~~transactions~~factors that negatively impact these industries could beimpact ~~adversely~~our ~~affected~~factoring byrevenues, as the ~~actions~~revenues ~~and~~earned ~~commercial~~from ~~soundness~~purchasing invoices are directly correlated with the amount of ~~other~~revenue ~~financial~~generated ~~institutions~~by our factoring clients (i.e., ~~Financial~~the ~~institutions~~volume of transportation and automotive parts and services invoices that they are ~~interrelated~~able asto generate by providing their services). Reductions in economic activity will typically cause a ~~result~~decrease in the volume of ~~trading,~~goods ~~clearing,~~in ~~counterparty~~commerce oravailable ~~other~~to ~~relationships.~~be ~~Defaults~~transported by our factoring clients. Moreover, orthe ~~even~~operations ~~rumors~~of ora ~~questions~~large ~~about~~number of our factoring clients are susceptible to changing economic conditions in the energy industry. For example, ~~one~~fluctuations orin ~~more~~prices ~~financial~~of ~~institutions~~oil orand ~~market~~diesel ~~utilities~~fuel may affect demand for transportation services, orwhich may in turn affect the ~~financial~~ability ~~services~~of such factoring clients to satisfy their obligations to us. Additionally, the factoring industry ~~generally~~may not continue its historical growth, and we may ~~lead~~face increased competition. A failure to compete effectively in our market~~-wide~~ ~~liquidity~~could ~~problems~~restrain ~~and~~our ~~losses~~growth or cause a loss in market share. Any of ~~depositor,~~these ~~creditor~~events ~~and~~could ~~counterparty~~adversely ~~confidence,~~impact the returns that we realize on our factoring activities or result in a decrease in the overall amount of our factoring activities and could ~~lead~~have toan ~~losses~~adverse oreffect ~~defaults~~on byour usfinancial orcondition byand ~~other~~results ~~institutions~~of operations.

WeAdditional ~~depend~~regulations and rulemaking impacting the transportation industry may have a disproportionate impact on the ~~accuracy~~small ~~and~~to ~~completeness~~medium-sized oftrucking ~~information~~businesses ~~about~~that ~~customers~~comprise our primary transportation factoring clients and ~~counterparties~~adversely affect our factoring business.

InOur ~~deciding~~primary ~~whether~~transportation factoring clients are small to ~~extend~~medium-sized ~~credit~~owner-operators orand ~~enter~~trucking ~~into~~fleets. ~~other~~Recently ~~transactions~~implemented ~~with~~federal ~~customers~~regulations, and ~~counterparties,~~regulations weproposed ~~may~~to ~~rely~~be onimplemented ~~information~~in ~~furnished~~the byfuture, ormay onsignificantly ~~behalf~~increase ofthe ~~customers~~costs and ~~counterparties,~~expenses ~~including~~associated ~~financial~~with ~~statements~~owning ~~and~~or ~~other~~operating ~~financial~~a ~~information,~~trucking asfleet. ~~well~~These asregulations ~~representations~~include maximum hours of ~~customers~~service limitations and ~~counterparties~~other asrules topromulgated by the ~~accuracy~~Federal ~~and~~Motor ~~completeness~~Carrier Safety Administration of ~~that~~the ~~information.~~United ~~With~~States ~~respect~~Department toof ~~financial~~Transportation, ~~statements~~electronic log requirements, weregulations ~~may~~proposed ~~rely~~by onthe ~~reports~~federal ofFood ~~independent~~and ~~auditors.~~Drug InAdministration ~~deciding~~(the ~~whether~~“FDA”) torequiring ~~extend~~increased ~~credit~~labeling orand ~~engage~~monitoring inby ~~other~~carriers ~~business~~of ~~transactions,~~any weFDA-regulated ~~may~~commodity, ~~rely~~and onregulations ~~our~~regarding ~~customers’~~the ~~representations~~amount ~~that~~of ~~their~~combined ~~financial~~single-limit ~~statements~~liability ~~conform~~insurance tocoverage ~~GAAP~~required ~~and~~of ~~present~~carriers. ~~fairly,~~The incosts ~~all~~and ~~material~~burdens ~~respects,~~of ~~the~~compliance ~~financial~~with ~~condition,~~these ~~results~~requirements ofwill ~~operations~~have ~~and~~a ~~cash~~disproportionate ~~flows~~impact ofon the ~~customer.~~small Weto ~~may~~medium-sized ~~also~~trucking ~~rely~~businesses onthat ~~customer~~comprise ~~representations~~our factoring client base and ~~certifications,~~could force some or ~~other~~all ~~audit~~of orthese ~~accountants’~~businesses ~~reports,~~out ~~with~~of ~~respect~~the tomarket. Such an occurrence could adversely impact the ~~business~~returns ~~and~~that ~~financial~~we ~~condition~~realize ofon our ~~clients.~~factoring ~~Our~~activities ~~financial~~or ~~condition,~~result ~~results~~in ofa ~~operations,~~decrease ~~financial~~in ~~reporting~~the ~~and~~overall ~~reputation~~amount ~~could~~of beour ~~negatively~~factoring ~~affected~~activities ifand wecould ~~rely~~have an adverse effect on ~~materially~~our ~~misleading~~business, ~~false,~~financial ~~inaccurate,~~condition orand ~~fraudulent~~results ~~information~~of operations.

Table of Contents

WeOur ~~are~~asset-based ~~subject~~lending toand ~~environmental~~factoring ~~risk~~products inmay ~~our~~expose ~~lending~~us ~~activities~~to an increased risk of fraud.

~~Because~~We arely ~~significant~~on ~~portion~~the ofstructural features embedded in our ~~loan~~asset-based ~~portfolio~~lending isand ~~secured~~factoring byproducts ~~real~~to ~~property~~mitigate the credit risk associated with such products. With respect to asset-based loans, we ~~may~~limit ~~foreclose~~our onlending ~~and~~to ~~take~~a ~~title~~percentage toof ~~such~~the ~~property~~customer’s borrowing base assets that we believe can be readily liquidated in the ~~ordinary~~event ~~course~~of financial distress of ~~business~~the borrower. IfWith ~~hazardous~~respect ~~substances~~to ~~are~~factoring ~~found~~products, onwe purchase the underlying invoices of our customers and become the direct payee under such ~~property~~invoices, wethus ~~could~~transferring bethe ~~liable~~credit ~~for~~risk ~~remediation~~in ~~costs,~~such astransactions ~~well~~from asour ~~for~~customers ~~personal~~to ~~injury~~the ~~and~~underlying ~~property~~account ~~damage~~debtors on such invoices. ~~Environmental~~In ~~laws~~the ~~might~~event ~~require~~that usone toor ~~incur~~more ~~substantial~~customers ~~expenses,~~fraudulently ~~materially~~represents ~~reduce~~the existence or valuation of borrowing base assets in the ~~property’s~~case ~~value~~of an asset-based loan, or ~~limit~~the ~~our~~existence ~~ability~~or validity of a purchased invoice in the case of a factoring transaction, we may advance more funds to ~~use~~such orcustomers ~~sell~~than we otherwise would and lose the ~~property~~benefit of the structural protections of our products with respect to such advances. ~~Although~~In ~~management~~such ~~has~~event, ~~policies~~we ~~requiring~~could ~~environmental~~be ~~reviews~~exposed ~~before~~to material additional losses with respect to such loans ~~secured~~or byfactoring ~~real~~products. ~~property~~Although ~~are~~we ~~made~~believe that we have adequate controls in place to monitor and ~~before~~detect ~~foreclosure~~fraud iswith ~~commenced~~respect to our asset-based lending and factoring products, itthere is ~~still~~no ~~possible~~guarantee that ~~environmental~~such ~~risks~~controls ~~might~~will ~~not~~ be ~~detected~~effective. ~~and~~Losses ~~that~~from ~~the~~such ~~associated~~fraudulent ~~costs~~activity ~~might~~could have a material adverse ~~effect~~impact on our financial condition and results of operations.

We ~~continually~~may ~~encounter~~not ~~technological~~be ~~change~~able to adequately measure and ~~may~~limit ~~have~~the ~~fewer~~credit ~~resources~~risk ~~than~~associated with our ~~competitors~~loan toportfolio, ~~invest~~which incould ~~technological~~adversely ~~improvements~~affect our profitability.

~~The~~As ~~banking~~a ~~and~~part ~~financial~~of ~~services~~the ~~industries~~products ~~are~~and ~~undergoing~~services ~~rapid~~that ~~technological~~we ~~changes~~offer, ~~with~~we ~~frequent~~make ~~introductions~~commercial ofbusiness ~~new~~and ~~technology-driven~~real ~~products~~estate ~~and services~~loans. InThe ~~addition~~principal toeconomic ~~enhancing~~risk ~~the~~associated ~~level~~with each class of ~~service~~loans ~~provided~~is tothe ~~customers,~~creditworthiness of the ~~effective~~borrower, ~~use~~which is affected by the strength of ~~technology~~the ~~increases~~relevant ~~efficiency~~business market segment, local market conditions and ~~enables~~general ~~financial~~economic ~~institutions~~conditions. Additional factors related to ~~reduce~~the ~~costs.~~credit ~~Our~~quality ~~future~~of ~~success~~commercial ~~will~~loans ~~depend,~~include inthe ~~part,~~quality onof ~~our~~the management of the business and the borrower’s ability both to ~~address~~properly evaluate changes in the ~~needs~~supply ofand ~~our~~demand ~~customers~~characteristics byaffecting ~~using~~the ~~technology~~market tofor ~~provide~~its products and services ~~that~~and ~~enhance~~to ~~customer~~effectively ~~convenience~~respond ~~and~~to ~~create~~those ~~additional~~changes. ~~efficiencies~~Additional infactors ~~operations.~~related ~~Many~~to ofthe ~~our~~credit ~~competitors~~quality ~~have~~of ~~greater~~commercial ~~resources~~real toestate ~~invest~~loans ininclude ~~technological~~tenant ~~improvements,~~vacancy rates and wethe ~~may~~quality ~~not~~of bemanagement ~~able~~of the property. A failure to effectively ~~implement~~measure ~~new~~and ~~technology-driven~~limit ~~products~~the ~~and~~credit ~~services,~~risk ~~which~~associated with our loan portfolio could ~~reduce~~have an adverse effect on our ~~ability~~business, tofinancial ~~effectively~~condition ~~compete~~and results of operations.

~~Our~~We ~~information~~operate ~~systems~~in a highly competitive industry and face significant competition from other financial institutions and financial services providers, which may ~~experience~~decrease aour ~~failure~~growth or ~~interruption~~profits.

WeConsumer ~~rely~~and ~~heavily~~commercial onbanking ~~communications~~are ~~and~~highly ~~information~~competitive ~~systems~~industries. toOur ~~conduct~~market ~~our~~areas ~~business.~~contain ~~Any~~not ~~failure~~only ora ~~interruption~~large innumber ~~the~~of ~~operation~~community ofand ~~these~~regional ~~systems~~banks, ~~could~~but ~~impair~~also ora ~~prevent~~significant presence of the ~~effective~~country’s ~~operation~~largest ofcommercial ~~our~~banks. ~~customer~~We ~~relationship~~compete ~~management~~with other state and national financial institutions, ~~general~~as ~~ledger~~well as savings and loan associations, ~~deposit~~savings banks and credit unions, ~~lending~~for ordeposits ~~other~~and ~~functions~~loans. ~~While~~In addition, we ~~have~~compete ~~policies~~with financial intermediaries, such as consumer finance companies, commercial finance companies, mortgage banking companies, insurance companies, securities firms, mutual funds and ~~procedures~~several ~~designed~~government toagencies, ~~prevent~~as orwell ~~limit~~as ~~the~~major ~~effect~~retailers, all actively engaged in providing various types of aloans ~~failure~~and orother ~~interruption~~financial inservices. ~~the~~Some ~~operation~~of these competitors may have a long history of successful operations in our ~~information~~market ~~systems~~areas, ~~there~~greater ~~can~~ties beto nolocal ~~assurance~~businesses ~~that~~and ~~any~~more ~~such~~expansive ~~failures~~banking orrelationships, ~~interruptions~~as ~~will~~well ~~not~~as ~~occur~~more orestablished depositor bases, iffewer ~~they~~regulatory constraints and lower cost structures, than we do. ~~occur~~Competitors with greater resources may possess an advantage through their ability to maintain numerous banking locations in more convenient sites, ~~that~~to ~~they~~conduct ~~will~~more beextensive ~~adequately~~promotional ~~addressed~~and advertising campaigns, or to operate a more developed technology platform. ~~The~~Due ~~occurrence~~to their size, many competitors may offer a broader range of ~~any~~products ~~failures~~and orservices, ~~interruptions~~as ~~impacting~~well ~~our~~as ~~information~~better ~~systems~~pricing ~~could~~for ~~damage~~certain ~~our~~products ~~reputation~~and services, ~~result~~than we can offer. For example, in athe ~~loss~~current low interest rate environment, competitors with lower costs of ~~customer~~capital ~~business~~may ~~and~~solicit ~~expose~~our uscustomers to ~~additional~~refinance ~~regulatory~~their ~~scrutiny~~loans with a lower interest rate. Further, ~~civil~~increased ~~litigation~~competition among financial services companies due to the recent consolidation of certain competing financial institutions may adversely affect our ability to market our products and services. Technology has lowered barriers to entry and made it possible ~~financial~~for ~~liability,~~banks ~~any~~to ofcompete ~~which~~in ~~could~~our ~~have~~market areas without a ~~material~~retail ~~adverse~~footprint ~~effect~~by onoffering ~~our~~competitive ~~financial~~rates ~~condition~~and for non-banks to offer products and ~~results~~services oftraditionally ~~operations~~provided by banks.

We use information technology in our operations and offer online banking services to our customers, and unauthorized access to our or our customers’ confidential or proprietary information as a result of a cyber-attack or otherwise could expose us to reputational harm and litigation and adversely affect our ability to attract and retain customers.22

~~Information~~Table ~~security risks for financial institutions have generally increased in recent years, in part because~~ of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists, activists and other external parties. We are under a continuous threat of loss due to hacking and cyber-attacks, especially as we continue to expand customer capabilities to utilize the internet and other remote channels to transact business. Our risk and exposure to these matters remains heightened because of the evolving nature and complexity of these threats from cybercriminals and hackers, our plans to continue to provide internet banking and mobile banking channels and our plans to develop additional remote connectivity solutions to serve our customers. Therefore, the secure processing, transmission and storage of information in connection with our online banking services are critical elements of our operations. However, our network could be vulnerable to unauthorized access, computer viruses and other malware, phishing schemes or other security failures. In addition, our customers may use personal smartphones, tablets or other mobile devices that are beyond our control systems in order to access our products and services. Our technologies, systems and networks, as well as our customers’ devices, may become the target of cyber-attacks, electronic fraud or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our customers’ confidential, proprietary and other information, or otherwise disrupt our or our customers’ or other third parties’ business operations. As cyber threats continue to evolve, we may be required to spend significant capital and other resources to protect against these threats or to alleviate or investigate problems caused by such threats. To the extent that our activities or the activities of our customers involve the processing, storage or transmission of confidential customer information, any breaches or unauthorized access to such information could present significant regulatory costs and expose us to litigation and other possible liabilities. Any inability to prevent these types of security threats could also cause existing customers to lose confidence in our systems and could adversely affect our reputation and ability to generate deposits. While we have not experienced any material losses relating to cyber-attacks or other information security breaches to date, we may suffer such losses in the future. The occurrence of any cyber-attack or information security breach could result in potential legal liability, reputational harm, damage to our competitive position and the disruption of our operations, all of which could adversely affect our financial condition or results of operations.Contents

22The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Banks, securities firms and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking.

