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BNCCORP, INC. Reports Second Quarter Net Income Of $2.1 Million, Or $0.60 Per Diluted Share

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BNCCORP, INC. Reports Second Quarter Net Income Of $2.1 Million, Or $0.60 Per Diluted Share

PR Newswire

BISMARCK, N.D., July 30, 2018 /PRNewswire/ --

Highlights

  • Net income in the 2018 second quarter increased 49.5% to $2.1 million compared to $1.4 million in the second quarter of 2017
  • Non-interest income increased by 11.1%, or $570 thousand, compared to the 2017 second quarter, driven by SBIC revenue
  • Non-interest expenses decreased by $117 thousand, or 1.2%, in the second quarter of 2018, versus the same period in 2017
  • Loans and leases held for investment increased to $467.7 million, rising 9.7% from $426.2 million at June 30, 2017
  • Net income in the first half of 2018 increased 81.9% to $4.5 million, or $1.28 per diluted share

 

BNCCORP Logo (PRNewsfoto/BNCCORP, INC.)

BNCCORP, INC. (BNC or the Company) (OTCQX Markets: BNCC), which operates community banking and wealth management businesses in North Dakota, Arizona and Minnesota, and has mortgage banking offices in Illinois, Kansas, Missouri, Minnesota, Arizona, and North Dakota, today reported financial results for the second quarter ended June 30, 2018.

Net income in the second quarter of 2018 was $2.145 million, compared to $1.435 million in the same period of 2017. Second quarter 2018 diluted earnings per share rose to $0.60, compared to $0.41 in the second quarter of 2017. The increase in net income from the year-ago period primarily reflects increases in both net interest income and non-interest income, with lower non-interest expenses.

Net interest income in the 2018 second quarter increased by $23 thousand, or 0.3%, from the same quarter in 2017.

Non-interest income in the second quarter of 2018 increased by $570 thousand, or 11.1%, from the same period in 2017. The increase is primarily due to $1.4 million of revenue from an investment in a Small Business Investment Company (SBIC) fund that sold a portfolio company. Gains on sales of SBA loans were higher in the second quarter of 2018, while mortgage banking revenues were lower than in the second quarter of 2017.

Non-interest expense in the second quarter of 2018 decreased by $117 thousand, or 1.2%, when compared to the second quarter of 2017, as higher compensation costs were offset by lower professional fees and mortgage banking expenses.

The provision for credit losses was $0 in the second quarter of 2018 and $150 thousand in the second quarter of 2017. The ratio of nonperforming assets to total assets decreased to 0.18% at June 30, 2018, from 0.21% at December 31, 2017. The allowance for loan losses was 1.67% of loans and leases held for investment at June 30, 2018, compared to 1.84% at December 31, 2017.

Book value per common share at June 30, 2018 was $21.88 compared to $22.40 at December 31, 2017. Excluding accumulated other comprehensive (loss) or income, book value per common share at June 30, 2018 was $23.64, compared to $22.38 at December 31, 2017 and $21.71 at June 30, 2017.

Management Comments

Timothy J. Franz, BNC President and Chief Executive Officer, said, "We are pleased to report higher net income of $2.1 million in the second quarter and $4.5 million in the first half of 2018.  We continue to focus on making investments in businesses, people and assets to create shareholder value over time. The earnings this quarter on our investment in an SBIC equity fund is a good example of our focus on generating value.  We are also pleased to report 9.7% growth in loans held for investment. Loan production teams in all of our banking markets have generated growth in 2018."

Mr. Franz continued, "The economics in western North Dakota related to energy have improved significantly in recent periods as oil production in this region is approaching record levels. The demand for loans in our other banking markets is encouraging, our credit metrics remain very good and our capital position is strong. Importantly, our people continue to be active in the communities where we live and work. This participation improves our communities and over time creates value for shareholders."

Second Quarter 2018 Comparison to Second Quarter 2017

Net interest income for the second quarter of 2018 was $7.062 million, an increase of $23 thousand, or 0.3%, from $7.039 million in the same period of 2017. The increase reflects the benefit of higher loan and investment balances and yields, partially offset by an increased cost of deposits.  Overall, the net interest margin increased to 3.07% in the second quarter of 2018 from 2.96% in the second quarter of 2017.

