Published: January 26, 2012
BNCCORP, INC. Reports 2011 Fourth Quarter Net Income of $1.392 Million, or $0.31 Per Diluted Share
BISMARCK, N.D., Jan. 26, 2012 /PRNewswire/ -- BNCCORP, INC. (BNC or the Company) (OTC Markets: BNCC), which operates community banking and wealth management businesses in Arizona, Minnesota and North Dakota, and has mortgage banking offices in Illinois, Kansas, Nebraska, Missouri, Minnesota and Arizona, today reported financial results for the fourth quarter and year ended December 31, 2011.
Net income for the 2011 fourth quarter was $1.392 million, or $0.31 per diluted share. This compared to net income of $528 thousand, or $0.06 per diluted share, in the fourth quarter of 2010. The 2011 fourth quarter results reflect lower net interest income and non-interest income offset by reduced costs for credit losses and lower non-interest expenses when compared to the fourth quarter of 2010. Nonperforming assets decreased by $6.4 million, or 28.1%, since September 30, 2011, and nonperforming assets have decreased by $14.3 million, or 46.6%, since December 31, 2010.
Gregory K. Cleveland, BNCCORP President and Chief Executive Officer, said, "We have consistently stated that our focus is managing capital, liquidity and credit quality. During 2011 we improved the capital ratios of the Bank considerably, maintained a liquid balance sheet, and significantly reduced problem assets. These areas will remain our priorities for the foreseeable future."
Mr. Cleveland continued, "We continue to believe the global economic environment will be challenging until individuals, businesses and governments reduce debt to manageable levels. In the United States the current regulatory environment remains in flux and these conditions are particularly challenging for banking entities. We do not expect these conditions to evaporate in the near term."
"It is significant that we successfully generated profits in 2011 despite challenging conditions. We start 2012 in better condition than we started 2011, and very importantly a significant part of our business is in North Dakota, which is one of the few markets in the world experiencing robust growth," Mr. Cleveland further noted.
Fourth Quarter Results
Net interest income for the fourth quarter of 2011 was $5.009 million, a decrease of $335 thousand, or 6.3%, from $5.344 million in the same period of 2010. The reduction in net interest income was influenced by reduced assets and the continuing low interest rate environment. During the fourth quarter the average balance of earning assets was approximately $610.2 million compared to average earning assets of approximately $695.7 million, in the fourth quarter of 2010. The yield on earning assets was approximately 4.15% in the fourth quarter of 2011 compared to 4.36% in the fourth quarter of 2010. The net interest margin for the current quarter increased to 3.26% from 3.05% in the same period of 2010. The margin was lower in the last quarter of 2010 because we harbored large cash balances at that time to facilitate the pending sale of branches.
The provision for credit losses was $250 thousand in the fourth quarter of 2011, compared to $1.000 million in the 2010 period. Nonperforming loans have decreased $11.7 million, or 65.5%, from $17.9 million at December 31, 2010, to $6.2 million at December 31, 2011.
Non-interest income for the fourth quarter of 2011 was $5.410 million, a decrease of $1.114 million, or 17.1% from $6.524 million in the same period of 2010. Mortgage banking revenues, which aggregated $4.191 million, decreased by $971 thousand, or 18.8%, from the fourth quarter of 2010. While low interest rates and government sponsorship in the secondary market have created conditions that recently have favored mortgage banking, the housing market remains problematic and the future role of government appears uncertain, which indicates that the level of mortgage banking revenues may be uncertain in future periods. Gains on sales of investment securities were $99 thousand during the recent quarter compared to no gains on sales of investment securities in the fourth quarter of 2010. The opportunity to sell assets at attractive prices can vary significantly from period to period. The 2011 fourth quarter included gains on sales of loans of $117 thousand compared to $159 thousand in the same period of 2010. Despite the decrease in the recent quarter, the secondary market for SBA loans is currently acquisitive and loans can be sold for attractive prices. We anticipate gains on sales of SBA loans will continue in 2012.
