BNCCORP, Inc. (BNCC)

[Enterprising Investor]

New 52-week high.

[56Chevy]

BNCC hits new 52-week high (6/13/14)

Marker: (mid-day)
Bnccorp, Inc. (QB) (BNCC)
$ 16.00 up 0.30 (1.91%)
Volume: 5,355

[56Chevy]

Net income for the 2014 first quarter was $1.792 million, or $0.41 per diluted share.

Banks in the Midwest region of the country have an average PE ratio of 14.25.

.41 X 4 = $1.64
$1.64 X standard PE ratio of 10 = $16.40
$1.64 X average PE ratio for banks in the midwest is 14.25 = $23.37
$1.64 X average PE ratio for banks nationally with $1B to $5B in assets is 15.21 = $24.94

BNCC remains to be a bona fide bargain among its peers...and very
few of those have a first class seat in the Bakken oil patch!

Marker:
Bnccorp, Inc. (QB) (BNCC)
$15.60 up 0.1 (0.65%)
Volume: 1,992

[56Chevy]

Banking financial reports don't get any better!

These guys have a "problem"... but its a problem every other banker in the country is green with envy over.

BNCC is literally 'rolling in dough'...it needs to be put to work.

But where, when and why.

Any thoughts on that?

Marker:
Bnccorp, Inc. (QB) (BNCC)
$15.50 0.0 (0.00%)
Volume: 9,400

[Enterprising Investor]

BNCC hits new 52-week high (4/25/14)

BNCCORP, Inc. (BNCC)
15.00 +1.10(7.91%)
Prev Close: 13.90
Open: 14.00
Day's Range: 14.00 - 15.00
52wk Range: 10.70 - 15.00
Volume: 12,722
Avg Vol (3m): 1,258
Market Cap: 50.61M
P/E (ttm): 7.11
EPS (ttm): 2.11

[Enterprising Investor]

BNCCORP, INC. Reports Growth Surge In Loans And Deposits And First Quarter Net Income Of $1.8 Million, Or $0.41 Per Diluted Share (4/24/14)

2014 First Quarter

- Deposits rose sharply by $79.6 million in the first quarter compared to December 31, 2013

- Total loans held for investment increased $41.2 million, or 14.6%, from March 31, 2013

- Private investors acquire BNC's preferred stock from United States Treasury

- Net interest income increases by $1.6 million, or 33.9%, compared to 2013 first quarter

- Non-interest income decreases due to lower mortgage banking revenues compared to 2013 first quarter

- Non-interest expenses decrease by $1.3 million, or 13.9%, compared to 2013 first quarter

- Book value per common share is $15.45 at March 31, 2014 compared to $14.45 at December 31, 2013

BISMARCK, N.D., April 24, 2014 /PRNewswire/ -- BNCCORP, INC. (BNC or the Company) (OTCQB Markets: BNCC), which operates community banking and wealth management businesses in North Dakota, Arizona and Minnesota, and has mortgage banking offices in Illinois, Kansas, Nebraska, Minnesota, Arizona and North Dakota, today reported financial results for the first quarter ended March 31, 2014.

Net income for the 2014 first quarter was $1.792 million, or $0.41 per diluted share. This compared to net income of $3.785 million, or $1.00 per diluted share, in the first quarter of 2013. Results for the first quarter of 2014 reflect lower non-interest income, which is impacted by lower mortgage banking revenues due to rising interest rates. This was partially offset by significantly higher net interest income and lower non-interest expenses when compared to the prior year first quarter. A reversal of provisions for credit losses increased pre-tax earnings by $200 thousand in the first quarter of 2014, compared to a provision of $700 thousand in the first quarter of 2013. Deposits surged in the first quarter, increasing by $79.6 million, or 11.0%, in the first quarter. While this surge fueled $85 million of asset growth, we anticipate clients will redeploy approximately $40 million of these funds in the second quarter of 2014. Nonperforming assets decreased to $6.1 million, or 0.66% of total assets, at March 31, 2014, compared to $6.7 million, or 0.79% of total assets, at December 31, 2013, and $13.6 million, or 1.70% of total assets, at March 31, 2013.

Timothy J. Franz, BNCCORP President and Chief Executive Officer, said, "Growing our core bank is a key strategy and we successfully continued our momentum this quarter. Growth in total assets and deposits, combined with the improving net interest margin, demonstrates that we are executing. We were solidly profitable, despite the expected decrease in mortgage banking revenues due to the trend in interest rates. Our people are focused, the pipeline of business is strong and the North Dakota market remains robust. We look forward to capitalizing on these conditions as 2014 continues."

Mr. Franz continued, "We are pleased to report the U.S. Treasury auctioned its investment in our preferred stock issued pursuant to the TARP program in the first quarter of 2014, thus ending our participation in this program. American taxpayers profited from their investment in BNC as private investors paid a full price for our shares. The new owners of our preferred stock are sophisticated investors familiar with community banking. Their willingness to pay a full price can be viewed as a vote of confidence in our financial condition and prospects."

First Quarter Results

Net interest income for the first quarter of 2014 was $6.205 million, an increase of $1.572 million, or 33.9%, from $4.633 million in the same period of 2013. The net interest margin in the first quarter of 2014 increased to 3.20% compared to 2.61% in the same period of 2013. Interest income rose as the average balance of interest earning assets increased to $787.3 million from $720.4 million, or $66.9 million when compared to the first quarter of 2013. The average loans held for investment increased $37.0 million, or 13.0%, compared to the prior year first quarter. On average, loans held for sale decreased by $54.5 million when compared to the first quarter of 2013 due to lower mortgage banking activity. This lower balance was more than offset by the increase of $125.6 million in average investment securities. The yield on earning assets increased to 3.66% in the first quarter of 2014, compared to 3.18% in the first quarter of 2013.

Interest expense decreased despite exceptional growth in deposits, as we have been able to lower the rates paid on deposits. The cost of interest bearing liabilities declined to 0.57% in the current quarter, compared to 0.70% in the same period of 2013.

A reversal of provisions for loan losses increased pre-tax earnings by $200 thousand in the first quarter of 2014 compared to a provision for loan losses of $700 thousand in the first quarter of 2013. The reduction of the allowance for credit losses reflects stabilized risk in our loan portfolio, strong allowance coverage of nonperforming and classified loans, and net recoveries in the first quarter of 2014.

Non-interest income for the first quarter of 2014 was $4.284 million, a decrease of $7.040 million, or 62.2%, from $11.324 million in the first quarter of 2013. The decrease primarily relates to a decline in mortgage banking revenues, which aggregated $2.282 million, compared to $8.247 million in the first quarter of 2013. Mortgage banking revenues continue to be significantly impacted in 2014 by the increase in interest rates that began in 2013. The 2014 first quarter included gains on sales of SBA loans of $240 thousand, compared to $755 thousand in the same period of 2013. This decrease is primarily due to temporary delays and we anticipate a rebound of gains on sales of loans in the second quarter of 2014. Bank fees and service charges were $704 thousand in the first quarter of 2014, an increase of 14.1% compared to the first quarter of 2013. These fees continue to rise with the growth in our deposits and our success in gaining new accounts. Wealth management revenues increased by $62 thousand, or 19.0%, in the first quarter of 2014 compared to the same period in 2013 as our North Dakota customers are increasingly utilizing our wealth management services.

Non-interest expense for the first quarter of 2014 was $8.090 million, a decrease of $1.307 million, or 13.9%, from $9.397 million in the first quarter of 2013. This decrease primarily relates to lower mortgage banking volume.

In the first quarter of 2014, we recorded an income tax expense of $807 thousand. The effective tax rate was 31.05%. We recorded income tax expense of $2.075 million in the first quarter of 2013, which resulted in an effective tax rate of 35.41%. The 2014 rate reduction relates primarily to the impact of tax exempt investments made throughout 2013.

Net income available to common shareholders was $1.420 million, or $0.41 per diluted share, for the first quarter of 2014 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $372 thousand in the first quarter of 2014 and $324 thousand in the same period of 2013. The costs associated with $20.1 million of preferred stock increased in the first quarter of 2014 as the annual dividend rate increased to 9% from 5% in mid quarter. Net income available to common shareholders in the first quarter of 2013 was $3.461 million, or $1.00 per diluted share.

Assets, Liabilities and Equity

Total assets were $928.0 million at March 31, 2014, an increase of $84.9 million, or 10.1%, compared to $843.1 million at December 31, 2013. The increases in recent periods have been funded primarily by growing deposits in North Dakota as this region is experiencing robust economic conditions. As previously noted, we anticipate that approximately $40 million of client assets will be redeployed in the second quarter of 2014 and our balance sheet will downsize as these funds are deployed.

