SUMMARY

 

This summary is a brief overview of the key aspects of the merger and the issuance of shares of NCC common stock and cash in the merger. This summary only identifies those aspects of the merger that we believe are most significant to you in your review of this proxy statement-prospectus. It is necessarily general and abbreviated, and it is not intended to be a complete explanation of all of the matters covered in this proxy statement-prospectus. To understand the merger and the issuance of cash and shares of NCC common stock in the merger, please see the more complete and detailed information in the sections that follow this summary, as well as the appendices included in this proxy statement-prospectus. For more information about NCC, see “Where You Can Find More Information” on page 82 . We have included page references in this summary to direct you to other places in this proxy statement-prospectus where you can find a more complete description of the topics we have summarized. You are urged to read all of these documents in their entirety prior to returning your proxy or voting at the special meeting.

 

The Companies (See page 63 for NCC and NBC and page 63 for FFHI and FirstAtlantic Bank)

 

National Commerce Corporation and National Bank of Commerce  

 

NCC, a Delaware corporation, is a financial holding company headquartered in Birmingham, Alabama. NCC engages in the business of banking through NBC, its wholly owned banking subsidiary.      

 

NBC provides a broad array of banking and other financial services to businesses, business owners and professionals. NBC operates seven (7) full-service banking offices in Alabama, fourteen (14) full-service banking offices in Florida (including under the trade names “United Legacy Bank ,” “Reunion Bank of Florida” and “Patriot Bank”) and two (2) 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” for the mortgage division).

 

NCC engages in the business of factoring commercial receivables through NBC’s ownership of a seventy percent (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.

 

As of June 3 0, 2017, NCC had total assets of approximately $2.4 billion, total net loans of approximately $1.9 billion, total deposits of approximately $2.0 billion and total shareholders’ equity of approximately $363.2 million. On August 31, 2017, NCC completed the acquisition of Patriot Bank, located in Trinity, Florida, through a combination of cash and shares of NCC common stock issued to Patriot Bank shareholders, with an aggregate value of approximately $31.1 million.

 

NCC’s common stock is traded on the Nasdaq Global Select Market under the symbol “NCOM.” NCC’s principal executive office is located at 813 Shades Creek Parkway, Suite 100, Birmingham, Alabama 35209, and its telephone number is (205) 313-8100. NCC does not maintain a standalone website, but additional information about NCC may be found on NBC’s website at www.nationalbankofcommerce.com. Information contained on the website is not part of this proxy statement-prospectus, and is not incorporated by reference herein.

 

F FHI and FirstAtlantic Bank

 

FFHI is the holding company for FirstAtlantic Bank, a full-service federal savings association headquartered in Jacksonville, Florida. FirstAtlantic Bank had approximately $462 million in assets, approximately $324 million and $372 million in total loans and deposits, respectively, and approximately $62 million in total equity as of June 30, 2017 and operates eight (8) financial centers located in Jacksonville, Orange Park, St. Augustine and Ponte Vedra Beach, Florida. FirstAtlantic Bank is dedicated to serving businesses, professionals, and consumers while offering a full array of banking services. FFHI’s common stock is quoted on the OTCQX under the symbol “FFHD.” FFHI’s principal executive office is located at 1325 Hendricks Avenue, Jacksonville, Florida 32207, and its telephone number is (904) 348-3100. FirstAtlantic Bank’s website can be accessed at https://www.firstatlantic.bank/. Information contained on FirstAtlantic Bank’s website does not constitute part of, and is not incorporated into, this proxy statement-prospectus.

 

The Merger Agreement (See page 42 )

 

Under the terms of the merger agreement, FFHI will be merged with and into NCC, with NCC continuing as the surviving corporation. Immediately following the merger, FFHI’s wholly owned bank subsidiary, FirstAtlantic Bank, will merge with and into NCC’s wholly owned bank subsidiary, NBC. NBC will be the surviving bank in the bank merger. Both NCC and NBC will continue their existence under Delaware law and the laws of the United States, respectively, while FFHI and FirstAtlantic Bank will cease to exist as separate corporations. However, subject to applicable laws and non-objection from regulatory authorities, NCC and FFHI intend for the former banking offices of FirstAtlantic Bank to continue to operate and conduct business under the trade name “FirstAtlantic Bank, a division of National Bank of Commerce,” for a period of at least two (2) years. A copy of the merger agreement is included in this proxy statement-prospectus as  Appendix A and is incorporated into this proxy statement-prospectus by reference. You are encouraged to read the entire merger agreement carefully, as it is the legal document that governs the proposed merger.

