U.S. Securities and Exchange Commission
Washington, D.C. 20549
------
FORM 10-Q
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[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarter ended March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File No. 0-26290
BNCCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 45-0402816
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
322 East Main
Bismarck, North Dakota 58501
(Address of principal executive office)
(701) 250-3040
(Registrant's telephone number)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No ___
The number of shares of the registrant's outstanding common stock on May
10, 2001 was 2,394,330
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BNCCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)
ASSETS March 31, December 31,
2001 2000
------------- -------------
(unaudited)
CASH AND DUE FROM BANKS........................ $ 17,965 $ 14,988
INTEREST-BEARING DEPOSITS WITH BANKS........... 193 595
INVESTMENT SECURITIES AVAILABLE FOR SALE....... 255,233 263,185
LOANS AND LEASES, net of unearned income....... 276,449 268,925
ALLOWANCE FOR CREDIT LOSSES.................... (3,956) (3,588)
------------- -------------
Net loans and leases......................... 272,493 265,337
PREMISES, LEASEHOLD IMPROVEMENTS AND
EQUIPMENT, net............................... 15,096 14,873
INTEREST RECEIVABLE............................ 3,889 3,854
OTHER ASSETS................................... 4,433 4,465
DEFERRED CHARGES AND INTANGIBLE ASSETS, net.... 2,601 2,719
------------- -------------
$ 571,903 $ 570,016
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS:
Noninterest-bearing.......................... $ 38,391 $ 31,459
Interest-bearing -
Savings, NOW and money market.............. 160,380 169,425
Time deposits $100,000 and over............ 74,950 61,720
Other time deposits........................ 98,424 99,860
------------- -------------
Total deposits............................... 372,145 362,464
SHORT-TERM BORROWINGS.......................... 15,615 33,228
FHLB BORROWINGS................................ 119,200 117,200
LONG-TERM BORROWINGS........................... 12,615 12,642
OTHER LIABILITIES.............................. 14,037 7,419
------------- -------------
Total liabilities................ 533,612 532,953
------------- -------------
GUARANTEED PREFERRED BENEFICIAL INTERESTS
IN COMPANY'S SUBORDINATED DEBENTURES......... 7,402 7,606
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value -
authorized 2,000,000 shares;
no shares issued........................... -- --
Common stock, $.01 par value -
authorized 10,000,000 shares;
issued 2,437,210 and 2,437,910
shares, respectively ...................... 24 24
Capital surplus.............................. 14,049 14,050
Retained earnings............................ 14,870 14,190
Treasury stock (42,880 shares)............... (513) (513)
Accumulated other comprehensive income,
net of income taxes........................ 2,459 1,706
------------- -------------
Total stockholders' equity.............. 30,889 29,457
------------- -------------
$ 571,903 $ 570,016
============= =============
The accompanying notes are an integral part of these consolidated balance
sheets.
BNCCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
For the Three Months Ended March 31
(In thousands, except per share data)
2001 2000
------------- -------------
(unaudited)
INTEREST INCOME:
Interest and fees on loans................... $ 6,118 $ 5,705
Interest and dividends on investment
securities -
Taxable.................................... 3,993 3,079
Tax-exempt................................. 227 229
Dividends.................................. 135 120
Other........................................ 20 50
------------- -------------
Total interest income.................... 10,493 9,183
------------- -------------
INTEREST EXPENSE:
Interest on deposits......................... 4,219 3,728
Interest on short-term borrowings............ 95 24
Interest on FHLB borrowings.................. 2,108 1,851
Interest on long-term borrowings............. 293 336
------------- -------------
Total interest expense................... 6,715 5,939
------------- -------------
Net interest income...................... 3,778 3,244
PROVISION FOR CREDIT LOSSES.................... 350 482
------------- -------------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES................................ 3,428 2,762
------------- -------------
NONINTEREST INCOME:
Net gain on sales of securities.............. 718 46
Insurance commissions........................ 508 568
Brokerage income............................. 349 421
Trust and financial services................. 283 262
Service charges.............................. 167 133
Fees on loans................................ 164 214
Rental income................................ 19 16
Other........................................ 119 103
------------- -------------
Total noninterest income................. 2,327 1,763
------------- -------------
NONINTEREST EXPENSE:
Salaries and employee benefits............... 2,349 2,030
Depreciation and amortization................ 450 387
Occupancy.................................... 449 327
Professional services........................ 299 397
Minority interest in income of
subsidiaries............................... 233 --
Office supplies, telephone and
postage.................................... 230 217
Marketing and promotion...................... 156 114
FDIC and other assessments................... 48 47
Other........................................ 417 382
------------- -------------
Total noninterest expense................ 4,631 3,901
------------- -------------
Income before income taxes..................... 1,124 624
Income taxes................................... 335 191
------------- -------------
Income before extraordinary item and
cumulative effect of change in
accounting principle......................... 789 433
BNCCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income, continued
For The Three Months Ended March 31
(In thousands, except per share data)
2001 2000
------------- -------------
(unaudited)
Extraordinary item-gain on early
extinguishment of debt, net
of income taxes.............................. 4 122
Cumulative effect of change in
accounting principle, net of
income taxes................................ (113) --
------------- -------------
NET INCOME..................................... $ 680 $ 555
============= =============
BASIC AND DILUTED EARNINGS PER COMMON SHARE:
Income before extraordinary item
and cumulative effect of change
in accounting principle...................... $ 0.33 0.18
Extraordinary item-gain on early
extinguishment of debt, net
of income taxes.............................. 0.00 0.05
Cumulative effect of change in
accounting principle, net
of income taxes.............................. (0.05) --
------------- -------------
Earnings per share............................. $ 0.28 $ 0.23
============= =============
The accompanying notes are an integral part of these consolidated financial
statements.
BNCCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
For the Three Months Ended March 31
(In thousands)
2001 2000
------------- -------------
(unaudited)
NET INCOME..................................... $ 680 $ 555
OTHER COMPREHENSIVE INCOME (LOSS)-
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)
arising during the period, net
of income taxes.......................... 690 (606)
Less: reclassification adjustment
for gains included in net income,
net of income taxes...................... (485) (32)
Net gain on derivative instruments
designated and qualifying as
cash flow hedging instruments, net of
income taxes................................. 63 --
------------- -------------
OTHER COMPREHENSIVE INCOME (LOSS).............. 268 (638)
------------- -------------
COMPREHENSIVE INCOME (LOSS).................... $ 948 $ (83)
------------- -------------
The accompanying notes are an integral part of these consolidated financial
statements.
BNCCORP, INC. AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
For the Three Months Ended March 31, 2001
(In thousands, except share data)
Accumulated
Common Stock Other
------------------- Capital Retained Treasury Comprehensive
Shares Amount Surplus Earnings Stock Income Total
---------- -------- --------- ---------- --------- ------------- ----------
Balance, December 31, 2000.......... 2,437,910 $ 24 $ 14,050 $ 14,190 $ (513) $ 1,706 $ 29,457
Net income (unaudited)........... -- -- -- 680 -- -- 680
Other comprehensive income -
Change in unrealized holding
gain on securities available
for sale, net of income
taxes (unaudited)............. -- -- -- -- -- 690 690
Net gain on derivative
instruments designated and
qualifying as cash flow
hedging instruments, net
of income taxes .............. -- -- -- -- -- 63 63
Other (unaudited)................. (700) -- (1) -- -- -- (1)
---------- -------- --------- ---------- --------- ------------- ----------
Balance, March 31, 2001
(unaudited)...................... 2,437,210 $ 24 $ 14,049 $ 14,870 $ (513) $ 2,459 $ 30,889
=========== ======== ========= ========== ========= ============= ==========
The accompanying notes are an integral part of these consolidated financial
statements.
BNCCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Three Months Ended March 31
(In thousands)
2001 2000
------------- -------------
(unaudited)
OPERATING ACTIVITIES:
Net income................................... $ 680 $ 555
Adjustments to reconcile net income to net
cash provided by operating activities -
Provision for credit losses................ 350 482
Depreciation and amortization.............. 328 252
Amortization of intangible assets.......... 122 137
Net premium amortization on investment
securities............................... 318 167
Proceeds from loans recovered.............. 46 46
Change in interest receivable and other
assets, net.............................. (746) (926)
Change in dividend payable - trust
preferred securities..................... (198) --
Net realized gains on sales of
investment securities.................... (718) (46)
Change in other liabilities, net........... 6,680 493
Originations of loans to be sold........... (21,006) (17,070)
Proceeds from sale of loans................ 21,006 17,070
------------- -------------
Net cash provided by operating
activities............................. 6,862 1,160
------------- -------------
INVESTING ACTIVITIES:
Purchases of investment securities........... (54,103) (99,469)
Proceeds from sales of investment
securities................................. 50,802 898
Proceeds from maturities of investment
securities................................. 13,082 4,770
Net (increase) decrease in loans............. (7,552) 5,654
Additions to premises, leasehold
improvements and equipment................. (571) (1,424)
Proceeds from sale of premises and
equipment.................................. 20 --
------------- -------------
Net cash provided by (used in)
investing activities................... 1,678 (89,571)
------------- -------------
FINANCING ACTIVITIES:
Net increase (decrease) in demand,
savings, NOW and money market
accounts................................... (2,113) 9,794
Net increase (decrease) in time deposits..... 11,794 (14,547)
Net increase (decrease) in short-term
and FHLB borrowings........................ (15,613) 84,225
Repayments of long-term borrowings........... (51) (822)
Proceeds from long-term borrowings........... -- 9
Other........................................ 18 75
------------- -------------
Net cash provided by (used in)
financing activities................... (5,965) 78,734
------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.................................. 2,575 (9,677)
CASH AND CASH EQUIVALENTS, beginning
of period.................................... 15,583 21,881
------------- -------------
CASH AND CASH EQUIVALENTS, end of period....... $ 18,158 $ 12,204
============= =============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid................................ $ 6,404 $ 6,110
============= =============
Income taxes paid............................ $ -- $ 2
============= =============
The accompanying notes are an integral part of these consolidated financial
statements.
BNCCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2001
NOTE 1 - Basis of Presentation
The accompanying interim consolidated financial statements have been prepared by
BNCCORP, Inc. ("BNCCORP" or the "Company"), without audit, in accordance with
accounting principles generally accepted in the United States for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information presented not misleading.
The unaudited consolidated financial statements as of March 31, 2001 and for the
three month periods ended March 31, 2001 and 2000 include, in the opinion of
management, all adjustments, consisting solely of normal recurring adjustments,
necessary for a fair presentation of the financial results for the respective
interim periods and are not necessarily indicative of results of operations to
be expected for the entire fiscal year ending December 31, 2001.
The accompanying interim consolidated financial statements have been prepared
under the presumption that users of the interim consolidated financial
information have either read or have access to the audited consolidated
financial statements for the year ended December 31, 2000. Accordingly, footnote
disclosures which would substantially duplicate the disclosures contained in the
December 31, 2000 audited consolidated financial statements have been omitted
from these interim consolidated financial statements. It is suggested that these
interim consolidated financial statements be read in conjunction with the
audited consolidated financial statements for the year ended December 31, 2000
and the notes thereto.
NOTE 2 - Reclassifications
Certain of the 2000 amounts have been reclassified to conform with the 2001
presentations. These reclassifications had no effect on net income or
stockholders' equity.