Non-interest expense decreased by $1.585 million, or 15.3%, to $8.755 million in the fourth quarter of 2011 compared to $10.340 million in the same period of 2010. The expense reduction reflects a decline in compensation of $526 thousand, or 12.2%, reflecting management's efforts to control costs. Professional fees decreased by $495 thousand, or 31.0%, primarily due to lower volume in mortgage banking operations. Other real estate costs were relatively stable, decreasing by $28 thousand, or 3.2%, as valuation adjustments on foreclosed assets were consistent quarter to quarter. Occupancy costs also decreased by $243 thousand, or 33.6%, due to the relocation of certain operations to smaller and less expensive locations and the sale of one branch in the first quarter of 2011. Regulatory costs decreased by $216 thousand, or 41.2%, due to lower deposit balances resulting from our branch sale in early 2011, which decreased depository premiums paid by BNC to the FDIC to insure its deposits.
A tax expense of $22 thousand was recognized during the fourth quarter of 2011 for miscellaneous tax liabilities. The Company has net operating loss carry-forwards for federal tax purposes aggregating $6.099 million. The Company has virtually a full valuation allowance for deferred tax assets and tax loss carry-forwards. No tax expense was recognized during the fourth quarter of 2010.
Net income available to common shareholders was $1.036 million, or $0.31 per diluted share, for the fourth quarter of 2011 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $356 thousand in the fourth quarter of 2011 and $341 thousand in the same period of 2010. Net income available to common shareholders in the fourth quarter of 2010 was $187 thousand, or $0.06 per diluted share.
Fraud Loss on Assets Serviced by Others
As previously reported, the Company discovered fraudulent activity in April of 2010 by an external company that was servicing residential mortgage loans for BNC. Subsequently, the Company and its advisors have been diligently addressing this matter. Our internal and external investigations have confirmed that this fraudulent activity was limited to this external servicing company and that no bank employees were involved in, or were aware of, this wrongful conduct by the servicing company. As such, we believe the fraud losses are not indicative of other credit quality problems within our loan portfolio.
In 2010, we submitted claims under our fidelity insurance policies seeking to recover the insured portion of these losses. The policies together provide for total coverage of $15 million. However, in the fourth quarter of 2010, our insurance carriers commenced a declaratory judgment action against the Company in an Arizona federal court seeking a judicial determination that the losses associated with the servicing fraud are not covered by the policies. We have subsequently countersued the insurance carriers for failure to honor the policies and for acting in bad faith. We intend to vigorously pursue our claims to recover amounts due under the insurance policies and for losses incurred as a result of the carriers acting in bad faith. While management believes we have strong claims, there can be no assurances as to the outcome of this litigation, or if we will recover all or any portion of the insured amounts.
The Company is providing adjusted earnings in addition to reported results prepared in accordance with generally accepted accounting principles in order to present financial information without the impact of the fraud loss on assets serviced by others. The following table reconciles the net income (loss) available to common shareholders as prepared in accordance with generally accepted accounting principles to our determination of adjusted earnings:
Three Months Ended Twelve Months Ended
December 31, 2011 December 31, 2011
----------------- -----------------
Diluted
per Diluted per
Amount share(1) Amount share(1)
------ -------- ------ ------------
Net income $1,392 $0.31 $4,208 $0.86
Fraud loss on assets
serviced by others - - - -
Accrued interest
reversed on assets
serviced by others - - - -
Legal and
professional fees
associated with the
fraud loss on
assets serviced by
others 223 0.07 1,126 0.34
--- ---- ----- ----
Adjusted earnings $1,615 $0.38 $5,334 $1.20
====== ===== ====== =====
Three Months Ended Twelve Months Ended
December 31, 2010 December 31, 2010
----------------- -----------------
Diluted
per Diluted per
Amount share(1) Amount share(1)
------ -------- ------ ------------
Net income(loss) $528 $0.06 $(22,065) $(7.13)
Fraud loss on assets
serviced by others - - 26,231 8.00
Accrued interest
reversed on assets
serviced by others - - 287 0.08
Legal and
professional fees
associated with the
fraud loss on
assets serviced by
others 222 0.07 878 0.27
--- ---- --- ----
Adjusted earnings $750 $0.13 $5,331 $1.22
==== ===== ====== =====
(1) Per share amounts represent amounts available to common
shareholders.
