-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D7jYJPMvPmOUaymxrgs5g/HjVle8Z81rt5ymI3W2SwuItCrPVdcQ5+BMVjrvH69s JNrSx2stThljjWET9rFJdQ== 0000945434-04-000003.txt : 20040115 0000945434-04-000003.hdr.sgml : 20040115 20040115153830 ACCESSION NUMBER: 0000945434-04-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031231 ITEM INFORMATION: FILED AS OF DATE: 20040115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BNCCORP INC CENTRAL INDEX KEY: 0000945434 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 450402816 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16527 FILM NUMBER: 04527308 BUSINESS ADDRESS: STREET 1: 322 E MAIN STREET 2: PO BOX 4050 CITY: BISMARCK STATE: ND ZIP: 58501 BUSINESS PHONE: 7012503040 MAIL ADDRESS: STREET 1: 322 E MAIN STREET 2: PO BOX 4050 CITY: BISMARCK STATE: ND ZIP: 58501 8-K 1 k8qtr4earnings.txt EARNINGS RELEASE FOR 4TH QUARTER 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 --------------------- Date of Report (Date of earliest event reported) January 14, 2004 BNCCORP, Inc. (Exact name of registrant as specified in its charter) Delaware 0-26290 45-0402816 (State of incorporation) (Commission File Number) (IRS Employer Identification No.) 322 East Main, Bismarck, North Dakota 58501 (Address of principal executive offices) (Zip Code) (701) 250-3040 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) Item 7. Exhibits (b) Exhibits: 99.1 Press release of BNCCORP, Inc. dated January 14, 2004. Item 12. Results of Operations and Financial Condition On January 14, 2004, BNCCORP, Inc. issued a press release announcing its earnings for the quarter ended December 31, 2003. A copy of the press release is attached hereto as Exhibit 99.1. The information and exhibit furnished under Item 12 of this Current Report on Form 8-K shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BNCCORP, INC. By: /s/ Gregory K. Cleveland ------------------------------------------ Gregory K. Cleveland President Date: January 15, 2004 EX-99.1 3 exh99.txt EARNINGS RELEASE QTR 4 2003 Exhibit 99.1 NEWS RELEASE FOR FURTHER INFORMATION: GREGORY K. CLEVELAND TELEPHONE: (612) 305-2261 BRENDA L. REBEL TELEPHONE: (701) 250-3040 WEBSITE: www.bnccorp.com BNCCORP REPORTS EARNINGS OF $3.84 MILLION FOR 2003 Highlights: Net income rises 88.5% for 2003 versus 2002 Insurance business generates commissions of $14.57 million for the year Non-interest income represents 60.87% of 2003 gross revenues BISMARCK, ND, January 14, 2004 - BNCCORP, Inc. (Nasdaq: BNCC), which operates community banking, insurance and brokerage/trust/financial services businesses in Arizona, Minnesota and North Dakota, said today that its 2003 earnings rose 88.5% compared with the prior year. Net income was $3.84 million, or $1.35 per share on a diluted basis, for the year ended December 31, 2003, up from $2.04 million, or $0.75 per diluted share, for 2002. Gregory K. Cleveland, President and Chief Executive Officer of BNCCORP, noted, "Our strategy to build a diversified and balanced base of financial services businesses continued to produce solid benefits for BNCCORP in 2003. This year's strong earnings performance reflected a full year of operations of our insurance agency business, Milne Scali & Company, Inc., based in Phoenix. We also benefited from a significant transaction fee recorded by our financial services division in the second quarter of 2003. These vital elements of our business more than offset the effects of the prevailing interest rate environment which has exerted pressure on the net interest margin and economic conditions which tended to dampen loan demand." 2003 Full Year Results As noted earlier, net income for the year ended December 31, 2003, was $3.84 million, or $1.35 per share on a diluted basis. By comparison, net income for 2002 was $2.04 million, or $0.75 per diluted share. Results for 2002 included income of $14,000, or $0.01 per diluted share, from the operations of the Fargo, North Dakota branch office, which was sold on September 30, 2002, and subsequently classified as a discontinued operation. Net interest income was $13.38 million for 2003, compared with $13.08 million for 2002. Due to the adoption of Statement of Financial Accounting Standards No. 150 ("SFAS 150"), the expense associated with the Company's subordinated debentures is now classified in interest expense for all periods presented. Noninterest income for 2003 rose 27.7% to $20.81 million, versus $16.30 million for 2002. The largest factor in the increase was insurance commission income from the Milne Scali & Company insurance agency, acquired in April 2002. Other significant contributors to 2003 noninterest income included fees on loans, trust and financial services income (including the previously mentioned transaction fee), and net gains on