BNCCORP, INC. REPORTS THIRD QUARTER NET INCOME OF $1.5 MILLION, OR $0.42 PER DILUTED SHARE, COMMUNITY BANKING SEGMENT REPORTED NET INCOME OF $2.2 MILLION, OR $0.61 PER DILUTED SHARE
- Net income decreased by 29% compared to the same period last year.
- The Mortgage Banking segment reported a net loss of $400 thousand.
- Net interest margin decreased by 2.5%.
- Loans held for investment balances increased by 3.7%.
- Non-performing assets remained unchanged.
- Tangible book value per common share increased by 2%.
- None.
Highlights
- For the quarter, the Community Banking segment reported net income of
, or$2.2 million per diluted share, compared to net income of$0.61 in the same period of 2022.$3.1 million - The Mortgage Banking segment reported a net loss of
for the quarter, compared to a net loss of$400 thousand in the 2022 period.$1.4 million - Net interest margin decreased to
3.57% for the third quarter of 2023 compared to3.66% during the third quarter of 2022. - The Company increased loans held for investment balances by
, or$24.0 million 3.7% , during the third quarter of 2023. - The ratio of loans held for investment-to-deposits increased to
84.2% from75.2% at December 31, 2022 and71.9% at September 30, 2022. - Allowance for credit losses as of September 30, 2023, was
1.38% of loans held for investment compared to1.43% as of December 31, 2022. - Non-performing assets were
as of September 30, 2023, unchanged from December 31, 2022.$1.4 million
Management Commentary
"Our third-quarter results mark the completion of our full transition out of our mortgage business and a measure of welcome respite from the significant deposit market volatility of the second quarter," said Daniel J. Collins, BNC's President and Chief Executive Officer. "As we successfully transitioned out of mortgage banking, our core banking team remained focused on moving our bank forward as evidenced by increased sequential deposit balances, stable deposit costs and continued loan growth. Our deliberate, careful approach to growth relies on important metrics such as liquidity, net interest margin, efficiency, credit quality, and capital. Our performance reflects the strength of our customer relationships as a financial partner of choice in our service area."
Mr. Collins continued, "Looking ahead to the last quarter of 2023, we continue to believe in our focus and our strategy to steer us over the long term and as the right posture in the face of the short-term uncertainty that persists in the market. As in the third quarter, our objectives remain to continue the measured trend of loan growth and to enhance our strong financial position through a sharp focus on margin protection and by delivering efficiency improvements from technology investments and infrastructure realignment. We remain steadfast in our belief that our disciplined approach to credit underwriting and administration is of primary importance and will continue to be a core element of our culture. This inherently conservative approach has served us well over the years and we believe it will continue to serve us well for the remainder of 2023 and beyond. That mindset, coupled with a commitment to superior customer service and a broad portfolio of financial products, will continue to meet the needs of existing and future clients."
2023 Versus 2022 Third Quarter Comparison | |||||||||||||||
SEGMENT DATA | For the Quarter Ended September 30, 2023 | ||||||||||||||
(in thousands) | Community Banking | Mortgage Banking | Holding Company | Intercompany Eliminations | BNCCORP Consolidated | ||||||||||
Net interest income (expense) | $ | 7,908 | $ | 171 | $ | (219) | $ | - | $ | 7,860 | |||||
Provision for credit losses | 230 | - | - | - | 230 | ||||||||||
Non-interest income | 1,578 | (381) | 559 | (638) | 1,118 | ||||||||||
Non-interest expense | 6,379 | 322 | 715 | (638) | 6,778 | ||||||||||
Income (loss) before taxes | 2,877 | (532) | (375) | - | 1,970 | ||||||||||
Income tax expense (benefit) | 683 | (132) | (88) | - | 463 | ||||||||||
Net income (loss) | $ | 2,194 | $ | (400) | $ | (287) | $ | - | $ | 1,507 | |||||
