BNCCORP : 2024 Audited Financial Statements

Published: 2025-03-28 08:56:12 ET BNCC

BNCCORP, INC. AND SUBSIDIARIES

Consolidated Financial Statements

December 31, 2024 and 2023

(With Independent Auditors' Report Thereon)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Independent Auditors' Report

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Income for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

CliftonLarsonAllen LLP CLAconnect.com

INDEPENDENT AUDITORS' REPORT

Board of Directors

BNCCORP, INC. and Subsidiaries Bismarck, North Dakota

Report on the Audit of the Consolidated Financial Statements Opinion

We have audited the accompanying consolidated financial statements of BNCCORP, INC. and Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of BNCCORP, INC. and Subsidiaries as of December 31, 2024 and 2023, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of BNCCORP, INC. and Subsidiaries and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about BNCCORP, INC. and Subsidiaries' ability to continue as a going concern for one year after the date the consolidated financial statements are available to be issued.

CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

 Exercise professional judgment and maintain professional skepticism throughout the audit.

 Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of BNCCORP, INC. and Subsidiaries' internal control. Accordingly, no such opinion is expressed.

 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about BNCCORP, INC. and Subsidiaries' ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Other Information Included in the Annual Report

Management is responsible for the other information included in the annual report. The other information comprises selected financial data, operating strategy, management's discussion and analysis of financial condition and results of operations, and quantitative and qualitative disclosures about market risk but does not include the consolidated financial statements and our auditors' report thereon. Our opinion on the consolidated financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the consolidated financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

CliftonLarsonAllen LLP

Minneapolis, Minnesota March 12, 2025

Consolidated Balance Sheets

As of December 31,

(In thousands, except share data)

ASSETS

Cash and cash equivalents

Debt securities available for sale

Federal Reserve Bank and Federal Home Loan Bank stock Loans held for investment

Allowance for credit losses

Net loans held for investment Premises and equipment, net Operating lease right of use asset Accrued interest receivable Other

Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:

Deposits:

Non-interest-bearing Interest-bearing -

Savings, interest checking and money market Time deposits

Total deposits

Guaranteed preferred beneficial interest in Company's subordinated debentures

Accrued interest payable Accrued expenses Operating lease liabilities Dividends payable

Other

Total liabilities

STOCKHOLDERS' EQUITY:

Common stock, $.01 par value - Authorized 11,300,000 shares; 3,668,653 issued; 3,521,375 and 3,569,210 shares outstanding

Capital surplus - common stock

Retained earnings

Treasury stock (147,278 and 99,443 shares, respectively) Accumulated other comprehensive loss, net

Total stockholders' equity

Total liabilities and stockholders' equity

2024

See accompanying notes to consolidated financial statements.

2023

100,815 $ 102,454

129,522 159,772

2,387 2,372

698,724 668,808

(9,223)

(9,284)

689,501 659,524

10,893 10,955

618 938

4,108 4,206

28,837 27,984

966,681 $ 968,205

172,456 $ 184,442

579,608 582,855

85,436 69,906

837,500 837,203

15,464 15,464

1,248 937

2,832 4,105

700 1,048

14,304

- 966 1,030

873,014 859,787

26,904 26,572

78,667 93,186

(2,696) (1,528)

(9,244) (9,848)

93,667 108,418

966,681 $ 968,205

Consolidated Statements of Income For the Years Ended December 31, (In thousands, except per share data)

INTEREST INCOME:

Interest and fees on loans

Interest and dividends on investments

Taxable

Tax-exempt Dividends

Total interest income INTEREST EXPENSE:

Deposits

Federal Home Loan Bank advances Subordinated debentures

Total interest expense

Net interest income

PROVISION FOR CREDIT LOSSES

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES NON-INTEREST INCOME:

Bank charges and service fees Wealth management revenues

2024

2023

38,180 8,130 - 145 46,455 14,360 -

1,037 1,014

35,582 7,534 19 143 43,278

9,949 5

15,397 10,968

31,058 32,310

635 815

30,423 31,495

2,990 3,615

2,036 1,948

Mortgage banking revenues, net - 3,771

Gains on sales of loans, net 22 16

Gains on sales of debt securities, net - 12

Other Total non-interest income NON-INTEREST EXPENSE:

Salaries and employee benefits Professional services

Data processing fees Marketing and promotion Occupancy

Regulatory costs Depreciation and amortization Office supplies and postage Other

Total non-interest expense Income before income taxes Income tax expense

Net income

Basic earnings per common share Diluted earnings per common share

$ $ $

See accompanying notes to consolidated financial statements.

