BNCCORP, INC. 
By
Net loss from continuing operations was
Net income from continuing operations for the full year 2008 was
Net income (loss), which combines results of both continuing and
discontinued operations, was
Fourth Quarter Continuing Operations
Net interest income for the fourth quarter of 2008 was
The provision for credit losses in the fourth quarter of 2008 was
Non-interest income for the fourth quarter of 2008 was
In the fourth quarter of 2008, non-interest expense decreased by
A tax benefit of
Continuing Operations for the Year ended
Net interest income was
The provision for credit losses was
Non-interest income in 2008 was
In 2008, non-interest expense decreased by
The tax expense in 2008 was
Overall, net income from continuing operations in 2008 was
Discontinued Operations
In the second quarter of 2007, BNC sold substantially all of the assets of
its insurance agency and accounted for this business as a discontinued
operation. For the year 2007, net income from discontinued operations was
Assets, Liabilities, Equity and Regulatory Capital
Total assets were
Total liabilities at
Core deposits aggregated
Other borrowings increased by
Total common stockholders' equity was
The book value per common share was
The Company's capital levels exceeded the regulatory requirements for
"well-capitalized" institutions at
At
On
Trust assets under supervision declined to
Asset Quality
The Company is carefully monitoring asset quality due to present economic conditions and expects credit risk to remain elevated in 2009 and periods beyond. Accordingly, provisions for credit and other real estate (ORE) losses are anticipated to be elevated for the foreseeable future.
The allowance for credit losses was
At
BNC has concentrations of land and construction loans. At
Outlook
Mr. Cleveland noted, "Undoubtedly, global business conditions are
continuing to decline and we expect
BNCCORP, Inc., headquartered in
This news release may contain "forward-looking statements" within the meaning 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", or other expressions. We caution readers that these forward-looking statements, including, without limitation, those relating to our future business prospects, revenues, working capital, liquidity, capital needs, interest costs and income, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements due to several important factors. These factors include, but are not limited to: 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 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.
(Financial tables attached)
BNCCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
For the Quarter For the Twelve
Ended Months Ended
December 31, December 31,
(In thousands, except per 2008 2007 2008 2007
share data)
SELECTED INCOME STATEMENT DATA
Interest income $11,451 $11,245 $46,026 $44,241
Interest expense 4,487 5,098 19,215 21,994
Net interest income 6,964 6,147 26,811 22,247
Provision for credit losses 3,150 - 7,750 3,750
Non-interest income 2,328 2,130 10,395 3,853
Non-interest expense 6,809 7,563 26,501 28,147
Income (loss) from continuing
operations before income taxes (667) 714 2,955 (5,797)
Income tax provision (benefit) (318) 4 737 (2,728)
Income (loss) from
continuing operations (349) 710 2,218 (3,069)
Discontinued operations:
Income(loss) from discontinued - (26) - 8,116
Income tax provision (benefit) - (49) - 3,067
Income from discontinued - 23 - 5,049
operations
Net income (loss) $(349) $733 $2,218 $1,980
(In thousands, For the Quarter For the Twelve Months
except per share Ended December 31, Ended December 31,
data) 2008 2007 2008 2007
BASIC EARNINGS PER SHARE
Income (loss)
from continuing
operations $(0.11) $0.21 $0.67 $ (0.89)
Income from
discontinued
insurance segment,
net of income taxes - - - 1.46
Basic earnings
(loss) per common
share $(0.11) $0.21 $0.67 $0.57
DILUTED EARNINGS PER SHARE
Income (loss)
from continuing
operations $(0.11) $0.20 $0.67 $ (0.89)
Income from
discontinued insurance
segment, net of
income taxes - 0.01 - 1.46
Diluted earnings
(loss) per common
share $(0.11) $0.21 $0.67 $0.57
BNCCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(In thousands, except share,
per share and full time As of
equivalent data) December 31, December 31, December 31,
2008 2007 2006
SELECTED BALANCE SHEET DATA*
Total assets $861,498 $699,580 $659,596
Participating interests
in mortgage loans 28,584 24,357 56,125
Loans and leases held
for investment 542,753 497,556 333,934
Total loans 584,740 521,913 391,728
Allowance for credit losses (8,751) (6,599) (3,370)
Investment securities
available for sale 209,857 122,899 182,974
Other real estate 10,189 - 409
Earning assets 791,844 643,131 600,334
Total deposits 675,321 541,874 529,252
Core deposits 575,637 511,874 529,252
Other borrowings 124,454 89,840 95,787
*From continuing operations
OTHER SELECTED DATA
Net unrealized gains
(losses) in investment
portfolio, pretax $(7,805) $2,278 $(2,719)
Trust assets under
supervision $320,340 $358,611 $282,788
Total common stockholders'
equity $53,947 $59,730 $ 55,602
Book value per common share $16.35 $17.11 $15.44
Effect of net unrealized