Interest income increased $619 thousand, or 7.8%, to $8.520 million in the second quarter of 2018, compared to $7.901 million in the second quarter of 2017. This increase is the result of higher balances and yields on loans held for investment and taxable investments. The yield on average interest earning assets was 3.69% in the second quarter of 2018 compared to 3.34% in the second quarter of 2017. The average balance of interest earning assets in the second quarter of 2018 decreased by $29.5 million when compared to the same period of 2017. In the first half of 2017 our deposits surged by more $100 million and, as expected, our customers have redeployed a significant portion of these deposits. As a result, the average balance of cash held at the Federal Reserve decreased by $64.8 million when comparing the two periods. The average balance of loans and leases held for investment increased by $36.2 million, yielding $600 thousand of additional interest income, while the average balance of mortgage loans held for sale was lower by $5.4 million than the same period of 2017. The average balance of investment securities was $4.3 million higher in the second quarter of 2018 than in the second quarter of 2017, yielding $182 thousand in additional interest income.

Interest expense in the second quarter of 2018 was $1.458 million, an increase of $596 thousand from the same period in 2017. The cost of interest bearing liabilities was 0.80% in the current quarter compared to 0.46% in the same period of 2017. Interest expense increased on deposits as a result of market-driven cost increases for consumer certificates of deposit and money market accounts. The cost of core deposits in the second quarter of 2018 and 2017 was 0.48% and 0.27%, respectively.

Provision for credit losses was $0 in the second quarter of 2018 and $150 thousand in the second quarter of 2017.

Non-interest income for the second quarter of 2018 was $5.727 million, an increase of $570 thousand, or 11.1%, from $5.157 million in the second quarter of 2017. Gains on sales of assets were $123 thousand higher in the second quarter of 2018 compared to the same period of 2017. Mortgage banking revenues were $2.636 million in the second quarter of 2018, a decrease of $436 thousand when compared to $3.072 million in the second quarter of 2017. As previously discussed, other non-interest income includes $1.4 million of earnings related to an investment in an SBIC fund. Life to date, our investment of $1.2 million in this SBIC fund has returned more than $6.4 million of cash. Gains on sales of assets and earnings from certain investments can vary significantly from period to period.

Non-interest expense for the second quarter of 2018 decreased $117 thousand, to $10.014 million, from $10.131 million in the second quarter of 2017. Salaries and employee benefits expense increased compared to second quarter of 2017 by $240 thousand, or 4.7%, primarily due to higher compensation expense in line with higher quarterly earnings and loan production. Professional services expense decreased compared to the second quarter of 2017 by $247 thousand, or 22.1%, primarily due to reduced mortgage banking volumes and lower legal expenses. Marketing and promotion expenses decreased $63 thousand, or 6.0%, in line with lower mortgage banking activity.

In the second quarter of 2018, income tax expense was $630 thousand, compared to $480 thousand in the second quarter of 2017. The effective tax rate was 22.7% in the second quarter of 2018, compared to 25.1% in the same period of 2017. The decrease in the effective tax rate is primarily due to the enactment of federal tax legislation on December 22, 2017 that reduced the statutory federal tax rate to 21.0% effective beginning January 1, 2018. The impact of the tax rate change was partially offset by a reduction in non-taxable income resulting from the first quarter 2018 sale of certain tax exempt municipal bonds resulting in a $2.1 million gain.

Net income was $2.145 million, or $0.60 per diluted share in the second quarter of 2018. Net income in the second quarter of 2017 was $1.435 million, or $0.41 per diluted share.

Six Months Ended 2018 Comparison to Six Months Ended 2017

Net interest income in the first half of 2018 was $13.922 million, an increase of $350 thousand, or 2.6%, from $13.572 million in the same period of 2017. Overall, the net interest margin increased to 3.09% in the first six months of 2018 from 3.02% in the first six months of 2017.

Interest income increased $1.321 million, or 8.7%, to $16.536 million in the six-month period ended June 30, 2018, compared to $15.215 million in the six-month period ended June 30, 2017. This increase is the result of higher balances and yields on loans and leases held for investment and taxable investments. The yield on average interest earning assets was 3.66% in the six-month period ended June 30, 2018 and 3.41% in the same period of 2017. The average balance of interest earning assets increased by $3.6 million. The average balance of loans and leases held for investment increased by $25.1 million, yielding $872 thousand of additional interest income, while the average balance of mortgage loans held for sale was largely unchanged from the same period of 2017. The average balance of investment securities was $17.8 million higher in the first half of 2018 than in the first half of 2017, yielding $612 thousand in additional interest income. The average balance of cash held at the Federal Reserve decreased by $36.6 million when comparing the two periods.