Loans held for investment, which aggregated $324.2 million at March 31, 2014, increased by $41.2 million, or 14.6%, since March 31, 2013. Loans held for sale have decreased by $5.5 million since December 31, 2013 as mortgage banking production has been reduced by the recent increase in interest rates.

Total deposits were $802.9 million at March 31, 2014, increasing by $79.6 million from 2013 year-end. Over recent years we have continued to witness growth in our North Dakota branches, particularly branches located near the Bakken Formation.

Trust assets under management or administration increased to $252.1 million at March 31, 2014, compared to $249.7 million at December 31, 2013 and $221.9 million at March 31, 2013. Our wealth management department is capturing wealth being created by the exceptionally strong economic conditions in North Dakota both in personal trust and pension plan services and bolstered by strong equity markets.

Capital

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

At March 31, 2014, BNCCORP's tier 1 leverage ratio was 11.28%, the tier 1 risk-based capital ratio was 22.48%, and the total risk-based capital ratio was 23.76%.

At March 31, 2014, BNCCORP's tangible common equity as a percent of assets was 5.61% compared to 5.79% at December 31, 2013. Common shareholder equity at March 31, 2014 was $52.1 million, and we had preferred stock and subordinated debentures outstanding which aggregated $43.5 million at March 31, 2014.

Book value per common share of the Company was $15.45 as of March 31, 2014, compared to $14.45 at December 31, 2013. Book value per common share, excluding accumulated other comprehensive income (loss), was $15.31 as of March 31, 2014, compared to $14.89 at December 31, 2013.

At March 31, 2014, BNC National Bank had a tier 1 leverage ratio of 10.21%, a tier 1 risk-based capital ratio of 20.65%, and a total risk-based capital ratio of 21.92%.

At March 31, 2014, tangible common equity of BNC National Bank was 9.36% of total Bank assets.

In July of 2013, the Federal Reserve issued new regulatory capital standards for community banks which incorporate some of the capital requirements addressed in the Basel III framework and begin to be effective January 1, 2015. We have estimated our regulatory capital ratios under the new Basel III framework and expect to be in compliance with these standards.

Asset Quality

Nonperforming assets were $6.1 million at March 31, 2014, down from $6.7 million at December 31, 2013 and $13.6 million at March 31, 2013. The ratio of total nonperforming assets to total assets was 0.66% at March 31, 2014 and 0.79% at December 31, 2013. There was no provision for other real estate costs in the first quarter of 2014 or 2013.

Nonperforming loans were $5.0 million at March 31, 2014, down from $5.6 million at December 31, 2013, and $10.3 million at March 31, 2013. The ratio of the allowance for credit losses to total nonperforming loans as of March 31, 2014 was 196%, compared to 175% at December 31, 2013, and 96% at March 31, 2013.

The allowance for credit losses was $9.9 million at March 31, 2014, compared to $9.8 million at December 31, 2013. The allowance for credit losses as a percentage of total loans at March 31, 2014 was 2.80%, compared to 2.81% at December 31, 2013. The allowance for credit losses as a percentage of loans and leases held for investment at March 31, 2014 was 3.04%, compared to 3.10% at December 31, 2013.

At March 31, 2014, BNCCORP had $12.2 million of classified loans, $5.0 million of loans on non-accrual and $1.1 million of other real estate owned. At December 31, 2013, the Company had $13.5 million of classified loans, $4.7 million of loans on non-accrual and $1.1 million of other real estate owned. At March 31, 2013, the Company had $13.8 million of classified loans, $10.2 million of loans on non-accrual and $3.3 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 North Dakota, Arizona and Minnesota from 14 locations. BNC also conducts mortgage banking from 15 offices in Illinois, Kansas, Nebraska, Minnesota, Arizona and North Dakota.

http://www.prnewswire.com/news-releases/bnccorp-inc-reports-growth-surge-in-loans-and-deposits-and-first-quarter-net-income-of-18-million-or-041-per-diluted-share-256608021.html

[56Chevy]

Treasury Department Announces $45.1 Million in Proceeds from Pricing of Auctions of Preferred Stock of Four Financial Institutions

3/7/2014

Auctions Part of Treasury’s Continued Efforts to Wind Down TARP’s Bank Programs

**Proceeds Deliver Additional Profit for Taxpayers on TARP’s Bank Programs

WASHINGTON – As part of the strategy it outlined for winding down its remaining Troubled Asset Relief Program (TARP) bank investments, the U.S. Department of the Treasury announced that it priced auctions of preferred stock (the “CPP Securities”) in the following four institutions at the following prices:

Issuer and Security

BNCCORP, Inc., Bismarck, ND

Fixed Rate Cumulative Perpetual Preferred Stock, Series A
Price per share: $1,001.08
Number of shares: 20,093
Aggregate Gross Proceeds: $20,114,700.44

Fixed Rate Cumulative Perpetual Preferred Stock, Series B
Price per share: $1,001.25
Number of shares: 1,005
Aggregate Gross Proceeds: $1,006,256.25

Total Borrowed(on Jan. 16, 2009): $20,093,000.00

Total Returned to the Treasury 2014: $21,120,956.69

http://www.treasury.gov/press-center/press-releases/Pages/jl2315.aspx

It's interesting to note that BNCC's TARP auction resulted in a full payment back to the Treasury. A high number of these auctions of late resulted in significant discounts to the amount owed. I suspect BNCC was deemed too healthy to qualify for any discount.

*We now know when ...and we now know how much... but we don't know "who".

==============================

Well whadayaknow...Uncle Sam made a buck...and it was off those much maligned evil bankers!

**TARP’s bank programs have already earned a significant profit for taxpayers. Including the expected proceeds from the transactions announced today, Treasury has now recovered more than $273 billion from TARP’s bank programs through repayments, dividends, interest, and other income – compared to the $245 billion initially invested.

[Enterprising Investor]

Missed it. Up to my eyeballs in change.

These auctions are always a good thing.

[vpagano]

EI have you seen this?

Treasury is auctioning BNCC TARP preferreds:

http://www.treasury.gov/press-center/press-releases/Pages/jl2299.aspx

[Enterprising Investor]

Traditional bank branches still have a place in rural America.

[Enterprising Investor]

BNCC continues to suffer from TARP Overhang Syndrome.

Net income available to common shareholders was $1.540 million, or $0.44 per diluted share, for the fourth quarter of 2013 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $339 thousand in the fourth quarter of 2013 and $373 thousand in the same period of 2012. The costs associated with $20.1 million of preferred stock will increase in the first quarter of 2014 when the rate of dividends increases to 9% from 5%. Net income available to common shareholders in the fourth quarter of 2012 was $4.608 million, or $1.34 per diluted share.

If there are any banks in American where still having TARP preferred stock outstanding makes good sense - even at a 9 percent dividend rate - BNCC is one.

Why?

BNCC continues to grow at a very healthy pace. Total assets grew by $72.3 million or 9.4 percent, while deposits jumped 73.6 million. Most of this growth relates primarily to North Dakota branches serving the Bakken Formation, where deposits have grown 60 percent from 2010 to 2013.

The faster a business grows, the more capital it will take to keep up. BNCC would most likely have to replace TARP preferred stock by issuing more common stock.

[Enterprising Investor]

BNCCORP, INC. Reports Fourth Quarter Net Income Of $1.9 Million, Or $0.44 Per Diluted Share (1/24/14)

2013 Fourth Quarter and Full Year Overview

- Net interest income increases by $1.4 million, or 29.0%, compared to 2012 fourth quarter

- Decrease in mortgage banking revenues partially offset by income on Small Business Investment Company (SBIC) investments

- Non-interest expenses decrease by $895 thousand, or 10.0% compared to 2012 fourth quarter

- Provision for credit losses is $0 for the third consecutive quarter

- Nonperforming assets decrease to $6.7 million, or 0.79% of total assets, compared to $15.6 million or 2.03% of assets at the end of 2012

- Full year return on assets is 1.07%

- Full year return on common equity is 15.15%

- Book value per common share is $14.45 at December 31, 2013

BISMARCK, N.D., Jan. 24, 2014 /PRNewswire/ -- BNCCORP, INC. (BNC or the Company) (OTCQB Markets: BNCC), which operates community banking and wealth management businesses in North Dakota, Arizona and Minnesota, and has mortgage banking offices in Illinois, Kansas, Nebraska, Missouri, Minnesota, Arizona and North Dakota, today reported financial results for the fourth quarter ended December 31, 2013.