~~Table~~Our ability to compete successfully depends on a number of ~~Contents~~factors, including:

We● ~~depend~~our onability ~~outside~~to ~~third~~develop, ~~parties~~maintain, ~~for the processing~~ and ~~handling~~build ofupon ~~our~~long-term ~~records~~customer ~~and~~relationships ~~data,~~based ~~which~~on ~~exposes~~quality usservice toand ~~additional~~high ~~risk~~ethical ~~for cybersecurity breaches or regulatory actions.~~standards;

We● rely on software and internet-based platforms developed by third-party vendors to process various transactions. In some cases, we have contracted with third parties to run their proprietary software on our ~~behalf.~~ability ~~These systems include, but are not limited~~ to, ~~general~~attract ~~ledger, payroll, employee benefits, loan~~ and ~~deposit~~retain ~~processing,~~qualified ~~and~~employees ~~securities portfolio accounting. If these third-party service providers experience difficulties, are subject~~ to ~~cybersecurity~~operate ~~breaches or terminate their services, and we are unable to replace them with other service providers on a timely basis,~~ our ~~operations could be interrupted. If an interruption were to continue for a significant period of time, our~~ business, financial condition and results of operations could be adversely affected. While we perform a review of controls instituted by the applicable vendors over these programs in accordance with industry standards and perform our own testing of user controls, we must rely on the continued maintenance of controls by these third-party vendors, including safeguards over the security of customer data. In addition, we maintain, or contract with third parties to maintain, daily backups of key processing outputs in the event of a failure on the part of any of these systems. Nonetheless, we may incur a temporary disruption in our ability to conduct business or process transactions, or damage to our reputation, if the third-party vendor fails to adequately maintain internal controls or institute necessary changes to systems. Such a disruption or breach of security may have a material adverse effect on our business.effectively;

In● ~~addition,~~our ~~federal~~ability ~~regulators have issued guidance outlining their expectations for third-party service provider oversight and monitoring by financial institutions. Any failure~~ to ~~adequately~~expand ~~oversee the actions of~~ our ~~third-party~~market ~~service providers could result in regulatory actions against us, which could adversely affect our business, financial condition and results of operations.~~position;

~~The~~● ~~internal~~the ~~controls~~scope, ~~that~~relevance, weand ~~have~~pricing ~~implemented~~of toproducts ~~mitigate~~and ~~risks~~services ~~inherent~~that towe ~~the~~offer ~~business~~to ofmeet ~~banking~~customer ~~might~~needs ~~fail~~and ~~or be circumvented.~~demands;

~~Management~~● ~~regularly reviews and updates our internal controls and procedures that are designed to manage~~ the ~~various risks in our business, including credit risk, operational risk and interest~~ rate ~~risk.~~at Nowhich ~~system~~we ofintroduce ~~controls,~~new ~~however~~products ~~well-designed~~ and ~~operated,~~services ~~can~~relative ~~provide~~to ~~absolute assurance that the objectives of the system will be met. If there were a failure of such a system, or if a system were circumvented, there could be a material adverse effect on~~ our ~~financial condition and results of operations.~~competitors;

~~Changes~~● incustomer ~~accounting~~satisfaction ~~standards~~with ~~could~~our ~~materially~~level ~~impact~~of ~~our~~service; ~~financial statements.~~and

~~From~~● ~~time~~industry ~~to time, the Financial Accounting Standards Board or the SEC may change the financial accounting~~ and ~~reporting~~general ~~standards~~economic ~~that govern the preparation of our financial statements~~trends. Such changes may result in new or different accounting and reporting standards. In addition, the bodies that interpret the accounting standards (such as banking regulators or outside auditors) may change their interpretations or positions on how these standards should be applied. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retrospectively, or to apply an existing standard differently, also retrospectively, in each case resulting in a need to revise or restate prior period financial statements.

23Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could harm our business, financial condition and results of operations.

~~Table~~As a community bank, we have lower lending limits and different lending risks than certain of ~~Contents~~our larger, more diversified competitors.

~~Adverse~~We ~~weather~~are ora ~~manmade~~community ~~events~~banking ~~could~~institution ~~negatively~~that ~~affect~~provides banking services to the local communities in the market areas in which we operate. Our ability to diversify our ~~core~~economic ~~markets~~risks oris ~~disrupt~~ limited by our ~~operations~~own local markets and economies. We lend primarily to individuals and small to medium-sized businesses, which ~~could~~may expose us to greater lending risks than those of banks that lend to larger, better-capitalized businesses with longer operating histories. In addition, our legally mandated lending limits are lower than those of certain of our competitors that have anmore ~~adverse~~capital ~~effect~~than onwe do. These lower lending limits may discourage borrowers with lending needs that exceed our limits from doing business ~~and~~with ~~results~~us. ofWe ~~operations~~may try to serve such borrowers by selling loan participations to other financial institutions; however, this strategy may not succeed.

Our ~~market~~financial ~~areas~~projections are ~~susceptible~~based toon ~~natural~~numerous ~~disasters,~~assumptions ~~such~~about as hurricanes, tornadoes, tropical storms, other severe weather events related flooding and wind damage and manmade disasters, such as the 2010 oil spill in the Gulf of Mexico. We cannot predict whether or to what extent damage that may be caused by future ~~weather or manmade~~ events ~~will affect our operations or the economies in our current or future market areas~~, ~~but such events could negatively impact economic conditions in these regions~~ and ~~result in a decline in local loan demand and loan originations, a decline in the value or destruction of properties securing~~ our ~~loans,~~actual ~~damage~~financial toperformance ~~our banking facilities and offices, and an increase in delinquencies, foreclosures or loan losses. Our business or results of operations~~ may bediffer ~~adversely~~materially affected by these and other negative effects of natural or manmade disasters. Further, severe weather, natural disasters, acts of war or terrorism, and other external events could adversely affect us in a number of ways, including an increase in delinquencies, bankruptcies or defaults that could result in a higher level of non-performing assets, net charge-offs, and provision for loan losses. Such risks could also impair the value of collateral securing from our ~~outstanding~~projections ~~loans~~if ~~and hurt~~ our ~~deposit~~assumptions ~~base~~are inaccurate.

WeIf ~~may~~the ~~become~~communities ~~involved~~in ~~from~~which ~~time~~we tooperate ~~time~~do innot ~~suits~~grow, ~~legal~~or ~~proceedings~~if the prevailing economic conditions locally or nationally are less favorable than we have assumed, ~~information~~then our ability to reduce our non-~~gathering~~performing ~~requests,~~loans ~~investigations~~and other real estate owned portfolios and ~~proceedings~~to byimplement ~~governmental~~our business strategies may be adversely affected, and ~~self-regulatory~~our ~~agencies~~actual ~~that~~financial performance may ~~lead~~be tomaterially ~~adverse~~different ~~consequences~~from our projections.

~~Many~~Moreover, ~~aspects~~there ofcan ~~the~~be ~~banking~~no ~~business~~assurance ~~involve~~that ~~some~~we ~~risk~~will ofbenefit ~~legal~~from ~~liability.~~any ~~From~~market ~~time~~growth toor ~~time,~~favorable weeconomic ~~may~~conditions bein ~~named~~our ormarket ~~threatened~~areas toeven beif ~~named~~they asdo ~~defendants~~occur. inIf ~~lawsuits arising from~~ our ~~business~~senior ~~activities~~management ~~(and~~team inis ~~some~~unable ~~cases~~to ~~from~~provide the ~~activities~~effective ofleadership ~~companies~~necessary ~~that~~to weimplement ~~have~~our ~~acquired).~~strategic Inplan ~~addition,~~for ~~from~~the ~~time~~Bank, tothen ~~time,~~our weactual ~~could~~financial ~~become~~performance ~~the~~may ~~subject~~be ofmaterially ~~governmental~~adversely ~~and~~different ~~self-regulatory~~from ~~agency~~our ~~information-gathering~~projections. ~~requests~~Additionally, ~~reviews,~~to ~~investigations,~~the ~~proceedings~~extent ~~and~~that ~~other~~any ~~forms~~component of ~~regulatory~~our ~~inquiry,~~strategic ~~including~~plan byrequires ~~bank~~ regulatory ~~agencies~~approval, ~~the~~if ~~SEC~~we ~~and~~are ~~law~~unable ~~enforcement~~to ~~authorities.~~obtain ~~The~~necessary ~~results~~approval, ofwe ~~such~~will ~~proceedings~~be ~~could~~unable ~~lead~~ to ~~significant~~completely ~~civil~~implement orour ~~criminal penalties~~strategy, ~~including~~which ~~monetary~~may ~~penalties,~~adversely ~~damages,~~affect ~~adverse~~our ~~judgments,~~actual ~~settlements,~~financial ~~fines,~~results. ~~injunctions,~~A ~~restrictions~~failure onto ~~the~~successfully ~~way~~implement inour ~~which~~strategic weplan ~~conduct~~could ~~our~~adversely ~~business~~affect orthe ~~reputational~~price ~~harm~~of our common stock.

~~Federal income tax reform could have unforeseen effects on our financial condition and results of operations.~~ 23

OnTable ~~December 22, 2017, the President~~ of the United States signed into law the Tax Cuts and Jobs Act of 2017. The Company is still in the process of analyzing this law and its possible effects on the Company. The law includes a number of provisions, including the lowering of the United States corporate tax rate from 35 percent to 21 percent, effective January 1, 2018. There are also provisions that may partially offset the benefit of such rate reduction. Financial statement impacts include adjustments for, among other things, the re-measurement of deferred tax assets and liabilities. While the provisions of the law generally are expected to benefit the Company, the law remains subject to implementation through rulemaking and administrative guidance that has not yet been implemented. The Company anticipates that the impact of Tax Cuts and Jobs Act may be material to our business, financial condition and results of operations; however, the intended and unintended consequences of the Tax Cuts and Jobs Act and of future tax legislation on our business are uncertain.Contents

~~Risks~~Our ~~Relating~~recent acquisitions may make it difficult for investors to ~~the~~evaluate ~~Regulation~~our business, financial condition and results of ~~the~~operations ~~Banking~~and ~~Industry~~may also impair our ability to accurately forecast our future performance.

We ~~are~~acquired ~~subject~~United toGroup ~~extensive~~Banking ~~regulation~~Company of Florida, Inc. and a controlling interest in CBI in 2014, Reunion Bank of Florida in 2015, Private Bancshares and Patriot in 2017, and FirstAtlantic, Premier and Landmark in 2018. Our limited history operating these businesses and the ~~conduct~~lack of combined historical financial information relating to the more recent acquisitions may not provide an adequate basis for investors to evaluate our business, ~~which~~financial ~~imposes~~condition ~~additional~~and ~~costs~~results of operations or to assess trends that may be affecting the acquired businesses or our business as a whole. Our future operating results depend on usa number of factors, including our ability to continue to integrate these acquisitions, manage our growth, retain the respective customer bases and ~~adversely~~successfully ~~affects~~identify and respond to emerging trends affecting our ~~profitability~~primary product lines and markets. As a result of these uncertainties, predictions about our future financial performance may not be as accurate as they would be if we had a longer operating history, which in turn may affect the trading price and volatility of our common stock.

AsBecause aour ~~financial~~business ~~holding~~success ~~company,~~depends ~~NCC~~significantly ison ~~subject~~key tomanagement ~~federal regulation under the BHCA and the examination and reporting requirements of the Federal Reserve. As a national banking association~~personnel, ~~NBC is subject to federal regulation under~~ the ~~National~~departure ~~Bank Act and the examination and reporting requirements~~ of ~~the~~such ~~OCC.~~personnel ~~Federal~~could ~~regulation~~impair ~~of the banking industry, along with tax and accounting laws, regulations, rules and standards, may limit our~~ operations ~~significantly and control the methods by which we conduct business~~. Banking regulations are primarily intended to protect depositors, deposit insurance funds and the banking system as a whole, and not stockholders or creditors. These regulations affect lending practices, capital structure, investment practices, dividend policy and overall growth, among other things. For example, federal and state consumer protection laws and regulations limit the manner in which we may offer and extend credit. In addition, the laws governing bankruptcy generally favor debtors, making it more expensive and more difficult to collect from customers who become subject to bankruptcy proceedings.

24We depend heavily on our senior management team. The loss of the services of a member of our senior management team, or an inability to attract other experienced banking personnel, could adversely affect our business. Some of these adverse effects could include the loss of personal contacts with existing or potential customers, as well as the loss of special technical knowledge, experience and skills of such individuals who are responsible for our operations.

~~Table~~We may be adversely affected by the lack of ~~Contents~~soundness of other financial institutions.

~~The~~Our ~~Federal~~ability ~~Reserve~~to ~~and~~engage ~~OCC~~in ~~periodically~~routine ~~conduct~~funding ~~examinations~~and ofother ~~our~~transactions ~~business,~~could ~~including~~be ~~our~~adversely ~~compliance~~affected ~~with~~by ~~applicable~~the ~~laws~~actions and ~~regulations.~~commercial ~~Accommodating~~soundness ~~such~~of ~~examinations~~other ~~may~~financial ~~require~~institutions. ~~management~~Financial toinstitutions ~~reallocate~~are ~~resources~~interrelated ~~that would otherwise be used in our day-to-day operations. If,~~ as a result of ~~an examination~~trading, ~~any such banking agency was to determine that the financial condition~~clearing, ~~capital~~counterparty ~~resources, allowance for loan losses, asset quality, earnings prospects, management, liquidity~~ or other ~~aspects~~relationships. ofDefaults ~~our operations had become unsatisfactory~~by, or ~~that~~even werumors or ~~our~~questions ~~management~~about, ~~were~~one ~~in violation of any law~~ or ~~regulation,~~more ~~such~~financial ~~banking~~institutions ~~agency may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe~~ or ~~unsound”~~market ~~practices~~utilities, ~~to require affirmative actions to correct any conditions resulting from any violation~~ or ~~practice,~~the tofinancial ~~issue~~services anindustry ~~administrative order that can be judicially enforced~~generally, tomay ~~direct~~lead ~~an increase in capital,~~ to ~~restrict~~market-wide ~~our~~liquidity ~~growth,~~problems ~~to assess civil monetary penalties against us~~ and ~~our~~losses ~~officers~~of ~~and directors~~depositor, tocreditor ~~remove officers~~ and ~~directors~~counterparty confidence, and, ifcould itlead isto ~~concluded~~losses ~~that~~or ~~such~~defaults ~~conditions~~by ~~cannot~~us ~~be corrected~~ or ~~there~~by isother ~~an imminent risk of loss to depositors, to terminate our deposit insurance~~institutions. ~~If we become subject to such a regulatory action, it could have a material adverse effect on our business, financial condition and results of operations.~~

~~FDIC~~We ~~deposit~~depend ~~insurance~~on ~~assessments may continue to materially increase in~~ the ~~future,~~accuracy ~~which~~and ~~would~~completeness ~~have~~of aninformation ~~adverse~~about ~~effect~~customers onand ~~our earnings~~counterparties.

AsIn adeciding ~~member~~whether ~~institution~~to ofextend ~~the~~credit ~~FDIC,~~or ~~NBC~~enter isinto ~~assessed~~other atransactions ~~quarterly~~with ~~deposit~~customers ~~insurance~~and ~~premium.~~counterparties, Inwe ~~the~~may ~~aftermath~~rely ofon ~~the~~information ~~most~~furnished ~~recent~~by ~~recession,~~or aon ~~number~~behalf of ~~bank~~customers ~~failures~~and ~~led~~counterparties, toincluding afinancial ~~depletion~~statements ofand ~~the~~other ~~FDIC’s~~financial ~~Deposit~~information, ~~Insurance~~as ~~Fund~~well as representations of customers and ~~reduced~~counterparties as to the ~~ratio~~accuracy and completeness of ~~reserves~~that information. With respect to ~~insured~~financial ~~deposits~~statements, we may rely on reports of independent auditors. ~~The~~In ~~FDIC~~deciding ~~has~~whether ~~adopted~~to aextend ~~Deposit~~credit ~~Insurance~~or ~~Fund~~engage ~~Restoration~~in ~~Plan~~other business transactions, ~~which~~we ~~requires~~may ~~the~~rely ~~Deposit~~on ~~Insurance~~our ~~Fund~~customers’ representations that their financial statements conform to ~~attain~~GAAP aand ~~1.35%~~present ~~reserve~~fairly, ~~ratio~~in byall ~~September 30~~material respects, ~~2020.~~the Asfinancial acondition, ~~result~~results of ~~this~~operations ~~requirement,~~and ~~NBC~~cash ~~could~~flows beof ~~required~~the tocustomer. ~~pay~~We ~~significantly~~may ~~higher~~also ~~premiums~~rely oron ~~additional~~customer ~~special~~representations ~~assessments~~and ~~that~~certifications, ~~would~~or ~~adversely~~other ~~affect~~audit ~~its~~or ~~earnings~~accountants’ reports, ~~thereby~~with ~~reducing~~respect to the ~~availability~~business and financial condition of ~~funds~~our toclients. ~~pay~~Our ~~dividends~~financial tocondition, ~~NCC~~results ~~(subject~~of tooperations, ~~the~~financial ~~other~~reporting ~~limitations~~and ~~discussed~~reputation ~~herein)~~could be negatively affected if we rely on materially misleading, false, inaccurate, or fraudulent information.

We are subject to ~~certain~~environmental ~~capital~~risk ~~requirements~~in by our ~~regulators~~lending activities.

~~Applicable~~Because ~~regulations~~a ~~require~~significant usportion toof ~~maintain~~our ~~specific~~loan ~~capital~~portfolio ~~standards~~is insecured ~~relation~~by toreal ~~the~~property, ~~credit~~we ~~risks~~may offoreclose ~~our~~on ~~assets~~ and ~~off-balance~~take ~~sheet~~title ~~exposures.~~to ~~Various~~such ~~components~~property in the ordinary course of ~~these~~business. ~~requirements~~If hazardous substances are ~~subject~~found toon ~~qualitative~~such ~~judgments~~property, bywe ~~regulators.~~could ~~Both~~be ~~NCC~~liable ~~and~~for ~~NBC~~remediation ~~are~~costs, “as well ~~capitalized”~~as ~~under~~for ~~the~~personal ~~current~~injury ~~regulatory~~and ~~framework~~property damage. AEnvironmental ~~failure~~laws tomight ~~remain~~require ~~“well~~us ~~capitalized”~~to ~~could~~incur ~~affect~~substantial ~~our~~expenses, ~~customers’~~materially ~~confidence,~~reduce ~~which~~the ~~could~~property’s ~~adversely~~value ~~affect~~or limit our ability to douse ~~business~~or sell the property. InAlthough ~~addition,~~management ahas ~~failure~~policies torequiring ~~maintain~~environmental ~~such~~reviews ~~status~~before ~~could~~loans ~~also~~secured ~~result~~by inreal ~~restrictions~~property ~~imposed~~are bymade ~~regulatory~~and ~~authorities~~before onforeclosure ~~our~~is ~~growth~~commenced, ~~and~~it ~~other~~is ~~activities.~~still ~~Any~~possible ~~such~~that ~~effect~~environmental onrisks ~~customers~~might ornot ~~restrictions~~be bydetected ~~regulators~~and ~~could~~that the associated costs might have a material adverse effect on our financial condition and results of operations.