gains (losses) on securities
available for sale, net of tax,
on book value per common share $(1.47) $0.40 $(0.47)
Book value per common share,
excluding effect of
unrealized gains (losses)
on securities $17.82 $16.71 $15.91
Full time equivalent employees 238 169 308
Common shares outstanding 3,299,163 3,491,337 3,600,467
CAPITAL RATIOS
Tier 1 leverage (Consolidated) 9.01% 12.01% 7.12%
Tier 1 risk-based capital
(Consolidated) 11.15% 12.58% 9.49%
Total risk-based capital
(Consolidated) 12.95% 14.26% 10.89%
Tangible capital (Consolidated) 6.21% 8.48% 7.96%
Pro forma Tier 1 leverage
(Consolidated) 12.16% - -
Pro forma Tier 1 risk-based
capital (Consolidated) 15.05% - -
Pro forma Total risk-based
capital (Consolidated) 15.88% - -
Pro forma tangible capital
(Consolidated) 8.55% - -
Tier 1 leverage
(BNC National Bank) 9.34% 12.57% 7.70%
Tier 1 risk-based capital
(BNC National Bank) 11.56% 13.18% 10.26%
Total risk-based capital
(BNC National Bank) 12.81% 14.26% 10.94%
Tangible capital
(BNC National Bank) 8.77% 11.77% 11.26%
BNCCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
For the Quarter For the Twelve Months
Ended December 31, Ended December 31,
(In thousands) 2008 2007 2008 2007
AVERAGE BALANCES*
Total assets $850,264 $641,517 $794,268 $637,961
Participating
interests in
mortgage loans 26,127 21,042 27,469 27,469
Loans and leases
held for investment 547,130 456,400 525,311 402,615
Total loans 578,016 477,541 553,585 430,501
Earning assets 787,046 587,242 735,953 583,840
Total deposits 666,599 520,294 611,271 519,755
Core deposits 570,957 641,517 537,206 637,961
Common stockholders'
equity 54,806 59,181 57,608 58,407
*From continuing
operations
KEY RATIOS*
Return on average
common stockholders'
equity (2.53)% 4.76% 3.85% (5.25)%
Return on average
assets (0.16)% 0.44% 0.28% (0.47)%
Net interest margin 3.52% 4.15% 3.64% 3.81%
Efficiency ratio 73.27% 91.38% 71.22% 107.85%
*From continuing
operations
KEY RATIOS **
Return on average
common stockholders'
equity (2.53)% 4.92% 3.85% 3.39%
Return on average
assets (0.16)% 0.45% 0.28% 0.30%
** Based on net income
BNCCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
As of
(In thousands) December 31, September 30, December 31,
2008 2008 2007
ASSET QUALITY*
Loans 90 days or more
delinquent and still
accruing interest $6 $26 $-
Non-accrual loans 22,909 21,120 5,399
Total nonperforming loans $22,915 $21,146 $5,399
Other real estate 10,189 5,098 -
Total nonperforming assets $33,104 $26,244 $5,399
Allowance for credit losses $8,751 $8,395 $6,599
Ratio of total
nonperforming loans
to total loans 3.92% 3.72% 1.03%
Ratio of total
nonperforming assets
to total assets 3.84% 3.13% 0.77%
Ratio of allowance for
credit losses to loans
and leases held for investment 1.61% 1.57% 1.33%
Ratio of allowance for
credit losses to total loans 1.50% 1.48% 1.26%
Ratio of allowance for
credit losses to nonperforming
loans 38% 40% 122%
*From continuing operations
For the Quarter For the Twelve Months
Ended December 31, Ended December 31,
2008 2007 2008 2007
Changes in Allowance
for Credit Losses:*
Balance, beginning of
period $8,395 $5,502 $6,599 $3,370
Provision charged to
operations expense 3,150 - 7,750 3,750
Loans charged off (2,895) (504) (5,946) (2,127)
Loan recoveries 101 1,601 348 1,606
Balance, end of period $8,751 $6,599 $8,751 $6,599
Ratio of net
charge-offs to
average total loans (0.483)% 0.230% (0.507)% (0.121)%
Ratio of net charge-offs
to average total loans,
annualized (1.934)% 0.919% (0.507)% (0.121)%
*From continuing
operations
BNCCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
For the Quarter For the Twelve Months
Ended December 31, Ended December 31,
(In thousands,
except share data) 2008 2007 2008 2007
ANALYSIS OF NON-INTEREST
INCOME*
Bank charges and
service fees $817 $479 $2,337 $2,010
Wealth management
revenues 611 702 2,826 2,041
Mortgage banking
revenues 629 12 2,101 158
Gains on sales of
commercial real
estate loans 41 512 1,116 1,731
Gain (loss) on sale of
premises and equipment (1) - 775 -
Net gain (loss) on
sales of securities - - 247 (3,277)
Other 231 425 993 1,190
Total non-interest
income $2,328 $2,130 $10,395 $3,853
*From continuing
operations
ANALYSIS OF NON-INTEREST
EXPENSE*
Salaries and employee
benefits $3,587 $4,614 $14,673 $14,868
Data processing fees 582 686 2,202 2,524
Occupancy 546 502 2,140 2,074
Depreciation and
amortization 360 394 1,375 1,697
Marketing and promotion 354 203 1,127 703
Professional services 284 300 1,177 840
FDIC and other assessments 173 54 400 228
Office supplies,
telephone and postage 152 127 533 499
ORE expenses 84 - 515 -
Debt extinguishment costs - - - 2,724
Other 687 683 2,359 1,990
Total non-interest
expense $6,809 $7,563 $26,501 $28,147
*From continuing
operations
WEIGHTED AVERAGE SHARES
Common shares
outstanding (a) 3,233,740 3,439,571 3,291,697 3,456,993
Incremental shares
from assumed
conversion of options
and contingent shares 3,437 47,697 27,528 58,859
Adjusted weighted
average shares (b) 3,237,177 3,487,268 3,319,225 3,515,852
(a) Denominator for Basic Earnings Per Common Share
(b) Denominator for Diluted Earnings Per Common Share
SOURCE BNCCORP, Inc.