For the Quarter Ended September 30, 2022 | |||||||||||||||
Community Banking | Mortgage Banking | Holding Company | Intercompany Eliminations | BNCCORP Consolidated | |||||||||||
Net interest income (expense) | $ | 7,860 | $ | 389 | $ | (142) | $ | - | $ | 8,107 | |||||
Provision for credit losses | 150 | - | - | - | 150 | ||||||||||
Non-interest income | 2,489 | 2,468 | 641 | (1,133) | 4,465 | ||||||||||
Non-interest expense | 6,064 | 4,741 | 727 | (1,133) | 10,399 | ||||||||||
Income (loss) before taxes | 4,135 | (1,884) | (228) | - | 2,023 | ||||||||||
Income tax expense (benefit) | 997 | (468) | (54) | - | 475 | ||||||||||
Net income (loss) | $ | 3,138 | $ | (1,416) | $ | (174) | $ | - | $ | 1,548 | |||||
The Community Banking Segment reported net income of
The Mortgage Banking Segment reported a net loss of
Consolidated net interest income for the third quarter of 2023 was
On a consolidated basis, third-quarter interest income increased
Consolidated interest expense in the third quarter of 2023 was
As of September 30, 2023, credit metrics remained stable with
Non-interest income for the Community Banking Segment during the third quarter of 2023 was
Non-interest expense for the Community Banking Segment during the third quarter of 2023 increased
In the third quarter of 2023, income tax expense on a consolidated basis was
Tangible book value per common share on September 30, 2023, was
2023 Versus 2022 Nine-Month Comparison | |||||||||||||||
SEGMENT DATA | For the Nine Months Ended September 30, 2023 | ||||||||||||||
(in thousands) | Community Banking | Mortgage Banking | Holding Company | Intercompany Eliminations | BNCCORP Consolidated | ||||||||||
Net interest income (expense) | $ | 24,519 | $ | 473 | $ | (648) | $ | - | $ | 24,344 | |||||
Provision for credit losses | 635 | - | - | - | 635 | ||||||||||
Non-interest income | 5,755 | 3,638 | 1,630 | (2,562) | 8,461 | ||||||||||
Non-interest expense | 19,068 | 8,781 | 2,237 | (2,562) | 27,524 | ||||||||||
Income (loss) before taxes | 10,571 | (4,670) | (1,255) | - | 4,646 | ||||||||||
Income tax expense (benefit) | 2,545 | (1,158) | (295) | - | 1,092 | ||||||||||
Net income (loss) | $ | 8,026 | $ | (3,512) | $ | (960) | $ | - | $ | 3,554 | |||||
For the Nine Months Ended September 30, 2022 | |||||||||||||||
Community Banking | Mortgage Banking | Holding Company | Intercompany Eliminations | BNCCORP Consolidated | |||||||||||
Net interest income (expense) | $ | 21,396 | $ | 1,280 | $ | (282) | $ | - | $ | 22,394 | |||||
Credit for credit losses | (400) | - | - | - | (400) | ||||||||||
Non-interest income | 6,982 | 10,389 | 1,689 | (3,305) | 15,755 | ||||||||||
Non-interest expense | 18,086 | 15,003 | 2,190 | (3,305) | 31,974 | ||||||||||
Income (loss) before taxes | 10,692 | (3,334) | (783) | - | 6,575 | ||||||||||
Income tax expense (benefit) | 2,556 | (827) | (184) | - | 1,545 | ||||||||||
Net income (loss) | $ | 8,136 | $ | (2,507) | $ | (599) | $ | - | $ | 5,030 | |||||
The Community Banking Segment reported net income of
The Mortgage Banking Segment reported a net loss of
Consolidated net interest income in the first nine months of 2023 was
On a consolidated basis, interest income increased by
Consolidated interest expense in the first nine months of 2023 was
The Company recorded a
The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments, on January 1, 2023, and applied the standard as a cumulative effect adjustment to retained earnings. At adoption, the Company recorded a
Non-interest income for the Community Banking Segment in the first nine months of 2023 was
Non-interest expense for the Community Banking Segment increased
During the nine-month period ended September 30, 2023, income tax expense on a consolidated basis was
Assets and Liabilities
At the consolidated level, total assets were
Total loans held for investment were
Total deposits decreased
The following table provides additional detail to the Company's total deposit relationships:
As of | |||||||||
(In thousands) | September 30, 2023 | December 31, 2022 | September 30, 2022 | ||||||
Deposits: | |||||||||