Net income for the 2013 fourth quarter was $1.879 million, or $0.44 per diluted share. This compared to net income of $4.981 million, or $1.34 per diluted share, in the fourth quarter of 2012. Results for the fourth quarter of 2013 include lower non-interest income largely due to a decrease in mortgage banking revenues. This was partially offset by significantly higher net interest income, income on SBIC investments and lower non-interest expenses when compared to the prior year fourth quarter. The provisions for credit losses were $0 in the fourth quarters of 2013 and 2012 as credit quality improved. Nonperforming assets decreased to $6.7 million, or 0.79% of total assets, at December 31, 2013, compared to $15.6 million, or 2.03% of total assets, at December 31, 2012.

Timothy J. Franz, BNCCORP President and Chief Executive Officer, said, "Overall, we are satisfied with the fourth quarter earnings. Our recent focus on growing loans held for investment has led to rising net interest income, while mortgage banking revenues have been affected by the rise in market interest rates, as expected. Realized distributions on longer term investments contributed to the recent quarter's results. BNC's performance in 2013 also was highlighted by a continued sharp improvement in asset quality and a solid capital base to support future growth. While it will take time to achieve our loan growth and net interest income objectives, initial results are promising and we look forward to continuing the momentum in 2014."

Mr. Franz continued, "Results for the full year of 2013 represented a 1.07% return on assets and 15.15% return on common equity, which compare favorably to our peers. In 2014 mortgage banking revenues will be harder to generate. To increase revenues we are adding producers to our talented banking and mortgage banking teams and their efforts should benefit from the strong North Dakota economy. We will continue to work hard at building our core bank to achieve long term results for our shareholders and the communities we are fortunate to serve."

Fourth Quarter Results

Net interest income for the fourth quarter of 2013 was $6.013 million, an increase of $1.353 million, or 29.0%, from $4.660 million in the same period of 2012. Interest income rose as the average balance of interest earning assets increased by $101.9 million when compared to the fourth quarter of 2012. Importantly, the average loans held for investment increased $13.3 million, or 4.6%, compared to the prior year quarter as initiatives to grow loans are beginning to demonstrate results. On average, loans held for sale decreased by $51.2 million when compared to the fourth quarter of 2012. This lower balance was more than offset by the increase in investment securities. The yield on earning assets increased to 3.55% in the fourth quarter of 2013, compared to 3.46% in the fourth quarter of 2012. The fourth quarter 2013 yield on assets was aided by approximately $337 thousand when a previously nonaccrual loan became current as anticipated. The net interest margin for the fourth quarter increased to 3.07%, compared to 2.75% in the same period of 2012.

Interest expense decreased despite exceptional growth in deposits, as we have been able to lower the rates paid on deposits. The cost of interest bearing liabilities declined to 0.59% in the current quarter, compared to 0.89% in the same period of 2012.

The provision for loan losses was $0 in the fourth quarters of 2013 and 2012. The absence of provisions for credit losses reflects stabilized risk in our loan portfolio.

Non-interest income for the fourth quarter of 2013 was $4.608 million, a decrease of $5.054 million, or 52.3% from $9.662 million in the fourth quarter of 2012. The decrease primarily relates to a decline in mortgage banking revenues, which aggregated $1.931 million, compared to $8.231 million in the fourth quarter of 2012. Mortgage banking revenues have been significantly impacted in 2013 by the increase in interest rates. In the current quarter, investments in SBIC's generated revenue of $1.419 million. We invested in the SBIC's several years ago and one of the investments is beginning to make distributions from the sale of the underlying companies. While it is difficult to predict the timing, or amount of such distributions, we currently anticipate further distributions in future periods. The 2013 fourth quarter included gains on sales of SBA loans of $224 thousand, compared to $246 thousand in the same period of 2012. Bank fees and service charges were $686 thousand in the fourth quarter of 2013, a decrease of 7.0% compared to the fourth quarter of 2012, due to the receipt of a non-recurring fee in the fourth quarter 2012. Wealth management revenues increased by 11.3% in the fourth quarter of 2013 compared to the same period in 2012.

Non-interest expense for the fourth quarter of 2013 was $8.074 million, a decrease of $895 thousand, or 10.0%, from $8.969 million in the fourth quarter of 2012. This decrease primarily relates to certain mortgage banking costs and reduced compensation. As previously reported, we recently reduced our mortgage banking administrative workforce due to lower volume in this area.

In the fourth quarter of 2013, we recorded a tax expense of $668 thousand. The effective tax rate was 26.23%. This rate was adjusted downward this quarter primarily due to the impact of tax exempt investments. We recorded tax expense of $372 thousand in the fourth quarter of 2012, which resulted in an effective tax rate of 6.95%. The effective tax rate in 2012 was lower due to the reversal of the valuation allowance on deferred tax assets.

Net income available to common shareholders was $1.540 million, or $0.44 per diluted share, for the fourth quarter of 2013 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $339 thousand in the fourth quarter of 2013 and $373 thousand in the same period of 2012. The costs associated with $20.1 million of preferred stock will increase in the first quarter of 2014 when the rate of dividends increases to 9% from 5%. Net income available to common shareholders in the fourth quarter of 2012 was $4.608 million, or $1.34 per diluted share.

Year Ended December 31, 2013

Net interest income in 2013 was $19.845 million, an increase of $1.374 million, or 7.4%, from $18.471 million in 2012. We grew assets steadily in 2013, as the average balance of earning assets was approximately $747.7 million, compared to approximately $648.4 million in the prior year. The net interest margin in 2013 decreased to 2.65%, compared to 2.85% in 2012. The yield on earning assets was 3.17% in 2013, compared to 3.70% in 2012. The cost of interest bearing liabilities was 0.63% in 2013, compared to 1.07% in 2012.

The provision for credit losses was $700 thousand in 2013, compared to $100 thousand in 2012. Nonperforming loans decreased $4.9 million to $5.6 million at December 31, 2013 from $10.5 million at December 31, 2012. Nonperforming assets decreased to $6.7 million at December 31, 2013 from $15.6 million at December 31, 2012. The majority of this decrease relates to the transfer of one lending relationship back to performing status in the fourth quarter of 2013.

Non-interest income in 2013 was $29.285 million compared to $42.938 million in 2012. In 2013, the Company recognized a life insurance benefit of $1.055 million while an insurance settlement of $7.5 million was recognized in 2012. Excluding the insurance amounts, non-interest income was $28.230 million in 2013 compared to $35.438 million in 2012, a decrease of $7.208 million, or 20.3%. Non-interest income was significantly influenced by mortgage banking revenues due to rising interest rates in 2013, which aggregated $19.344 million, a decrease of $10.314 million, or 34.8%, compared to 2012. Gains on sales of investments were higher in 2013 aggregating $1.247 million, compared to $279 thousand in the same period of 2012. Gains on sales of SBA loans were $1.632 million in 2013, compared to $1.110 million in 2012. Gains on sales of loans and investments can vary from period to period. We also experienced an increase in bank fees and service charges of $183 thousand, or 7.3% in 2013, reflecting growth in deposits and new accounts. Non-interest income in 2013 included $1.587 million of revenues related to SBIC investments.

Non-interest expense was $35.981 million in 2013, compared to $39.965 million in the same period of 2012. Non-interest expense in 2013 included an impairment charge of $1.5 million, relating to the consolidation of our Minnesota operations, while 2012 included $2.5 million of non-recurring legal expenses associated with the insurance settlement received in the period. When these expenses are excluded, non-interest expense was $34.481 million in 2013 compared to $37.465 million in 2012 a decrease of $2.984 million or 8.0%. The valuation adjustments on other real estate were $14 thousand in 2013 compared to $1.700 million in 2012. In early 2013, we experienced higher operating costs when mortgage banking revenues were higher relative to early 2012. As 2013 proceeded, mortgage banking costs have decreased when compared to 2012.

During 2013, we recorded tax expense of $3.822 million which resulted in an effective tax rate of 30.70%. A tax benefit of $5.280 million was recognized in 2012, which resulted in an effective tax rate of (24.74%). The provision for income taxes was lower in 2012 because of the reversal of the valuation allowance on deferred tax assets.

Net income available to common shareholders was $7.307 million, or $2.11 per diluted share, in 2013 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $1.320 million in 2013 and $1.462 million in the same period of 2012. Net income available to common shareholders in 2012 was $25.162 million, or $7.52 per diluted share. The cost associated with $20.1 million of preferred stock will increase in the first quarter of 2014 when the rate of dividends increases to 9% from 5%. Net income available to common shareholders in the fourth quarter of 2012 was $4.608 million, or $1.34 per diluted share.

Assets, Liabilities and Equity

Total assets were $843.1 million at December 31, 2013, an increase of $72.3 million, or 9.4%, compared to $770.8 million at December 31, 2012. The increases in recent periods have been funded primarily by growing deposits in North Dakota as this region is experiencing robust economic conditions.