 

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What You Will Receive in the Merger (See page 42)

 

If the merger is completed, the shareholders of FFHI may elect to receive, for each of their shares of FFHI common stock, either (i) 0.44 shares of NCC common stock or (ii) $17.25 in cash, without interest, subject to certain allocation limitations and proration procedures described in the merger agreement. The merger agreement provides that the total amount of cash payable in the merger will be equal as nearly as practicable to, but will not exceed, $11,148,555; however, if valid cash elections exceed this amount, then NCC may increase the aggregate amount of cash payable up to the amount actually elected, subject to an adjusted maximum of $14,857,305. Accordingly, elections by FFHI shareholders to receive a particular form of consideration, whether cash or shares of NCC common stock, will be prorated as necessary to cause the aggregate mix of consideration issuable to the shareholders of FFHI in the merger to comply with the foregoing allocation. After the merger is completed, and assuming the issuance of the maximum possible number of shares in the merger, current NCC stockholders would own approximately 85.2% of the issued and outstanding common stock of NCC, and current shareholders of FFHI would own approximately 14.8% of the issued and outstanding common stock of NCC. See “Proposal No. 1 – The Merger; Structure of the Merger” beginning on page 24 and “The Merger Agreement” beginning on page 42 for further explanation.

 

As described in more detail elsewhere in this proxy statement-prospectus, under the terms of the merger agreement, if the average closing price of NCC common stock over a designated period of time prior to the closing of the merger decreases below certain specified thresholds and other specified conditions are met, the FFHI board of directors would have a right to terminate the merger agreement, unless NCC elects to make a compensating cash payment to FFHI shareholders who have elected to receive shares of NCC common stock. For more information regarding these termination rights and the adjustment that may result to the merger consideration, see “The Merger Agreement; Termination of the Merger Agreement; Termination Fee” beginning on page 55.

 

No fractional shares of NCC common stock will be issued in the merger. Instead, NCC will pay to each former shareholder of FFHI who otherwise would be entitled to receive a fractional share of NCC common stock an amount in cash (without interest) determined by multiplying the fraction of a share of NCC common stock otherwise issuable by the average closing price (rounded to two decimal places) for a share of NCC common stock as reported by the Nasdaq Global Select Market during the ten (10) consecutive business days ending on the fifth business day prior to the date of the closing of the merger.

 

Cash and Stock Elections (See page 42 )

 

 A form of election will be provided to shareholders of FFHI at a later date, and shareholders of FFHI should carefully review and follow the instructions that will be included with the election form. The deadline to make an election is 5:00 p.m. Eastern Time on the day prior to the special meeting (or [ ●], 2017). The number of shares of FFHI common stock to be converted into cash will equal, as closely as possible, but will not exceed, 646,293 shares ($11,148,555 in cash); however, if valid cash elections exceed this amount, then NCC may increase the aggregate amount of cash payable up to the amount actually elected, subject to an adjusted maximum of $14,857,305. Therefore, the remaining shares of FFHI common stock outstanding will be converted into a right to receive shares of NCC common stock. In addition, shares of FFHI common stock may be converted into a right to receive cash if the aggregate number of shares of FFHI common stock for which an election has been made to receive shares of NCC common stock exceeds the maximum number of shares issuable in accordance with the allocation of consideration contemplated by the merger agreement. In the event that the shareholders of FFHI elect to receive, in the aggregate, a particular form of consideration in an amount that exceeds the predetermined allocation, all shareholders who elected to receive such form of consideration will have their elections prorated according to a method to be mutually selected by NCC and FFHI to the extent necessary to cause the aggregate mix of consideration to equal, as nearly as practicable, the allocation described in the merger agreement. Accordingly, shareholders of FFHI may receive a consideration mix that is different from the consideration that they elect to receive, and your ability to receive cash or shares of NCC in exchange for your shares of FFHI common stock in accordance with your election will depend upon the election of other FFHI shareholders. See “The Merger Agreement – Proration Procedures” beginning on page 43 for further explanation.