Non-interest-bearing | $ | 180,045 | $ | 207,232 | $ | 198,698 | |||
Interest-bearing – | |||||||||
Savings, interest checking and money market | 543,909 | 554,577 | 563,717 | ||||||
Time deposits | 65,572 | 57,775 | 61,277 | ||||||
Total on balance sheet deposits | 789,526 | 819,584 | 823,692 | ||||||
Off-balance sheet deposits (1) | 40,232 | 187,407 | 218,602 | ||||||
Total available deposits | $ | 829,758 | $ | 1,006,991 | $ | 1,042,294 |
(1) | The off-balance sheet deposits above do not include off-balance sheet time deposits that can be brought back on the balance sheet at various future maturity dates. As of September 30, 2023, the Company managed off-balance sheet time deposit balances of |
The Company remains highly focused on meeting the needs of its customers and ensuring deposit rates reflect changing market conditions. The Company estimates that deposit insurance and other deposit protection programs secure greater than
Off-balance sheet accounts are primarily utilized to accommodate larger business customers with significant deposits who require daily access to funds and to provide FDIC insurance coverage. The Company maintained
Trust assets under administration increased
Asset Quality
The allowance for credit losses was
Past due loans for a period of 31-89 days increased to
As of September 30, 2023, classified loans were
The Company continues to monitor the diminishing effects of the pandemic and its impact on customers. Additional macroeconomic and geopolitical factors have emerged in recent quarters and are being monitored for their possible impact on the performance of the loan portfolio.
BNC's loans held for investment are geographically concentrated in
The
The
The following table approximately describes the Company's concentrations by industry as of September 30, 2023 and December 31, 2022, respectively:
Loans Held for Investment by Industry Sector | |||||||||||
(in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Non-owner occupied commercial real estate – not | $ | 204,427 | 31 | % | $ | 177,674 | 29 | % | |||
Consumer, not otherwise categorized | 98,896 | 15 | 85,648 | 14 | |||||||
Hotels | 82,852 | 13 | 91,388 | 15 | |||||||
Retail trade | 35,794 | 5 | 36,607 | 6 | |||||||
Healthcare and social assistance | 32,508 | 5 | 33,327 | 5 | |||||||
Agriculture, forestry, fishing and hunting | 32,056 | 5 | 30,641 | 5 | |||||||
Transportation and warehousing | 26,856 | 4 | 23,951 | 4 | |||||||
Non-hotel accommodation and food service | 24,482 | 4 | 21,538 | 4 | |||||||
Art, entertainment and recreation | 23,630 | 4 | 19,024 | 3 | |||||||
Mining, oil and gas extraction | 22,518 | 3 | 22,480 | 4 | |||||||
Construction contractors | 15,874 | 2 | 11,124 | 2 | |||||||
Other service | 11,158 | 2 | 11,810 | 2 | |||||||
Professional, scientific, and technical services | 9,588 | 1 | 8,209 | 1 | |||||||
Real estate and rental and leasing support services | 8,615 | 1 | 9,233 | 1 | |||||||
Public administration | 8,038 | 1 | 8,316 | 1 | |||||||
Manufacturing | 8,004 | 1 | 7,572 | 1 | |||||||
Finance and insurance | 6,810 | 1 | 5,022 | 1 | |||||||
Educational services | 4,293 | 1 | 4,435 | 1 | |||||||
All other | 7,469 | 1 | 7,650 | 1 | |||||||
Gross loans held for investment | $ | 663,868 | 100 | % | $ | 615,649 | 100 | % |
The Company's loans to the hospitality industry have shown signs of improved credit quality that are reflected by improved hotel occupancy and restaurant utilization trends. Hotel operators in BNC's loan portfolio are reporting positive trends and, in some cases, stronger balance sheets. Despite these positive indications, labor shortages limit the ability of the industry to fully capitalize on these trends and the potential for inflationary impacts on travel and leisure activities continue to be closely monitored. As of September 30, 2023, the Company's loans related to office space were
Capital
Banks and bank holding companies operate under separate regulatory capital requirements. As of September 30, 2023, the Company's capital ratios exceeded all regulatory capital thresholds, including the capital conservation buffer.