Loans held for investment, which aggregated $317.9 million at December 31, 2013, increased by $28.5 million since December 31, 2012. Actions taken to increase our loans held for investment are beginning to demonstrate results. Loans held for sale have decreased by $62.2 million since December 31, 2012 as mortgage banking production has been reduced by the recent increase in interest rates.

Total deposits were $723.2 million at December 31, 2013, increasing by $73.6 million from 2012 year-end. This increase relates primarily to growth in our North Dakota branches. Over recent years we have continued to witness growth in our rural branches located near the Bakken Formation. The table below shows changes since 2010.


[Click on link to see table and remainder of press release]

http://www.prnewswire.com/news-releases/bnccorp-inc-reports-fourth-quarter-net-income-of-19-million-or-044-per-diluted-share-241798421.html

[56Chevy]

10 things disappearing from America

The country is evolving at a rapid pace, and that means some aspects of life that our parents and grandparents counted on are getting cast aside.

<go to #9 out of 12>

Traditional bank branches

Do you grouse about the five minutes you have to wait in line at the bank to make a teller transaction? Well, technology is making it so that you increasingly don't -- but that's taking its toll on traditional branches and the workers who staff them.

According to financial researcher SNL Financial, U.S. bank branches dropped by 390 during the third quarter of this year -- about the same number eliminated in the second quarter. Only two states -- Iowa and Nebraska -- added branches.

Meanwhile, banks including Bank of America (BAC), Wells Fargo (WFC) and PNC Financial (PNC) are experimenting with smaller "express" branches utilizing video technology and smaller in-house staffs to maintain a physical presence.

The trend comes as more Americans are turning to mobile forms of banking, using smartphone cameras to deposit checks and relying on various online services to manage their money. According to Accenture, roughly 32 percent of American banking customers "use mobile banking at least once a month."

http://money.msn.com/investing/10-things-disappearing-from-america

*For FYI industry trend reading only. Not meant as a comment on BNCC or any of the banks we invest in directly.

[56Chevy]

I keep looking towards the sky to see if favorable winds are blowing to fill our sails in 2014 ...expecting a little more speed when they do... but its easy to forget below the surface we're dragging a mighty hefty anchor known as TARP.

TARP loan goes to 9% in 3 short weeks ":~O

[Enterprising Investor]

Mortgage banking stopped being a "cash cow" in May.

However, average rates on fixed mortgages dropped last week to their lowest level in four months. Freddie Mac reported the average rate on a 30-year loan fell to 4.13 percent, down from 4.28 the previous week. A 15-year fixed loan fell to 3.24 percent. Both averages are the lowest since June 20.

Mortgage rates follow the 10-year Treasury note. The 10-year traded at 2.50 percent last Wednesday, meaning the spread is about 160 basis points for a 30-year mortgage loan.

Rates have been dropping since August, when the Fed realized it could not slow its $85 billion in bond purchases. Hiring slowdowns will force the Fed to continue its stimulus into next year.

New data is due later today.

[vpagano]

Lots of noise this quarter and a semi-transitional one (sadly no TARP news), have to dig further into this but one must obviously normalize the data. Focusing on ND is a smart move as asset growth has been strong, 17% annually is huge.

Throw rocks at this thinking, it's very back of envelope:

.487 net income
(1.055) life insurance benefit
.3 quarterly saving from Minnesota closings (1.2 / 4)
1.5 impairment charge on real estate sold

1.23 MM / 3.34 MM shares outstanding = $.35 per share

$.35/share x 4 = $1.42 annualized

$13.30 current price / $1.42 = 9.4x earnings multiple

Couple that w/ BV = $13.30 / $14.75 = 90%BV for 17% asset growth

Pinched NIM's are tough, but that asset growth is a positive.

-Pagz

[norweger1979]

BNCCORP, INC. Reports 2013 Third Quarter Net Income Of $487 Thousand, Or $0.05 Per Diluted Share

BV up to $14.75

Net income for the 2013 third quarter was $487 thousand, or $0.05 per diluted share. This compared to net income of $15.045 million, or $4.41 per diluted share, in the third quarter of 2012. Major factors contributing to the earnings decrease (as further described below) included the recent impact of higher interest rates on mortgage banking revenues, an impairment charge in the latest quarter related to a strategic decision to consolidate operations, and a sizeable insurance settlement in the year-ago period.

The third quarter of 2013 reflects lower net interest income which was impacted by lower interest rates on most earning assets; lower non-interest income, which includes insurance receipts in 2013 and 2012, as mortgage banking revenues declined due to the recent rapid increase in interest rates; and significantly lower non-interest expenses, which includes impairment charges and non-recurring legal costs in 2013 and 2012, respectively, as operating costs were trimmed when revenues declined. The provisions for credit losses were $0 in the third quarters of 2013 and 2012. Credit quality improved as nonperforming assets decreased to $12.3 million or 1.49% of total assets at September 30, 2013, compared to $15.6 million at December 31, 2012. In the third quarter of 2013 a tax benefit was recorded due to a change in our effective tax rate, primarily relating to the recent impairment charge, while the 2012 third quarter included a large tax benefit due to the reversal of the valuation allowance on deferred tax assets.

Timothy J. Franz, new BNCCORP President and Chief Executive Officer, said, "We had a very eventful quarter. Foremost was the unexpected passing of co-founder and CEO Greg Cleveland, who is deeply missed by all of us. Mr. Cleveland was one of a kind in terms of his vision, larger than life personality and honorable character. Employees, customers and shareholders of BNC will benefit from his legacy as an exceptional business person for many years to come, and we honor Greg by continuing to manage BNC with a commitment to service, prudent growth and integrity."

Mr. Franz continued, "Results for the 2013 third quarter reflected an increase in interest rates, which impacted mortgage banking revenues in particular. While the effect of the higher rates was expected, we could not anticipate the timing or extent of the impact. When mortgage banking revenues contracted this quarter, we moved quickly to reduce our mortgage banking operating costs. The benefits of these decisions will be seen in future periods. In order to further control operating costs, we also consolidated operations in Minnesota this quarter and recognized the cost of contraction with an impairment charge. Throughout these events our employees performed admirably. As a result, we grew loans held for investment, increased deposits, invested opportunistically and increased book value per share. Our shareholders and the communities we serve are the fortunate beneficiaries of our team's efforts."

Third Quarter Results

Net interest income for the third quarter of 2013 was $4.616 million, a decrease of $151 thousand, or 3.2%, from $4.767 million in the same period of 2012. Interest income decreased due to lower interest rates on most assets as the yield on earning assets decreased to 2.94% in the third quarter of 2013, compared to 3.71% in the third quarter of 2012. The impact of lower rates was partially offset by increases in total average earning assets, which were $750.3 million in the third quarter of 2013 compared to $653.8 million in the same quarter of 2012. We have increased the balance of investment securities by $104.8 million and loans held for investment by $5.4 million since the beginning of the year. In the third quarter of 2013 the Company deployed $97 million of cash to invest in securities, to take advantage of interest rates higher than those available in previous periods. On average, loans held for sale decreased by $28.5 million when compared to the third quarter of 2012.

Interest expense decreased despite growth in deposits, as we have been able to lower the rates paid on deposits. The cost of interest bearing liabilities declined to 0.61% in the current quarter, compared to 1.02% in the same period of 2012. The net interest margin for the third quarter decreased to 2.44%, compared to 2.90% in the same period of 2012.

The provision for loan losses was $0 in the third quarters of 2013 and 2012. The absence of provisions for credit losses reflects stabilized risk in our loan portfolio.

Non-interest income for the third quarter of 2013 was $5.001 million compared to $16.826 million in the third quarter of 2012. In the third quarter of 2013 the Company recognized a life insurance benefit of $1.055 million while an insurance settlement of $7.5 million was recognized in the third quarter of 2012. Excluding the insurance amounts, non-interest income was $3.946 million in the third quarter of 2013 compared to $9.326 million in 2012, a decrease of $5.380 million, or 57.7%. The major factor in this decrease was a decline in 2013 third quarter mortgage banking revenues, which aggregated $2.422 million, compared to $7.787 million in the third quarter of 2012. Mortgage banking revenues have been significantly impacted in 2013 by the increase in interest rates. In response to lower revenues, the Company reduced operations personnel in mortgage banking by more than 20 positions, which is estimated to reduce future compensation by approximately $1.2 million annually. There were $37 thousand of gains on sales of investment securities during the recent quarter, compared to $181 thousand in the third quarter of 2012. The opportunity to sell assets at attractive prices can vary significantly from period to period based on market conditions. The 2013 third quarter included gains on sales of SBA loans of $301 thousand, compared to $245 thousand in the same period of 2012. While the secondary market for SBA loans is currently acquisitive, the recent shut down of federal government operations has prevented us from selling loans early in the fourth quarter of 2013 which may impact earnings as the year ends. Bank fees and service charges were $698 thousand in the third quarter of 2013, an increase of 11.5% compared to the third quarter of 2012. These fees are growing as we continue to grow deposits and open new accounts. Wealth management revenues increased by 13.5% in the third quarter of 2013 compared to the same period in 2012.