Year Ended December 31, 2011
Net interest income in 2011 was $19.477 million, a decrease of $3.795 million, or 16.3%, from $23.272 million in the same period of 2010. The net interest margin for 2011 decreased to 3.11% from 3.20% in 2010. The reduction in net interest income was influenced by reduced assets and the continuing low interest rate environment. In 2011, the average balance of earning assets was approximately $563.3 million compared to average earning assets of approximately $727.6 million in 2010. The yield on earning assets was approximately 4.11% in 2011 compared to 4.61% in 2010, while the cost of funds was 1.22% in 2011 compared to 1.66% in 2010.
The provision for credit losses was $1.625 million in 2011, compared to $5.750 million in 2010. Nonperforming loans have decreased $11.7 million, or 65.5%, to $6.2 million at December 31, 2011, from $17.9 million at December 31, 2010.
Non-interest income in 2011 was $20.237 million, a decrease of $3.736 million, or 15.6% from $23.973 million in 2010. Mortgage banking revenues decreased by $2.139 million, or 15.9%, from $13.424 million in 2010, to $11.285 million. Gains on sales of investment securities aggregated $2.830 million in 2011 compared to $4.390 million in 2010. The opportunity to sell assets at attractive prices can vary from period to period. Wealth management revenues decreased to $1.282 million in 2011 compared to $2.133 million in 2010 as we have exited certain product offerings. Bank fees and service charges decreased by $315 thousand in 2011 as we sold deposits in early 2011. These decreases were partially offset by increases in gains on sales of loans which increased by $1.056 million in 2011, primarily related to higher sales of SBA loans.
Non-interest expense decreased by $3.398 million, or 9.1%, to $33.859 million in 2011, compared to $37.257 million in 2010 (excluding the fraud loss on assets serviced by others). The expense reduction reflects a decline in compensation of $1.108 million, or 6.9%, reflecting management's efforts to control costs. Professional fees decreased by $761 thousand, or 15.0%, due to lower volume in mortgage banking operations in 2011. Other real estate costs decreased by $412 thousand, or 15.2%, as valuation adjustments on foreclosed assets were lower in 2011. Charges to revalue foreclosed assets can vary significantly in an environment where real estate values are declining. Occupancy costs also decreased by $857 thousand, or 29.7%, due to the relocation of certain operations to smaller and less expensive locations and the sale of one branch in the first quarter of 2011. Regulatory costs decreased by $209 thousand, or 10.7%, due to lower deposit balances resulting from our branch sale in early 2011, which decreased depository premiums paid by BNC to the FDIC to insure its deposits. These decreases were partially offset by an increase in marketing costs of $187 thousand primarily due the promotional activity in mortgage banking operations.
Tax expense was $22 thousand in 2011 as we recognized exposure for miscellaneous tax liabilities. The Company has net operating loss carry-forwards aggregating $6.099 million for federal tax purposes. The Company virtually has a full valuation allowance for deferred tax assets and tax loss carry-forwards. Tax expense in 2010 was $72 thousand, or 0.3% of pre-tax losses.
Net income available to common shareholders was $2.814 million, or $0.86 per diluted share, in 2011 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. Net loss available to common shareholders was $(23.398) million, or $(7.13) per share, in 2010, largely reflecting the fraud loss on assets serviced by others.
Assets, Liabilities and Equity
Total assets were $665.2 million at December 31, 2011, a decrease of $81.9 million, or 11.0%, compared to $747.1 million at December 31, 2010. This decrease can primarily be attributed to the sale of certain assets consummated on March 11, 2011, resulting in the transfer of $65.7 million of loans. Excluding the impact of the sale, loans held for investment decreased by $57.3 million as we have implemented measures to reduce our exposure to credit risk and concentrations within certain segments of our loan portfolio. Investment securities have increased by $105.6 million since December 31, 2010 as we have invested a portion of our liquidity. The investment portfolio has net unrealized gains aggregating $4.145 million as of December 31, 2011.
Total deposits were $576.3 million at December 31, 2011, decreasing by $84.8 million from 2010 year-end. This decrease can primarily be attributed to the transfer of certain liabilities consummated on March 11, 2011, resulting in the transfer of $107.4 million of deposits. Excluding the impact of the sale, deposit balances increased by $22.6 million. This increase relates primarily to growth in our North Dakota branches.