Interest expense in the first half of 2018 was $2.614 million, an increase of $971 thousand from the same period in 2017. The cost of interest bearing liabilities was 0.73% in the first six months compared to 0.46% in the same period of 2017. Interest expense increased on deposits, driven largely by increased cost of consumer certificates of deposit and money market accounts. The cost of core deposits in the first half of 2018 and 2017 was 0.44% and 0.27%, respectively. The Company obtained $30.0 million of brokered certificates of deposit in the first quarter of 2018.

Provision for credit losses was $0 in the first half of 2018 and $150 thousand in the first half of 2017.

Non-interest income for the first six months of 2018 was $11.608 million, an increase of $1.704 million, or 17.2%, from $9.904 million in the first six months of 2017. Gains on sales of assets were $1.392 million higher in the first six months of 2018 compared to the same period of 2017. Mortgage banking revenues were $5.137 million in the first half of 2018, a decrease of $439 thousand when compared to $5.576 million in the first half of 2017. Other income includes $1.4 million of revenue from SBIC investments. Gains on sales of assets and earnings from certain investments can vary significantly from period to period.

Non-interest expense for the first six months of 2018 decreased $207 thousand, to $19.782 million, from $19.989 million in the first six months of 2017. Salaries and employee benefits expense increased by $231 thousand, or 2.2%, primarily due to higher compensation expense in line with higher year-to-date 2018 earnings and loan production.  Professional services expense decreased compared to the first six months of 2017 by $510 thousand, or 23.5%, primarily due to reduced mortgage banking volumes and reduced legal fees. Marketing and promotion expenses increased $86 thousand, or 4.8%, largely attributed to increased competition for mortgage banking leads. Other expense decreased by $52 thousand largely due to mortgage cost reduction efforts initiated in the second half of 2017.

During the six-month period ended June 30, 2018, income tax expense was $1.207 million, compared to $841 thousand in the first half of 2017. The effective tax rate was 21.0% in the first half of 2018, compared to 25.2% in the same period of 2017. The decrease in the effective tax rate is primarily due to the enactment of federal tax legislation effective December 22, 2017 that reduced the statutory federal tax rate to 21% effective beginning January 1, 2018. The impact of the tax rate change was partially offset by a reduction in non-taxable income related to the first quarter 2018 sale of certain tax exempt municipal bonds resulting in a $2.1 million gain.

Net income was $4.541 million, or $1.28 per diluted share, for the six months ended June 30, 2018. Net income in the first six months of 2017 was $2.496 million, or $0.70 per diluted share.

Assets, Liabilities and Equity

Total assets were $987.7 million at June 30, 2018, an increase of $41.6 million, or 4.4%, compared to $946.1 million at December 31, 2017. Loans and leases held for investment aggregated $467.7 million at June 30, 2018, an increase of $39.4 million, or 9.2%, since December 31, 2017 and an increase of $41.5 million, or 9.7%, since June 30, 2017. Loans held for sale as of June 30, 2018 were down $7.1 million from December 31, 2017. Investment securities increased $13.5 million from year-end 2017.

Total deposits increased $43.7 million to $861.5 million at June 30, 2018, compared to $817.8 million at December 31, 2017. At June 30, 2018 total deposits include $30.0 million of brokered deposits that were acquired as an attractive alternative relative to comparable FHLB advances. At June 30, 2018, core deposits, which include recurring customer repurchase agreement balances, increased by $13.3 million to $849.1 million, or 1.6%, from $835.8 million as of December 31, 2017.

The table below shows total deposits since 2014:


June 30,


December 31,


December 31,


December 31,


December 31,

(In Thousands)

2018


2017


2016


2015


2014
















ND Bakken Branches

$

176,318


$

168,981


$

178,677


$

190,670


$

178,565

ND Non-Bakken Branches


440,087



435,255



384,476



388,630



433,129

Total ND Branches


616,405



604,236



563,153



579,300



611,694

Brokered Deposits


30,000



-



-



33,363



53,955

Other


215,107



213,570



189,474



167,786



145,582

Total Deposits

$

861,512


$

817,806


$

752,627


$

780,449


$

811,231

Trust assets under management or administration increased 18.0%, or $51.4 million, to $337.0 million at June 30, 2018, compared to $285.6 million at June 30, 2017, as we have been able to capture wealth generated by commercial customers and convert new customers to BNC's wealth management services. Since January 1, 2016, assets under management or administration have increased by approximately $63.3 million, or 23.1%.