Non-interest expense for the third quarter of 2013 was $9.451 million, compared to $12.303 million in the third quarter of 2012. Non-interest expense in the third quarter of 2013 included an impairment charge of $1.5 million while the same period in 2012 included $2.5 million of legal expenses associated with the insurance settlement received in the period. When these expenses are excluded, non-interest expense declined to $7.951 million in 2013, compared to $9.803 million in 2012, a decrease of $1.852 million, or 18.9%. This decrease primarily relates to certain mortgage banking costs and reduced incentive costs for producers. As economic conditions and organic growth in Minnesota is limited when compared to North Dakota, we consolidated all Minnesota operations to one location to reduce operating costs and decided to sell a branch building that was underutilized. This resulted in an impairment charge of $1.5 million in the third quarter to reflect the fair market value of the property.

In the third quarter of 2013, we recorded a tax benefit of $321 thousand. A tax benefit of $5.755 million was recognized during the third quarter of 2012 primarily related to the reversal of the valuation allowance on deferred tax assets.

Net income available to common shareholders was $157 thousand, or $0.05 per diluted share, for the third quarter of 2013 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $330 thousand in the third quarter of 2013 and $369 thousand in the same period of 2012. Net income available to common shareholders in the third quarter of 2012 was $14.676 million, or $4.41 per diluted share.

Nine Months Ended September 30, 2013

Net interest income for the nine month period ended September 30, 2013 was $13.832 million, an increase of $21 thousand or 0.2%, from $13.811 million in the same period of 2012. We grew assets in the first nine months of 2013, as the average balance of earning assets was approximately $738.3 million, compared to approximately $639.8 million in the same period of the prior year. The net interest margin in the recent nine-month period decreased to 2.50%, compared to 2.88% in the same period of 2012. The yield on earning assets was 3.04% in the nine month period ended September 30, 2013, compared to 3.78% in the same period of 2012. The cost of interest bearing liabilities was 0.65% in the first nine months of 2013, compared to 1.13% in the first nine months of 2012.

The provision for credit losses was $700 thousand in the first nine months of 2013, compared to $100 thousand in the first nine months of 2012. Nonperforming loans decreased $383 thousand to $10.1 million at September 30, 2013 from $10.5 million at December 31, 2012. BNC has made positive progress relating to one of our non-performing loan relationships which is recorded at $5.8 million. We anticipate that this loan will return to accrual status in the fourth quarter of 2013.

Non-interest income for the first nine months of 2013 was $24.677 million compared to $33.276 million in the same period of 2012. In 2013, the Company recognized a life insurance benefit of $1.055 million while an insurance settlement of $7.5 million was recognized in 2012. Excluding the insurance amounts, non-interest income was $23.622 million in the first nine months of 2013 compared to $25.776 million in same period of 2012, a decrease of $2.154 million, or 8.4%. Non-interest income was significantly influenced by mortgage banking revenues in the first nine months of 2013, which aggregated $17.413 million, a decrease of $4.014 million, or 18.7%, compared to the first nine months of 2012. These revenues declined as interest rates rose in 2013. As noted above, we recently reduced our mortgage banking workforce due to lower revenues in this area. Gains on sales of investments were higher in the first nine months of 2013 aggregating $1.247 million, compared to $279 thousand in the same period of 2012. Gains on sales of SBA loans were $1.408 million in the first nine months of 2013, compared to $864 thousand in the same period of 2012. We also experienced an increase in bank fees and service charges of $235 thousand, or 13.4% in the first nine months of 2013, reflecting growth in deposits and new accounts.

Non-interest expense was $27.907 million in the first nine months of 2013, compared to $30.996 million in the same period of 2012. Non-interest expense in 2013 included an impairment charge of $1.5 million while the same period in 2012 included $2.5 million of non-recurring legal expenses associated with the insurance settlement received in the period. When these expenses are excluded, non-interest expense was $26.407 million in 2013 compared to $28.496 million in 2012 a decrease of $2.089 million or 7.3%. The valuation adjustments on foreclosed assets were $40 thousand in the first nine months of 2013 compared to $1.700 million in the first nine months of 2012. In early 2013 we experienced higher operating costs as mortgage banking revenues were higher relative to early 2012. As 2013 proceeded, mortgage banking costs have decreased when compared to the same period of 2012.

During the nine month period ended September 30, 2013, we recorded tax expense of $3.154 million which resulted in an effective tax rate of 31.85%. A tax benefit of $5.652 million was recognized during the nine month period ended September 30, 2012. The provision for income taxes was lower in 2012 because of the reversal of the valuation allowance on deferred tax assets.

Net income available to common shareholders was $5.767 million, or $1.66 per diluted share, for the nine months ended September 30, 2013 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $981 thousand in the first nine months of 2013 and $1.089 million in the same period of 2012. Net income available to common shareholders for the nine months ended September 30, 2012 was $20.554 million, or $6.21 per diluted share.

Assets, Liabilities and Equity

Total assets were $829.2 million at September 30, 2013, an increase of $58.4 million, or 7.6%, compared to $770.8 million at December 31, 2012 and an increase of $86.8 million, or 11.7%, since September 30, 2012. The increases in recent periods have been funded primarily by growing deposits in North Dakota as this region is experiencing robust economic conditions. Accumulated other comprehensive income was an unrealized gain of $363 thousand at September 30, 2013, compared to a net unrealized loss of $1.1 million as of June 30, 2013. Investment securities increased by $62.6 million since June 30, 2013 as we deployed cash reserves early in the third quarter when interest rates increased relative to earlier periods.

Loans held for investment increased by $13.4 million since June 30, 2013 and $5.4 million versus December 31, 2012. We have implemented measures to increase our loans held for investment portfolio with the objective of achieving loan growth (in North Dakota, our loans held for investment grew $23.2 million since September 30, 2012). Loans held for sale have decreased by $60.8 million since December 31, 2012 as production was reduced by the recent increase in interest rates.

Total deposits were $706.5 million at September 30, 2013, increasing by $56.9 million from 2012 year-end, and increasing by $83.5 million, or 13.4% since September 30, 2012. This increase relates primarily to growth in our North Dakota branches. In recent years we have observed that deposit growth can be seasonal as customers utilize their cash in warmer months.

Over recent years we have continued to witness growth in our rural branches located near the Bakken Formation.

Book value per common share was $14.75 as of September 30, 2013, compared to $14.35 as of June 30, 2013, $14.49 at December 31, 2012 and $13.60 at September 30, 2012.

At September 30, 2013, tangible common equity of BNC National Bank was 10.55% of total Bank assets.

Trust assets under management or administration increased to $256.2 million at September 30, 2013, compared to $211.5 million at December 31, 2012 as this department is capturing wealth being created by the exceptionally strong economic conditions in North Dakota.

Capital

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

At September 30, 2013, BNCCORP's tier 1 leverage ratio was 10.99%, the tier 1 risk-based capital ratio was 22.60%, and the total risk-based capital ratio was 24.18%.

At September 30, 2013, BNC National Bank had a tier 1 leverage ratio of 10.70%, a tier 1 risk-based capital ratio of 22.17%, and a total risk-based capital ratio of 23.43%.

At September 30, 2013, BNCCORP's tangible common equity as a percent of assets was 5.92% compared to 6.21% at December 31, 2012 and 6.06% at September 30, 2012. Common shareholder equity at September 30, 2013 was $49.0 million and we had preferred stock and subordinated debentures outstanding which aggregated $43.5 million at September 30, 2013.

In July of 2013, the Federal Reserve issued new regulatory capital standards for community banks which incorporate some of the capital requirements addressed in the Basel III framework and begin to be effective January 1, 2015. Although we believe we are compliant with the fully phased in standards, we have not completed our assessment of the proposed standards. The Company routinely evaluates the need to raise capital to comply with regulatory capital standards and for other corporate purposes. In addition to the new capital standards the regulatory environment for banking entities is increasingly complicated and the cost of complying with regulations will impact earnings for the foreseeable future.

Asset Quality

In recent years, 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 reduce credit risk.

Nonperforming assets were $12.3 million at September 30, 2013, down from $13.1 at June 30, 2013 and $15.6 million at December 31, 2012. The ratio of total nonperforming assets to total assets was 1.49% at September 30, 2013 and 2.03% at December 31, 2012. The provision for credit losses and other real estate costs was $40 thousand in the third quarter of 2013 and $0 in the third quarter of 2012.