845 642

5,893 10,004

15,005 17,517

1,108 3,419

3,414 3,722

813 3,127

1,556 1,785

539 470

1,086 1,094

364 415

2,167 2,634

26,052 34,183

10,264 7,316

2,336 1,611

7,928 $ 5,705

2.24 $ 1.59

2.23 $ 1.59

BNCCORP, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income

NET INCOME

Unrealized gain on debt securities available for sale

Reclassification adjustment for gains on sales of securities, net, included in net income

Other comprehensive income before tax Income tax effect related to items of other comprehensive income

Other comprehensive income

TOTAL COMPREHENSIVE INCOME

2024

7,928

801 $ 2,922

- (12) 801 2,910

(197) (716)

604

604 $ 2,194 2,194

8,532

See accompanying notes to consolidated financial statements.

2023

$ 5,705

$ 7,899

BNCCORP, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity

(In thousands, except share data)

Common Stock

Outstanding Amount

Capital

Surplus

BALANCE, December 31, 2022

Cumulative effect adjustment for adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments

Net income

Other comprehensive income

Share-based compensation

BALANCE, December 31, 2023

Net income

Other comprehensive income

Impact of share-based compensation

Common stock repurchased

Dividends declared on common stock

($6.25)

BALANCE, December 31, 2024

See accompanying notes to consolidated financial statements.

3,559,334 $

- - - 9,876 3,569,210 $

- 3,521,375 $

(50,000)

- 2,165

- 36

- - - - 36

- - - - - 36

Common

Retained

Treasury

Stock

Earnings

Stock

Total

26,399

87,575

(1,622)

(12,042)

100,346

(94)

5,705

2,194

173

267

26,572

93,186

(1,528)

(9,848)

108,418

7,928

604

332

(5)

327

(1,163)

(22,447)

(9,244)

93,667

Income (Loss), net

26,904

78,667

(2,696)

Accumulated

Other

Comprehensive

BNCCORP, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows

2024

2023

OPERATING ACTIVITIES:

Net income

7,928

5,705

Adjustments to reconcile net income to net cash provided by operating

activities -

Provision for credit losses

635

815

Depreciation

1,086

1,094

Amortization of right of use assets

342

566

Net amortization of premiums and (discounts) on debt securities and

subordinated debentures

1,375

1,522

Share-based compensation

327

267

Change in accrued interest receivable and other assets, net

(886)

(469)

Loss on sale of bank premises and equipment

144

Net realized gain on sales of debt securities

(12)

Deferred tax benefit

(90)

(76)

Change in other liabilities, net

(1,363)

(1,214)

Funding of loans held for sale, mortgage banking

(439,449)

Proceeds from sales of loans held for sale, mortgage banking

477,272

Fair value adjustment for loans held for sale, mortgage banking

Fair value adjustment on mortgage banking derivatives

409

Gains on sales of loans, net

(22)

(16)

Net cash provided by operating activities

9,362

46,610

INVESTING ACTIVITIES:

Purchases of debt securities available for sale

(9,555)

Proceeds from sales of debt securities available for sale

9,483

Proceeds from maturities of debt securities available for sale

29,677

16,575

Purchases of Federal Reserve and Federal Home Loan Bank Stock

(15)

(1,640)

Sales of Federal Reserve and Federal Home Loan Bank Stock

2,331

Net increase in loans held for investment

(30,600)

(52,508)

Proceeds from sales of premises and equipment

102

Purchases of premises and equipment

(1,054)

(531)

Net cash used in investing activities

(1,992)

(35,743)

See accompanying notes to consolidated financial statements.

Disclaimer

BNCCORP Inc. published this content on March 28, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on March 28, 2025 at 12:55 UTC .