Capital

Banks and bank holding companies operate under separate regulatory capital requirements.

At June 30, 2018, our capital ratios exceeded all regulatory capital thresholds, including thresholds that incorporate fully phased-in conservation buffers.

A summary of our capital ratios at June 30, 2018 and December 31, 2017 is presented below:



June 30,

2018


December 31,

2017

BNCCORP, INC (Consolidated)





   Tier 1 leverage


9.89%


9.53%

   Total risk based capital


19.74%


19.98%

   Common equity tier 1 risk based capital


14.17%


14.15%

   Tier 1 risk based capital


16.76%


16.90%

   Tangible common equity


7.69%


8.18%






BNC National Bank





   Tier 1 leverage


10.05%


9.62%

   Total risk based capital


18.27%


18.31%

   Common equity tier 1 risk based capital


17.02%


17.06%

   Tier 1 risk based capital


17.02%


17.06%

The Common Equity Tier 1 ratio, which is generally a comparison of a bank's core equity capital to its total risk weighted assets, is a measure of the current risk profile of our asset base from a regulatory perspective. The Tier 1 leverage ratio, which is based on average assets, does not consider the mix of risk-weighted assets. In recent periods, regulators have required Tier 1 leverage ratios that significantly exceed "Well Capitalized" ratio levels. As a result, management believes the Bank's Tier 1 leverage ratio is our most restrictive capital measurement and we are managing the Tier 1 leverage ratio to levels significantly above the "Well Capitalized" ratio threshold.

The Company routinely evaluates the sufficiency of its capital in order to ensure compliance with regulatory capital standards and to provide a source of strength for the Bank. We manage capital by assessing the composition of capital and the amounts available for growth, risk, or other purposes.

Book value per common share of the Company was $21.88 as of June 30, 2018, compared to $22.40 at December 31, 2017. Book value per common share, excluding accumulated other comprehensive (loss) or income, was $23.64 as of June 30, 2018, compared to $22.38 at December 31, 2017 and $21.71 at June 30, 2017.

Asset Quality

The allowance for credit losses was $7.8 million at June 30, 2018, compared to $7.9 million at December 31, 2017. The allowance for credit losses as a percentage of total loans at June 30, 2018 decreased to 1.57%, from 1.69% at December 31, 2017.  The allowance as a percentage of loans and leases held for investment at June 30, 2018 decreased to 1.67% from 1.84% at December 31, 2017 as a result of loan growth and continuing strong credit ratios in 2018.

Nonperforming assets were $1.8 million at June 30, 2018 and $2.0 million at December 31, 2017. The ratio of nonperforming assets to total assets was 0.18% at June 30, 2018 and 0.21% at December 31, 2017. Nonperforming loans were $1.8 million at June 30, 2018 and $2.0 million at December 31, 2017.

At June 30, 2018, BNC had $10.5 million of classified loans, $1.8 million of loans on non-accrual, no other real estate owned, and no repossessed assets. At December 31, 2017, BNC had $11.0 million of classified loans, $2.0 million of loans on non-accrual, no other real estate owned, and no repossessed assets. BNC had $632 thousand of potentially problematic loans, which are risk rated "watch list", at June 30, 2018, compared with $1.7 million as of December 31, 2017.

In recent periods, economic activity in western North Dakota, influenced by the energy sector, has improved. However, it will take time to absorb capacity built in earlier periods, particularly in the commercial real estate sector. The region is driven by the commodity-based industries of energy and agriculture. Commodity based industries can be very volatile and impacted by a variety of influences.  For example, the impact, if any, of recent increases in global tariffs on North Dakota farmers adds a measure of uncertainty to the region's agriculture sector.  Prolonged periods of lower commodity prices or market disruption could have an adverse impact on our loan portfolio.

BNCCORP, INC., headquartered in Bismarck, N.D., is a registered bank holding company dedicated to providing banking and wealth management services to businesses and consumers in its local markets. The Company operates community banking and wealth management businesses in North Dakota, Arizona and Minnesota from 13 locations. BNC also conducts mortgage banking from 12 locations in Illinois, Kansas, Missouri, Minnesota, Arizona and North Dakota.