We may need to raise additional capital in the future, including as a result of potential increased minimum capital thresholds established by regulators, but that capital may not be available when it is needed or may be dilutive to stockholders.24

WeTable are required by federal and state regulatory authorities to maintain adequate capital levels to support our operations. New regulations implementing minimum capital standards could require financial institutions to maintain higher minimum capital ratios and may place a greater emphasis on common equity as a component of “Tier 1 Capital,” which consists generally of shareholders’ equity and qualifying preferred stock, less certain goodwill items and other intangible assets. In order to support operations and comply with regulatory standards, we may need to raise capital in the future, and in some cases, NCC may be required to contribute capital to NBC. Our ability to raise additional capital will depend on conditions in the capital markets at that time, which are outside of our control, on our financial performance and on a successful execution of our growth strategy. Accordingly, there can be no assurance that any additional needed capital will be available on favorable terms. The capital and credit markets have experienced significant volatility in recent years. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength. If we have to raise capital in the form of debt, we may have to pledge our assets, including our stock in NBC. If we cannot raise additional capital when needed, our financial condition and results of operations may be adversely affected, and banking regulatory authorities may subject us to regulatory enforcement action, including receivership. Furthermore, an issuance of additional shares of our common stock could dilute the economic ownership interest of our stockholders. Contents

25We continually encounter technological change and may have fewer resources than our competitors to invest in technological improvements.

~~Table~~The banking and financial services industries are undergoing rapid technological changes, with frequent introductions of ~~Contents~~new technology-driven products and services. In addition to enhancing the level of service provided to customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend, in part, on our ability to address the needs of our customers by using technology to provide products and services that enhance customer convenience and create additional efficiencies in operations. Many of our competitors have greater resources to invest in technological improvements, and we may not be able to effectively implement new technology-driven products and services, which could reduce our ability to effectively compete.

WeOur ~~are~~information ~~subject~~systems tomay ~~numerous~~experience ~~laws~~a ~~designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and~~ failure toor ~~comply with these laws could lead to a wide variety of sanctions~~interruption.

~~The~~We ~~CRA,~~rely ~~the~~heavily ~~Equal~~on ~~Credit~~communications ~~Opportunity~~and ~~Act,~~information ~~the~~systems ~~Fair~~to ~~Housing~~conduct ~~Act,~~our ~~and~~business. ~~other~~Any ~~fair~~failure ~~lending~~or ~~laws~~interruption ~~and~~in ~~regulations~~the ~~impose~~operation ~~nondiscriminatory~~of ~~lending~~these ~~requirements~~systems oncould ~~financial~~impair ~~institutions.~~or ~~The~~prevent ~~United~~the ~~States~~effective ~~Department~~operation of ~~Justice~~our ~~and~~customer ~~other~~relationship ~~federal~~management, ~~agencies~~general ~~are~~ledger, ~~responsible~~deposit, ~~for~~lending ~~enforcing~~or ~~these~~other ~~laws~~functions. ~~and~~While ~~regulations.~~we Ahave ~~successful~~policies ~~regulatory~~and ~~challenge~~procedures designed to anprevent ~~institution’s~~or ~~performance~~limit ~~under~~ the ~~CRA~~effect of a failure or ~~fair~~interruption ~~lending~~in ~~laws~~the ~~and~~operation ~~regulations~~of ~~could~~our ~~result~~information insystems, athere ~~wide~~can ~~variety~~be ofno ~~sanctions,~~assurance ~~including~~that ~~damages~~any ~~and~~such ~~civil~~failures ~~money~~or ~~penalties~~interruptions will not occur or, ~~injunctive~~if ~~relief~~they do occur, ~~restrictions~~that onthey ~~merger~~will ~~and~~be ~~acquisition~~adequately ~~activities,~~addressed. ~~restrictions~~The onoccurrence ~~expansion~~of ~~and~~any ~~restrictions~~failures onor ~~entering~~interruptions ~~new~~impacting ~~business~~our ~~lines.~~information ~~Private~~systems ~~parties~~could ~~may~~damage ~~also~~our ~~have~~reputation, ~~the~~result ~~ability~~in toa ~~challenge~~loss anof ~~institution’s~~customer ~~performance~~business ~~under~~and ~~fair~~expose ~~lending~~us ~~laws~~to inadditional ~~private~~regulatory ~~class~~scrutiny, ~~action~~civil litigation. ~~Such~~and ~~actions~~possible financial liability, any of which could have a material adverse effect on our ~~business,~~ financial condition, and results of operations ~~and future prospects~~.

We ~~are~~use ~~subject~~information totechnology ~~laws~~in ~~regarding~~our ~~the~~operations ~~privacy,~~and ~~information~~offer ~~security~~online ~~and~~banking ~~protection~~services ofto ~~personal~~our ~~information~~customers, and ~~any~~unauthorized ~~violation~~access ofto ~~these~~our ~~laws~~or our customers’ confidential or ~~unauthorized~~proprietary ~~disclosure~~information as a result of ~~such~~a ~~information~~cyber-attack or otherwise could ~~damage~~expose ~~our~~us ~~reputation~~to reputational harm and ~~otherwise~~litigation and adversely affect our ~~operations~~ability to attract and ~~financial~~retain ~~condition~~customers.

~~Our~~Information ~~business~~security ~~requires~~risks ~~the~~for ~~collection~~financial ~~and~~institutions ~~retention~~have ofgenerally ~~large~~increased ~~volumes~~in ofrecent ~~customer data~~years, ~~including personally identifiable information~~ in ~~various~~part ~~information~~because ~~systems~~of ~~that~~the weproliferation ~~maintain~~of ~~and~~new ~~in those maintained by third parties with whom we contract to provide data services. We also maintain important internal data~~technologies, ~~such~~the asuse ~~personally~~of ~~identifiable~~the ~~information~~internet ~~about our employees~~ and ~~information~~telecommunications ~~relating~~technologies to ~~our~~conduct ~~operations.~~financial Wetransactions, ~~are subject to complex~~ and ~~evolving laws and regulations governing~~ the ~~privacy~~increased sophistication and ~~protection~~activities of ~~personal~~organized ~~information~~crime, ~~of individuals (including customers~~hackers, ~~employees~~terrorists, ~~suppliers~~activists and other ~~third~~external parties). ~~For~~We ~~example,~~are ~~our~~under ~~business~~a iscontinuous ~~subject~~threat toof ~~the~~loss ~~Gramm-Leach-Bliley~~due ~~Act, which, among other things: (i) imposes certain limitations on our ability~~ to ~~share~~hacking ~~nonpublic~~and ~~personal~~cyber-attacks, ~~information~~especially ~~about~~as ~~our~~we ~~customers~~continue ~~with nonaffiliated third parties; (ii) requires us~~ to ~~provide~~expand ~~certain~~customer ~~disclosures~~capabilities to ~~customers~~utilize ~~about~~the ~~our~~internet ~~information collection, sharing~~ and ~~security~~other ~~practices~~remote ~~and~~channels to ~~afford~~transact ~~customers~~business. ~~the~~These ~~right~~cyber-attacks toinclude ~~“opt~~computer ~~out”~~viruses, ofmalicious ~~any~~or ~~information~~destructive ~~sharing~~code, byphishing ~~us with nonaffiliated third parties (with certain exceptions); and (iii) requires us to develop~~attacks, ~~implement~~denial ~~and~~of ~~maintain~~service aor ~~written comprehensive~~ information, ~~security~~ransomware, ~~program~~improper ~~containing~~access ~~appropriate~~by ~~safeguards~~employees ~~based~~or ~~on our size and complexity~~vendors, ~~the~~attacks ~~nature~~on ~~and~~personal ~~scope~~email of ~~our activities~~employees, ~~and~~ransom ~~the~~demands ~~sensitivity of customer information we process, as well as plans for responding~~ to ~~data~~not expose security ~~breaches.~~vulnerabilities ~~Various~~in ~~state~~our ~~and~~systems ~~federal~~or ~~banking~~the ~~regulators~~systems ~~and~~of ~~state~~third ~~legislatures~~parties ~~have~~or ~~also~~other ~~enacted data~~ security ~~breach~~breaches ~~notification~~that ~~requirements~~could ~~with~~result ~~varying~~in ~~levels~~the ofunauthorized ~~individual~~release, ~~consumer~~gathering, ~~regulatory or law enforcement notification in the event of a security breach. Ensuring that our collection~~monitoring, ~~use~~misuse, ~~transfer and storage of personal information complies with all applicable laws and regulations can increase our costs. Furthermore~~loss, weor ~~may~~destruction ~~not be able to ensure that all~~ of ~~our clients~~confidential, ~~suppliers~~proprietary, ~~counterparties~~ and other ~~third~~information ~~parties have appropriate controls in place to protect the confidentiality~~ of ~~the information that they exchange with us~~ours, ~~particularly~~our ~~where such information is transmitted by electronic means. If personal~~employees, ~~confidential~~our ~~or proprietary information of~~ customers ~~or others were to be mishandled or misused (in situations where~~, ~~for example, such information was erroneously provided to unauthorized persons,~~ or ~~where~~of ~~such information was intercepted or otherwise compromised by~~ third parties), wedamage ~~could~~our besystems ~~exposed to litigation~~ or ~~regulatory~~otherwise ~~sanctions~~materially ~~under~~disrupt ~~applicable laws and regulations. Concerns about the effectiveness of~~ our ~~measures to safeguard personal information could cause us to lose customers~~ or ~~potential~~our customers’ ~~for our products and services and thereby reduce our revenues. Accordingly, any failure~~ or ~~perceived~~other ~~failure~~third toparties’ ~~comply~~network ~~with~~access ~~applicable privacy~~ or ~~data~~business ~~protection laws and regulations may subject us to inquiries, examinations and investigations that could result in requirements to modify or cease certain~~ operations ~~or practices or in significant liabilities, fines or penalties, and could damage our reputation and otherwise adversely affect our operations and financial condition~~.

WeOur ~~are~~risk ~~subject~~and exposure to these matters remains heightened because of the ~~Bank~~evolving ~~Secrecy~~nature ~~Act~~and complexity of these threats from cybercriminals and hackers, our plans to continue to provide internet banking and mobile banking channels and our plans to develop additional remote connectivity solutions to serve our customers. Therefore, the secure processing, transmission and storage of information in connection with our online banking services are critical elements of our operations. However, our network could be vulnerable to unauthorized access, computer viruses and other ~~anti~~malware, phishing schemes or other security failures. In addition, our customers may use personal smartphones, tablets or other mobile devices that are beyond our control systems in order to access our products and services. Our technologies, systems and networks, as well as our customers’ devices, may become the target of cyber-~~money~~attacks, ~~laundering~~electronic ~~statutes~~fraud or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our customers’ confidential, proprietary and ~~regulations~~other information, or otherwise disrupt our or our customers’ or other third parties’ business operations. As cyber threats continue to evolve, we may be required to spend significant capital and ~~any~~other ~~deemed~~resources ~~deficiency~~to protect against these threats or to alleviate or investigate problems caused by such threats. To the extent that our ~~regulators~~activities ~~with~~or ~~respect~~the activities of our customers involve the processing, storage or transmission of confidential customer information, any breaches or unauthorized access to such information could present significant regulatory costs and expose us to litigation and other possible liabilities. Any inability to prevent these ~~laws~~types of security threats could also cause existing customers to lose confidence in our systems and could adversely affect our reputation and ability to generate deposits. While we have not experienced any material losses relating to cyber-attacks or other information security breaches to date, we may suffer such losses in the future. The occurrence of any cyber-attack or information security breach could result in ~~significant~~potential legal liability, reputational harm, damage to our competitive position and the disruption of our operations, all of which could adversely affect our financial condition or results of operations.

Federal law requires financial institutions to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports when appropriate. In addition to other bank regulatory agencies, the Financial Crimes Enforcement Network of the United States Department of the Treasury is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with state and federal banking regulators, as well as the United States Department of Justice, Consumer Financial Protection Bureau, Drug Enforcement Administration, and Internal Revenue Service. We are also subject to increased scrutiny with regard to our compliance with the rules enforced by the Office of Foreign Assets Control regarding, among other things, the prohibition on transacting business with, and the need to freeze assets of, certain persons and organizations identified as a threat to the national security, foreign policy or economy of the United States. If our policies, procedures and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including acquisition activities. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition, results of operations and future prospects. 25

26Table of Contents

~~Table~~We depend on outside third parties for the processing and handling of ~~Contents~~our records and data, which exposes us to additional risk for cybersecurity breaches or regulatory actions.

~~Risks~~We ~~Related~~rely on software and internet-based platforms developed by third-party vendors to ~~Ownership~~process various transactions. In some cases, we have contracted with third parties to run their proprietary software on our behalf. These systems include, but are not limited to, general ledger, payroll, employee benefits, loan and deposit processing, and securities portfolio accounting. If these third-party service providers experience difficulties, are subject to cybersecurity breaches or terminate their services, and we are unable to replace them with other service providers on a timely basis, our operations could be interrupted. If an interruption were to continue for a significant period of ~~Our~~time, ~~Common~~our ~~Stock~~business, financial condition and results of operations could be adversely affected. While we perform a review of controls instituted by the applicable vendors over these programs in accordance with industry standards and perform our own testing of user controls, we must rely on the continued maintenance of controls by these third-party vendors, including safeguards over the security of customer data. In addition, we maintain, or contract with third parties to maintain, daily backups of key processing outputs in the event of a failure on the part of any of these systems. Nonetheless, we may incur a temporary disruption in our ability to conduct business or process transactions, or damage to our reputation, if the third-party vendor fails to adequately maintain internal controls or institute necessary changes to systems. Such a disruption or breach of security may have a material adverse effect on our business.

~~The~~In ~~market~~addition, ~~price~~federal ofregulators ~~our~~have ~~common~~issued ~~stock~~guidance ~~may~~outlining betheir ~~subject~~expectations tofor ~~substantial~~third-party ~~fluctuations,~~service ~~which~~provider ~~may~~oversight ~~make~~and itmonitoring ~~difficult~~by ~~for~~financial ~~you~~institutions. toAny ~~sell~~failure ~~your~~to ~~shares~~adequately atoversee the ~~volumes~~actions of our third-party service providers could result in regulatory actions against us, ~~prices~~which could adversely affect our business, orfinancial ~~times~~condition ~~desired.~~and results of operations.

~~The~~Uncertainty ~~trading~~relating ~~price~~to ofthe ~~our~~LIBOR ~~common~~calculation ~~stock~~process ~~may be volatile~~ and ~~subject~~potential tophasing ~~wide~~out ~~price~~of ~~fluctuations~~LIBOR inmay ~~response~~adversely toaffect ~~various~~our ~~factors,~~results ~~including:~~ of operations.

●On ~~actual~~July 27, 2017, the Chief Executive of the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop persuading or ~~anticipated~~compelling ~~fluctuations~~banks to submit rates for the calibration of LIBOR to the administrator of LIBOR after 2021. The announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. It is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR or whether any additional reforms to LIBOR may be enacted in ~~our~~the ~~operating~~United ~~results~~Kingdom or elsewhere. At this time, no consensus exists as to what rate or rates may become acceptable alternatives to LIBOR and it is impossible to predict the effect of any such alternatives on the value of LIBOR-based securities and variable rate loans, subordinated debentures, or other securities or financial ~~condition~~arrangements, given LIBOR’s role in determining market interest rates globally. Uncertainty as to the nature of alternative reference rates and as to potential changes or ~~asset~~other ~~quality;~~reforms to LIBOR may adversely affect LIBOR rates and the value of LIBOR-based loans and securities in our portfolio, and may impact the availability and cost of hedging instruments and borrowings. If LIBOR rates are no longer available, and we are required to implement substitute indices for the calculation of interest rates under our loan agreements with our borrowers, we may incur significant expenses in effecting the transition, and may be subject to disputes or litigation with customers over the appropriateness or comparability to LIBOR of the substitute indices, which could have an adverse effect on our results of operations.

~~● market conditions in the broader stock market in general, or in the financial services industry in particular;~~26

●Table ~~publication~~ of research reports about us, our competitors, or the financial services industry generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage;Contents

●The ~~future~~internal ~~issuances~~controls that we have implemented to mitigate risks inherent to the business of ~~our~~banking ~~common~~might ~~stock~~fail or ~~other~~be ~~securities;~~circumvented.