 

Elections may be revoked or amended at any time prior to the election deadline. If you transfer your shares before the effective time of the merger (whether before or after the election deadline), then any election you have made with respect to the transf erred shares will be deemed to have been revoked. The ability of the transferee of the shares to make an election depends on whether the transfer occurs before or after the election deadline. If the transfer is completed before the election deadline, then the transferee may make a new election by requesting an election form from FFHI and following the instructions therein. However, if the shares are transferred after the election deadline, then the transferee may not make an election with respect to the transferred shares, and the shares will be subject to the default allocation procedures set forth in the merger agreement.  

 

What Holders of FFHI Stock Options Will Receive (See page 45)

 

The merger agreement provides that, at the effective time of the merger, each outstanding and unexercised option to purchase shares of FFHI common stock will be automatically cancelled and converted into the right of the holder to receive, with respect to each share of FFHI common stock subject to the option, a cash payment equal to the excess, if any, of $17.25 over the exercise price per share of FFHI common stock subject to such option (rounded to the nearest cent), less any required withholding tax.

 

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What Holders of FFHI Warrants Will Receive (See page 46)

 

Under the terms of the merger agreement, upon completion of the merger, NCC will assume all outstanding FFHI warrants according to their terms, including any acceleration in vesting that will occur as a consequence of the merger. Such warrants will be converted automatically into the right to purchase NCC common stock; however, the exercise price and number of shares issuable upon exercise thereof will be adjusted according to the exchange ratio.

 

What Holders of FFHI Restricted Stock Will Receive (See page 46)

 

Under the terms of the merger agreement, all outstanding shares of FFHI restricted stock will become fully vested, will convert into shares of FFHI common stock immediately prior to the merger and will be treated the same as outstanding shares of FFHI common stock for purposes of the merger consideration allocation. Each holder of FFHI restricted stock will be entitled to elect to receive cash or shares of NCC common stock and will be subject to the proration procedures described in this proxy statement-prospectus.

 

Your Expected Tax Treatment as a Result of the Merger (See page 38)

 

The merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Code. In connection with the filing of the registration statement of which this proxy statement-prospectus is a part, Maynard, Cooper & Gale, P.C. has delivered to NCC, and Troutman Sanders LLP has delivered to FFHI, their respective opinions (filed as Exhibits 8.1 and 8.2, respectively of the registration statement of which this proxy statement-prospectus is a part) that, for U.S. federal income tax purposes, subject to the limitations, assumptions and qualifications described in “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 38, the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Accordingly, if you are a U.S. holder (as defined in “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 38) of FFHI common stock, you will not recognize any gain or loss for U.S. federal income tax purposes upon your exchange of shares of FFHI common stock for shares of NCC common stock in the merger. However, to the extent that you receive cash, whether as a result of an election to receive cash as your consideration in the merger, as a result of proration, upon your exercise of dissenters’ rights, or in lieu of fractional shares, you may recognize gain or loss for U.S. federal income tax purposes.

 

The U.S. federal income tax consequences of the merger are complicated, and the tax consequences described in this proxy statement-prospectus may not apply to all holders of FFHI common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your own tax advisor to determine the particular tax consequences of the merger to you.   It is a condition to the respective obligations of NCC and FFHI to complete the merger that each party receives a legal opinion from its counsel that, for U.S. federal income tax purposes, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Under the merger agreement, receipt of the tax opinions may be waived by NCC and FFHI prior to the closing of the merger. However, if receipt of such opinions were waived, FFHI would resolicit its shareholders in the event that any change in the tax consequences were material, and would disclose the reasons for the waiver and the change in tax consequences. Such resolicitation would require an amendment to the registration statement on Form S-4 of which this proxy statement-prospectus is a part. See “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 38 for additional information.

 

Dissenters ’ Rights (See page 60)

 

Shareholders of FFHI have dissenters’ rights in connection with the proposed merger under the FBCA. The FBCA provides that a dissenting shareholder is entitled to receive the fair value of his, her or its shares in cash (which may be more or less than the value of the consideration that such holder would receive in the merger) if the dissenting shareholder complies with all of the requirements set forth in the FBCA. To perfect dissenters’ rights, you must (i) give FFHI written notice of your intent to dissent from the merger prior to the special meeting, (ii) not vote your shares, or allow your shares to be voted, in favor of the merger and (iii) comply technically with proper procedure as set forth under the FBCA. The value of your shares determined for this purpose may be more or less than the per-share consideration to be paid in the merger. Pursuant to the merger agreement, NCC’s board of directors may terminate the merger agreement and abandon the merger if dissenters’ rights of appraisal are properly asserted with respect to more than ten percent (10%) of the outstanding shares of FFHI common stock.