This news release may contain "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of BNC. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management are generally identifiable by the use of words such as "expect", "believe", "anticipate", "plan", "intend", "estimate", "may", "will", "would", "could", "should", "future" and other expressions relating to future periods. Examples of forward-looking statements include, among others, statements we make regarding our belief that we have exceptional liquidity, our expectations regarding future market conditions and our ability to capture opportunities and pursue growth strategies, our expected operating results such as revenue growth and earnings and our expectations of the effects of the regulatory environment on our earnings for the foreseeable future. Forward-looking statements are neither historical facts nor assurances of future performance. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, but are not limited to: the impact of current and future regulation; the risks of loans and investments, including dependence on local and regional economic conditions; competition for our customers from other providers of financial services; possible adverse effects of changes in interest rates, including the effects of such changes on mortgage banking revenues and derivative contracts and associated accounting consequences; risks associated with our acquisition and growth strategies; and other risks which are difficult to predict and many of which are beyond our control. In addition, all statements in this news release, including forward-looking statements, speak only of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

This press release contains references to financial measures which are not defined in GAAP. Such non-GAAP financial measures include the tangible common equity to total period end assets ratio. These non-GAAP financial measures have been included as the Company believes they are helpful for investors to analyze and evaluate the Company's financial condition.

 (Financial tables attached)

 

BNCCORP, INC.

CONSOLIDATED FINANCIAL DATA

(Unaudited)




For the Quarter
Ended June 30,


For the Six Months
Ended June 30,

(In thousands, except per share data)


2018


2017


2018


2017

SELECTED INCOME STATEMENT DATA













Interest income


$

8,520


$

7,901


$

16,536


$

15,215

Interest expense



1,458



862



2,614



1,643

Net interest income



7,062



7,039



13,922



13,572

Provision for credit losses



-



150



-



150

Non-interest income



5,727



5,157



11,608



9,904

Non-interest expense



10,014



10,131



19,782



19,989

Income before income taxes



2,775



1,915



5,748



3,337

Income tax expense



630



480



1,207



841

Net income


$

2,145


$

1,435


$

4,541


$

2,496

EARNINGS PER SHARE DATA













Basic earnings per common share


$

0.61


$

0.41


$

1.30


$

0.72

Diluted earnings per common share


$

0.60


$

0.41


$

1.28


$

0.70

 

BNCCORP, INC.

CONSOLIDATED FINANCIAL DATA

(Unaudited)




For the Quarter
Ended June 30,


For the Six Months
Ended June 30,

(In thousands, except per share data)


2018


2017


2018


2017

ANALYSIS OF NON-INTEREST INCOME













Bank charges and service fees


$

675


$

671


$

1,327


$

1,359

Wealth management revenues



459



411



936



872

Mortgage banking revenues



2,636



3,072



5,137



5,576

Gains on sales of loans, net



175



69



178



612

Gains on sales of investments, net



194



177



2,273



447

Other



1,588



757



1,757



1,038

   Total non-interest income


$

5,727


$

5,157


$

11,608


$

9,904

ANALYSIS OF NON-INTEREST EXPENSE













Salaries and employee benefits


$

5,370


$

5,130


$

10,600


$

10,369

Professional services



869



1,116



1,659



2,169

Data processing fees



937



990



1,934



1,870

Marketing and promotion



994



1,057



1,869



1,783

Occupancy



580



574



1,165



1,194

Regulatory costs



135



131



275



263

Depreciation and amortization



392



409



798



809

Office supplies and postage



144



160



308



327

Other real estate costs



-



(23)



-



(21)

Other



593



587



1,174



1,226

   Total non-interest expense


$

10,014


$

10,131


$

19,782


$

19,989

WEIGHTED AVERAGE SHARES













Common shares outstanding (a)



3,496,135



3,473,025



3,491,670



3,472,379

Incremental shares from assumed conversion of options and contingent shares



52,215



67,239



56,243



68,042

Adjusted weighted average shares (b)



3,548,350



3,540,264



3,547,913



3,540,421



(a)

Denominator for basic earnings per common share

(b)

Denominator for diluted earnings per common share

 

BNCCORP, INC.