●Management ~~significant~~regularly ~~acquisitions~~reviews orand updates our internal controls and procedures that are designed to manage the various risks in our business, ~~combinations~~including credit risk, ~~strategic~~operational ~~partnerships~~risk and interest rate risk. No system of controls, ~~joint~~however ~~ventures~~well-designed and operated, orcan ~~capital~~provide ~~commitments~~absolute byassurance orthat ~~involving~~the usobjectives of the system will be met. If there were a failure of such a system, or if a system were circumvented, there could be a material adverse effect on our ~~competitors;~~financial condition and results of operations.

●Changes ~~additions~~in oraccounting ~~departures~~standards ofcould ~~key~~materially ~~personnel;~~impact our financial statements.

●From ~~trades~~time ofto ~~large~~time, ~~blocks~~the FASB or the Securities and Exchange Commission (“SEC”) may change the financial accounting and reporting standards that govern the preparation of our ~~stock;~~financial statements. Such changes may result in new or different accounting and reporting standards. In addition, the bodies that interpret the accounting standards (such as banking regulators or outside auditors) may change their interpretations or positions on how these standards should be applied. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retrospectively, or to apply an existing standard differently, also retrospectively, in each case resulting in a need to revise or restate prior period financial statements.

●Adverse ~~economic~~weather ~~and~~or ~~political~~manmade ~~conditions~~events could negatively affect our core markets or ~~events;~~disrupt our operations, which could have an adverse effect on our business and results of operations.

●Our ~~proposed~~market areas are susceptible to natural disasters, such as hurricanes, tornadoes, tropical storms, other severe weather events related flooding and wind damage and manmade disasters, such as the 2010 oil spill in the Gulf of Mexico. We cannot predict whether or ~~adopted~~to ~~changes~~what extent damage that may be caused by future weather or manmade events will affect our operations or the economies in ~~laws~~our current or future market areas, ~~regulations~~but such events could negatively impact economic conditions in these regions and result in a decline in local loan demand and loan originations, destruction of properties securing our loans, damage to our banking facilities and offices, and an increase in foreclosures or ~~policies~~loan ~~affecting~~losses. Our business or results of operations may be adversely affected by these and other negative effects of natural or manmade disasters. Further, severe weather, natural disasters, acts of war or terrorism, and other external events could adversely affect us; in a number of ways, including an increase in delinquencies, bankruptcies or defaults that could result in a higher level of non-performing assets, net charge-offs, and provision for loan losses. Such risks could also impair the value of collateral securing our outstanding loans and hurt our deposit base.

~~● other regulatory developments; and~~27

●Table ~~other~~of ~~news, announcements, or disclosures (whether by us or others) related to us, our competitors, our core markets, or the financial services industry.~~Contents

~~These~~We ~~and other factors~~ may ~~cause~~become ~~the~~involved ~~market~~from ~~price~~time ~~and~~to ~~demand~~time ~~for~~in ~~our~~suits, ~~common~~legal ~~stock~~proceedings, toinformation-gathering ~~fluctuate substantially~~requests, ~~which~~investigations ~~may~~and ~~limit~~proceedings orby ~~prevent~~governmental ~~investors~~and ~~from~~self-regulatory ~~readily~~agencies ~~selling~~that ~~their shares of common stock and~~ may ~~otherwise~~lead ~~negatively~~to ~~affect~~adverse ~~the liquidity of our common stock~~consequences.

WeMany ~~have~~aspects ~~not~~of ~~historically~~the ~~paid~~banking ~~dividends~~business involve some risk of legal liability. From time to time, we may be named or threatened to be named as defendants in lawsuits arising from our ~~stockholders~~business activities (and ~~cannot~~in ~~guarantee~~some cases from the activities of companies that we ~~will~~have ~~pay~~acquired). ~~dividends~~In addition, from time to ~~our~~time, ~~stockholders~~we incould become the ~~future~~subject of governmental and self-regulatory agency information-gathering requests, reviews, investigations, proceedings and other forms of regulatory inquiry, including by bank regulatory agencies, the SEC and law enforcement authorities. The results of such proceedings could lead to significant civil or criminal penalties, including monetary penalties, damages, adverse judgments, settlements, fines, injunctions, restrictions on the way in which we conduct our business or reputational harm.

~~Holders~~Risks ofRelating our common stock will receive dividends if and when declared by our board of directors out of legally available funds. Our board of directors has not declared a dividend on our common stock since our inception. Any future determination relating to ~~our dividend policy will be made at~~ the ~~discretion~~Regulation of the ~~board~~Banking of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition, future prospects, regulatory restrictions, and other factors that our board of directors may deem relevant.Industry

~~Our~~We ~~principal business operations~~ are ~~conducted~~subject ~~through NBC. Cash available~~ to ~~pay~~extensive ~~dividends~~regulation toin ~~stockholders~~the ofconduct ~~NCC is derived primarily, if not entirely, from dividends paid by NBC to NCC. The ability~~ of ~~NBC~~our ~~to pay dividends to NCC~~business, ~~and~~which ~~therefore~~imposes ~~NCC’s~~additional ~~ability~~costs toon ~~pay~~us ~~dividends to its stockholders, will continue to be subject to,~~ and ~~limited~~adversely ~~by,~~affects ~~certain~~our ~~legal and regulatory restrictions~~profitability. ~~Further, any lenders making loans to us may impose financial covenants that may be more restrictive with respect to dividend payments than regulatory requirements.~~

27As a financial holding company, NCC is subject to federal regulation under the BHCA and the examination and reporting requirements of the Federal Reserve. As a national banking association, NBC is subject to federal regulation under the National Bank Act and the examination and reporting requirements of the OCC. Federal regulation of the banking industry, along with tax and accounting laws, regulations, rules and standards, may limit our operations significantly and control the methods by which we conduct business. Banking regulations are primarily intended to protect depositors, deposit insurance funds and the banking system as a whole, and not stockholders or creditors. These regulations affect lending practices, capital structure, investment practices, dividend policy and overall growth, among other things. For example, federal and state consumer protection laws and regulations limit the manner in which we may offer and extend credit. In addition, the laws governing bankruptcy generally favor debtors, making it more expensive and more difficult to collect from customers who become subject to bankruptcy proceedings.

~~Table~~The Federal Reserve and OCC periodically conduct examinations of ~~Contents~~our business, including our compliance with applicable laws and regulations. Accommodating such examinations may require management to reallocate resources that would otherwise be used in our day-to-day operations. If, as a result of an examination, any such banking agency was to determine that the financial condition, capital resources, allowance for loan losses, asset quality, earnings prospects, management, liquidity or other aspects of our operations had become unsatisfactory, or that we or our management were in violation of any law or regulation, such banking agency may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in capital, to restrict our growth, to assess civil monetary penalties against us and our officers and directors, to remove officers and directors, and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance. If we become subject to such a regulatory action, it could have a material adverse effect on our business, financial condition and results of operations.

~~A future issuance of stock could dilute the value of our common stock.~~ 28

~~Our~~Table ~~certificate~~ of incorporation provides that we may issue up to 30,000,000 shares of common stock. As of March 7, 2018, 17,220,188 shares of our common stock were issued and outstanding. Those shares outstanding do not include the potential issuance, as of March 7, 2018, of (i) 305,876 shares of our common stock subject to issuance upon the exercise of outstanding options and warrants to purchase our common stock, (ii) 220,921 shares of our common stock potentially issuable pursuant to outstanding performance awards (based on projections of the earned percentages of the respective awards as of such date),or (iii) approximately 72,026 shares that have been earned but deferred (and therefore not yet issued) under the National Commerce Corporation Deferral of Compensation Plan for Key Employees and Non-Employee Directors. Any future issuance of new shares could cause further dilution in the value of outstanding shares of our common stock. Contents

~~Our~~FDIC ~~directors~~deposit ~~and~~insurance ~~executive~~assessments ~~officers~~may ~~beneficially~~continue ~~own~~to amaterially ~~significant~~increase ~~portion~~in ofthe ~~our~~future, ~~outstanding~~which ~~common~~would ~~stock~~have ~~and~~an ~~have~~adverse ~~substantial~~effect ~~influence~~on ~~over~~our usearnings.

~~Our~~As ~~directors~~a ~~and~~member ~~executive~~institution ~~officers~~of the FDIC, asNBC ais ~~group,~~assessed ~~beneficially~~a ~~owned~~quarterly ~~approximately~~deposit 14insurance premium.3% ofIn ~~our~~the ~~common~~aftermath ~~stock~~of asthe ofmost ~~March~~recent 7recession, ~~2018. As~~ a ~~result~~number of ~~this~~bank ~~level~~failures ofled ~~ownership,~~to ~~our~~a ~~directors~~depletion ~~and~~of ~~executive officers have~~ the ~~ability,~~FDIC’s byDeposit ~~taking~~Insurance ~~coordinated~~Fund ~~action,~~and toreduced ~~exercise~~the ~~significant~~ratio ~~influence~~of ~~over~~reserves ~~our~~to ~~affairs~~insured ~~and policies~~deposits. The ~~interests~~FDIC ofhas ~~our~~adopted ~~directors~~a ~~and~~Deposit ~~executive~~Insurance ~~officers~~Fund ~~may~~Restoration ~~not~~Plan, bewhich ~~consistent~~requires ~~with~~the ~~your~~Deposit ~~interests~~Insurance asFund to attain a ~~stockholder~~1.35% ~~This~~reserve ~~influence~~ratio ~~may~~by ~~also~~September 30, ~~have~~2020. ~~the~~As ~~effect~~a result of ~~delaying~~this orrequirement, ~~preventing~~NBC ~~changes~~could ofbe ~~control~~required orto ~~changes~~pay insignificantly ~~management,~~higher premiums or ~~limiting~~additional ~~the~~special ~~ability~~assessments ofthat ~~our~~would ~~other~~adversely ~~stockholders~~affect toits ~~approve~~earnings, ~~transactions~~thereby ~~that~~reducing ~~they~~the ~~may~~availability ~~deem~~of funds to bepay individends ~~the~~to ~~best~~NCC ~~interests~~(subject ofto the ~~Company~~other limitations discussed herein).

~~Shares~~We ~~of our common stock~~ are ~~not~~subject ~~insured~~to ~~deposits~~certain ~~and~~capital ~~may~~requirements ~~lose~~by ~~value~~our regulators.

~~Shares~~Applicable regulations require us to maintain specific capital standards in relation to the credit risks of our ~~common~~assets ~~stock~~and off-balance sheet exposures. Various components of these requirements are ~~not~~subject ~~savings~~to orqualitative ~~deposit~~judgments ~~accounts~~by regulators. Both NCC and NBC are ~~not~~“well ~~insured~~capitalized” byunder the ~~FDIC~~current orregulatory ~~any~~framework. ~~other~~A ~~agency~~failure orto ~~private~~remain ~~entity.~~“well ~~Such~~capitalized” ~~shares~~could ~~are~~affect ~~subject~~our customers’ confidence, which could adversely affect our ability to ~~investment~~do ~~risk~~business. In addition, ~~including~~a ~~the~~failure ~~possible~~to ~~loss~~maintain ofsuch ~~some~~status could also result in restrictions imposed by regulatory authorities on our growth and other activities. Any such effect on customers or ~~all~~restrictions ofby ~~the~~regulators ~~value~~could ofhave ~~your~~a ~~investment~~material adverse effect on our financial condition and results of operations.

~~The~~We ~~laws~~may ~~that~~need ~~regulate~~to ~~our~~raise ~~operations~~additional ~~are~~capital ~~designed~~in ~~for~~ the ~~protection~~future, including as a result of ~~depositors~~potential ~~and~~increased ~~the~~minimum ~~public~~capital thresholds established by regulators, but that capital may not ~~our~~be available when it is needed or may be dilutive to stockholders.

~~The~~We are required by federal and state ~~laws~~regulatory ~~and~~authorities ~~regulations~~to ~~applicable~~maintain adequate capital levels to support our operations. ~~give~~New ~~regulatory~~regulations ~~authorities~~implementing ~~extensive~~minimum ~~discretion~~capital instandards ~~connection~~could ~~with~~require ~~their~~financial ~~supervisory~~institutions ~~and~~to ~~enforcement~~maintain ~~responsibilities~~higher minimum capital ratios and may place a greater emphasis on common equity as a component of “Tier 1 Capital,” which consists generally ~~have~~of ~~been~~shareholders’ ~~promulgated~~equity and qualifying preferred stock, less certain goodwill items and other intangible assets. In order to ~~protect~~support ~~depositors~~operations and ~~the~~comply ~~Deposit~~with ~~Insurance~~regulatory ~~Fund~~standards, ~~maintained~~we bymay need to raise capital in the ~~FDIC~~future, and ~~not~~in ~~for~~some cases, NCC may be required to contribute capital to NBC. Our ability to raise additional capital will depend on conditions in the ~~purpose~~capital markets at that time, which are outside of ~~protecting~~our ~~stockholders.~~control, ~~These~~on ~~laws~~our financial performance and ~~regulations~~on ~~can~~a ~~materially~~successful ~~affect~~execution of our ~~future~~growth ~~business~~strategy. ~~Laws~~Accordingly, ~~and~~there ~~regulations~~can ~~now~~be ~~affecting~~no usassurance ~~may~~that any additional needed capital will be ~~changed~~available aton ~~any~~favorable ~~time~~terms. The capital and credit markets have experienced significant volatility in recent years. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength. If we have to raise capital in the ~~interpretation~~form of ~~such~~debt, ~~laws~~we may have to pledge our assets, including our stock in NBC. If we cannot raise additional capital when needed, our financial condition and ~~regulations~~results byof ~~bank~~operations may be adversely affected, and banking regulatory authorities ismay ~~also~~ subject us to ~~change~~regulatory enforcement action, including receivership. Furthermore, an issuance of additional shares of our common stock could dilute the economic ownership interest of our stockholders.

We are ansubject ~~emerging~~to ~~growth~~numerous ~~company~~laws ~~under~~designed to protect consumers, including the ~~JOBS~~Community Reinvestment Act, and ~~the~~fair ~~reduced~~lending ~~disclosure~~laws, ~~requirements~~and ~~applicable~~failure to ~~emerging~~comply ~~growth~~with ~~companies~~these laws could ~~make~~lead ~~our~~to ~~common~~a ~~stock~~wide ~~less~~variety ~~attractive~~of ~~to investors~~sanctions.

WeThe ~~are~~CRA, ~~an emerging growth company under~~ the ~~Jumpstart~~Equal ~~Our~~Credit ~~Business~~Opportunity ~~Startups~~ Act, ~~of 2012 (~~the ~~“JOBS~~Fair Housing Act”), and weother ~~are~~fair ~~therefore~~lending ~~permitted~~laws ~~to,~~ and ~~intend~~regulations ~~to,~~impose ~~take~~nondiscriminatory ~~advantage~~lending ofrequirements ~~exemptions~~on ~~from~~financial ~~certain disclosure requirements~~institutions. WeThe ~~are~~United anStates ~~emerging~~Department ~~growth company until the earliest~~ of: ~~(i) the~~Justice ~~last~~and ~~day~~other offederal ~~the~~agencies ~~fiscal~~are ~~year~~responsible ~~during~~for ~~which~~enforcing wethese ~~have~~laws ~~total~~and ~~annual gross revenues of $1~~regulations.0 ~~billion~~A orsuccessful ~~more;~~regulatory ~~(ii) the~~challenge ~~last~~to ~~day~~an ofinstitution’s ~~the~~performance ~~fiscal~~under ~~year following~~ the ~~fifth~~CRA ~~anniversary~~or offair ~~the~~lending ~~completion~~laws ofand ~~our~~regulations ~~merger~~could ~~with~~result ~~United (December 31, 2019); (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion~~ in ~~non-convertible debt; or (iv) the date on which we are deemed~~ a ~~“large~~wide ~~accelerated~~variety ~~filer,” as defined under the federal securities laws. For so long as we remain an emerging growth company, we may take advantage~~ of ~~certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies~~sanctions, including, ~~but~~damages ~~not~~and ~~limited~~civil ~~to,~~money ~~an exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002~~penalties, asinjunctive ~~amended (the “Sarbanes-Oxley Act”)~~relief, ~~reduced~~restrictions ~~disclosure~~on ~~obligations~~merger ~~regarding executive compensation in our periodic reports~~ and ~~proxy~~acquisition ~~statements~~activities, ~~and~~restrictions ~~exemptions from the requirements of holding a nonbinding advisory vote~~ on ~~certain~~expansion ~~executive~~and ~~compensation~~restrictions ~~matters, such as “say~~ on ~~pay”~~entering ~~and~~new ~~“say~~business ~~on frequency~~lines.” AsPrivate aparties ~~result, our stockholders~~ may ~~not~~also have ~~access~~the toability ~~certain information that they may deem important. Although we intend~~ to ~~rely~~challenge onan ~~certain~~institution’s ofperformance ~~the~~under ~~exemptions~~fair ~~provided~~lending laws in ~~the~~private ~~JOBS~~class ~~Act,~~action ~~the~~litigation. ~~exact~~Such ~~implications~~actions ofcould ~~the~~have ~~JOBS~~a ~~Act~~material ~~for~~adverse useffect ~~are~~on ~~still~~our ~~subject~~business, tofinancial ~~interpretations~~condition, ~~and~~results ~~guidance~~of byoperations ~~the SEC~~ and ~~other~~future ~~regulatory agencies~~prospects.