Other borrowings decreased by $7.7 million in 2011.
Total equity was $41.9 million at December 31, 2011 and $37.3 million at December 31, 2010. The book value per common share was $6.42 as of December 31, 2011, compared to $5.09 as of December 31, 2010. Excluding unrealized gains and losses on the investment portfolio, the book value per common share was $5.64 as of December 31, 2011, compared to $4.57 as of December 31, 2010.
Trust assets under supervision were $228.9 million at December 31, 2011, compared to $223.8 million at December 31, 2010.
Regulatory Capital
Banks and their bank holding companies operate under separate regulatory capital requirements.
At December 31, 2011, BNCCORP's tier 1 leverage ratio was 7.59%, the tier 1 risk-based capital ratio was 13.71%, and the total risk-based capital ratio was 17.56%. Tangible common equity at December 31, 2011 was 3.17%.
At December 31, 2011, BNC National Bank had a tier 1 leverage ratio of 9.41%, a tier 1 risk-based capital ratio of 16.95%, and a total risk-based capital ratio of 18.22%. Tangible capital to tangible assets for BNC National Bank was 10.12%.
In 2010, the Bank entered into a formal agreement with the Office of the Comptroller of the Currency (the OCC) which focused on credit related issues. During the fourth quarter of 2011, the Bank's formal agreement with the OCC was removed.
Asset Quality
Challenging economic conditions have led to elevated credit risk throughout the banking industry. As a result, the Company is carefully monitoring asset quality and taking what it believes to be prudent and appropriate action to strengthen its credit metrics.
Nonperforming assets declined significantly to $16.3 million at December 31, 2011, compared to $30.6 million at December 31, 2010. The ratio of total nonperforming assets to total assets was 2.45% at December 31, 2011, compared with 4.09% at December 31, 2010. The provision for credit losses and other real estate costs decreased to $3.400 million in 2011, from $8.133 million in 2010.
Nonperforming loans declined to $6.2 million at December 31, 2011, compared to $17.9 million at December 31, 2010. The ratio of the allowance for credit losses to total nonperforming loans as of December 31, 2011 was 172%, compared with 83% at December 31, 2010.
The allowance for credit losses was $10.6 million at December 31, 2011 and $14.8 million at December 31, 2010. The allowance for credit losses as a percentage of total loans at December 31, 2011 was 2.94%, compared with 3.84% at December 31, 2010. The allowance for credit losses as a percentage of loans and leases held for investment at December 31, 2011 was 3.63%, compared with 4.21% at December 31, 2010. The allowance for credit losses as a percentage of loans decreased because nonperforming loans decreased.
At December 31, 2011, BNC had $24.2 million of classified loans, $6.2 million of loans on non-accrual and $10.1 million of other real estate owned. At December 31, 2010, BNC had $47.6 million of classified loans, $17.9 million of loans on non-accrual and $12.7 million of other real estate owned.
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 Arizona, Minnesota and North Dakota from 15 locations. BNC also conducts mortgage banking from 12 locations in Illinois, Kansas, Nebraska, Missouri, Minnesota and Arizona.
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 DATA
(Unaudited)
For the Twelve
For the Quarter Months
--------------- ---------------
Ended December 31, Ended December 31,
------------------ ------------------
(In
thousands,
except per
share data) 2011 2010 2011 2010
------------ ---- ---- ---- ----
SELECTED
INCOME
STATEMENT
DATA
Interest
income $6,387 $7,637 $25,749 $33,510
Interest
expense 1,378 2,293 6,272 10,238
----- ----- ----- ------
Net interest
income 5,009 5,344 19,477 23,272
Provision for
credit
losses 250 1,000 1,625 5,750
Non-interest
income 5,410 6,524 20,237 23,973
Non-interest
expense 8,755 10,340 33,859 63,488
----- ------ ------ ------
Income (loss)
before
income taxes 1,414 528 4,230 (21,993)
Income tax
expense 22 - 22 72
--- --- --- ---
Net income
(loss) 1,392 528 4,208 (22,065)
Preferred
stock costs (356) (341) (1,394) (1,333)
Net income
(loss)
available to
common
shareholders $1,036 $187 $2,814 $(23,398)
====== ==== ====== ========
EARNINGS PER
SHARE DATA
Basic
earnings
(loss) per
common share $0.31 $0.06 $0.86 $(7.13)
Diluted
earnings
(loss) per
common share $0.31 $0.06 $0.86 $(7.13)
BNCCORP, INC.