 

If you sign and send in your proxy card and do not indicate how you want to vote on the merger proposal, your proxy will be voted FOR the merger proposal and you will effectively waive your appraisal rights. Therefore, an FFHI shareholder who submits a proxy and who also wishes to exercise appraisal rights must either (i) submit a proxy containing instructions to vote against the merger proposal or (ii) abstain from voting on the merger proposal and submit a written notice to FFHI prior to the special meeting of his, her or its intent to dissent from the merger.

 

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Appendix B includes the relevant statutory provisions regarding these rights. See “Dissenters’ Rights” beginning on page 60 for additional information on how to assert dissenters’ rights. In view of the complexity of the procedures specified under applicable law, shareholders who wish to pursue dissenters’ appraisal rights should promptly consult their legal, financial and tax advisors.

 

What NCC Stockholders Will Receive (See page 45 )

 

NCC stockholders will not receive any consideration in the merger. After the merger, current NCC stockholders will continue to own the same number of shares of NCC common stock owned before the merger.

 

Comparative Stock Prices (See page 20 for NCC and page 21 for FFHI)

 

NCC  

 

NCC common stock is traded on the Nasdaq Global Select Market under the symbol “ NCOM.” The closing price of NCC common stock on [● ], 2017, the most recent practicable trading day before the date of this proxy statement-prospectus, was $[● ]. The value of the shares of NCC common stock to be issued in the merger will fluctuate between now and the closing of the merger.

 

FFHI

 

FFHI’s common stock is quoted on the OTCQX under the symbol “FFHD.” The last sale price of FFHI common stock prior to public announcement of the merger was $13.70 per share, which occurred on August 16, 2017. The last sale price for a share of FFHI common stock on [●], 2017, the most recent practicable trading day prior to the date of this proxy statement-prospectus, was $[●]. The value of shares of FFHI common stock will fluctuate between now and the closing of the merger.

 

NCC Dividends (See page 20)

 

NCC’ s board of directors has not declared a dividend since its inception and does not expect to do so in 2017. Future determinations regarding dividend policy will be made at the discretion of NCC’ s board of directors based on factors that it deems relevant at that time.

 

FFHI Dividends (See page 21 )

 

Under the merger agreement, until the effective time of the merger or the earlier termination of the merger agreement, FFHI may not declare or pay any dividend or make any other capital distribution, except for quarterly dividends consistent with past practice in an amount up to $0.04 per share of FFHI common stock per quarter. On August 22, 2017, FFHI declared a cash dividend of $0.04 per share that was paid to shareholders of record as of September 15, 2017 on October 4, 2017.

 

NCC ’s Reasons for the Merger (See page 29)

 

NCC’s board of directors considered a number of financial and nonfinancial factors in making its decision to merge with FFHI, including its respect for the ability and integrity of the FFHI board of directors, management and staff. The board of directors of NCC believes that expanding operations in the market areas where FFHI operates will provide financial and strategic benefits to NCC and FFHI as a combined company.

 

FFHI ’s Reasons for the Merger (See page 28)

 

FFHI’s board of directors considered a number of factors, both financial and nonfinancial in nature, as part of its consideration of the proposed merger with NCC. The board of directors of FFHI believes that the proposed acquisition of FFHI by NCC will provide significant value to the shareholders of FFHI and will benefit the customers and communities served by FirstAtlantic Bank.

 

See “ Proposal No. 1 – The Merger; Reasons for the Merger” beginning on page 28 for additional information.

 

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Opinion of FFHI’s Financial Advisor (See page 29)

 

FFHI retained FIG Partners, LLC (“FIG Partners”) to provide its opinion as to the fairness, from a financial point of view, to the holders of FFHI’s common stock of the merger consideration to be received by such holders in the merger. FFHI selected FIG Partners to act as its financial advisor based on its qualifications, expertise, reputation and knowledge of FFHI’s business and affairs and its experience with the industry in which FFHI operates. At a meeting of the FFHI board of directors on August 16, 2017, representatives of FIG Partners rendered FIG Partners’ oral opinion, which was subsequently confirmed by delivery of a written opinion to the FFHI board dated August 16, 2017, as to the fairness, as of such date, from a financial point of view, to the holders of FFHI’s outstanding common stock of the merger consideration to be received by such holders in the merger pursuant to the merger agreement, based upon and subject to the qualifications, assumptions and other matters considered in connection with the preparation of its opinion.