2829

Table of Contents

We ~~cannot~~are ~~predict~~subject ~~whether~~to ~~investors~~laws ~~will~~regarding ~~find~~the ~~our~~privacy, ~~common~~information ~~stock~~security ~~less~~and ~~attractive~~protection ~~as a result~~ of ~~our~~personal ~~decision~~information, toand ~~take~~any ~~advantage~~violation of these ~~exemptions.~~laws Ifor ~~some~~unauthorized ~~investors~~disclosure ~~find~~of ~~our~~such ~~common~~information ~~stock~~could ~~less~~damage ~~attractive,~~our ~~there~~reputation ~~may~~and beotherwise aadversely ~~less~~affect ~~active trading market for~~ our ~~common~~operations ~~stock,~~ and ~~our~~financial ~~stock price may be more volatile~~condition.

~~The~~Our ~~requirements~~business requires the collection and retention of ~~being~~large avolumes ~~public~~of ~~company~~customer ~~may~~data, ~~strain~~including personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract to provide data services. We also maintain important internal data, such as personally identifiable information about our ~~resources~~employees and ~~distract~~information relating to our ~~management~~operations. We are subject to complex and evolving laws and regulations governing the privacy and protection of personal information of individuals (including customers, employees, suppliers and other third parties). For example, our business is subject to the Gramm-Leach-Bliley Act, which, ~~could~~among ~~make~~other itthings: ~~difficult~~(i) imposes certain limitations on our ability to ~~manage~~share nonpublic personal information about our ~~business~~customers with nonaffiliated third parties; (ii) requires us to provide certain disclosures to customers about our information collection, ~~particularly~~sharing ~~after~~and wesecurity ~~are~~practices noand ~~longer~~to anafford ~~emerging~~customers ~~growth~~the ~~company~~right ~~under~~to “opt out” of any information sharing by us with nonaffiliated third parties (with certain exceptions); and (iii) requires us to develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on our size and complexity, the ~~JOBS~~nature ~~Act~~and scope of our activities, and the sensitivity of customer information we process, as well as plans for responding to data security breaches.

~~Since~~Various ~~October 28,~~state ~~2014,~~and wefederal banking regulators and state legislatures have ~~been~~also ~~required~~enacted todata ~~comply~~security breach notification requirements with ~~the~~varying levels of individual, consumer, regulatory ~~and~~or ~~reporting~~law ~~requirements~~enforcement ofnotification in the ~~SEC~~event of a security breach. The federal bank regulatory agencies have proposed enhanced cyber risk management standards, which would apply to a wide range of large financial institutions and ~~since~~their ~~March~~third-party 19service providers, ~~2015~~including us and the Bank, weand ~~have~~would ~~been~~focus ~~subject~~on tocyber ~~the~~risk ~~listing~~governance ~~requirements~~and management, management of ~~the~~internal ~~Nasdaq~~and ~~Global~~external ~~Select~~dependencies, ~~Market~~and incident response, cyber resilience, and situational awareness. ~~Complying~~Ensuring that our collection, use, transfer and storage of personal information complies with ~~these~~all ~~reporting~~applicable laws and ~~other requirements~~regulations iscan ~~time~~increase ~~consuming~~our costs. Furthermore, ~~results~~we inmay ~~increased~~not ~~costs~~be able to usensure that all of our clients, suppliers, counterparties and ~~could~~other third parties have aappropriate ~~material~~controls ~~adverse~~in ~~effect~~place onto ~~our~~protect ~~business~~the confidentiality of the information that they exchange with us, ~~financial~~particularly ~~condition~~where ~~and~~such ~~results~~information ofis ~~operations~~transmitted by electronic means.

AsIf ~~a public company~~personal, weconfidential ~~are~~or ~~subject~~proprietary toinformation ~~the requirements~~ of ~~the~~customers ~~Exchange~~or ~~Act~~others ~~and~~were ~~the~~to ~~Sarbanes-Oxley~~be ~~Act.~~mishandled ~~These~~or ~~requirements~~misused ~~may~~(in ~~place~~situations awhere, ~~strain~~for onexample, ~~our~~such ~~systems~~information ~~and~~was ~~resources.~~erroneously ~~The~~provided ~~Exchange Act requires us~~ to ~~file~~unauthorized ~~annual~~persons, ~~quarterly~~or ~~and~~where ~~current~~such ~~reports~~information ~~with~~was ~~respect~~intercepted toor ~~our~~otherwise ~~business~~compromised ~~and~~by ~~financial~~third ~~condition.~~parties), ~~The~~we ~~Sarbanes-Oxley~~could ~~Act~~be ~~requires~~exposed us to ~~maintain~~litigation ~~effective~~or ~~disclosure~~regulatory ~~controls~~sanctions ~~and~~under ~~procedures~~applicable laws and ~~internal~~regulations. ~~controls~~Concerns ~~over~~about ~~financial~~the ~~reporting.~~effectiveness Toof ~~maintain~~our ~~and~~measures ~~improve~~to ~~the~~safeguard ~~effectiveness~~personal ofinformation ~~our~~could ~~disclosure~~cause ~~controls~~us ~~and~~to ~~procedures,~~lose wecustomers ~~must~~or ~~commit~~potential ~~significant~~customers ~~resources~~for our products and ~~management~~services ~~oversight.~~and Wethereby ~~continue~~reduce toour ~~implement~~revenues. ~~procedures~~Accordingly, ~~and~~any ~~processes~~failure toor ~~address~~perceived ~~the~~failure ~~standards~~to ~~and~~comply ~~requirements~~with applicable toprivacy ~~public~~or ~~companies.~~data ~~Sustaining~~protection ~~our~~laws ~~growth~~and ~~also~~regulations ~~requires~~may subject us to ~~commit~~inquiries, ~~additional~~examinations ~~resources~~and toinvestigations ~~maintain~~that ~~appropriate~~could ~~operational~~result ~~and~~in ~~financial~~requirements ~~systems~~ to ~~adequately~~modify ~~support~~or ~~our~~cease ~~expansion.~~certain ~~These~~operations ~~activities~~or ~~may~~practices ~~divert~~or ~~management’s~~in ~~attention~~significant ~~from~~liabilities, ~~other~~fines ~~business~~or ~~concerns~~penalties, ~~which~~and could ~~have~~damage ~~a material adverse effect on~~ our ~~business,~~reputation ~~financial~~and ~~condition,~~otherwise ~~results~~adversely ofaffect our operations and ~~cash~~financial ~~flows~~condition.

AsWe anare ~~emerging~~subject ~~growth~~to ~~company under~~ the ~~JOBS~~Bank Secrecy Act, ~~we are permitted to,~~ and ~~intend to, take advantage of certain exemptions from various reporting requirements that are applicable to~~ other ~~public~~anti-money ~~companies~~laundering ~~that~~statutes ~~are~~and ~~not emerging growth companies~~regulations, ~~including, but not limited to, an exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act~~ and ~~reduced~~any ~~disclosure~~deemed ~~obligations~~deficiency ~~regarding~~by ~~executive compensation in~~ our ~~periodic~~regulators ~~reports~~with ~~and~~respect ~~proxy~~to ~~statements. When~~ these ~~exemptions~~laws ~~cease~~could toresult ~~apply,~~in wesignificant ~~expect to incur additional expenses and to devote increased management effort toward ensuring compliance with these reporting requirements~~liability.

WeFederal ~~cannot~~law ~~predict~~requires orfinancial ~~estimate~~institutions to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports when appropriate. In addition to other bank regulatory agencies, the ~~amount~~Financial Crimes Enforcement Network of ~~additional~~the ~~costs~~United ~~that~~States weDepartment ~~may~~of ~~continue~~the Treasury is authorized to ~~incur~~impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with state and federal banking regulators, as awell ~~result~~as the United States Department of ~~being~~Justice, CFPB, Drug Enforcement Administration, and Internal Revenue Service. We are also subject to increased scrutiny with regard to our compliance with the rules enforced by the Office of Foreign Assets Control regarding, among other things, the prohibition on transacting business with, and the need to freeze assets of, certain persons and organizations identified as a ~~public~~threat ~~company~~to the national security, foreign policy or economy of the ~~timing~~United States. If our policies, procedures and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions, which may include restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of ~~such~~our ~~costs~~business plan, including acquisition activities. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our internal controls over financial reporting may not be effective, and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.30

WeTable ~~are currently required to comply with the SEC’s rules implementing Sections 302 and 404~~ of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting. However, pursuant to the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting until we are no longer an emerging growth company.Contents

29Risks Related to Ownership of Our Common Stock

~~Table~~The market price of ~~Contents~~our common stock may be subject to substantial fluctuations, which may make it difficult for you to sell your shares at the volumes, prices, or times desired.

~~When~~The ~~evaluating~~trading ~~our~~price internal controls over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of ~~Section 404 of the Sarbanes-Oxley Act. In addition, if we fail to achieve and maintain the adequacy of~~ our ~~internal~~common ~~controls,~~stock ~~as such standards are modified, supplemented or amended from time to time, we~~ may ~~not~~ be ~~able~~volatile to ensure that management can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain as to the timing of the completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting, and we may be subject to ~~sanctions~~wide orprice ~~investigations~~fluctuations ~~by regulatory authorities, such as the SEC. As a result, there could be a negative reaction~~ in ~~the~~response ~~financial markets due~~ to avarious ~~loss of confidence in the reliability of our financial statements. In addition~~factors, ~~we may be required to incur costs in improving our internal control system and hiring additional personnel. Any such action could negatively affect our results of operations and cash flows.~~ including:

~~Our~~● ~~corporate~~actual ~~governance~~or ~~documents,~~anticipated ~~and~~fluctuations ~~certain~~in ~~corporate~~our ~~and~~operating ~~banking~~results, ~~laws~~financial ~~applicable to us~~condition, ~~could~~or ~~make~~asset ~~a takeover more difficult.~~ quality;

~~Certain~~● ~~provisions~~market ofconditions ~~our~~in ~~certificate~~the ofbroader ~~incorporation~~stock ~~and~~market ~~bylaws,~~in ~~and corporate and federal banking laws~~general, ~~could make it more difficult for a third party to acquire control of us~~ or ~~conduct~~in ~~a proxy contest, even if those events were perceived by many of our stockholders as beneficial to their interests. These provisions, and~~ the ~~corporate~~financial ~~and~~services ~~banking~~industry ~~laws~~in ~~and regulations applicable to us:~~ particular;

● ~~empower~~publication of research reports about us, our ~~board~~competitors, ofor ~~directors~~the financial services industry generally, ~~without~~or ~~stockholder~~changes ~~approval~~in, toor ~~issue~~failure ~~preferred~~to ~~stock~~meet, ~~the~~securities ~~terms~~analysts’ estimates of ~~which,~~our ~~including~~financial ~~voting~~and ~~power~~operating performance, ~~are~~or ~~set~~lack of research reports by ~~the~~industry ~~board~~analysts or ceasing of coverage;

● ~~only~~future ~~permit~~issuances of our ~~board~~common ofstock ~~directors~~ or ~~the~~other ~~chairman thereof to call a special stockholders’ meeting~~securities;

● ~~require~~significant atacquisitions ~~least~~or ~~120~~business ~~days’~~combinations, ~~advance~~strategic ~~notice~~partnerships, ofjoint ~~nominations~~ventures, ~~for~~or ~~the~~capital ~~election~~commitments ofby ~~directors~~or ~~and~~involving ~~the~~us ~~presentation~~or ofour ~~stockholder proposals at meetings of stockholders~~competitors; ~~and~~

● ~~require~~additions ~~prior~~or ~~regulatory~~departures ~~application and approval~~ of ~~any~~key ~~transaction involving control of us.~~personnel;

~~These~~● ~~provisions~~trades ~~may~~of ~~discourage~~large ~~potential~~blocks ~~acquisition proposals and could delay or prevent a change in control, including under circumstances in which our stockholders might otherwise receive a premium over the market price~~ of our ~~common~~ stock.;

~~Item~~● ~~1B.~~economic ~~Unresolved~~and ~~Staff~~political ~~Comments.~~conditions or events;

~~None.~~● proposed or adopted changes in laws, regulations or policies affecting us;

~~Item~~● 2.other ~~Properties.~~regulatory developments; and

~~NCC~~● ~~owns~~other ~~no real property. NCC’s headquarters and the main office of NBC are located at 813 Shades Creek Parkway~~news, ~~Suite 100~~announcements, ~~Birmingham,~~or ~~Alabama~~disclosures ~~35209. Including its main office, NBC operates 31 full-service banking offices: seven in Alabama, twenty-two in central and northeast Florida~~ (~~eight~~whether ofby ~~which~~us ~~were~~or ~~acquired~~others) ~~subsequent~~related to ~~December 31~~us, ~~2017),~~our ~~and two in the Atlanta~~competitors, ~~Georgia~~our ~~metro~~core ~~area. NBC owns 16 and leases 15 of these offices. NBC also operates three loan production offices~~markets, ~~all~~or of which are leased. NBC also leases space for its mortgage operations center, located in Mountain Brook, Alabama. The sole office of both CBI and Corporate Billing, which is owned by a subsidiary of Corporate Billing, is located at 239 Johnson Street, S.E., Decatur, Alabama 35601. See Note 5 to the ~~Notes~~financial toservices the Consolidated Financial Statements included in this report and the information under the heading “Contractual Obligations” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” portion of this report for more information regarding our office premisesindustry. ~~We believe that our banking and non-banking offices are in good condition and are suitable to our needs at this time and for the foreseeable future.~~

30These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock.

~~Table~~We ofhave ~~Contents~~not historically paid dividends to our stockholders and cannot guarantee that we will pay dividends to our stockholders in the future.

~~Item~~Holders 3of our common stock will receive dividends if and when declared by our board of directors out of legally available funds. ~~Legal~~Our ~~Proceedings~~board of directors has not declared a dividend on our common stock since our inception. Any future determination relating to our dividend policy will be made at the discretion of the board of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition, future prospects, regulatory restrictions, and other factors that our board of directors may deem relevant.

We are subject to various pending and threatened litigation actions in the ordinary course of business. Although it is not possible to determine with certainty at this point in time what liability, if any, we will have as a result of such litigation, based on consultation with legal counsel, management does not anticipate that the ultimate liability, if any, resulting from such litigation will have a material effect on our financial condition and results of operations.31

~~Item~~Table 4.of ~~Mine Safety Disclosures.~~Contents

~~Not~~Our ~~applicable~~principal business operations are conducted through NBC. Cash available to pay dividends to stockholders of NCC is derived primarily, if not entirely, from dividends paid by NBC to NCC. The ability of NBC to pay dividends to NCC, and therefore NCC’s ability to pay dividends to its stockholders, will continue to be subject to, and limited by, certain legal and regulatory restrictions. Further, any lenders making loans to us may impose financial covenants that may be more restrictive with respect to dividend payments than regulatory requirements.

31A future issuance of stock could dilute the value of our common stock.

~~Table~~Our certificate of ~~Contents~~incorporation provides that we may issue up to 30,000,000 shares of common stock. As of March 1, 2019, 20,813,165 shares of our common stock were issued and outstanding. Those shares outstanding do not include the potential issuance, as of March 1, 2019, of (i) 302,915 shares of our common stock subject to issuance upon the exercise of outstanding options and warrants to purchase our common stock, (ii) 166,822 shares of our common stock potentially issuable pursuant to outstanding performance awards (based on projections of the earned percentages of the respective awards as of such date), or (iii) approximately 105,473 shares that have been earned but deferred (and therefore not yet issued) under the National Commerce Corporation Deferral of Compensation Plan for Key Employees and Non-Employee Directors. Any future issuance of new shares could cause further dilution in the value of outstanding shares of our common stock.

~~PART~~Our IIdirectors and executive officers beneficially own a significant portion of our outstanding common stock and have substantial influence over us.

~~Item~~Our 5directors and executive officers, as a group, beneficially owned approximately 11.95% ~~Market~~of ~~For~~our ~~Registrant’s~~common ~~Common~~stock ~~Equity~~as of March 1, ~~Related~~2019. ~~Stockholder~~As ~~Matters~~a result of this level of ownership, our directors and ~~Issuer~~executive ~~Purchases~~officers have the ability, by taking coordinated action, to exercise significant influence over our affairs and policies. The interests of ~~Equity~~our ~~Securities~~directors and executive officers may not be consistent with your interests as a stockholder. This influence may also have the effect of delaying or preventing changes of control or changes in management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in the best interests of the Company.

~~Market~~Shares ~~for~~of ~~Our~~our ~~Common~~common ~~Stock~~stock are not insured deposits and may lose value.