A summary of BNC's capital ratios at September 30, 2023, and December 31, 2022, is presented below:
September 30, 2023 | December 31, 2022 | |||
BNCCORP, INC. (Consolidated) | ||||
Tier 1 leverage | 14.31 % | 13.99 % | ||
Common equity tier 1 risk based capital | 14.38 % | 14.48 % | ||
Tier 1 risk based capital | 16.24 % | 16.43 % | ||
Total risk based capital | 17.37 % | 17.57 % | ||
Tangible common equity | 11.18 % | 10.63 % | ||
BNC National Bank | ||||
Tier 1 leverage | 12.35 % | 11.97 % | ||
Common equity tier 1 risk based capital | 14.01 % | 14.04 % | ||
Tier 1 risk based capital | 14.01 % | 14.04 % | ||
Total risk based capital | 15.14 % | 15.19 % | ||
Tangible common equity | 10.91 % | 10.28 % |
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 the Bank's 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.
The Company regularly evaluates the sufficiency of its capital to ensure compliance with regulatory capital standards and to serve as a source of strength for the Bank. The Company manages capital by assessing the composition of capital and the amounts available for growth, risk, or other purposes.
The Company made an election at the adoption of
The Company currently has an outstanding 175,000 share repurchase authorization with no expiration date set on the authorization. No share repurchases have been made under the authorization as of September 30, 2023. Share repurchases can be made through open market purchases, unsolicited and solicited privately negotiated transactions, or in accordance with terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934. The Company will not repurchase shares from directors or officers of the Company under the authorization. The Company will contemplate share repurchases subject to market conditions and other factors, including legal and regulatory restrictions and required approvals.
About BNCCORP, INC.
BNCCORP, INC., headquartered in
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", "at the present time", "plan", "optimistic", "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 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 or current or future pandemics 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 pandemics, 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 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 September 30, | For the Nine Months Ended September 30, | |||||||||||
(In thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||
INCOME STATEMENT | ||||||||||||
Interest income | $ | 11,086 | $ | 8,853 | $ | 31,789 | $ | 23,947 | ||||
Interest expense | 3,226 | 746 | 7,445 | 1,553 | ||||||||
Net interest income | 7,860 | 8,107 | 24,344 | 22,394 | ||||||||
Provision (credit) for credit losses | 230 | 150 | 635 | (400) | ||||||||
Net interest income after provision (credit) for | 7,630 | 7,957 | 23,709 | 22,794 | ||||||||
Non-interest income | ||||||||||||
Bank charges and service fees | 815 | 1,215 | 2,792 | 2,568 | ||||||||
Wealth management revenues | 504 | 489 | 1,474 | 1,517 | ||||||||
Mortgage banking revenues | (381) | 2,468 | 3,767 | 10,392 | ||||||||
Gains on sales of loans, net | 5 | 3 | 15 | 242 | ||||||||
Gains on sales of debt securities, net | - | - | 12 | - | ||||||||
Other | 175 | 290 | 401 | 1,036 | ||||||||
Total non-interest income | 1,118 | 4,465 | 8,461 | 15,755 | ||||||||
Non-interest expense | ||||||||||||
Salaries and employee benefits | 3,673 | 5,170 | 13,677 | 16,330 | ||||||||