 

The full text of the written opinion of FIG Partners, dated August 16, 2017, which sets forth, among other things, the various qualifications, assumptions and limitations on the scope of the review undertaken, is attached as Appendix C to this proxy statement-prospectus. FIG Partners provided its opinion for the information and assistance of the FFHI board of directors in connection with, and for purposes of, its consideration of the merger and its opinion only addresses whether the merger consideration to be received by the holders of FFHI common stock in the merger pursuant to the merger agreement was fair, from a financial point of view, to such holders. The opinion of FIG Partners does not address any other term or aspect of the merger agreement or the merger. The FIG Partners opinion does not constitute a recommendation to the FFHI board or any holder of FFHI common stock as to how the board, such shareholder or any other person should vote or otherwise act with respect to the merger or any other matter. See “ Proposal No. 1 – The Merger; Opinion of FFHI’s Financial Advisor” beginning on page 29 for additional information.

 

Recommendation of the FFHI Board of Directors (See page 35)

 

The FFHI board of directors has unanimously approved the merger agreement and believes that the merger is in the best interests of the shareholders of FFHI. The board unanimously recommends that you vote FOR approval of the merger proposal.

 

Information About the Special Meeting (See page 22)

 

A special meeting of the shareholders of FFHI will be held on [●], 2017, at [●] a.m., local time. The special meeting will be held at [●], located at [●]. At the special meeting, the shareholders of FFHI will vote on the merger proposal described herein. If the shareholders approve the merger agreement and the conditions to completing the merger are satisfied, the parties expect to complete the merger as soon as practicable after the special meeting. See “ The FFHI Special Meeting” beginning on page 22 for additional information.

 

Quorum and Vote Required at the Special Meeting (See page 22)

 

Shareholders who own FFHI common stock at the close of business on [●], 2017, the record date, will be entitled to vote at the special meeting. A majority of the issued and outstanding shares of FFHI common stock as of the record date for the special meeting must be present in person or by proxy at the special meeting in order for a quorum to be present. If a quorum is not present at the special meeting, the meeting will be adjourned, and no vote will be taken until and unless a quorum is present. Approval of the merger proposal requires the affirmative vote of holders of a majority of the shares of FFHI common stock issued and outstanding on the record date. Approval of the adjournment proposal requires the affirmative vote of holders of a majority of the shares represented at the special meeting and entitled to vote on the matter. See “ The FFHI Special Meeting; Record Date , Quorum and Vote Required” beginning on page 22 for additional information.

 

Share Ownership of Management (See page 66 for FFHI)

 

FFHI

 

As of the record date for the special meeting, directors and executive officers of FFHI had or shared voting or dispositive power over approximately [ ●]% of the issued and outstanding FFHI common stock. FFHI’s directors and executive officers have entered into written agreements with NCC providing that they will vote the shares over which they have voting power, subject to their fiduciary duties, in favor of the merger proposal.

 

The directors and executive officers of NCC do not have or share voting or dispositive power over any of the issued and outstanding shares of FFHI common stock.

 

NCC

 

As of the date of this proxy statement-prospectus, directors and executive officers of NCC have or share voting or dispositive power over approximately 15.5% of the issued and outstanding shares of NCC common stock (or 16.4% after giving effect to vested options held by such individuals as of such date).

 

The directors and executive officers of FFHI do not currently have or share voting or dispositive power over any of the issued and outstanding shares of NCC common stock.

 

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Structure of the Merger (See page 24)

 

If the shareholders of FFHI approve the merger proposal and the other conditions to the consummation of the merger are satisfied, FFHI will merge with and into NCC, NCC will be the surviving corporation in the merger and FFHI will cease to exist as a separate entity. Immediately following the merger, FirstAtlantic Bank will merge with and into NBC. NBC will be the surviving bank in the bank merger. However, subject to applicable laws and non-objection from regulatory authorities, NCC and FFHI intend for the former banking offices of FirstAtlantic Bank to continue to operate and conduct business under the trade name “FirstAtlantic Bank, a division of National Bank of Commerce,” for a period of at least two (2) years .