~~Our~~Shares of our common stock isare ~~listed~~not ~~and~~savings ~~trades~~or ondeposit ~~the~~accounts ~~Nasdaq~~and ~~Global~~are ~~Select~~not ~~Market~~insured ~~under~~by the ~~symbol~~FDIC ~~“NCOM.”~~or ~~The~~any ~~following~~other ~~table~~agency ~~shows,~~or ~~for~~private ~~the~~entity. ~~indicated~~Such ~~periods,~~shares ~~the~~are ~~high~~subject ~~and~~to ~~low~~investment ~~sale~~risk, ~~prices~~including ~~per~~the ~~share~~possible ~~for~~loss ~~our~~of ~~common~~some ~~stock~~or asall ~~reported~~of on the ~~Nasdaq~~value ~~Global~~of ~~Select~~your ~~Market~~investment. ~~We did not pay cash dividends on our common stock during the periods indicated.~~

	High		Low
2017
Fourth Quarter	$	43.80	$	38.03
Third Quarter	$	43.80	$	38.05
Second Quarter	$	40.00	$	35.55
First Quarter	$	39.99	$	35.00
2016
Fourth Quarter	$	38.00	$	26.54
Third Quarter	$	28.74	$	22.32
Second Quarter	$	24.50	$	21.37
First Quarter*	$	25.30	$	20.50

The laws that regulate our operations are designed for the protection of depositors and the public, not our stockholders.

~~Holders~~The federal and state laws and regulations applicable to our operations give regulatory authorities extensive discretion in connection with their supervisory and enforcement responsibilities and generally have been promulgated to protect depositors and the Deposit Insurance Fund maintained by the FDIC, and not for the purpose of protecting stockholders. These laws and regulations can materially affect our future business. Laws and regulations now affecting us may be changed at any time, and the interpretation of such laws and regulations by bank regulatory authorities is also subject to change.

As of March 7, 2018, there were 17,220,188 shares of our common stock outstanding and approximately 813 record holders of our common stock (excluding any participants in any clearing agency and “street name” holders).32

~~Dividends~~Table of Contents

~~Holders~~We ofare ~~our~~an ~~common~~emerging ~~stock~~growth ~~receive~~company ~~dividends~~under ifthe ~~and~~JOBS ~~when declared by our board of directors out of legally available funds. Our board of directors has not declared~~Act, and ~~we have not paid, a dividend since our inception, and our board of directors does not expect to declare a dividend in~~ the ~~foreseeable~~reduced ~~future.~~disclosure ~~Any~~requirements ~~future~~applicable ~~determination or change relating~~ to ~~our~~emerging ~~dividend~~growth ~~policy~~companies ~~will~~could bemake ~~made at the discretion of~~ our board of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition, future prospects, regulatory restrictions, and other factors that our board of directors may deem relevant at that time. In addition, the payment of dividends by NBC to NCC and by NCC to its stockholders is subject to certain regulations that may limit or prohibit such payments in certain circumstances. See “Supervision and Regulation – Dividend Restrictions” beginning on page 8. No assurances can be given that any dividends on NCC’s common stock ~~will~~less beattractive ~~declared~~to ~~in the future or, if declared, what the amount of such dividends will be or whether such dividends will continue for future periods~~investors.

32We are an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we are therefore permitted to, and intend to, take advantage of exemptions from certain disclosure requirements. We are an emerging growth company until the earliest of: (i) the last day of the fiscal year during which we have total annual gross revenues of $1.0 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the completion of our merger with United Group Banking Company of Florida, Inc. (December 31, 2019); (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed a “large accelerated filer,” as defined under the federal securities laws. For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, an exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on certain executive compensation matters, such as “say on pay” and “say on frequency.” As a result, our stockholders may not have access to certain information that they may deem important. Although we intend to rely on certain of the exemptions provided in the JOBS Act, the exact implications of the JOBS Act for us are still subject to interpretations and guidance by the SEC and other regulatory agencies.

~~Table~~We cannot predict whether investors will find our common stock less attractive as a result of ~~Contents~~our decision to take advantage of these exemptions. If some investors find our common stock less attractive, there may be a less active trading market for our common stock, and our stock price may be more volatile.

~~Performance~~ The ~~Graph~~requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an emerging growth company under the JOBS Act.

~~Set~~Since ~~forth~~October 28, ~~below~~2014, iswe ahave ~~line~~been ~~graph~~required ~~comparing~~to ~~the~~comply ~~yearly~~with ~~percentage change in~~ the ~~cumulative~~regulatory ~~total~~and ~~shareholder~~reporting ~~return~~requirements ~~on our common stock (based on the last reported sales price~~ of the ~~respective~~SEC, ~~year) with the cumulative total return of the Russell 2000 Index~~ and ~~the~~since ~~SNL U.S. Bank Index ($1 billion to $5 billion in assets) from~~ March 1819, 2015, ~~(the~~we ~~date~~have onbeen ~~which~~subject ~~our~~to ~~common~~the ~~stock~~listing ~~was~~requirements ~~first~~of ~~traded on~~ the Nasdaq Global Select Market). ~~through~~Complying ~~December~~with ~~31,~~these ~~2017.~~reporting ~~The~~and ~~following~~other requirements is ~~based~~time ~~on an investment of $100 on March 18~~consuming, ~~2015~~results in ~~our~~increased ~~common~~costs ~~stock,~~to ~~the~~us ~~Russell 2000 Index~~ and ~~the~~could ~~SNL~~have ~~U.S.~~a ~~Bank~~material ~~Index~~adverse ~~($1~~effect ~~billion~~on toour ~~$5 billion in assets)~~business, ~~with~~financial ~~dividends~~condition ~~reinvested~~and ~~where~~results ~~applicable~~of operations.

			Period Ending
Index	03/18/15		06/30/15		12/31/15		06/30/16		12/31/16		06/30/17		12/31/17
National Commerce Corporation		100.00		132.31		128.46		119.59		190.51		203.08		206.61
Russell 2000		100.00		100.56		91.75		93.79		111.31		117.67		127.61
SNL U.S. Bank $1B-$5B		100.00		107.23		113.43		111.97		163.19		163.31		173.97

As a public company, we are subject to the requirements of the Exchange Act and the Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The Exchange Act requires us to file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires us to maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we must commit significant resources and management oversight. We continue to implement procedures and processes to address the standards and requirements applicable to public companies. Sustaining our growth also requires us to commit additional resources to maintain appropriate operational and financial systems to adequately support our expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

~~Source:~~As ~~S&P~~an ~~Global~~emerging ~~Market~~growth ~~Intelligence~~company ©under ~~2017~~the JOBS Act, we are permitted to, and intend to, take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. When these exemptions cease to apply, we expect to incur additional expenses and to devote increased management effort toward ensuring compliance with these reporting requirements.

33We cannot predict or estimate the amount of additional costs that we may continue to incur as a result of being a public company or the timing of such costs.

~~Table~~Our ofinternal ~~Contents~~controls over financial reporting may not be effective, and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

~~Item~~We 6are currently required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting. ~~Selected~~However, ~~Financial~~pursuant ~~Data~~to the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting until we are no longer an emerging growth company.

	SUMMARY CONSOLIDATED FINANCIAL DATA
	As of and for the Year Ended December 31,
(Dollars in thousands, except per share information)	2017			2016			2015			2014			2013
Statement of Income Data
Interest income	$	109,791		$	74,563		$	54,845		$	31,342		$	23,312
Interest expense		10,367			7,381			4,796			2,869			2,613
Net interest income		99,424			67,182			50,049			28,473			20,699
Provision for loan losses		3,894			3,248			1,113			978			-
(Loss) gain on sale of securities		(91	)		-			-			(33	)		47
Other noninterest income (1)		20,126			13,956			8,459			5,065			5,255
Merger/conversion-related expenses		2,320			479			764			662			257
Other noninterest expense (2)		71,199			48,600			39,481			22,791			19,428
Income before income taxes		42,046			28,811			17,150			9,074			6,316
Income tax expense		13,840			9,394			5,476			3,159			2,310
Deferred tax asset write-down		6,231			-			-			-			-
Total income tax expense		20,071			9,394			5,476			3,159			2,310
Net income before minority interest		21,975			19,417			11,674			5,915			4,006
Net income attributable to minority interest		1,907			1,564			2,069			512			-
Net income to common shareholders		20,068			17,853			9,605			5,403			4,006
Balance sheet (at period end)
Cash and cash equivalents	$	235,288		$	217,293		$	212,457		$	123,435		$	124,136
Total investment securities		111,396			99,709			80,863			34,932			47,979
Mortgage loans held-for-sale		29,191			15,373			15,020			9,329			7,159
Acquired purchased credit-impaired loans		25,696			11,975			12,690			9,077			-
Acquired non-purchased credit-impaired loans		538,276			313,399			368,625			143,981			-
Nonacquired loans held for investment (3)		1,455,376			1,076,209			870,471			653,063			582,002
CBI loans (factoring receivables)		118,710			83,901			67,628			82,600			-
Total gross loans held for investment		2,138,058			1,485,484			1,319,414			888,721			582,002
Allowance for loan losses		14,985			12,113			9,842			9,802			9,119
Total intangibles		117,849			52,803			53,474			30,591			-
Total assets		2,737,676			1,950,784			1,763,369			1,138,426			791,781
Total deposits		2,285,831			1,667,710			1,514,458			971,060			678,031
FHLB and other borrowings		7,000			7,000			22,000			22,000			22,000
Subordinated debt		24,553			24,500			-			-			-
Total liabilities		2,337,718			1,713,740			1,546,733			1,002,265			702,842
Minority interest		7,348			7,309			7,372			7,239			-
Common stock		148			109			108			75			5,730
Total shareholders' equity		399,958			237,044			216,636			136,161			88,939
Tangible common equity		281,695			183,866			162,724			105,265			88,939
Selected Performance Ratios
Return on average assets (ROAA) (4)		0.81	%		1.00	%		0.72	%		0.66	%		0.60	%
Return on average equity (ROAE)		5.65			7.89			5.55			5.55			4.61
Return on average tangible common equity (ROATCE)		8.14			10.32			6.96			6.07			4.61
Net interest margin - taxable equivalent		4.44			4.15			4.13			3.76			3.27
Efficiency ratio		61.50			60.49			68.79			69.93			75.85
Operating efficiency ratio (2)		59.56			59.90			67.48			67.96			74.86
Noninterest income / average assets		0.81			0.78			0.64			0.62			0.79
Noninterest expense / average assets		2.96			2.76			3.03			2.88			2.97
Yield on loans		5.40			5.06			5.17			4.68			4.37
Cost of total deposits		0.41			0.40			0.39			0.35			0.38
Per Share Outstanding Data
Net earnings per share	$	1.45		$	1.64		$	1.04		$	0.92		$	0.70
Diluted net earnings per share		1.41			1.61			1.02			0.91			0.69
Common shares outstanding at period end		14,788,436			10,934,541			10,824,969			7,541,541			5,730,114
Weighted average diluted shares		14,193,433			11,093,987			9,395,741			5,960,199			5,764,285
Book value per share		27.05			21.68			20.01			18.05			15.52
Tangible book value per share		19.05			16.82			15.03			13.96			15.52
Nonperforming assets
Nonacquired
Non-accrual loans	$	82		$	69		$	187		$	2,276		$	3,371
Other real estate and repossessed assets		-			2,068			3,873			823			845
Loans past due 90 days or more and still accruing		677			581			252			217			-
Total nonacquired nonperforming assets		759			2,718			4,312			3,316			4,216

34Table of Contents

~~Table~~When evaluating our internal controls over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of ~~Contents~~Section 404 of the Sarbanes-Oxley Act. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that management can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain as to the timing of the completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting, and we may be subject to sanctions or investigations by regulatory authorities, such as the SEC. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and hiring additional personnel. Any such action could negatively affect our results of operations and cash flows.

	As of and for the Year Ended December 31,
(Dollars in thousands, except per share information)	2017			2016			2015			2014			2013
Acquired
Non-accrual loans		2,640			2,768			3,508			2,589			-
Other real estate and repossessed assets		1,094			-			92			557			-
Loans past due 90 days or more and still accruing		-			-			-			80			-
Total acquired nonperforming assets		3,734			2,768			3,600			3,226			-
Asset Quality Ratios
Nonperforming assets / Assets		0.16	%		0.28	%		0.45	%		0.57	%		0.53	%
Nonperforming assets / Loans + OREO + repossessed assets		0.21			0.37			0.60			0.73			0.72
Nonacquired nonperforming assets / Nonacquired loans + nonacquired OREO + nonacquired repossessed assets (3)		0.05			0.25			0.49			0.51			0.72
Net charge-offs to average loans		0.05			0.07			0.11			0.05			0.19
Allowance for loan losses to total loans		0.70			0.82			0.75			1.10			1.57
Allowance for loan losses / (Nonacquired non-accrual loans + nonacquired loans past due 90 days or more and still accruing)		1,974.31			1,863.54			2,241.91			393.18			270.51
Additional Information: Allowance for Loan Losses
Allowance for loan losses excluding CBI loans (factoring receivables)	$	14,985		$	12,113		$	9,842		$	9,802		$	9,119
Nonacquired loans held for investment (3)		1,455,376			1,076,209			870,471			653,063			582,002
Allowance for loan losses allocated to CBI loans (factoring receivables)		600			500			500			955			-
CBI loans (factoring receivables)		118,710			83,901			67,628			82,600			-
Capital ratios (at period end)
Tier 1 leverage ratio		10.89	%		9.57	%		9.68	%		10.68	%		12.18	%
Tier 1 common capital ratio		12.54			11.46			11.18			10.66			14.58
Tier 1 risk-based capital ratio		12.54			11.46			11.18			10.66			14.58
Total risk-based capital ratio		14.37			13.90			11.91			11.75			15.83
Equity / Assets		14.61			12.15			12.29			11.96			11.23
Tangible common equity to tangible assets		10.75			9.69			9.52			9.50			11.23
Composition of Loans Held for Investment
Owner-occupied commercial real estate	$	378,525		$	254,099		$	215,021		$	132,126		$	71,790
Non-owner occupied commercial real estate		509,764			352,677			294,191			198,658			146,509
Commercial and industrial loans		258,577			150,268			171,160			113,788			102,286
Factored commercial receivables		118,710			83,901			67,628			82,600			-
Construction, land development and other land loans		231,030			155,813			152,862			83,663			58,372
1-4 family		508,935			387,342			333,761			221,222			162,091
Multifamily		60,054			47,060			31,128			23,420			22,316
Consumer and other		72,463			54,324			53,663			33,244			18,638
Deposit Composition
Demand	$	697,144		$	429,030		$	382,946		$	217,643		$	128,837
NOW		362,266			262,261			202,649			154,816			107,060
Money market and savings		951,846			703,289			611,887			392,394			304,071
Retail time		63,044			64,073			87,069			74,367			15,979
Jumbo time (5)		211,531			209,057			229,907			131,840			122,084
Mortgage Metrics
Total production ($)	$	507,563		$	322,909		$	281,706		$	207,269		$	246,649

Our corporate governance documents, and certain corporate and banking laws applicable to us, could make a takeover more difficult.

~~(1)~~Certain ~~Excludes~~provisions ~~securities~~of ~~gains~~our ~~(losses)~~certificate ~~(2)~~of ~~Excludes~~incorporation ~~merger/conversion-related~~and ~~expenses~~bylaws, ~~(3)~~and ~~Excludes~~corporate ~~CBI~~and ~~loans~~federal ~~(4)~~banking ~~Net~~laws, ~~income~~could make it more difficult for a third party to ~~common~~acquire ~~shareholders~~control /of ~~average~~us ~~assets~~or ~~(5)~~conduct ~~Jumbo~~a ~~time~~proxy ~~deposits~~contest, ~~defined~~even if those events were perceived by many of our stockholders as ~~time~~beneficial ~~deposits~~to ~~greater~~their ~~than~~interests. ~~$100~~These provisions,~~000~~ and the corporate and banking laws and regulations applicable to us:

35● empower our board of directors, without stockholder approval, to issue preferred stock, the terms of which, including voting power, are set by the board;

~~Table~~● only permit our board of ~~Contents~~directors or the chairman thereof to call a special stockholders’ meeting;

~~GAAP~~● ~~Reconciliation~~require at least 120 days’ advance notice of nominations for the election of directors and ~~Management~~the ~~Explanation~~presentation of ~~Non-GAAP~~stockholder ~~Financial~~proposals ~~Measures~~at meetings of stockholders; and

~~Some~~● ofrequire ~~the~~prior ~~financial~~regulatory ~~measures~~application ~~included in our selected historical consolidated financial data table~~ and ~~other~~approval ~~data are not measures~~ of ~~financial~~any ~~performance~~transaction ~~recognized~~involving bycontrol generally accepted accounting principles in the United States (“non-GAAP financial measures”). These non-GAAP financial measures include tangible common equity, tangible book value per share, return on average tangible common equity, efficiency ratio and operating efficiency ratios. The Company’s management uses the non-GAAP financial measures set forth below in its analysis of ~~the Company’s performance~~us.