Nonperforming loans were $10.1 million at September 30, 2013 down from $10.5 million at December 31, 2012. As noted earlier, we expect nonperforming loans to decrease by $5.8 million early in the fourth quarter of 2013. The ratio of the allowance for credit losses to total nonperforming loans as of September 30, 2013 was 98% compared to 96% at December 31, 2012. The provision for credit losses in the third quarters of 2013, and 2012 were $0.

The allowance for credit losses was $9.9 million at September 30, 2013, compared to $10.1 million at December 31, 2012. The allowance for credit losses as a percentage of total loans at September 30, 2013 was 3.01%, compared to 2.62% at December 31, 2012. The allowance for credit losses as a percentage of loans and leases held for investment at September 30, 2013 was 3.36%, compared to 3.49% at December 31, 2012.

At September 30, 2013, BNC had $13.0 million of classified loans, $10.1 million of loans on non-accrual and $2.2 million of other real estate owned. At December 31, 2012, BNC had $13.6 million of classified loans, $10.5 million of loans on non-accrual and $5.1 million of other real estate owned. At September 30, 2012, BNC had $17.4 million of classified loans, $4.8 million of loans on non-accrual and $5.9 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 North Dakota, Arizona and Minnesota from 14 locations. BNC also conducts mortgage banking from 12 offices in Illinois, Kansas, Nebraska, Missouri, Minnesota, Arizona and North Dakota.

[vpagano]

Earnings should be out soon if history is any indicator. Even if net income would drop a few hundred $K to roughly $.50 / share, we still would be trading less than a 7x multiple annualized and under BV. Continue to hold all my shares for the moment.

-Pagz

[LGL8054]

Our government wants Big Bank and BNC will have to grow to meet a need and to acquire more Banks and location to spread the risk and broaden the product line. A good place to look is the OCC and the FDIC for acquisitions.

From my point of view if any thing happens with oil they are to small to ride it out.

Please Note if Bank buy a Bank, approval can take a year or more.
But if Bank take over a FDIC failed Bank you can fast tract the approval and the FDIC guarantee the debt.

[56Chevy]

That's a beautiful trend if you are holding a bank in the area.

Amen Pagz...they're sitting pretty to be sure.

I'm really kind of surprised the bank hasn't built or acquired at least one or 2 more branches in the Bakken region. On the other hand we've seen how hard it is to get something built up there [ala dynv], and even tougher is finding staff to work in a new bank ":~O

It could be the bank is waiting for some Bakken hay day dust to settle before they make a move ?? They may not have a choice.. but either way its a good problem to have! Unprecidented growth is on their doorstep!

[vpagano]

BNCC broke through book value for the first time at the end of the day, still highly undervalued on that basis.

[vpagano]

U.S. Median Household income vs. North Dakota Household median

http://stocktwits.com/jackdamn/message/15949605?utm_campaign=&utm_source=twitter&utm_medium=community

That's a beautiful trend if you are holding a bank in the area.

[vpagano]

52-week high, grinding up. Haven't sold any shares yet.

[vpagano]

Low unemployment = good for banks.

Look at how a few ND places pop up on this list.

http://www.bls.gov/web/metro/laummtrk.htm

[bacc]

It wasn't meant to get under your skin, I can see how it came across. and I do apologize for it. You have your valid reasons for exiting. I respect that and wish you the best.
Joe

[Enterprising Investor]

Not every poster has an axe to grind.

You believed your exit point marked "fair value". Good for you.

I, on the other hand, see BNCC going higher over time. Others may bail out before I do. There may even be some who sell it short.

[10 bagger]

You know as I posted I wish all holders of BNCC the best and I really wish that you and others make the same % move as I did.. Not is lost though because I am still Loaded with ENSV.. BNCC actualy came from a mistake in following another stock and that is where I came to know some of the finer posters on this board.. If you think bringing up a post that I made on BNCC serves you that is fine with me but after I noticed where you have been posting before and how many followers you have I will just consider the source of the remark.. But I will admit you got under my skin.. hank

keep it rolling, 10 bagger is wondering why

[bacc]

keep it rolling, 10 bagger is wondering why

[Enterprising Investor]

BNCC sets new 52-week high (8/27/13)

BNCC
USD Bnccorp Inc
Last [Tick] $14.00[+]
Change $0.75
% Change 5.66%
Open $13.24
Volume 8,500
Day High $14.00
Day Low $13.00

[Enterprising Investor]

BNCCORP Names Timothy J. Franz Permanent President And CEO (8/16/13)

BISMARCK, N.D., Aug. 16, 2013 /PRNewswire/ -- BNCCORP, Inc. (BNC or the Company) (OTC Markets: BNCC) announced today that the Company's Board of Directors has named Timothy J. Franz to the position of President and Chief Executive Officer on a permanent basis. Mr. Franz had been serving in that role on an interim basis since July 24, 2013, following the untimely passing of BNC co-founder, President and CEO Gregory K. Cleveland.

Tracy J. Scott, Chairman of the BNCCORP Board of Directors, commented, "Tim Franz is a highly experienced and able executive. Furthermore, as an officer of BNCCORP and BNC Bank for the past seven years, he is deeply immersed in the culture of integrity, community engagement, customer service and financial stewardship that are the hallmarks of our business approach. We are fortunate to be able to draw upon Tim's leadership going forward."

Mr. Franz stated, "I consider it an honor to be associated with a group of talented, capable people who consistently demonstrate exceptional professionalism and dedication, and who have helped BNC to thrive. Following in Greg Cleveland's footsteps will be a humbling experience, and I want to thank the Board and the entire BNC team in advance for their guidance and assistance along this path."

Prior to being named President and CEO, Mr. Franz, age 55, served as Chief Financial Officer of BNCCORP, INC. and BNC National Bank since 2006. A Certified Public Accountant (Inactive), he began his professional career at KPMG LLP in 1983 and was a partner at KPMG from 1997 to 2003. During his tenure at KPMG, Mr. Franz focused on the financial services industry and served Wells Fargo, TCF Bank and several community banks. Mr. Franz has served on BNC National Bank's Board of Directors since 2006 and on BNCCORP, INC.'s Board of Directors since 2013. He also has been active in several of BNC's operating committees since joining the Company.

About BNCCORP, Inc.
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 14 locations. BNC also conducts mortgage banking from 11 offices in Illinois, Kansas, Nebraska, 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.

SOURCE BNCCORP, Inc.

http://investorshub.advfn.com/boards/post_new.aspx?board_id=25049

[10 bagger]

BNCC.. $12.75 I believe that BNCC will start deploying assets from areas other than ND and will use the growth in ND to allow them to sell other assets sometimes lower than asset values..

Bad debt and mortages from lower score cients are/will be the primary sales.. Loans outside of ND will be limited to only high score individuals and I think commerical loans will be given only to exsting high score customers..

The Ins. settlement will/gave BNCC a new lease on life and the deployment of assets has wetted the profit motives of bank management to concentrate in areas of growth and secure loans.. IE Nd..

This transformation will take at least 9 to 12 Qtrs. of immposible comps. to better.. The last release was in my opinion the start of this change in the loan habits of BNCC.. .. The bank will emerge much stongr but IMO will take at least 3 years to exceed the latest years earnings.. That was why at this level for the time being I feel at around the $13.00 BNCC is fully priced and except for the buying it's footprint by another bank.. I look for a merger /takeover now at only a 15% chaance.. GLTA,, hank

Hank

[vpagano]

Can I ask how you are running your valuation to say it is fully valued?

I posted this before:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=89246332

Friday fun with numbers:

- $800 MM in assets
- median ROA% for North Dakota Q1 2013 = 1.03%

source: http://www.fdic.gov/bank/analytical/stateprofile/Kansascity/ND/ND.pdf

800MM * 1.03% = $10.4 MM

10X earnings multiple = $104 MM or ~ $31.50 per share potential

They just have to keep on performing.

I was pretty close on the assets number, and let's assume the ROA% sits around 1%. Now if we triangulate between a 10X earnings multiple at approximately $30 per share and and 1.5X BV multiple(a fair multiple for growth I believe) at the low $20's, we get a combined mid-$20's valuation or a half off sale currently.

Do you believe non-interest income will take a hit? Growth will stop in the Bakken? Competition from larger players? Just curious, TIA.

-Pagz

FD: ~10% holding

[free_bee]

Feel like start calling you Mr 9 and half bagger for leaving BNCC early.

[Enterprising Investor]

Possess a different view.

BNCC is merely suffering from TARP Overhang Syndrome.

However, I have been picking up shares for several accounts. BNCC is now my largest holding since departing C after seven and one-half years with a retirement account fully-allocated with common stock.

[dffhogs]

Good to know. Moving back up now that the overhang is gone....