Professional services | 529 | 954 | 3,115 | 2,870 | ||||||||
Data processing fees | 862 | 993 | 2,915 | 2,964 | ||||||||
Marketing and promotion | 225 | 1,596 | 2,954 | 4,388 | ||||||||
Occupancy | 382 | 499 | 1,376 | 1,609 | ||||||||
Regulatory costs | 134 | 120 | 334 | 360 | ||||||||
Depreciation and amortization | 261 | 310 | 838 | 927 | ||||||||
Office supplies and postage | 94 | 99 | 322 | 316 | ||||||||
Other | 618 | 658 | 1,993 | 2,210 | ||||||||
Total non-interest expense | 6,778 | 10,399 | 27,524 | 31,974 | ||||||||
Income before taxes | 1,970 | 2,023 | 4,646 | 6,575 | ||||||||
Income tax expense | 463 | 475 | 1,092 | 1,545 | ||||||||
Net income | $ | 1,507 | $ | 1,548 | $ | 3,554 | $ | 5,030 | ||||
WEIGHTED AVERAGE SHARES | ||||||||||||
Common shares outstanding (a) | 3,578,029 | 3,574,677 | 3,577,216 | 3,573,963 | ||||||||
Dilutive effect of share-based compensation | 3,193 | 825 | 2,585 | 877 | ||||||||
Adjusted weighted average shares (b) | 3,581,222 | 3,575,502 | 3,579,801 | 3,574,840 | ||||||||
EARNINGS PER SHARE DATA | ||||||||||||
Basic earnings per common share | $ | 0.42 | $ | 0.43 | $ | 0.99 | $ | 1.41 | ||||
Diluted earnings per common share | $ | 0.42 | $ | 0.43 | $ | 0.99 | $ | 1.41 |
(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 | September 30, 2023 | December 31, 2022 | September 30, 2022 | ||||||
BALANCE SHEET DATA | |||||||||
Cash and cash equivalents | $ | 51,366 | $ | 73,968 | $ | 75,495 | |||
Debt securities available for sale | 158,016 | 174,876 | 180,760 | ||||||
FRB and FHLB stock | 2,938 | 3,063 | 3,063 | ||||||
Loans held for sale-mortgage banking | 120 | 37,764 | 54,996 | ||||||
Loans held for investment | 665,026 | 616,645 | 592,026 | ||||||
Allowance for credit losses (1) | (9,146) | (8,831) | (8,617) | ||||||
Net loans held for investment | 655,880 | 607,814 | 583,409 | ||||||
Premises and equipment, net | 10,951 | 11,764 | 12,038 | ||||||
Operating lease right of use asset | 1,020 | 1,521 | 1,727 | ||||||
Accrued interest receivable | 3,851 | 3,312 | 3,096 | ||||||
Other | 29,215 | 29,239 | 31,590 | ||||||
Total assets | $ | 913,357 | $ | 943,321 | $ | 946,174 | |||
Deposits: | |||||||||
Non-interest-bearing | $ | 180,045 | $ | 207,232 | $ | 198,698 | |||
Interest-bearing – | |||||||||
Savings, interest checking and money market | 543,909 | 554,577 | 563,717 | ||||||
Time deposits | 65,572 | 57,775 | 61,277 | ||||||
Total deposits | 789,526 | 819,584 | 823,692 | ||||||
Guaranteed preferred beneficial interest in Company's | 15,000 | 15,000 | 15,000 | ||||||
Accrued interest payable | 687 | 312 | 234 | ||||||
Accrued expenses | 3,630 | 5,482 | 4,948 | ||||||
Operating lease liabilities | 1,134 | 1,660 | 1,872 | ||||||
Other | 1,133 | 937 | 2,355 | ||||||
Total liabilities | 811,110 | 842,975 | 848,101 | ||||||
Common stock | 36 | 36 | 36 | ||||||
Capital surplus – common stock | 26,670 | 26,399 | 26,356 | ||||||
Retained earnings | 91,035 | 87,575 | 86,105 | ||||||
Treasury stock | (1,665) | (1,622) | (1,625) | ||||||
Accumulated other comprehensive income, net | (13,829) | (12,042) | (12,799) | ||||||
Total stockholders' equity | 102,247 | 100,346 | 98,073 | ||||||
Total liabilities and stockholders' equity | $ | 913,357 | $ | 943,321 | $ | 946,174 | |||
OTHER SELECTED DATA | |||||||||
Trust assets under administration | $ | 369,377 | $ | 352,677 | $ | 321,076 | |||