●These ~~“Tangible~~provisions ~~common~~may ~~equity”~~discourage ispotential ~~total~~acquisition ~~shareholders’~~proposals ~~equity~~and ~~less~~could ~~goodwill,~~delay ~~other~~or ~~intangible~~prevent ~~assets~~a ~~and~~change ~~minority~~in ~~interest~~control, ~~not~~including ~~included~~under circumstances in ~~intangible~~which ~~assets~~our stockholders might otherwise receive a premium over the market price of our common stock.

●Item ~~“Tangible book value per share” is defined as tangible common equity divided by total common shares outstanding~~1B. ~~This~~Unresolved ~~measure~~Staff ~~is important to investors interested in changes from period to period in book value per share exclusive of changes in intangible assets~~Comments.

~~● “Average tangible common equity” is defined as the average of tangible common equity for the applicable period~~ None.

●Item ~~“Return~~2. ~~on average tangible common equity,” or ROATCE, is defined as net income available to common shareholders divided by average tangible common equity~~Properties.

WeNCC ~~believe~~owns ~~that~~no real property. NBC owns our headquarters and the ~~above~~main ~~measures~~office of NBC located at 600 Luckie Drive, ~~each~~Suite of350, ~~which~~Birmingham, ~~utilizes~~Alabama 35223. Including the ~~concept~~main office, we operate 36 full-service banking offices through NBC: seven in Alabama, 24 in central and northeast Florida and five in the Atlanta, Georgia metro area. We own 24 and lease 12 of ~~tangible~~these ~~common~~offices. ~~equity~~We ~~rather~~also ~~than~~operate ~~total~~a ~~common~~loan ~~equity~~production office that we lease. We also lease space for our mortgage operations center, ~~provide~~located ~~useful~~in ~~information~~Mountain Brook, Alabama. The sole office of both CBI and Corporate Billing, which Corporate Billing owns, is located at 239 Johnson Street, S.E., Decatur, Alabama 35601. See Note 5 to ~~management~~the Notes to the Consolidated Financial Statements included in this report and ~~investors~~the ~~because~~information ~~they~~under ~~eliminate~~the heading “Contractual Obligations” in the ~~impact~~“Management’s Discussion and Analysis of ~~goodwill~~Financial Condition and ~~other~~Results ~~intangible~~of ~~assets~~Operations” ~~created~~portion inof anthis ~~acquisition~~report for more information regarding our office premises. ~~These~~We ~~measures~~believe that our banking and non-banking offices are ~~commonly~~in ~~used~~good bycondition ~~investors~~and ~~when~~are ~~assessing~~suitable ~~financial~~to ~~institutions~~our needs.

● “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.34

●Table ~~“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.Contents

36Item 3. Legal Proceedings.

~~Table~~ We are subject to various pending and threatened litigation actions in the ordinary course of ~~Contents~~business. Although it is not possible to determine with certainty at this point in time what liability, if any, we will have as a result of such litigation, based on consultation with legal counsel, management does not anticipate that the ultimate liability, if any, resulting from such litigation will have a material effect on our financial condition and results of operations.

WeItem 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 the non-GAAP financial measures have a number of limitations4. AsMine ~~such,~~Safety you should not view these disclosures 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 useDisclosures. ~~The following reconciliation table provides more detailed analysis of these non-GAAP financial measures:~~

	NON-GAAP RECONCILIATION
	As of and for the Year Ended December 31,
(Dollars in thousands, except per share information)	2017			2016			2015			2014			2013
Total shareholders' equity	$	399,958		$	237,044		$	216,636		$	136,161		$	88,939
Less: Intangible assets		117,849			52,803			53,474			30,591			-
Less: minority interest not included in intangible assets		414			375			438			305			-
Tangible common equity	$	281,695		$	183,866		$	162,724		$	105,265		$	88,939
Common shares outstanding at year end or period end		14,788,436			10,934,541			10,824,969			7,541,541			5,730,114
Tangible book value per share	$	19.05		$	16.82		$	15.03		$	13.96		$	15.52
Total assets at end of period	$	2,737,676		$	1,950,784		$	1,763,369		$	1,138,426		$	791,781
Less: Intangible assets		117,849			52,803			53,474			30,591			-
Adjusted total assets at end of period		2,619,827			1,897,981			1,709,895			1,107,835			791,781
Tangible common equity to tangible assets		10.75	%		9.69	%		9.52	%		9.50	%		11.23	%
Total average shareholders' equity		355,378			226,351			172,954			97,326			86,969
Less: average intangible assets		108,638			53,136			34,628			8,244			-
Less: average minority interest not included in intangible assets		332			264			267			136			-
Average tangible common equity	$	246,408		$	172,951		$	138,059		$	88,946		$	86,969
Net income to common shareholders		20,068			17,853			9,605			5,403			4,006
Return on average tangible common equity (ROATCE)		8.14	%		10.32	%		6.96	%		6.07	%		4.61	%
Efficiency ratio:
Net interest income	$	99,424		$	67,182		$	50,049		$	28,473		$	20,699
Total noninterest income		20,035			13,956			8,459			5,032			5,302
Less: gain (loss) on sale of securities		(91	)		-			-			(33	)		47
Operating revenue	$	119,550		$	81,138		$	58,508		$	33,538		$	25,954
Expenses:
Total noninterest expenses	$	73,519		$	49,079		$	40,245		$	23,453		$	19,685
Efficiency ratio		61.50	%		60.49	%		68.79	%		69.93	%		75.85	%
Operating efficiency ratio:
Net interest income	$	99,424		$	67,182		$	50,049		$	28,473		$	20,699
Total noninterest income		20,035			13,956			8,459			5,032			5,302
Less: gain (loss) on sale of securities		(91	)		-			-			(33	)		47
Operating revenue	$	119,550		$	81,138		$	58,508		$	33,538		$	25,954
Expenses:
Total noninterest expenses	$	73,519		$	49,079		$	40,245		$	23,453		$	19,685
Less: merger/conversion-related expenses		2,320			479			764			662			257
Adjusted noninterest expenses	$	71,199		$	48,600		$	39,481		$	22,791		$	19,428
Operating efficiency ratio		59.56	%		59.90	%		67.48	%		67.96	%		74.86	%

Not applicable.

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Table of Contents

~~Item~~PART ~~7. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~II

~~The~~Item following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes thereto and other financial information appearing elsewhere in this report5. InMarket ~~addition~~For toRegistrant’s ~~historical~~Common ~~information~~Equity, ~~this~~Related ~~discussion~~Stockholder ~~and~~Matters ~~analysis contains forward-looking statements that involve risks, uncertainties~~ and ~~assumptions~~Issuer ~~that~~Purchases could cause actual results to differ materially from our expectations. Factors that could cause such differences are discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors.” We assume no obligation to update any of ~~these~~Equity ~~forward-looking statements except as required by law~~Securities.

~~The~~Market ~~following~~for ~~discussion~~Our ~~pertains~~Common to our historical results, on a consolidated basis. However, because we conduct all of our material business operations through our subsidiaries, the discussion and analysis relates to activities primarily conducted at the subsidiary level.Stock

~~All~~Our ~~dollar~~common ~~amounts~~stock inis ~~the~~listed ~~tables~~and intrades ~~this~~on ~~section~~the ~~are~~Nasdaq inGlobal ~~thousands~~Select ofMarket ~~dollars,~~under ~~except~~the ~~per~~symbol ~~share data or when specifically identified~~“NCOM.”

~~Our Business~~Holders

WeAs ~~(the “Company” or “NCC”) are a financial holding company headquartered in Birmingham, Alabama. We operate one subsidiary bank, National Bank~~ of ~~Commerce~~March ~~(“NBC” or the “Bank”). Through NBC~~1, ~~we provide a broad array of financial services to businesses~~2019, ~~business~~there ~~owners~~were ~~and professionals through seven full-service banking offices in Alabama~~20, ~~twenty-two full-service banking offices in central and northeast Florida~~813,165 ~~and~~shares ~~two full-service banking offices in the Atlanta, Georgia metro area. Certain~~ of our ~~offices~~common ~~operate~~stock ~~under~~outstanding ~~trade~~and ~~names,~~approximately ~~including “United Legacy Bank~~1,”057 ~~“Reunion~~record ~~Bank~~holders of ~~Florida,”~~our ~~“Patriot~~common ~~Bank”~~stock ~~and~~(excluding ~~“FirstAtlantic~~any ~~Bank”~~participants in ~~Florida,~~any ~~and~~clearing ~~“Private~~agency ~~Bank of Buckhead,” “Private Bank of Decatur”~~ and “~~PrivatePlus~~street ~~Mortgage~~name” ~~in Georgia~~holders).

We also own a 70% equity interest in CBI Holding Company, LLC (“CBI”), which owns Corporate Billing LLC (“Corporate Billing”), 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 throughout the United States and Canada.Dividends

~~2018~~Holders of our common stock receive dividends if and when declared by our board of directors out of legally available funds. Our board of directors has not declared, and we have not paid, a dividend since our inception, and our board of directors does not expect to declare a dividend in the foreseeable future. Any future determination or change relating to our dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition, future prospects, regulatory restrictions, and other factors that our board of directors may deem relevant at that time. In addition, the payment of dividends by NBC to NCC and by NCC to its stockholders is subject to certain regulations that may limit or prohibit such payments in certain circumstances. See “Supervision and Regulation – Dividend Restrictions” in Part I, Item 1 ~~Acquisition~~of this Annual Report on Form 10-K. No assurances can be given that any dividends on NCC’s common stock will be declared in the future or, if declared, what the amount of such dividends will be or whether such dividends will continue for future periods.

~~FirstAtlantic~~Securities ~~Financial~~Authorized ~~Holdings,~~for ~~Inc.~~Issuance Under Equity Compensation Plans

OnInformation ~~January~~regarding 1,securities ~~2018,~~authorized wefor ~~acquired~~issuance ~~FirstAtlantic~~under ~~Financial~~our ~~Holdings,~~equity ~~Inc.~~compensation ~~(“FirstAtlantic”),~~plans ais ~~savings~~incorporated ~~and~~by ~~loan~~reference holding company headquartered in Jacksonville, Florida, through the merger of FirstAtlantic with and into NCC and of FirstAtlantic’s wholly-owned subsidiary, FirstAtlantic Bank, with and into NBC. The former offices of FirstAtlantic Bank continue to ~~operate~~Item as12 ~~a division~~ of ~~NBC~~this ~~under~~Annual ~~the~~Report ~~trade~~on Form ~~name “FirstAtlantic Bank.” Because the acquisition was completed after year~~10-~~end, the assets, liabilities and results of operations for FirstAtlantic were not included in our financial results for 2017, but they will be included in our financial results for 2018~~K.

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Table of Contents

InPerformance connection with the merger, each share of FirstAtlantic common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive either 0.44 shares of our common stock or $17.25 in cash. We paid approximately $12.8 million in cash and issued 2,393,389 shares of our common stock as consideration in the merger. The aggregate estimated value of the consideration was $110.0 million.Graph

WeThe ~~marked~~following ~~FirstAtlantic’s~~information ~~assets~~in ~~and~~Part ~~liabilities~~II, toItem ~~fair~~5 ~~value~~of ~~based~~this onAnnual ~~information~~Report ~~available~~on atForm ~~the~~10-K ~~time~~is ofnot ~~acquisition.~~deemed Weto ~~acquired~~be ~~approximately~~“soliciting ~~$489.4~~material” or ~~million~~to inbe ~~assets~~“filed” with atthe ~~fair~~SEC ~~value~~or ~~from~~subject ~~FirstAtlantic~~to ~~and~~Regulation ~~added~~14A ~~eight~~or ~~banking~~14C ~~centers~~under ~~with~~the ~~approximately~~Securities ~~$303.9~~Exchange ~~million~~Act inof ~~loans~~1934 ~~and~~or ~~approximately~~to ~~$374.3~~the ~~million~~liabilities inof ~~deposits.~~Section We18 ~~expect~~of tothe ~~record~~Securities ~~goodwill~~Exchange Act of ~~approximately~~1934, ~~$50.5 million~~ and awill ~~core~~not ~~deposit~~be ~~intangible~~deemed ~~asset~~to ofbe ~~approximately~~incorporated ~~$6.3~~by ~~million~~reference asinto aany ~~result~~filing ofunder the ~~merger.~~Securities ~~The~~Act ~~fair~~of ~~value~~1933 ~~results~~or ~~are~~the ~~preliminary~~Securities ~~and~~Exchange ~~subject~~Act toof ~~refinement~~1934, ~~for~~except up to ~~one~~the ~~year~~extent ~~after~~we ~~the~~specifically ~~closing~~incorporate asit ~~additional~~by ~~information~~reference ~~becomes~~into ~~available~~such a filing.

~~Additional~~Set ~~information~~forth ~~regarding~~below is a line graph comparing the ~~FirstAtlantic~~yearly ~~merger~~percentage ischange ~~included~~in the cumulative total shareholder return on our common stock (based on the last reported sales price of the respective year) with the cumulative total return of the Russell 2000 Index and the SNL U.S. Bank Index ($1 billion to $5 billion in ~~Note~~assets) 20from March 18, ~~“Subsequent~~2015 ~~Events~~(the date on which our common stock was first traded on the Nasdaq Global Select Market) through December 31,” 2018. The following is based on an investment of $100 on March 18, 2015 in our common stock, the ~~Notes~~Russell 2000 Index and the SNL U.S. Bank Index ($1 billion to ~~Consolidated~~$5 ~~Financial~~billion ~~Statements~~in ~~provided~~assets), ~~herein~~with dividends reinvested where applicable.

2017 Acquisitions

			*Period Ending*
*Index*	03/18/15		12/31/15		12/31/16		12/31/17		12/31/18
National Commerce Corporation		100.00		128.46		190.51		206.61		184.62
Russell 2000 Index		100.00		91.75		111.31		127.61		113.55
SNL U.S. Bank $1B-$5B Index		100.00		113.43		163.19		173.97		152.42

On August 31, 2017, we acquired Patriot Bank, headquartered in Trinity, Florida, through the merger of Patriot Bank with and into NBC. The former offices of Patriot Bank continue to operate as a division of NBC under the trade name “Patriot Bank.” 37

InTable ~~connection with the merger, each share~~ of Patriot Bank common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive 0.1711 shares of NCC common stock and $0.725 in cash. We paid approximately $3.0 million in cash and issued 706,702 shares of our common stock as consideration in the merger. The aggregate estimated value of the consideration was $31.1 million.Contents

WeItem ~~marked Patriot Bank’s assets and liabilities to fair value based on information available at the time of acquisition~~6. WeSelected ~~acquired~~Financial ~~approximately $160~~Data.3 million in assets at fair value from Patriot Bank and added four banking centers with approximately $121.7 million in loans and approximately $127.7 million in deposits. We recorded goodwill of $14.7 million and a core deposit intangible asset of $899 thousand as a result of the merger.

Private Bancshares, Inc.