CONSOLIDATED FINANCIAL DATA
(Unaudited)
For the Quarter For the Twelve Months
--------------- ---------------------
Ended December 31, Ended December 31,
------------------ ------------------
(In
thousands,
except
share
data) 2011 2010 2011 2010
----------- ---- ---- ---- ----
ANALYSIS OF
NON-
INTEREST
INCOME
Bank
charges
and
service
fees $551 $705 $2,218 $2,533
Wealth
management
revenues 280 360 1,282 2,133
Mortgage
banking
revenues 4,191 5,162 11,285 13,424
Gains on
sales of
loans, net 117 159 1,427 371
Gains on
sales of
securities,
net 99 - 2,830 4,390
Other 172 138 1,195 1,122
--- -----
Total non-
interest
income $5,410 $6,524 $20,237 $23,973
====== ====== ======= =======
ANALYSIS OF
NON-
INTEREST
EXPENSE
Salaries
and
employee
benefits $3,787 $4,313 $14,972 $16,080
Professional
services 1,101 1,596 4,307 5,068
Other real
estate
costs 849 877 2,295 2,707
Data
processing
fees 667 692 2,673 2,697
Occupancy 480 723 2,028 2,885
Marketing
and
promotion 386 369 1,559 1,372
Regulatory
costs 308 524 1,742 1,951
Depreciation
and
amortization 289 344 1,172 1,333
Office
supplies
and
postage 157 159 590 603
Fraud loss
on assets
serviced
by others - - - 26,231
Other 731 743 2,521 2,561
--- --- ----- -----
Total non-
interest
expense $8,755 $10, 340 $33,859 $63,488
====== ======= ======= =======
WEIGHTED
AVERAGE
SHARES
Common
shares
outstanding
(a) 3,289,756 3,281,719 3,282,182 3,281,719
Incremental
shares from
assumed
conversion
of options
and
contingent
shares - - - -
--- --- --- ---
Adjusted
weighted
average
shares (b) 3,289,756 3,281,719 3,282,182 3,281,719
========= ========= ========= =========
(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 December December
data) 31, September 30, 31, 2010
-------------- --------- ------------- ---------
2011 2011
--- ---
SELECTED
BALANCE SHEET
DATA
Total assets $665,158 $669,518 $747,069
Loans held for
sale-
mortgage
banking 68,622 49,848 29,116
Participating
interests in
mortgage
loans - 125 4,888
Other loans
held for sale - - 72,212
Loans and
leases held
for
investment 293,211 297,371 350,501
Total loans 361,833 347,344 455,006
Allowance for
credit
losses(1) - - (16,476)
Allowance for
credit
losses(2) (10,630) (11,014) (14,765)
Investment
securities
available for
sale 242,630 227,842 137,032
Other real
estate, net 10,145 14,036 12,706
Earning assets 604,151 604,448 680,002
Deposits held
for sale - - 107,446
Total deposits 576,255 572,646 661,111
Core deposits 516,436 512,827 594,152
Other
borrowings 31,062 39,848 38,754
Cash and cash
equivalents 19,296 46,351 112,847
(1) Excluding
impact of
pending sale
at December
31, 2010
(2) Including
impact of
pending sale
at December
31, 2010
OTHER SELECTED
DATA
Net unrealized
gains in
investment
portfolio,
pretax $4,145 $3,348 $2,789
Trust assets
under
supervision $228,932 $221,942 $223,829
Total common
stockholders'
equity $21,180 $19,305 $16,835
Book value per
common share $6.42 $5.85 $5.09
Effect of net
unrealized
gains on
securities
available for
sale, net of
tax, on book
value per
common share $0.78 $0.63 $0.52
Book value per
common share,
excluding
effect of
unrealized
gains on
securities $5.64 $5.22 $4.57
Full time
equivalent
employees 261 270 281
Common shares
outstanding 3,301,007 3,301,856 3,304,339
CAPITAL RATIOS
Tier 1
leverage
(Consolidated) 7.59% 7.63% 6.17%
Tier 1 risk-
based capital
(Consolidated) 13.71% 13.21% 9.46%
Total risk-
based capital
(Consolidated) 17.56% 17.15% 13.23%
Tangible
common equity
(Consolidated) 3.17% 2.87% 2.24%
Tier 1
leverage (BNC
National
Bank) 9.41% 9.46% 7.53%
Tier 1 risk-
based capital
(BNC National
Bank) 16.95% 16.33% 11.53%
Total risk-
based capital
(BNC National
Bank) 18.22% 17.60% 12.80%
Tangible
capital (BNC
National
Bank) 10.12% 9.65% 8.00%
BNCCORP, INC.