[10 bagger]

BNCC.. After the earnings came out I re-thought my projections on the value of BNCC and as a result I started to sell my entire position and completed my sales today.. Thanks to all as this is a clean board and factual in its posting.. I sold because I feel that at the $13.00 level BNCC is now fully valued.. It was at one time my largest holding in my Investment account.. GLTa.. hank

[free_bee]

Rest in peace

http://www.americanbanker.com/people/bnccorp-ceo-gregory-cleveland-dies-1060855-1.html

[56Chevy]

- Book value per common share is $14.35 at June 30, 2013

At todays pps of $12.55 its still selling at 87% of BV.

I think everyone expected 2Q earnings to be down...but maybe not that much.

BNCC has spoiled us. Funny how .62 @ share earnings sounds disappointing...and yet there isn't another peer bank in the country that wouldn't kill to trade 2Q numbers with them.

[Enterprising Investor]

BNCC total assets grew by 14.4 percent.

However, non-interest expense declined by 9.6 percent. Management is doing a good job of managing expenses while growing the business at a fast pace.

Mortgage banking revenue declined by about $2.7 million.

[Enterprising Investor]

BNCCORP, INC. Reports 2013 Second Quarter Net Income Of $2.5 Million, Or $0.62 Per Diluted Share (7/24/13)

2013 Second Quarter Overview

- Net income of $2.5 million is $0.62 per diluted share

- Net interest income increased by $184 thousand, or 4.2%, compared to second quarter 2012

- Non-interest income is $8.4 million, $2.4 million lower than second quarter of 2012

- Non-interest expense decreased by $962 thousand, or 9.6%, compared to second quarter 2012

- Provisions for credit and OREO losses were $0 compared to $1.0 million in the second quarter of 2012

- Total assets were $798.2 million at June 30, 2013, up 14.4% from a year earlier

- Total deposits are $679.1 million at June 30, 2013, increasing by $82.6 million, or 13.9% in one year

- Second quarter annualized return on assets is 1.24% and return on common equity is 16.98%

- Book value per common share is $14.35 at June 30, 2013

BISMARCK, N.D., July 24, 2013 /PRNewswire/ -- BNCCORP, INC. (BNC or the Company) (OTCQB: BNCC), which operates community banking and wealth management businesses in Arizona, Minnesota and North Dakota, and has mortgage banking offices in Illinois, Kansas, Nebraska, Minnesota, Arizona and North Dakota, today reported net income for the second quarter ended June 30, 2013.

Net income for the 2013 second quarter was $2.476 million, or $0.62 per diluted share. This compared to net income of $5.030 million, or $1.42 per diluted share, in the second quarter of 2012. The second quarter of 2013 reflects higher net interest income due to asset growth, offset by lower non-interest income as mortgage banking revenues were strong yet reduced partially due to rising interest rates. In addition, non-interest expenses decreased primarily due to lower costs associated with foreclosed assets when compared to the same quarter in 2012. The provisions for credit losses and OREO valuation allowances declined to $0 in the second quarter of 2013 compared to $1.000 million in the second quarter of 2012. Credit quality improved as nonperforming assets decreased to $13.1 million at June 30, 2013, compared to $15.6 million at December 31, 2012. Also, net income for the 2013 second quarter reflected a substantial increase in income tax versus a year ago, which benefited from a valuation allowance on deferred tax assets.

Gregory K. Cleveland, BNCCORP President and Chief Executive Officer, said, "Our solid second quarter results generated a 1.24% return on assets and a 16.98% return on equity. We are very pleased with the results in the first half of 2013, as we have exceptional liquidity, while credit quality remains acceptable given the turmoil banks have faced in recent years. We have capitalized on the recovery of the housing market in recent periods and as a result our non-interest revenues have been robust. We recognize the current mortgage banking cycle is being challenged as interest rates rise, and in response we intend to focus our growth initiatives on core banking and wealth management in order to have a bigger, stronger and more diverse business base for the longer term."

Mr. Cleveland continued, "Despite relative improvement in the macro-economic conditions, the banking industry remains immersed in an unsettled economy and a demanding regulatory environment. While maintaining status quo is likely to leave many community banks operating from weakness, our subsidiary bank is operating from a position of strength in capital, liquidity, asset quality and profitable operations. Thus, we believe that we are poised to boldly capture opportunities and be prudently patient in pursuing our growth strategies."

Second Quarter Results

Net interest income for the second quarter of 2013 was $4.583 million, an increase of $184 thousand, or 4.2%, from $4.399 million in the same period of 2012. This increase is the result of growing assets by 14.4% since June 30, 2012. During the second quarter of 2013, the average balance of earning assets was approximately $744.1 million, compared to approximately $643.7 million in the second quarter of 2012. The net interest margin for the second quarter decreased to 2.47%, compared to 2.75% in the same period of 2012. Net interest income has been negatively impacted by the low interest rate environment, which reduced the yield on earning assets to 3.00% in the second quarter of 2013, compared to 3.69% in the second quarter of 2012. Our cost of interest bearing liabilities declined to 0.64% in the current quarter, compared to 1.19% in the same period of 2012.

The provision for loan losses was $0 in the second quarters of 2013 and 2012. The absence of provisions for credit losses reflects stabilized risk in our loan portfolio.

Non-interest income for the second quarter of 2013 was $8.352 million, a decrease of $2.401 million, or 22.3% from $10.753 million in the same period of 2012. Second quarter mortgage banking revenues aggregated $6.744 million, compared to $9.393 million in the second quarter of 2012. While revenues from mortgage banking remain healthy, they decreased in second quarter of 2013 due to the recent increase in interest rates, especially compared to the second quarter of 2012 when mortgage banking revenues were exceptionally high. We are optimistic that mortgage banking operations can continue to generate healthy profits in the near term as mortgage rates remain attractive in historical terms. Over a longer horizon, mortgage banking volume may not be sustained at current levels as interest rates will inevitably rise further. There were $0 of gains on sales of investment securities during the recent quarter, compared to $98 thousand in the second quarter of 2012. The opportunity to sell assets at attractive prices can vary significantly from period to period based on market conditions. The 2013 second quarter included gains on sales of SBA loans of $352 thousand, compared to $281 thousand in the same period of 2012. While gains on sales of loans can vary significantly, the secondary market for SBA loans is currently acquisitive and loans can be sold for attractive prices. Bank fees and service charges were $674 thousand in the second quarter of 2013, an increase of 19.3% compared to the second quarter of 2012. These fees are growing as we continue to grow deposits and open new accounts.

Non-interest expense decreased by $962 thousand, or 9.6%, to $9.059 million in the second quarter of 2013 compared to $10.021 million in the same period of 2012. This decrease primarily relates to reduced valuation adjustments on foreclosed assets, which were $0 in the second quarter of 2013 compared to $1.000 million in the same quarter of 2012. In the aggregate, all other non-interest expenses were essentially flat in the second quarter when compared to the second quarter of 2012.

In the second quarter of 2013, we recorded tax expense of $1.400 million which resulted in an effective tax rate of 36.12% for the quarter. A tax expense of $101 thousand was recognized during the second quarter of 2012. The provision for income taxes was low in 2012 because of the reversal of the valuation allowance on deferred tax assets.

Net income available to common shareholders was $2.149 million, or $0.62 per diluted share, for the second quarter of 2013 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $327 thousand in the second quarter of 2013 and $362 thousand in the same period of 2012. Net income available to common shareholders in the second quarter of 2012 was $4.668 million, or $1.42 per diluted share.

Six Months Ended June 30, 2013

Net interest income in the first half of 2013 was $9.216 million, an increase of $172 thousand or 1.9%, from $9.044 million in the first half of 2012. The positive impact on net interest income from the growth in assets was partially offset by the negative impact of low interest rates. During the first six months of 2013, the average balance of earning assets was approximately $732.2 million, compared to approximately $632.9 million in the same period of the prior year. The net interest margin in the recent six month period decreased to 2.54%, compared to 2.87% in the same period of 2012. The yield on earning assets was 3.09% in the six month period ended June 30, 2013, compared to 3.82% in the same period of 2012. The cost of interest bearing liabilities was 0.67% in the first half of 2013, compared to 1.19% in the first half of 2012.

The provision for credit losses was $700 thousand in the first six months of 2013, compared to $100 thousand in the first six months of 2012. Nonperforming loans decreased $329 thousand to $10.2 million at June 30, 2013 from $10.5 million at December 31, 2012.

Non-interest income for the first six months of 2013 was $19.676 million, an increase of $3.226 million, or 19.6% from $16.450 million in the same period of 2012. Non-interest income was significantly influenced by mortgage banking revenues in the first six months of 2013, which aggregated $14.991 million, an increase of $1.351 million, or 9.9%, compared to the first six months of 2012. Gains on sales of investments were higher in the first half of 2013 aggregating $1.210 million, compared to $98 thousand in the same period of 2012. Gains on sales of SBA loans were $1.107 million in the first six months of 2013, compared to $619 thousand in the same period of 2012. We also experienced an increase in bank fees and service charges of $163 thousand, or 14.5% in the first half of 2013, reflecting growth in deposits and new accounts.