 

Regulatory Approval s (See page 37)

 

In general, the merger of a savings and loan holding company, like FFHI, into a financial holding company, like NCC, requires the approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”). However, under Federal Reserve regulations, certain transactions that are subject to the Bank Merger Act are eligible for a waiver from the Federal Reserve’s general application and approval requirements. NCC filed a waiver request with the Federal Reserve in connection with the proposed transaction, which was granted on September 18, 2017 . The merger of FirstAtlantic Bank with and into NBC must be approved by the Office of the Comptroller of the Currency (the “OCC”). The OCC will consider, among other factors, the competitive impact of the bank merger, the financial and managerial resources of the parties and the convenience and needs of the communities to be served. As part of that consideration, NBC and FirstAtlantic Bank expect that the OCC will review the respective banks’ capital position, safety and soundness, legal and regulatory compliance and performance under the Community Reinvestment Act. The parties have applied for and are awaiting the OCC’s approval of the proposed transaction. There can be no assurance as to whether such approvals will be received, the timing of such approvals, whether any conditions will be imposed in connection with such approvals, or whether such approvals will be later modified, suspended or revoked.

 

Conditions to Completing the Merger (See page 48)

 

The merger will only be completed if certain conditions are met, including the following:  

 

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approval by shareholders of FFHI of the merger proposal by the required vote;

 

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approval of the merger, the bank merger and the transactions contemplated thereby by applicable regulatory authorities;

 

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receipt of all third-party consents (other than the regulatory consents described above) necessary to consummate the merger and the bank merger, other than those that would not have a material adverse effect on the party required to obtain the consent if not obtained;

 

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receipt by each party of an opinion from its counsel that the merger qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code;

 

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the authorization for listing on the Nasdaq Global Select Market of the shares of NCC common stock to be issued in the merger;

 

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immediately prior to the merger, FFHI will have a minimum adjusted shareholders’ equity of not less than $59,000,000;

 

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the repayment by FFHI of all outstanding indebtedness and the release of all liens on its property;

 

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subject to the materiality standards set forth in the merger agreement, the accuracy of the representations and warranties of FFHI and NCC;

 

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the absence of a stop order suspending the effectiveness of NCC’ s registration statement under the Securities Act and any action, suit, proceeding or investigation for that purpose with respect to the shares of NCC common stock to be issued to shareholders of FFHI; and

 

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the absence of an order, decree or injunction enjoining or prohibiting completion of the merger, or the initiation of or known threat of any action or proceeding seeking to restrain consummation of the merger, that renders such transactions impossible or inadvisable in the opinion of either party.

 

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If these and certain other conditions s pecific to the respective parties are satisfied, NCC and FFHI expect that they will complete the merger in the fourth quarter of 2017 or first quarter of 2018. See “ The Merger Agreement; Conditions to the Merger” beginning on page 48 for additional information.

 

Termination and Termination Fee (See page 55)

 

The merger agreement may be terminated, either before or after shareholder approval, under certain circumstances described in detail elsewhere in this proxy statement-prospectus. If NCC terminates the merger agreement because FFHI’s board withdraws or changes its recommendation of the merger agreement, cancels the meeting at which the shareholders of FFHI will vote on the merger proposal, allows the acquisition by any person of a majority of FFHI’s outstanding common stock or recommends, approves or announces a transaction for the sale to or merger with an entity other than NCC, or if FFHI terminates the merger agreement because it has received an offer for such an acquisition transaction, then FFHI (or its successor) must pay NCC a termination fee of $4,000,000.

 

FFHI’s board of directors may terminate the merger agreement if the average closing price of NCC common stock over the ten (10)-day period ending on the fifth business day prior to the effective time of the merger is less than $31.84 and if NCC’s common stock underperforms the Nasdaq Bank Index by more than a specified threshold, unless NCC elects to make a compensating cash payment with respect to the shares of FFHI common stock to be converted into shares of NCC common stock.

 

NCC’ s board of directors may terminate the merger agreement and abandon the merger if holders of more than ten percent (10%) of the outstanding shares of FFHI common stock exercise dissenters’ rights.