CONSOLIDATED FINANCIAL DATA

(Unaudited)




As of

(In thousands, except share, per share and full time equivalent data)


June 30,

2018


December 31,

2017


June 30,

2017

SELECTED BALANCE SHEET DATA










Total assets


$

987,691


$

946,150


$

1,001,505

Loans held for sale-mortgage banking



29,459



36,601



37,745

Loans and leases held for investment



467,678



428,325



426,210

Total loans



497,137



464,926



463,955

Allowance for credit losses



(7,788)



(7,861)



(7,898)

Investment securities available for sale



425,443



411,917



440,542

Other real estate, net and repossessed assets



-



-



13

Earning assets



929,398



886,212



945,108

Total deposits



861,512



817,806



877,053

Core deposits (1)



849,090



835,850



891,175

Other borrowings



42,588



43,054



39,135

Cash and cash equivalents



20,604



25,830



55,173

OTHER SELECTED DATA










Net unrealized (losses) gains in accumulated other comprehensive (loss) income


$

(6,098)


$

48


$

3,764

Trust assets under supervision


$

336,952


$

321,274


$

285,627

Total common stockholders' equity


$

76,096


$

77,626


$

78,808

Book value per common share


$

21.88


$

22.40


$

22.80

Book value per common share excluding accumulated  other comprehensive (loss) income, net


$

23.64


$

22.38


$

21.71

Full time equivalent employees



258



252



268

Common shares outstanding



3,477,426



3,465,992



3,456,192

CAPITAL RATIOS










Common equity Tier 1 risk-based capital (Consolidated)



14.17%



14.15%



13.87%

Tier 1 leverage (Consolidated)



9.89%



9.53%



8.90%

Tier 1 risk-based capital (Consolidated)



16.76%



16.90%



16.66%

Total risk-based capital (Consolidated)



19.74%



19.98%



19.77%

Tangible common equity (Consolidated)



7.69%



8.18%



7.85%











Common equity Tier 1 risk-based capital (Bank)



17.02%



17.06%



17.12%

Tier 1 leverage (Bank)



10.05%



9.62%



9.15%

Tier 1 risk-based capital (Bank)



17.02%



17.06%



17.12%

Total risk-based capital (Bank)



18.27%



18.31%



18.37%

Tangible common equity (Bank)



9.41%



9.91%



9.63%













(1)

Core deposits consist of all deposits and repurchase agreements with customers and exclude certain brokered certificates of deposit.

 

BNCCORP, INC.

CONSOLIDATED FINANCIAL DATA

(Unaudited)




For the Quarter
Ended June 30,


For the Six Months
Ended June 30,

(In thousands)


2018


2017


2018


2017

AVERAGE BALANCES













Total assets


$

980,746


$

1,008,782


$

966,258


$

961,531

Loans held for sale-mortgage banking



23,288



28,667



23,514



26,462

Loans and leases held for investment



449,899



413,674



440,028



414,899

Total loans



473,187



442,341



463,542



441,361

Investment securities available for sale



438,091



433,823



434,679



416,916

Earning assets



922,679



952,133



908,530



904,943

Total deposits



850,780



886,365



835,445



837,478

Core deposits



839,135



899,994



830,812



850,291

Total equity



76,005



77,344



76,683



75,979

Cash and cash equivalents



24,641



89,745



23,722



60,317

KEY RATIOS













Return on average common stockholders' equity (a)



10.55%



7.75%



11.38%



6.83%

Return on average assets (b)



0.88%



0.57%



0.95%



0.52%

Net interest margin



3.07%



2.96%



3.09%



3.02%

Efficiency ratio



78.31%



83.07%



77.49%



85.15%

Efficiency ratio (BNC National Bank)



75.03%



80.05%



74.22%



81.80%



(a)

Return on average common stockholders' equity is calculated by using net income as the numerator and average common equity (less accumulated other comprehensive (loss) income) as the denominator.

(b)

Return on average assets is calculated by using net income as the numerator and average total assets as the denominator.

 

BNCCORP, INC.