sales of securities. Noninterest income represented 60.87% of gross revenues for 2003, up from 55.47% for 2002. Noninterest expense for 2003 was $27.29 million, compared with $25.33 million a year ago. The comparison was affected by expenses related to the expansion of BNCCORP's banking and insurance operations, primarily in Arizona. Fourth Quarter Results For the fourth quarter of 2003, BNCCORP reported net income of $737,000, or $0.25 per share on a diluted basis. This compares with net income of $794,000, or $0.28 per diluted share, for the 2002 fourth quarter (including a loss of $15,000, or $0.01 per diluted share, from the discontinued Fargo branch operations). Net interest income for the 2003 fourth quarter was $3.53 million, compared with $3.62 million in the same period of 2002. Noninterest income was $4.78 million for the fourth quarter of 2003 and $4.71 million for the same period of 2002. Noninterest income represented 57.51% of gross revenues for the recent quarter, up from 56.56% a year ago. Insurance commissions, loan fees and service charges were the largest sources of noninterest income during the 2003 fourth quarter. Noninterest expense for the 2003 fourth quarter was $7.30 million, compared with $6.79 million in the same 2002 period. Loan and Deposit Balances Total loans included in continuing operations were $283.6 million at the end of 2003, compared with $335.8 million a year earlier and $297.9 million at December 31, 2001. The 2003 decrease reflected planned loan reductions and the completion of some financed commercial real estate projects. Investment securities available for sale were $262.6 million at December 31, 2003, compared with $208.1 million a year earlier and $211.8 million at December 31, 2001. The increased investment securities and loan reduction represents a change in the mix of our earning asset portfolio. Total assets included in continuing operations were $621.5 million at year-end 2003, an increase from $602.2 million at the end of 2002 and $556.0 million at the end of 2001. Total deposits included in continuing operations were $395.9 million at the end of 2003, compared with $398.2 million a year earlier and $375.3 million at December 31, 2001. The 2003 decrease in deposits was affected by a $27.2 million reduction in brokered and national market certificates of deposit offset by deposit growth, primarily in the Company's Wealthbuilder family of deposit products. Cleveland stated, "We are pleased by the level of deposit growth in our new markets. This growth allowed us to reduce our use of brokered and national market certificates of deposit by $27.2 million over the course of the year." Total common stockholders' equity for BNCCORP at December 31, 2003 was $38.7 million, equivalent to book value per common share of $14.07 (tangible book value per common share of $5.54) compared with $36.2 million, or book value per common share of $13.41 (tangible book value per common share of $5.60) at December 31, 2002. Net unrealized gains in the investment portfolio as of December 31, 2003 were more than $1.6 million, or approximately $0.59 per share, on a pretax basis compared with $4.4 million, or approximately $1.62 per share, on a pretax basis, at December 31, 2002. Asset Quality No provision for credit losses was required for the 2003 fourth quarter, versus a provision of $400,000 for the same period of 2002. The provisions were $1.48 million and $1.20 million for the years 2003 and 2002, respectively. The allowance for credit losses as a percentage of total loans strengthened to 1.68% at year-end 2003, from 1.49% at December 31, 2002 and 1.45% at December 2001. Our allowance for credit losses as a percentage of total loans has increased primarily due to reduced loan volume. The ratio of total nonperforming assets to total assets was 1.28% at the end of 2003 compared with 1.27% at the close of 2002 and 0.80% at the close of 2001. The ratio of allowance for credit losses to total nonperforming loans was 60% at December 31, 2003, compared with 66% a year earlier and 99% two years earlier. "As we look toward 2004, we are continuing to develop the potential of many aspects of BNCCORP's operations," noted Mr. Cleveland. "For example, our BNC National Bank subsidiary has taken several actions to expand its branch network in Arizona, and we also expect to open a branch in Golden Valley, Minnesota later this year. As 2003 came to a close, our insurance subsidiaries announced the asset acquisition of The Insurance Alliance of the Southwest, Inc., based in Tucson, strengthening our presence in the Arizona market. BNC National Bank also recently purchased the assets of Lynk Financial LLC, of Arizona, bringing with it an established mortgage operation." BNCCORP, Inc., headquartered in