Non-interest expense decreased by $237 thousand, or 1.3%, to $18.456 million in the first six months of 2013, compared to $18.693 million in the same period of 2012. The valuation adjustments on foreclosed assets were $0 in the first half of 2013 compared to $1.700 million in the first half of 2012. This decrease was partially offset by compensation costs which increased by $1.162 million, or 14.2%, primarily due to higher volume in mortgage banking, additional banking and mortgage banking producers, and incentives accrued for producers. Increases in marketing expenses, data processing and occupancy in the first half of 2013 reflect larger banking and mortgage banking operations.

During the six month period ended June 30, 2013, we recorded tax expense of $3.475 million which resulted in an effective tax rate of 35.69%. A tax expense of $103 thousand was recognized during the six month period ended June 30, 2012. The provision for income taxes was lower in 2012 because of the reversal of the valuation allowance on deferred tax assets.

Net income available to common shareholders was $5.610 million, or $1.62 per diluted share, for the six months ended June 30, 2013 after accounting for dividends accrued on preferred stock and the amortization of issuance discounts on preferred stock. These costs aggregated $651 thousand in the first six months of 2013 and $720 thousand in the same period of 2012. Net income available to common shareholders for the six months ended June 30, 2012 was $5.878 million, or $1.78 per diluted share.

Assets, Liabilities and Equity

Total assets were $798.2 million at June 30, 2013, an increase of $27.4 million, or 3.6%, compared to $770.8 million at December 31, 2012 and an increase of $100.2 million, or 14.4%, since June 30, 2012. The increases in recent periods have been funded primarily by growing deposits in North Dakota as this region is experiencing exceptional prosperity. Cash and investment securities have increased by $47.9 million since December 31, 2012 as we continue to emphasize liquidity. The investment portfolio had net unrealized losses aggregating $3.322 million as of June 30, 2013, compared to net unrealized gains of $6.480 million as of December 31, 2012. The value of investment securities decreased due to the spike in interest rates in the latter part of the second quarter. This increase in interest rates provides an opportunity to invest earning assets at higher rates than been available in the last few years.

Although loans held for investment decreased by $8.0 million versus December 31, 2012, we have implemented measures to increase our loan portfolio with the objective of achieving loan growth later in 2013. In North Dakota, our loans held for investment grew $15.0 million since June 30, 2012. Loans held for sale have decreased by $11.1 million since December 31, 2012 as we sold more mortgage banking loans than we funded in the first half of 2013.

Total deposits were $679.1 million at June 30, 2013, increasing by $29.5 million from 2012 year-end, and increasing by $82.6 million, or 13.9% since June 30, 2012. This increase relates primarily to growth in our North Dakota branches.

Book value per common share was $14.35 as of June 30, 2013, compared to $14.49 as of December 31, 2012 and $8.44 at June 30, 2012.

At June 30, 2013, tangible common equity of BNC National Bank was 10.67% of total Bank assets.

Trust assets under supervision increased to $237.4 million at June 30, 2013, compared to $211.5 million at December 31, 2012 as our recent focus on growing wealth management operations is beginning to show results.

Capital

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

At June 30, 2013, BNCCORP's tier 1 leverage ratio was 11.26%, the tier 1 risk-based capital ratio was 22.39%, and the total risk-based capital ratio was 24.01%.

At June 30, 2013, BNC National Bank had a tier 1 leverage ratio of 10.70%, a tier 1 risk-based capital ratio of 21.63%, and a total risk-based capital ratio of 22.90%.

At June 30, 2013, BNCCORP's tangible common equity as a percent of assets was 5.93% compared to 6.21% at December 31, 2012 and 3.99% at June 30, 2012. Common shareholder equity at June 30, 2013 was $47.4 million and we had preferred stock and subordinated debentures outstanding which aggregated $43.4 million at June 30, 2013.

In July of 2013, the Federal Reserve issued new regulatory capital standards for community banks which incorporate some of the capital requirements addressed in the Basel III framework and begin to be effective January 1, 2015. Although we believe we are compliant with the fully phased in standards, we have not completed our assessment of the proposed standards. The Company routinely evaluates the need to raise capital to comply with regulatory capital standards and for other corporate purposes. In addition to the new capital standards the regulatory environment for banking entities is increasingly complicated and cumbersome and the regulatory influence will burden earnings for the foreseeable future.

Asset Quality

In recent years, 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 reduce credit risk.

Nonperforming assets were $13.1 million at June 30, 2013, down from $15.6 million at December 31, 2012. The ratio of total nonperforming assets to total assets was 1.65% at June 30, 2013 and 2.03% at December 31, 2012. The provision for credit losses and other real estate costs was $0 in the second quarter of 2013 and $1.000 million in the second quarter of 2012.

Nonperforming loans were $10.2 million at June 30, 2013 down from $10.5 million at December 31, 2012. The ratio of the allowance for credit losses to total nonperforming loans as of June 30, 2013 was 97% compared to 96% at December 31, 2012. The provision for credit losses in the second quarters of 2013, and 2012 were $0.

The allowance for credit losses was $9.9 million at June 30, 2013, compared to $10.1 million at December 31, 2012. The allowance for credit losses as a percentage of total loans at June 30, 2013 was 2.71%, compared to 2.62% at December 31, 2012. The allowance for credit losses as a percentage of loans and leases held for investment at June 30, 2013 was 3.52%, compared to 3.49% at December 31, 2012.

At June 30, 2013, BNC had $13.1 million of classified loans, $10.2 million of loans on non-accrual and $3.0 million of other real estate owned. At December 31, 2012, BNC had $13.6 million of classified loans, $10.5 million of loans on non-accrual and $5.1 million of other real estate owned. At June 30, 2012, BNC had $14.0 million of classified loans, $4.9 million of loans on non-accrual and $7.9 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 14 locations. BNC also conducts mortgage banking from 11 offices in Illinois, Kansas, Nebraska, Minnesota, Arizona and North Dakota.

http://www.prnewswire.com/news-releases/bnccorp-inc-reports-2013-second-quarter-net-income-of-25-million-or-062-per-diluted-share-216731151.html

[vpagano]

Interesting little sell-off here considering earnings out soon, pull-back right to the 50-day EMA.

[free_bee]

Q - What suggestion do you have for my 8 year old daughter?

A - We've always tried to stay sane when other people go crazy

http://www.bizjournals.com/sanfrancisco/blog/2013/05/warren-buffett-wells-fargo-berkshire.html?page=all

So, other people do go crazy by not buying stocks when they sell for a fair price.

[free_bee]

That may be the hardest thing to do for most people- to actually buy and make money. They can't control themselves.

[Enterprising Investor]

Glad to see someone had the time.

56Chevy has been on my case for the longest time to write an article for SA. Just overwhelmed at work.

Now, let's see if anyone who reads SA is actually paying attention and wants to make some money.

[vpagano]

Seeking Alpha article out on BNCC, nothing new we don't already know here in our little group BUT it gets a little exposure to the casual retail investor maybe:

http://seekingalpha.com/article/1542322-bnccorp-undervalued-regional-offers-more-than-a-margin-of-safety?source=yahoo

[free_bee]

Already the stock is making more sense. Thanks to the folks here and especially 56Chevy 10bagger and EI for giving this stock some life. My first pure play.

[vpagano]

Hope it was a good weekend for all as well, only a few more weeks until the next earnings announcement. Can't wait!

[free_bee]

Everyone here, happy 4th of July.

[Enterprising Investor]

Total mortgage applications have been declining.

However, purchase applications are declining at a much slower rate (3 percent week over week). I expect the purchase share to represent a larger percentage of total applications going forward.

New housing demand grows between 1.25 to 1.5 million units per year, but homebuilders have only been constructing between 500 to 600 thousand units annually over the past five years.

It should be noted that HARP activity increased from 30 to 34 percent, meaning that the these types of loans continue to be strong. Borrowers, who are able to refinance their homes and can withstand the long lead time, are saving real money. A good percentage of these borrowers are cutting their rate by 200 basis points.

Since BNCC has 12 MPOs in Arizona, Minnesota, Illinois, Kansas, Nebraska and Missouri, I am highly confident a good chunk of originations are coming from borrowers outside the Bakken. Better yet, BNCC is operating in a "originate to sell" environment.

Finally, mortgage banking can be strategically counter cyclical to community banking. Banks need to be making more non-residential loans, where interest rates are generally higher and terms are considerably shorter when compared to single-family
mortgage.