CONSOLIDATED FINANCIAL DATA
(Unaudited)
For the Quarter For the Twelve Months
--------------- ---------------------
Ended December 31, Ended December 31,
------------------ ------------------
(In
thousands) 2011 2010 2011 2010
----------- ---- ---- ---- ----
AVERAGE
BALANCES
Total assets $673,457 $760,478 $689,268 $790,702
Loans held
for sale-
mortgage
banking 67,217 43,571 33,317 29,039
Participating
interests in
mortgage
loans 4 12,548 1,101 20,144
Loans and
leases held
for
investment 294,177 438,440 328,091 478,492
Total loans 361,398 494,559 362,509 527,675
Investment
securities
available
for sale 238,754 144,108 210,811 166,802
Earning
assets 610,192 695,667 563,341 727,627
Total
deposits 579,376 672,615 600,604 697,614
Core deposits 519,557 599,175 538,583 607,277
Total equity 41,248 37,354 38,433 46,253
Cash and cash
equivalents 27,756 80,818 72,567 53,512
KEY RATIOS
Return on
average
common
stockholders'
equity 19.97% 4.39% 15.77% (90.47)%
Return on
average
assets 0.82% 0.28% 0.61% (2.79)%
Net interest
margin 3.26% 3.05% 3.11% 3.20%
Efficiency
ratio 84.03% 87.13% 85.26% 134.38%
Efficiency
ratio,
excluding
gains on
sales of
securities
and
provisions
for real
estate
losses 77.57% 80.81% 86.99% 142.59%
Efficiency
ratio,
excluding
provisions
for real
estate
losses (BNC
National
Bank) 73.35% 79.63% 77.18% 131.64%
BNCCORP, INC.
CONSOLIDATED FINANCIAL DATA
(Unaudited)
As of
-----
September
(In thousands) December 31, 30, December 31,
-------------- ------------ ---------- ------------
2011 2011 2010
---- ---- ----
ASSET QUALITY
Loans 90 days or more delinquent and
still accruing interest $ - $3 $ -
Non-accrual loans 6,169 8,654 17,862
Total nonperforming loans $6,169 $8,657 $17,862
Other real estate, net 10,145 14,036 12,706
------ ------ ------
Total nonperforming assets $16,314 $22,693 $30,568
======= =======
Allowance for credit losses(1) $ - $ - $16,476
=== === = =======
Allowance for credit losses(2) $10,630 $11,014 $14,765
======= ======= =======
Ratio of total nonperforming loans to
total loans 1.70% 2.49% 3.93%
Ratio of total nonperforming assets to
total assets 2.45% 3.39% 4.09%
Ratio of allowance for credit losses to
loans and leases held for investment(1) - - 4.70%
Ratio of allowance for credit losses to
total loans(1) - - 3.62%
Ratio of allowance for credit losses to
nonperforming loans(1) - - 92%
Ratio of allowance for credit losses to
loans and leases held for investment(2) 3.63% 3.70% 4.21%
Ratio of allowance for credit losses to
total loans(2) 2.94% 3.17% 3.84%
Ratio of allowance for credit losses to
nonperforming loans(2) 172% 127% 83%
(1) Excluding impact of pending sale at
December 31, 2010
(2) Including impact of pending sale at
December 31, 2010
For the Quarter For the Twelve Months
(In thousands) Ended December 31, Ended December 31,
-------------- ------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----
Changes in
Nonperforming
Loans:
Balance,
beginning of
period $8,657 $22,726 $17,862 $35,890
Additions to
nonperforming 12 820 6,312 7,385
Charge-offs (633) (725) (3,895) (3,991)
Reclassified
back to
performing (1,649) (1,097) (3,616) (5,208)
Principal
payment
received (218) (623) (4,442) (4,882)
Transferred to
other real
estate owned - (3,239) (6,052) (11,332)
------ -------
Balance, end
of period $6,169 $17,862 $6,169 $17,862
====== ======= ====== =======
BNCCORP, INC.