CONSOLIDATED FINANCIAL DATA

(Unaudited)




As of

(In thousands)


June 30,

2018


December 31,

2017


June 30,

2017

ASSET QUALITY










Loans 90 days or more delinquent and still accruing interest


$

-


$

26


$

-

Non-accrual loans



1,769



1,952



2,142

Total nonperforming loans


$

1,769


$

1.978


$

2,142

Other real estate, net and repossessed assets



-



-



13

Total nonperforming assets


$

1,769


$

1,978


$

2,155

Allowance for credit losses


$

7,788


$

7,861


$

7,898

Troubled debt restructured loans


$

3,381


$

1,908


$

1,932

Ratio of total nonperforming loans to total loans



0.36%



0.43%



0.46%

Ratio of total nonperforming assets to total assets



0.18%



0.21%



0.22%

Ratio of nonperforming loans to total assets



0.18%



0.21%



0.21%

Ratio of allowance for credit losses to loans and leases held for investment                 



1.67%



1.84%



1.85%

Ratio of allowance for credit losses to total loans



1.57%



1.69%



1.70%

Ratio of allowance for credit losses to nonperforming loans



440%



397%



369%

 



For the Quarter
Ended June 30,


For the Six Months
Ended June 30,

(In thousands)


2018


2017


2018


2017

Changes in Nonperforming Loans:













Balance, beginning of period


$

1,950


$

2,672


$

1,978


$

2,445

Additions to nonperforming



91



159



157



716

Charge-offs



(62)



(330)



(93)



(536)

Reclassified back to performing



-



-



(26)



-

Principal payments received



(210)



(319)



(247)



(443)

Transferred to other real estate owned



-



(40)



-



(40)

Balance, end of period


$

1,769


$

2,142


$

1,769


$

2,142

 

BNCCORP, INC.

CONSOLIDATED FINANCIAL DATA

(Unaudited)




For the Quarter Ended
June 30,


For the Six Months
Ended June 30,

(In thousands)


2018


2017


2018


2017

Changes in Allowance for Credit Losses:













Balance, beginning of period


$

7,811


$

8,040


$

7,861


$

8,285

Provision



-



150



-



150

Loans charged off



(86)



(337)



(143)



(590)

Loan recoveries



63



45



70



53

Balance, end of period


$

7,788


$

7,898


$

7,788


$

7,898














Ratio of net charge-offs to average total loans



(0.005)%



(0.066)%



(0.016)%



(0.122)%

Ratio of net charge-offs to average total loans, annualized



(0.019)%



(0.264)%



(0.031)%



(0.243)%

 



For the Quarter
Ended June 30,


For the Six Months
Ended June 30,

(In thousands)


2018


2017


2018


2017

Changes in Other Real Estate:













Balance, beginning of period


$

-


$

214


$

-


$

214

Transfers from nonperforming loans



-



40



-



40

Real estate sold



-



(264)



-



(264)

Net gains on sale of assets



-



-



-



-

(Reduction) Provision



-



10



-



10

Balance, end of period


$

-


$

-


$

-


$

-

 




As of

(In thousands)


June 30,

2018


December 31,

2017


June 30,

2017

Other Real Estate:










Other real estate


$

-


$

-


$

-

Valuation allowance



-



-



-

Other real estate, net


$

-


$

-


$

-

 

BNCCORP, INC.

CONSOLIDATED FINANCIAL DATA

(Unaudited)




As of

(In thousands)


June 30,

2018


December 31,
2017


June 30,

2017

CREDIT CONCENTRATIONS










North Dakota










   Commercial and industrial


$

49,332


$

36,590


$

41,824

   Construction



6,662



4,747



3,908

   Agricultural



26,049



23,004



24,558

   Land and land development



9,111



8,494



9,112

   Owner-occupied commercial real estate



42,798



44,173



44,885

   Commercial real estate



110,213



108,191



106,541

   Small business administration



6,507



4,558



4,406

   Consumer



60,416



56,318



50,652

      Subtotal loans held for investment


$

311,088


$

286,075


$

285,886

Consolidated










   Commercial and industrial


$

68,370


$

51,524


$

53,953

   Construction



17,027



13,167



11,365

   Agricultural



26,951



23,773



25,240

   Land and land development



14,480



14,168



15,178

   Owner-occupied commercial real estate



52,587



50,872



49,518

   Commercial real estate



180,581



177,429



176,210

   Small business administration



31,171



25,064



27,446

   Consumer



75,963



71,876



66,902

      Total loans held for investment


$

467,130


$

427,873


$

425,812

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/bnccorp-inc-reports-second-quarter-net-income-of-2-1-million-or-0-60-per-diluted-share-300688178.html

SOURCE BNCCORP, INC.

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