Core deposits (2) | $ | 789,526 | $ | 819,584 | $ | 823,692 | |||
Tangible book value per common share (3) | $ | 28.71 | $ | 28.19 | $ | 27.55 | |||
Tangible book value per common share excluding | $ | 32.59 | $ | 31.58 | $ | 31.15 | |||
Full time equivalent employees | 145 | 206 | 255 | ||||||
Common shares outstanding | 3,561,334 | 3,559,334 | 3,559,266 |
(1) | The Company adopted ASU 2016-13 as of January 1, 2023. The prior year amounts presented are calculated under the prior accounting standard. |
(2) | Core deposits consist of all deposits and repurchase agreements with customers. |
(3) | Tangible book value per common share is equal to book value per common share. |
BNCCORP, INC. | |||||||||||||||||||||||||
CONSOLIDATED FINANCIAL DATA | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
AVERAGE BALANCE, | For the Quarter Ended September 30, 2023 | For the Quarter Ended September 30, 2022 | Quarter-Over-Quarter Comparison | ||||||||||||||||||||||
(dollars in thousands) | Average | Interest | Average | Average | Interest | Average | Change Due to | ||||||||||||||||||
Rate | Volume | Total | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Interest-bearing due from | $ | 40,980 | $ | 562 | 5.44 % | $ | 67,779 | $ | 394 | 2.31 % | $ | 372 | $ | (204) | $ | 168 | |||||||||
FRB and FHLB stock | 2,938 | 36 | 4.85 % | 3,074 | 37 | 4.78 % | - | (1) | (1) | ||||||||||||||||
Debt securities available | 163,192 | 1,321 | 3.21 % | 190,990 | 1,143 | 2.37 % | 348 | (170) | 178 | ||||||||||||||||
Loans held for sale- | 24,378 | 384 | 6.24 % | 55,127 | 649 | 4.67 % | 173 | (438) | (265) | ||||||||||||||||
Loans held for investment | 650,109 | 8,783 | 5.36 % | 570,702 | 6,630 | 4.61 % | 1,146 | 1,007 | 2,153 | ||||||||||||||||
Allowance for credit | (8,980) | - | 0.00 % | (8,474) | - | 0.00 % | - | - | - | ||||||||||||||||
Total | $ | 872,617 | $ | 11,086 | 5.04 % | $ | 879,198 | $ | 8,853 | 3.99 % | $ | 2,039 | $ | 194 | $ | 2,233 | |||||||||
Liabilities | |||||||||||||||||||||||||
Interest checking and | $ | 515,957 | $ | 2,655 | 2.04 % | $ | 497,430 | $ | 515 | 0.41 % | $ | 1,850 | $ | 290 | $ | 2,140 | |||||||||
Savings | 43,957 | 12 | 0.11 % | 51,338 | 5 | 0.04 % | 8 | (1) | 7 | ||||||||||||||||
Time deposits | 61,909 | 296 | 1.90 % | 62,967 | 80 | 0.51 % | 219 | (3) | 216 | ||||||||||||||||
Short-term borrowings | - | - | 0.00 % | 1,046 | 3 | 1.14 % | (4) | 1 | (3) | ||||||||||||||||
Subordinated debentures | 15,000 | 263 | 6.95 % | 15,000 | 143 | 3.80 % | 120 | - | 120 | ||||||||||||||||
Total | $ | 636,825 | $ | 3,226 | 2.01 % | $ | 627,781 | $ | 746 | 0.47 % | $ | 2,193 | $ | 287 | $ | 2,480 | |||||||||
Net Interest Income | $ | 7,860 | $ | 8,107 | |||||||||||||||||||||
Net Interest Spread | 3.03 % | 3.52 % | |||||||||||||||||||||||
Net Interest Margin | 3.57 % | 3.66 % |
AVERAGE BALANCE, | For the Nine Months Ended September 30, 2023 | For the Nine Months Ended September 30, 2022 | Nine Month Comparison | ||||||||||||||||||||||
(dollars in thousands) | Average | Interest | Average | Average | Interest | Average | Change Due to | ||||||||||||||||||
Rate | Volume | Total | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Interest-bearing due from | $ | 36,351 | $ | 1,353 | 4.98 % | $ | 127,782 | $ | 696 | 0.73 % | $ | 1,472 | $ | (815) | $ | 657 | |||||||||
FRB and FHLB stock | 2,984 | 108 | 4.84 % | 3,080 | 110 | 4.77 % | (1) | (1) | (2) | ||||||||||||||||