CONSOLIDATED FINANCIAL DATA
(Unaudited)
(In
thousands) For the Quarter For the Twelve Months
----------- --------------- ---------------------
Ended December 31, Ended December 31,
------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----
Changes
in
Allowance
for
Credit
Losses:
Balance,
beginning
of
period $11,014 $16,757 $16,476 $18,047
Provision 250 1,000 1,625 5,750
Loans
charged
off (1,161) (1,378) (6,517) (7,786)
Loan
recoveries 527 97 677 465
Transferred
with
branch
divestiture - - (1,631) -
--- --- ------ ---
Balance,
end of
period $10,630 $16,476 $10,630 $16,476
======= ======= ======= =======
Allowance
related
to other
loans
held for
sale $1,711 $1,711
Allowance
including
impact of
pending
sale $14,765 $14,765
Ratio of
net
charge-
offs to
average
total
loans (0.175)% (0.259)% (1.611)% (1.387)%
Ratio of
net
charge-
offs to
average
total
loans,
annualized (0.702)% (1.036)% (1.611)% (1.387)%
(In thousands) For the Quarter For the Twelve Months
-------------- --------------- ---------------------
Ended December 31, Ended December 31,
------------------ ------------------
2011 2010 2011 2010
---- ---- ---- ----
Changes in Other
Real Estate:
Balance,
beginning of
period $14,036 $10,571 $12,706 $7,253
Transfers from
nonperforming
loans - 3,239 6,052 11,332
Real estate sold (3,101) (375) (6,900) (3,370)
Net gains
(losses) on
sale of assets (40) 21 62 (126)
Provision (750) (750) (1,775) (2,383)
---- ---- ------ ------
Balance, end of
period $10,145 $12,706 $10,145 $12,706
======= ======= ======= =======
(In thousands) For the Twelve Months
-------------- ---------------------
Ended December 31,
------------------
2011 2010
---- ----
Other real estate $15,530 $17,116
Valuation allowance (5,385) (4,410)
------ ------
Other real estate, net $10,145 $12,706
======= =======
BNCCORP, INC.
CONSOLIDATED FINANCIAL DATA
(Unaudited)
As of
-----
December 31,
(In thousands) December 31, 2011 2010
----------------- -------------
CREDIT CONCENTRATIONS
North Dakota
Commercial and
industrial $65,986 $80,536
Construction 2,533 1,029
Agricultural 13,043 13,673
Land and land development 10,579 10,682
Owner-occupied
commercial real estate 25,526 24,941
Commercial real estate 12,100 12,567
Small business
administration 2,333 3,116
Consumer/participating
interests 15,175 15,820
------ ------
Subtotal $147,275 $162,364
-------- --------
Arizona
Commercial and
industrial $2,552 $9,243
Construction - -
Agricultural - -
Land and land development 5,832 8,621
Owner-occupied
commercial real estate 550 19,286
Commercial real estate 14,070 28,560
Small business
administration 7,085 8,937
Consumer/participating
interests 2,813 10,319
----- ------
Subtotal $32,902 $84,966
------- -------
Minnesota
Commercial and
industrial $1,316 $3,656
Construction 2,090 2,002
Agricultural 28 30
Land and land development 1,649 7,903
Owner-occupied
commercial real estate - 16,555
Commercial real estate 14,665 19,524
Small business
administration 77 885
Consumer/participating
interests 893 6,430
--- -----
Subtotal $20,718 $56,985
------- -------
SOURCE BNCCORP, INC.
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