	SUMMARY CONSOLIDATED FINANCIAL DATA
	As of and for the Year Ended December 31,
(Dollars in thousands, except per share information)	2018			2017			2016			2015			2014
Statement of Income Data
Interest income	$	171,658		$	109,791		$	74,563		$	54,845		$	31,342
Interest expense		21,437			10,367			7,381			4,796			2,869
Net interest income		150,221			99,424			67,182			50,049			28,473
Provision for loan losses		4,723			3,894			3,248			1,113			978
Gain (loss) on sale of securities		193			(91	)		-			-			(33	)
Other noninterest income⁽¹⁾		19,088			19,802			13,956			8,459			5,065
Merger/conversion-related expenses		6,645			2,320			479			764			662
Other noninterest expense⁽²⁾		100,430			70,875			48,600			39,481			22,791
Income before income taxes		57,704			42,046			28,811			17,150			9,074
Income tax expense		12,791			13,840			9,394			5,476			3,159
Deferred tax asset write-down		-			6,231			-			-			-
Total income tax expense		12,791			20,071			9,394			5,476			3,159
Net income before minority interest		44,913			21,975			19,417			11,674			5,915
Net income attributable to minority interest		2,469			1,907			1,564			2,069			512
Net income to common shareholders		42,444			20,068			17,853			9,605			5,403
Balance sheet (at period end)
Cash and cash equivalents	$	217,130		$	235,288		$	217,293		$	212,457		$	123,435
Total investment securities		212,561			111,396			99,709			80,863			34,932
Mortgage loans held-for-sale		15,031			29,191			15,373			15,020			9,329
Acquired purchased credit-impaired loans		39,536			25,696			11,975			12,690			9,077
Acquired non-purchased credit-impaired loans		1,198,058			538,276			313,399			368,625			143,981
Nonacquired loans held for investment ⁽³⁾		1,953,685			1,455,376			1,076,209			870,471			653,063
CBI loans (factoring receivables)		126,686			118,710			83,901			67,628			82,600
Total gross loans held for investment		3,317,965			2,138,058			1,485,484			1,319,414			888,721
Allowance for loan losses		18,176			14,985			12,113			9,842			9,802
Total intangibles		267,984			117,849			52,803			53,474			30,591
Total assets		4,210,541			2,737,676			1,950,784			1,763,369			1,138,426
Total deposits		3,432,289			2,285,831			1,667,710			1,514,458			971,060
FHLB and other borrowings		20,851			7,000			7,000			22,000			22,000
Subordinated debt		37,235			24,553			24,500			-			-
Total liabilities		3,513,483			2,337,718			1,713,740			1,546,733			1,002,265
Minority interest		7,655			7,348			7,309			7,372			7,239
Common stock		208			148			109			108			75
Total shareholders' equity		697,058			399,958			237,044			216,636			136,161
Tangible common equity		428,353			281,695			183,866			162,724			105,265
Selected Performance Ratios
Return on average assets (ROAA)⁽⁴⁾		1.19	%		0.81	%		1.00	%		0.72	%		0.66	%
Return on average equity (ROAE)		7.23			5.65			7.89			5.55			5.55
Return on average tangible common equity (ROATCE)		11.47			8.14			10.32			6.96			6.07
Net interest margin - taxable equivalent		4.75			4.44			4.15			4.13			3.76
Efficiency ratio		63.24			61.39			60.49			68.79			69.93
Operating efficiency ratio⁽²⁾		59.32			59.45			59.90			67.48			67.96
Noninterest income / average assets		0.53			0.80			0.78			0.64			0.62
Noninterest expense / average assets		2.99			2.95			2.76			3.03			2.88
Yield on loans		5.76			5.40			5.06			5.17			4.68
Cost of total deposits		0.66			0.41			0.40			0.39			0.35
Per Share Outstanding Data
Net earnings per share	$	2.26		$	1.45		$	1.64		$	1.04		$	0.92
Diluted net earnings per share		2.21			1.41			1.61			1.02			0.91
Common shares outstanding at period end		20,762,084			14,788,436			10,934,541			10,824,969			7,541,541
Weighted average diluted shares		19,230,190			14,193,433			11,093,987			9,395,741			5,960,199
Book value per share		33.57			27.05			21.68			20.01			18.05
Tangible book value per share		20.63			19.05			16.82			15.03			13.96
Nonperforming assets
Nonacquired
Non-accrual loans	$	4,807		$	82		$	69		$	187		$	2,276
Other real estate and repossessed assets		75			-			2,068			3,873			823
Loans past due 90 days or more and still accruing		818			677			581			252			217
Total nonacquired nonperforming assets		5,700			759			2,718			4,312			3,316
Acquired
Non-accrual loans		5,612			2,640			2,768			3,508			2,589
Other real estate and repossessed assets		899			1,094			-			92			557
Loans past due 90 days or more and still accruing		-			-			-			-			80
Total acquired nonperforming assets		6,511			3,734			2,768			3,600			3,226

On January 1, 2017, we acquired Private Bancshares, Inc. (“Private Bancshares”), a bank holding company headquartered in Atlanta, Georgia, through the merger of Private Bancshares with and into NCC and of Private Bancshares’ wholly-owned subsidiary, Private Bank of Buckhead, with and into NBC. The former offices of Private Bank of Buckhead continue to operate as a division of NBC under the trade names “Private Bank of Buckhead,” “Private Bank of Decatur” and “PrivatePlus Mortgage.” 38

39Table of Contents

Table of Contents

	As of and for the Year Ended December 31,
(Dollars in thousands, except per share information)	2018			2017			2016			2015			2014
Asset Quality Ratios
Nonperforming assets / Assets		0.29	%		0.16	%		0.28	%		0.45	%		0.57	%
Nonperforming assets / Loans + OREO + repossessed assets		0.37			0.21			0.37			0.60			0.73
Nonacquired nonperforming assets / Nonacquired loans + nonacquired OREO + nonacquired repossessed assets⁽³⁾		0.29			0.05			0.25			0.49			0.51
Net charge-offs to average loans		0.05			0.05			0.07			0.11			0.05
Allowance for loan losses to total loans		0.55			0.70			0.82			0.75			1.10
Allowance for loan losses / (Nonacquired non-accrual loans + nonacquired loans past due 90 days or more and still accruing)		323.13			1,974.31			1,863.54			2,241.91			393.18
Additional Information: Allowance for Loan Losses
Allowance for loan losses excluding CBI loans (factoring receivables)	$	17,576		$	14,385		$	11,613		$	9,342		$	8,847
Nonacquired loans held for investment ⁽³⁾		1,953,685			1,455,376			1,076,209			870,471			653,063
Allowance for loan losses allocated to CBI loans (factoring receivables)		600			600			500			500			955
CBI loans (factoring receivables)		126,686			118,710			83,901			67,628			82,600
Capital ratios (at period end)
Tier 1 leverage ratio		10.87	%		10.89	%		9.57	%		9.68	%		10.68	%
Tier 1 common capital ratio		13.10			12.54			11.46			11.18			10.66
Tier 1 risk-based capital ratio		13.10			12.54			11.46			11.18			10.66
Total risk-based capital ratio		14.82			14.37			13.90			11.91			11.75
Equity / Assets		16.56			14.61			12.15			12.29			11.96
Tangible common equity to tangible assets		10.86			10.75			9.69			9.52			9.50
Composition of Loans Held for Investment
Owner-occupied commercial real estate	$	646,863		$	378,525		$	254,099		$	215,021		$	132,126
Non-owner occupied commercial real estate		879,572			509,764			352,677			294,191			198,658
Commercial and industrial loans		408,166			258,577			150,268			171,160			113,788
Factored commercial receivables		126,686			118,710			83,901			67,628			82,600
Construction, land development and other land loans		361,263			231,030			155,813			152,862			83,663
1-4 family		724,614			508,935			387,342			333,761			221,222
Multifamily		89,551			60,054			47,060			31,128			23,420
Consumer and other		81,250			72,463			54,324			53,663			33,244
Deposit Composition
Demand	$	929,820		$	697,144		$	429,030		$	382,946		$	217,643
NOW		692,725			362,266			262,261			202,649			154,816
Money market and savings		1,315,337			951,846			703,289			611,887			392,394
Retail time		91,652			63,044			64,364			87,069			74,367
Jumbo time⁽⁵⁾		402,755			211,531			208,766			229,907			131,840
Mortgage Metrics
Total production ($)	$	490,770		$	507,563		$	322,909		$	281,706		$	207,269

In(1) ~~connection~~Excludes ~~with~~securities ~~the~~gains ~~merger,~~(losses) ~~each~~(2) ~~share~~Excludes ofmerger/conversion-related ~~Private~~expenses ~~Bancshares~~(3) ~~common~~Excludes ~~stock~~CBI ~~issued~~loans ~~and~~(4) ~~outstanding~~Net ~~immediately~~income ~~prior~~ to ~~the effective time of the merger was converted into the right to receive either 0.85417 shares of our~~ common ~~stock~~shareholders or/ ~~$20.50~~average inassets ~~cash.~~(5) WeJumbo ~~paid~~time ~~approximately~~deposits ~~$8.3~~defined ~~million in cash and issued 1,809,189 shares of our common stock~~ as ~~consideration~~time indeposits ~~the~~greater ~~merger.~~than ~~The aggregate estimated value of the consideration was~~ $~~79.9 million.~~100,000

We marked Private Bancshares’ assets and liabilities to fair value based on information available at the time of acquisition. We acquired approximately $371.1 million in assets at fair value from Private Bancshares and added two banking centers with approximately $260.0 million in loans and approximately $286.2 million in deposits. We recorded goodwill of $47.9 million and a core deposit intangible asset of $3.0 million as a result of the merger. 39

~~2015~~Table ~~Acquisition~~of Contents

~~Reunion~~GAAP ~~Bank~~RECONCILIATION ofAND ~~Florida~~MANAGEMENT EXPLANATION OF NON-GAAP FINANCIAL MEASURES

OnSome ~~October~~of ~~31,~~the ~~2015,~~financial wemeasures ~~acquired~~included ~~Reunion~~in ~~Bank~~NCC’s selected historical consolidated financial data table and other data are not measures of ~~Florida~~financial performance recognized by generally accepted accounting principles in the United States (“~~Reunion~~non-GAAP financial measures”),. ~~headquartered~~These innon-GAAP ~~Tavares,~~financial ~~Florida,~~measures ~~through~~include ~~the~~tangible ~~merger~~common ofequity, ~~Reunion~~tangible ~~with~~book ~~and~~value ~~into~~per ~~NBC.~~share, ~~The~~return ~~former~~on ~~offices~~average oftangible ~~Reunion~~common ~~continue~~equity, toefficiency ~~operate~~ratio asand aoperating ~~division~~efficiency ofratio. ~~NBC~~NCC’s ~~under~~management uses the ~~trade~~non-GAAP ~~name~~financial ~~“Reunion~~measures ~~Bank~~set forth below in its analysis of ~~Florida.”~~the Company’s performance.

In● ~~connection~~“Tangible ~~with the merger, each share of Reunion~~ common ~~stock~~equity” ~~issued~~is ~~and~~total ~~outstanding~~stockholders’ ~~immediately~~equity ~~prior~~less togoodwill, ~~the~~other ~~effective~~intangible ~~time~~assets ~~of the merger was converted into the right to receive either 0.7273 shares of our common stock or $16.00 in cash. We paid approximately $7.4 million in cash~~ and ~~issued~~minority ~~1,339,129~~interest ~~shares~~not ofincluded ~~our common stock as consideration~~ in ~~the~~intangible ~~merger~~assets. ~~The aggregate estimated value of the consideration was $43.2 million.~~

We● ~~marked~~“Tangible ~~Reunion’s~~book ~~assets~~value ~~and~~per ~~liabilities~~share” tois ~~fair~~defined ~~value~~as ~~based~~tangible oncommon ~~information~~equity ~~available~~divided atby ~~the~~total ~~time~~common ofshares ~~the acquisition~~outstanding. WeThis ~~acquired~~measure ~~approximately~~is ~~$309.7~~important ~~million~~to ininvestors ~~assets~~interested atin ~~fair~~changes ~~value~~ from ~~Reunion~~period ~~and~~to ~~added~~period ~~approximately~~in ~~$258.4~~book ~~million~~value inper ~~loans~~share ~~and~~exclusive ~~approximately~~of ~~$277.7~~changes ~~million~~ in ~~deposits.~~intangible assets.

~~Additional~~● ~~information~~“Average ~~regarding~~tangible ~~the~~common ~~Patriot~~equity” ~~Bank, Private Bancshares and Reunion acquisitions~~ is ~~included~~defined inas ~~Note~~the 2,average ~~“Business Combinations,”~~ of ~~the~~tangible ~~Notes~~common toequity ~~Consolidated~~for ~~Financial~~the ~~Statements~~applicable ~~provided herein~~period.

~~Overview~~● of“Return ~~2017~~on ~~Results~~average tangible common equity,” or ROATCE, is defined as net income available to common stockholders divided by average tangible common equity.

~~Our~~NCC’s ~~net~~management ~~income~~believes ~~was~~that ~~$20.1~~the ~~million~~measures ~~in 2017~~above, ~~compared~~each toof ~~$17.9~~which ~~million~~utilizes inthe ~~2016,~~concept ~~after~~of ~~taking~~tangible ~~into~~common ~~account~~equity arather ~~write-down~~than oftotal ~~our~~common ~~deferred~~equity, ~~tax~~provide ~~asset~~useful ~~(“DTA”)~~information ~~due~~ to ~~the~~management ~~enactment~~and ofinvestors ~~the~~because ~~Tax~~they ~~Cuts~~eliminate ~~and~~the ~~Jobs~~impact ~~Act~~ of ~~2017,~~goodwill ~~increasing~~and ~~income~~other ~~tax~~intangible ~~expense~~assets ~~for~~created ~~the~~in ~~year~~an ~~by $6~~acquisition.2 ~~million.~~These ~~The~~measures ~~primary~~are ~~factors~~commonly ~~leading~~used toby ~~the~~investors ~~increase~~when inassessing ~~our~~financial ~~2017 net income and other highlights include the following:~~institutions.

● We“Efficiency ~~acquired~~ratio” ~~Private~~is ~~Bancshares~~defined onas ~~January~~noninterest 1,expense ~~2017~~divided ~~and~~by ~~Patriot~~operating ~~Bank~~revenue on(which ~~August~~is ~~31,~~equal ~~2017.~~to Asnet ainterest ~~result~~income plus noninterest income), ~~our~~excluding ~~2017~~one-time ~~results~~gains ~~include~~and anlosses ~~entire~~on ~~year~~sales of ~~revenue~~securities. ~~and~~This ~~expenses~~measure ~~attributable~~is important to ~~Private~~investors ~~Bancshares~~looking ~~and~~for ~~four~~a ~~months~~measure of ~~revenue~~efficiency ~~and~~in ~~expenses~~productivity ~~attributable~~based toon ~~Patriot~~the ~~Bank~~amount of revenue generated for each dollar spent.

● ~~Average~~“Operating ~~loans~~efficiency ~~outstanding~~ratio” inis ~~2017~~defined ~~were~~as ~~$1.92~~noninterest ~~billion,~~expense ~~compared~~divided toby ~~$1.40~~operating ~~billion in 2016~~revenue, anexcluding ~~increase~~one-time ofgains ~~approximately~~and ~~37.3%.~~losses ~~The~~on ~~higher~~sales ~~loan~~of ~~balance~~securities ~~led~~and toone-time angains ~~increase~~and inexpenses ~~net~~related ~~interest~~to ~~income~~merger ~~from~~and ~~$67.2~~acquisition ~~million in 2016 to $99~~activities.4 ~~million~~This inmeasure ~~2017.~~is Inimportant ~~addition~~ to ~~organic~~investors ~~growth,~~looking ~~2017~~for ~~balances include~~ a ~~full~~measure ~~year~~ of ~~loans~~efficiency ~~attributable~~in toproductivity ~~Private~~based ~~Bancshares~~on ~~and~~the ~~four~~amount ~~months~~ of ~~loans~~revenue ~~attributable~~generated tofor ~~Patriot~~each ~~Bank~~dollar spent.

40NCC’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, management acknowledges that the 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 these disclosures are not necessarily comparable to non-GAAP financial measures that other companies use. The following reconciliation table provides more detailed analysis of these non-GAAP financial measures.

~~Table of Contents~~40

●Table Loan yields in 2017 averaged 5.40%, compared to 5.06% for 2016. Interest-bearing liability costs were 0.70% in 2017, compared to 0.64% in 2016. As a result, our net interest spread increased from 3.96% in 2016 to 4.20% in 2017. Average noninterest-bearing deposits grew from $396.9 million in 2016 to $621.8 million in 2017, reducing our overall funding cost. The combination of ~~higher loan yields, relatively stable funding costs and an increase in noninterest-bearing deposits led to an expansion in our net interest margin from 4.12% in 2016 to 4.42% in 2017.~~Contents

● Average deposits in 2017 were $2.08 billion, compared to $1.52 billion in 2016, an increase of approximately 36.7%. In addition to organic growth, the increase in the 2017 balances was driven by a full year of deposits attributable to Private Bancshares and four months of deposits attributable to Patriot Bank.

	NON-GAAP RECONCILIATION
	As of and for the Year Ended December 31,
(Dollars in thousands, except per share information)	2018			2017			2016			2015			2014
Total shareholders' equity	$	697,058		$	399,958		$	237,044		$	216,636		$	136,161
Less: Intangible assets		267,984			117,849			52,803			53,474			30,591
Less: minority interest not included in intangible assets		721			414			375			438			305
Tangible common equity	$	428,353		$	281,695		$	183,866		$	162,724		$	105,265
Common shares outstanding at year end or period end		20,762,084			14,788,436			10,934,541			10,824,969			7,541,541
Tangible book value per share	$	20.63		$	19.05		$	16.82		$	15.03		$	13.96
Total assets at end of period	$	4,210,541		$	2,737,676		$	1,950,784		$	1,763,369		$	1,138,426
Less: Intangible assets		267,984			117,849			52,803			53,474			30,591
Adjusted total assets at end of period		3,942,557			2,619,827			1,897,981			1,709,895			1,107,835
Tangible common equity to tangible assets		10.86	%		10.75	%		9.69	%		9.52	%		9.50	%
Total average shareholders' equity		586,977			355,378			226,351			172,954			97,325
Less: average intangible assets		216,658			108,638			53,136			34,628			8,244
Less: average minority interest not included in intangible assets		399			332			264			267			136
Average tangible common equity	$	369,920		$	246,408		$	172,951		$	138,059		$	88,945
Net income to common shareholders		42,444			20,068			17,853			9,605			5,403
Return on average tangible common equity (ROATCE)		11.47	%		8.14	%		10.32	%		6.96	%		6.07	%
Efficiency ratio:
Net interest income	$	150,221		$	99,424		$	67,182		$	50,049		$	28,473
Total noninterest income		19,281			19,711			13,956			8,459			5,032
Less: gain (loss) on sale of securities		193			(91	)		-			-			(33	)
Operating revenue	$	169,309		$	119,226		$	81,138		$	58,508		$	33,538
Expenses:
Total noninterest expenses	$	107,075		$	73,195		$	49,079		$	40,245		$	23,453
Efficiency ratio		63.24	%		61.39	%		60.49	%		68.79	%		69.93	%
Operating efficiency ratio:

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