Bismarck, N.D., is a registered bank holding company dedicated to providing a broad range of financial products and superior customer service to businesses and consumers in its local communities. The company operates 22 locations in Arizona, Minnesota and North Dakota through its subsidiary, BNC National Bank. The company also provides a wide array of insurance, brokerage and trust and financial services through BNC National Bank subsidiaries Milne Scali & Company, Inc., BNC Insurance, Inc. and BNC Asset Management, Inc. and the bank's trust and financial services division. The company offers a wide variety of traditional and nontraditional financial products and services in order to meet the financial needs of its current customer base, establish new relationships in the markets it serves, and expand its business opportunities. Forward-Looking Statements Statements included in this news release which are not historical in nature are intended to be, and are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. We caution readers that these forward-looking statements, including without limitation, those relating to our future business prospects, revenues, working capital, liquidity, capital needs, interest costs and income, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements due to several important factors. These factors include, but are not limited to: risks of loans and investments, including dependence on local and regional economic conditions; competition for our customers from other providers of financial services; possible adverse effects of changes in interest rates including the effects of such changes on derivative contracts and associated accounting consequences; risks associated with our acquisition and growth strategies; and other risks which are difficult to predict and many of which are beyond our control. (Financial tables attached) # # #
BNCCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS For the Quarter For the Twelve Months Ended December 31, Ended December 31, --------------------------------- --------------------------------- (In thousands, except per share data) 2003 2002 2003 2002 - ------------------------------------------------------ --------------- --------------- --------------- ---------------- SELECTED INCOME STATEMENT DATA (unaudited) (unaudited) Interest income....................................... $ 7,179 $ 7,981 $ 28,646 $ 31,818 Interest expense...................................... 3,648 4,364 15,268 18,736 --------------- --------------- --------------- ---------------- Net interest income................................... 3,531 3,617 13,378 13,082 Provision for credit losses........................... 0 400 1,475 1,202 Noninterest income.................................... 4,780 4,709 20,812 16,296 Noninterest expense................................... 7,301 6,789 27,290 25,329 --------------- --------------- --------------- ---------------- Income from continuing operations before 1,010 1,137 5,425 2,847 income taxes....................................... Income tax provision.................................. 273 328 1,581 822 --------------- --------------- --------------- ---------------- Income from continuing operations..................... 737 809 3,844 2,025 Discontinued operation: Income (loss) from operations of discontinued Fargo branch, net of income taxes............. -- (15) -- 14 --------------- --------------- --------------- ---------------- Net income............................................ $ 737 $ 794 $ 3,844 $ 2,039 =============== =============== =============== ================ Dividends on preferred stock.......................... $ (30) $ (30) $ (120) $ (79) --------------- --------------- --------------- ---------------- Net income available to common stockholders........... $ 707 $ 764 $ 3,724 $ 1,960 =============== =============== =============== ================
BNCCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS For the Quarter For the Twelve Months Ended December 31, Ended December 31, --------------------------------- --------------------------------- 2003 2002 2003 2002 - ---------------------------------------------- --------------- --------------- --------------- ---------------- EARNINGS PER SHARE DATA (unaudited) (unaudited) BASIC EARNINGS PER COMMON SHARE Income from continuing operations............. $ 0.26 $ 0.29 $ 1.38 $ 0.74 Income (loss) from discontinued Fargo branch, net of income taxes................. -- (0.01) -- 0.01 --------------- --------------- --------------- ---------------- Basic earnings per common share............... $ 0.26 $ 0.28 $ 1.38 $ 0.75 =============== =============== =============== ================ DILUTED EARNINGS PER COMMON SHARE Income from continuing operations............. $ 0.25 $ 0.29 $ 1.35 $ 0.74 Income (loss) from discontinued Fargo branch, net of income taxes................. -- (0.01) -- 0.01 --------------- --------------- --------------- ---------------- Diluted earnings per common share............. $ 0.25 $ 0.28 $ 1.35 $ 0.75 =============== =============== =============== ================
BNCCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS As of ------------------------------------------------------------ (In thousands, except share, per share and full time December 31, December 31, December 31, equivalent data) 2003 2002 2001 - ----------------------------------------------------------------- ------------------- ------------------ ------------------- (unaudited) SELECTED BALANCE SHEET DATA Total assets.................................................... $ 621,477 $ 602,228 $ 585,057 Total assets *.................................................. 621,477 602,228 555,967 Investment securities available for sale *...................... 262,568 208,072 211,801 Total loans *................................................... 283,555 335,794 297,924 Allowance for credit losses *................................... (4,763) (5,006) (4,325) Goodwill *...................................................... 15,089 12,210 437 Other intangible assets, net *.................................. 8,373 8,875 1,734 Total deposits *................................................ 395,942 398,245 375,277 Long term borrowings *.......................................... 8,640 8,561 13 * From continuing operations Notation: Unrealized gains in investment portfolio, pretax................ $ 1,625 $ 4,383 $ 2,674 Total common stockholders' equity .............................. $ 38,686 $ 36,223 $ 30,679 Book value per common share..................................... $ 14.07 $ 13.41 $ 12.79 Tangible book value per common share............................ $ 5.54 $ 5.60 $ 11.88 Effect of net unrealized gains on securities available for sale, net of tax, on book value per common share............. $ 0.37 $ 1.01 $ 0.69 Full time equivalents........................................... 284 270 219 Common shares outstanding....................................... 2,749,196 2,700,929 2,399,170 CAPITAL RATIOS Tier 1 leverage................................................. 4.90% 4.46% 6.33% Tier 1 risk-based capital....................................... 7.14% 5.92% 8.87% Total risk-based capital........................................ 10.63% 9.53% 12.96%
BNCCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS For the Quarter For the Twelve Months Ended December 31, Ended December 31, ------------------------------------ ------------------------------------ (In thousands) 2003 2002 2003 2002 - ------------------------------------------------------ ----------------- ----------------- ----------------- ----------------- (unaudited) (unaudited) (unaudited) AVERAGE BALANCES Total assets *........................................ $ 612,092 $ 594,777 $ 600,668 $ 569,046 Total assets.......................................... 612,092 594,777 600,668 591,304 Loans *............................................... 280,896 321,911 308,115 307,227 Earning assets *...................................... 543,342 540,321 540,685 520,395 Deposits *............................................ 388,061 398,561 383,619 391,173 Common stockholders' equity *......................... 37,428 35,303 37,525 33,722 * From continuing operations KEY RATIOS Return on average common stockholders' equity *...... 7.49% 8.75% 9.92% 5.77% Return on average common stockholders' equity......... 7.49% 8.59% 9.92% 5.81% Return on average assets *............................ 0.48% 0.54% 0.64% 0.36% Return on average assets.............................. 0.48% 0.53% 0.64% 0.34% Net interest margin *................................. 2.58% 2.66% 2.47% 2.51% Net interest margin before impact of derivative contracts *......................................... 2.58% 2.70% 2.49% 2.66% Efficiency ratio * ................................... 87.85% 81.54% 79.82% 86.22% Efficiency ratio not including impact of derivative contracts *........................................ 87.80% 80.98% 79.63% 83.99% Noninterest income as a percent of gross revenues *... 57.51% 56.56% 60.87% 55.47% * From continuing operations
BNCCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS As of ------------------------------------------------------ December 31, December 31, December 31, (In thousands) 2003 2002 2001 - --------------------------------------------------- ----------------- ---------------- ----------------- ASSET QUALITY (unaudited) Loans 90 days or more delinquent and still accruing interest......................... $ 38 $ 5,081 $ 983 Nonaccrual loans.................................. 7,913 2,549 3,391 Restructured loans................................ -- -- 5 ----------------- ---------------- ----------------- Total nonperforming loans......................... 7,951 7,630 4,379 Other real estate owned and repossessed assets.......................................... -- 8 70 ----------------- ---------------- ----------------- Total nonperforming assets........................ $ 7,951 $ 7,638 $ 4,449 ================= ================ ================= Allowance for credit losses....................... $ 4,763 $ 5,006 $ 4,325 ================= ================ ================= Ratio of total nonperforming loans to total loans *................................... 2.80% 2.27% 1.47% Ratio of total nonperforming assets to total assets *.................................. 1.28% 1.27% 0.80% Ratio of allowance for credit losses to total loans *................................... 1.68% 1.49% 1.45% Ratio of allowance for credit losses to total nonperforming loans *........................... 60% 66% 99% * From continuing operations
For the Quarter For the Twelve Months Ended December 31, Ended December 31, ---------------------------------- ---------------------------------- 2003 2002 2003 2002 ---------------- ---------------- ---------------- ----------------- Changes in Allowance for Credit Losses: (unaudited) (unaudited) (unaudited) Balance, beginning of period................. $ 4,827 $ 4,939 $ 5,006 $ 4,325 Provision charged to operations expense...... -- 400 1,475 1,202 Loans charged off............................ (95) (424) (1,820) (657) Loan recoveries.............................. 31 91 102 136 ---------------- ---------------- ---------------- ----------------- Balance, end of period....................... $ 4,763 $ 5,006 $ 4,763 $ 5,006 ================ ================ ================ ================= Ratio of net charge-offs to average total loans................................ (0.02)% (0.10)% (0.56)% (0.17)% Ratio of net charge-offs to average total loans, annualized.................... (0.09)% (0.41)% (0.56)% (0.17)%
BNCCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS For the Quarter For the Twelve Months Ended December 31, Ended December 31, --------------------------------- ---------------------------------- (In thousands, except share data) 2003 2002 2003 2002 - ------------------------------------------------- -------------- --------------- --------------- --------------- ANALYSIS OF NONINTEREST INCOME * (unaudited) (unaudited) (unaudited) Insurance commissions........................... $ 3,585 $ 3,053 $ 14,568 $ 8,981 Fees on loans................................... 381 637 2,022 2,169 Service charges................................. 242 212 909 755 Brokerage income................................ 129 131 420 1,094 Net gain on sales of securities................. 99 255 968 1,870 Trust and financial services.................... 97 148 1,009 751 Rental income................................... 67 22 212 89 Other........................................... 180 251 704 587 -------------- --------------- --------------- --------------- Total noninterest income.................... $ 4,780 $ 4,709 $ 20,812 $ 16,296 ============== =============== =============== =============== * From continuing operations ANALYSIS OF NONINTEREST EXPENSE * Salaries and employee benefits.................. $ 4,403 $ 3,982 $ 16,478 $ 14,723 Occupancy....................................... 556 634 2,306 2,235 Depreciation and amortization................... 373 347 1,458 1,320 Office supplies, telephone & postage............ 321 278 1,214 1,106 Professional services........................... 289 390 1,146 1,495 Marketing and promotion......................... 281 195 803 749 Amortization of intangible assets............... 266 266 1,063 881 FDIC and other assessments...................... 49 53 201 214 Other .......................................... 763 644 2,621 2,606 -------------- --------------- --------------- --------------- Total noninterest expense................... $ 7,301 $ 6,789 $ 27,290 $ 25,329 ============== =============== =============== =============== * From continuing operations WEIGHTED AVERAGE SHARES Common shares outstanding (a)................... 2,711,620 2,699,951 2,705,602 2,611,629 Incremental shares from assumed conversion of options and other contingent shares.......... 92,054 10,360 59,214 17,169 -------------- --------------- --------------- --------------- Adjusted weighted average shares (b)............ 2,803,674 2,710,311 2,764,816 2,628,798 ============== =============== =============== =============== (a) Denominator for Basic Earnings Per Common Share (b) Denominator for Diluted Earnings Per Common Share
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