 

Interests of Certain Executive Officers and Directors of FFHI (See page 57)

 

Some of the executive officers and directors of FFHI have interests in the merger that are different from, or in addition to, those of the shareholders of FFHI generally. These interests and arrangements may create potential conflicts of interest. FFHI’s board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that FFHI’s shareholders vote in favor of the merger proposal. These interests include the following:   

 

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Pursuant to the merger agreement, FFHI’s executives, along with all full-time employees of FFHI, will be eligible to participate in any benefit plans and arrangements that are made available to NCC and NBC full-time employees, which include health and dental insurance, vision insurance, life insurance and short and long-term disability insurance.

 

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Pursuant to the merger agreement, NCC has agreed to increase the size of its board of directors by one (1) seat as of the effective time of the merger and to fill the vacancy with a designee selected by NCC and reasonably acceptable to FFHI. NCC has selected Thomas H. Coley, currently the Chairman of the Board of FFHI and FirstAtlantic Bank, to serve on the NCC board of directors following the effective time of the merger. Mr. Coley beneficially owns shares of FFHI common stock, including vested warrants to purchase shares of FFHI common stock and currently unvested shares of restricted FFHI common stock. Assuming (i) the exercise of all warrants held by Mr. Coley and subsequent conversion into shares of NCC common stock and (ii) the accelerated vesting and conversion of the restricted shares of FFHI common stock beneficially owned by Mr. Coley into shares of NCC common stock, Mr. Coley would be the beneficial owner of 24,142 shares of NCC common stock at the effective time of the merger. See “Security Ownership of Certain Beneficial Owners and Management of FFHI,” beginning on page 66 . As with all non-employee directors of NCC other than the lead independent director, Mr. Coley will be entitled to receive an annual retainer of $37,500, an additional $1,000 for each board meeting attended and $500 for each committee meeting attended.

 

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Under the terms of the merger agreement, NCC has agreed to maintain director and officer liability insurance for the benefit of FFHI’s directors and officers and to indemnify FFHI’s directors and officers against certain liabilities.

 

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On the date of the merger agreement, Mitchell W. Hunt, Jr., the President and Chief Executive Officer and a director of FFHI and FirstAtlantic Bank, accepted an offer of employment and signed an employment agreement with NBC that will take effect as of the effective date of the merger.

 

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On the date of the merger agreement, FirstAtlantic Bank entered into an agreement with Timothy S. Ayers, Executive Vice President, Secretary and Chief Financial Officer of FFHI and FirstAtlantic Bank, that terminates his employment agreement and employment with FFHI and FirstAtlantic Bank as of the effective time of the merger and provides that Mr. Ayers will agree to perform consulting services for NBC for twelve (12) months following the closing of the merger .

 

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In connection with the termination of existing agreements between FFHI, FirstAtlantic Bank , and Messrs. Timothy S. Ayers, Thomas Michael White and Mitchell W. Hunt, Jr., FFHI or FirstAtlantic will make a lump-sum payment to each such individual immediately prior to the effective time of the merger.

 

For a more complete description of these interests, see “ The Merger Agreement; Interests of Certain Persons in the Merger” beginning on page 57 .

 

Employee Benefits of FFHI Employees after the Merger (See page 54)

 

NCC has agreed to offer to all current employees of FFHI who become NCC or NBC employees as a result of the merger substantially similar employee benefits to those that NCC and NBC offer to employees in similar positions.

 

Differences in Rights of Shareholders of FFHI after the Merger (See page 68)

 

The rights of FFHI shareholders are governed by Florida law and by FFHI’s articles of incorporation and bylaws. Upon the completion of the merger, FFHI shareholders receiving shares of NCC common stock as merger consideration will become NCC stockholders and will only participate in the combined company’s future earnings and potential growth through their ownership of NCC common stock. Their rights as stockholders of NCC after the merger will be governed by Delaware law and by NCC’ s certificate of incorporation and bylaws. The rights of NCC stockholders are different in certain respects from the rights of shareholders of FFHI. See “ Comparison of Rights of NCC Stockholders and FFHI Shareholders” beginning on page 68 for additional information. All of the other incidents of direct stock ownership in FFHI will be extinguished upon completion of the merger.

 

Risk Factors (See page 12)

 

You should consider all of the information contained in or incorporated by reference into this proxy statement-prospectus in deciding how to vote for the proposals presented in the proxy statement-prospectus. In particular, you should consider the factors described under “ Risk Factors” beginning on page 12.

 

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