Debt securities available | 169,259 | 4,060 | 3.21 % | 197,384 | 3,191 | 2.16 % | 1,349 | (480) | 869 | ||||||||||||||||
Loans held for sale- | 35,724 | 1,514 | 5.67 % | 55,091 | 1,554 | 3.77 % | 619 | (659) | (40) | ||||||||||||||||
Loans held for investment | 634,460 | 24,754 | 5.22 % | 548,769 | 18,396 | 4.48 % | 3,246 | 3,112 | 6,358 | ||||||||||||||||
Allowance for credit | (8,890) | - | 0.00 % | (8,665) | - | 0.00 % | - | - | - | ||||||||||||||||
Total | $ | 869,888 | $ | 31,789 | 4.88 % | $ | 923,441 | $ | 23,947 | 3.47 % | $ | 6,685 | $ | 1,157 | $ | 7,842 | |||||||||
Liabilities | |||||||||||||||||||||||||
Interest checking and | $ | 507,211 | $ | 6,135 | 1.62 % | $ | 535,645 | $ | 1,008 | 0.25 % | $ | 5,090 | $ | 37 | $ | 5,127 | |||||||||
Savings | 48,306 | 35 | 0.10 % | 51,173 | 15 | 0.04 % | 21 | (1) | 20 | ||||||||||||||||
Time deposits | 56,620 | 526 | 1.24 % | 67,334 | 235 | 0.47 % | 331 | (40) | 291 | ||||||||||||||||
Short-term borrowings | 333 | 6 | 2.41 % | 595 | 4 | 0.90 % | 2 | - | 2 | ||||||||||||||||
Subordinated debentures | 15,000 | 743 | 6.62 % | 15,001 | 291 | 2.60 % | 452 | - | 452 | ||||||||||||||||
Total | $ | 627,470 | $ | 7,445 | 1.59 % | $ | 669,748 | $ | 1,553 | 0.31 % | $ | 5,896 | $ | (4) | $ | 5,892 | |||||||||
Net Interest Income | $ | 24,344 | $ | 22,394 | |||||||||||||||||||||
Net Interest Spread | 3.29 % | 3.16 % | |||||||||||||||||||||||
Net Interest Margin | 3.74 % | 3.24 % |
BNCCORP, INC. | ||||||||||||
CONSOLIDATED FINANCIAL DATA | ||||||||||||
(Unaudited) | ||||||||||||
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||
OTHER AVERAGE BALANCES | ||||||||||||
Total assets | 926,655 | 935,843 | 924,690 | 979,500 | ||||||||
Core deposits | 801,292 | 809,072 | 799,428 | 846,911 | ||||||||
Total equity | 103,762 | 102,919 | 103,776 | 107,619 | ||||||||
KEY RATIOS | ||||||||||||
Return on average common stockholders' equity (a) | 5.17 % | 5.55 % | 4.14 % | 6.03 % | ||||||||
Return on average assets (b) | 0.65 % | 0.66 % | 0.51 % | 0.69 % | ||||||||
Efficiency ratio (Consolidated) | 75.50 % | 82.71 % | 83.90 % | 83.81 % | ||||||||
Efficiency ratio (Bank) | 72.28 % | 81.22 % | 80.61 % | 82.02 % |
(a) | Return on average common stockholders' equity is calculated by using net income as the numerator and average common equity (less accumulated other comprehensive income (loss)) 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) | September 30, 2023 | December 31, 2022 | September 30, 2022 | ||||||
ASSET QUALITY | |||||||||
Loans 90 days or more delinquent and accruing interest | $ | - | $ | 1 | $ | 6 | |||
Non-accrual loans | 1,405 | 1,354 | 1,313 | ||||||
Total nonperforming loans | $ | 1,405 | $ | 1,355 | $ | 1,319 | |||
Repossessed assets, net | 11 | 64 | - | ||||||
Total nonperforming assets | $ | 1,416 | $ | 1,419 | $ | 1,319 | |||
Allowance for credit losses | $ | 9,146 | $ | 8,831 | $ | 8,617 | |||
Troubled debt restructured loans (1) | $ | 926 | $ | 952 | |||||
Ratio of total nonperforming loans to total loans | 0.21 % | 0.21 % | 0.20 % | ||||||
Ratio of total nonperforming assets to total assets | 0.16 % | 0.15 % | 0.14 % | ||||||
Ratio of nonperforming loans to total assets | 0.15 % | 0.14 % | 0.14 % | ||||||
Ratio of allowance for credit losses to loans held for | 1.38 % | 1.43 % | 1.46 % | ||||||
Ratio of allowance for credit losses to total loans | 1.38 % | 1.35 % | 1.33 % | ||||||
Ratio of allowance for credit losses to nonperforming loans | 651 % | 652 % | 653 % |
(1) | The Company adopted ASU 2022-02 as of January 1, 2023, thereby removing disclosure requirements for trouble debt restructured loans. Historical comparative period information is being provided for reference. |
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||
Changes in Nonperforming Loans: | ||||||||||||
Balance, beginning of period | $ | 1,434 | $ | 1,406 | $ | 1,355 | $ | 1,673 | ||||
Additions to nonperforming | 25 | 29 | 357 | 102 | ||||||||
Charge-offs | (8) | (15) | (95) | (62) | ||||||||
Reclassified back to performing | - | - | (1) | (165) | ||||||||
Principal payments received | (46) | (101) | (165) | (214) | ||||||||
Transferred to repossessed assets | - | - | (46) | (15) | ||||||||
Balance, end of period | $ | 1,405 | $ | 1,319 | $ | 1,405 | $ | 1,319 |
BNCCORP, INC. | ||||||||||||
CONSOLIDATED FINANCIAL DATA | ||||||||||||
(Unaudited) | ||||||||||||
For the Quarter Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||
Changes in Allowance for Credit Losses: (1) | ||||||||||||
Balance, beginning of period | $ | 9,212 | $ | 8,487 | $ | 8,831 | $ | 9,080 | ||||
Cumulative effect of CECL adoption | - | - | 125 | - | ||||||||
Provision (credit) | 230 | 150 | 635 | (400) | ||||||||
Loans charged off | (103) | (25) | (268) | (99) | ||||||||
Loan recoveries | 4 | 5 | 20 | 36 | ||||||||
Balance, end of period | $ | 9,343 | $ | 8,617 | $ | 9,343 | $ | 8,617 | ||||
Components: | ||||||||||||
Allowance for loan losses | $ | 9,146 | $ | 8,617 | $ | 9,146 | $ | 8,617 | ||||
Allowance for unfunded commitments | $ | 197 | $ | - | $ | 197 | $ | - | ||||
Ratio of net charge-offs to average total loans | (0.015) % | (0.003) % | (0.037) % | (0.010) % | ||||||||
Ratio of net charge-offs to average total loans, annualized | (0.059) % | (0.013) % | (0.049) % | (0.014) % |
(1) | The Company adopted ASU 2016-13 as of January 1, 2023. The prior year amounts presented are calculated under the prior accounting standard. |
As of | |||||||||
(In thousands) | September 30, 2023 | December 31, 2022 | September 30, 2022 | ||||||
CREDIT CONCENTRATIONS | |||||||||
Commercial and industrial | $ | 61,295 | $ | 61,784 | $ | 45,043 | |||
Construction | 18,582 | 13,930 | 10,953 | ||||||
Agricultural | 33,272 | 30,799 | 33,248 | ||||||
Land and land development | 6,505 | 6,524 | 7,090 | ||||||
Owner-occupied commercial real estate | 32,102 | 34,683 | 33,171 | ||||||
Commercial real estate | 123,673 | 114,937 | 115,485 | ||||||
Small business administration | 17,660 | 18,671 | 18,161 | ||||||
Consumer | 88,863 | 81,026 | 81,622 | ||||||
Subtotal gross loans held for investment | $ | 381,952 | $ | 362,354 | $ | 344,773 | |||
Consolidated | |||||||||
Commercial and industrial | $ | 93,702 | $ | 96,389 | $ | 81,155 | |||
Construction | 43,612 | 24,690 | 20,319 | ||||||
Agricultural | 35,795 | 30,850 | 33,307 | ||||||
Land and land development | 8,129 | 10,758 | 11,341 | ||||||
Owner-occupied commercial real estate | 80,902 | 78,190 | 73,776 | ||||||
Commercial real estate | 231,251 | 230,243 | 228,257 | ||||||
Small business administration | 59,905 | 48,638 | 45,993 | ||||||
Consumer | 110,572 | 95,891 | 96,793 | ||||||
Total gross loans held for investment | $ | 663,868 | $ | 615,649 | $ | 590,941 |
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SOURCE BNCCORP, INC.
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