NOTE 3 - Earnings Per Share
The following table shows the amounts used in computing earnings per share
("EPS") and the effect on weighted average number of shares of potential
dilutive common stock issuances for the three month periods ended March 31:
Net Per-Share
Income Shares Amount
---------- ---------- ----------
2001
Basic earnings per share:
Income before extraordinary item and
cumulative effect of change in
accounting principle........................ $ 789,000 2,394,610 $ 0.33
Extraordinary item - gain on early
extinguishment of debt, net
of income taxes............................. 4,000 2,394,610 0.00
Cumulative effect of change in
accounting principle, net of
income taxes................................ (113,000) 2,394,610 (0.05)
---------- ----------
Income available to common
stockholders................................ $ 680,000 2,394,610 $ 0.28
========== ==========
Effect of dilutive shares -
Options.................................... 16,872
----------
Diluted earnings per share:
Income before extraordinary item and
cumulative effect of change in
accounting principle........................ $ 789,000 2,411,482 $ 0.33
Extraordinary item - gain on early
extinguishment of debt, net
of income taxes............................. 4,000 2,411,482 0.00
Cumulative effect of change in
accounting principle, net of
income taxes................................ (113,000) 2,411,482 (0.05)
---------- ----------
Income available to common stockholders....... $ 680,000 2,411,482 $ 0.28
========== ==========
2000
Basic earnings per share:
Income before extraordinary item.............. $ 433,000 2,399,980 $ 0.18
Extraordinary item - gain on early
extinguishment of debt, net
of income taxes............................. 122,000 2,399,980 0.05
---------- ----------
Income available to common stockholders....... $ 555,000 2,399,980 $ 0.23
========== ==========
Effect of dilutive shares -
Options.................................... 506
---------
Diluted earnings per share:
Income before extraordinary item.............. $ 433,000 2,400,486 $ 0.18
Extraordinary item - gain on early
extinguishment of debt, net of
income taxes................................ 122,000 2,400,486 0.05
---------- ----------
Income available to common stockholders....... $ 555,000 2,400,486 $ 0.23
========== ==========
The following number of options and warrants, with exercise prices ranging from
$7.25 to $17.75, were outstanding during the periods indicated but were not
included in the computation of diluted EPS because their exercise prices were
higher than the average price of the Company's common stock for the period:
2001 2000
---------- ----------
Quarter ended March 31.................. 101,570 159,934
NOTE 4 - Segment Disclosures
During 2000, the Company merged its two subsidiary banks which were previously
reported as separate operating segments in accordance with the Financial
Accounting Standards Board's ("FASB's") Statement of Financial Accounting
Standards No. 131. Banking is the primary operational activity of the Company.
There are no other operational segments which are material and are required to
be separately disclosed for financial statement purposes. Therefore, there are
no segment disclosures included in these consolidated financial statements.
NOTE 5 - Retirement of Subordinated Notes
During the quarters ended March 31, 2001 and 2000, the Company retired $40,000
and $814,000, respectively, of its 8 5/8 percent subordinated notes due 2004.
The Company purchased the notes at a discount, and the transactions resulted in
extraordinary gains of $4,000 and $122,000 ($.05 per share in 2000), net of
income taxes of $2,000 and $62,000, respectively. The notes were retired using
cash generated from the sale of BNC Financial Corporation, the Company's
asset-based lending subsidiary which was sold on December 31, 1999 and from the
issuance of trust preferred securities in July 2000.
NOTE 6 - Recently Adopted Accounting Standards
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities," ("SFAS
133"). SFAS 133 establishes accounting and reporting standards requiring that
every derivative instrument (including certain derivative instruments embedded
in other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. SFAS 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the hedged
item in the income statement, and requires that a company must formally
document, designate and assess the effectiveness of transactions that receive
hedge accounting.
In June 1999, the FASB issued Statement of Financial Accounting Standards No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
the Effective Date of FASB Statement No. 133," ("SFAS 137") which delayed the
effective date of SFAS 133 to fiscal years beginning after June 15, 2000. In
June 2000, the FASB issued Statement of Financial Accounting Standards No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities -
An Amendment of FASB Statement No. 133," ("SFAS 138"). The Company adopted SFAS
133, as amended by SFAS 137 and SFAS 138, on January 1, 2001.
From time to time, the Company enters into derivative contracts such as interest
rate swaps, caps and floors. Interest rate swaps are contracts to exchange fixed
and floating rate interest payment obligations based on a notional principal
amount and are used to hedge the Company's balance sheet against fluctuations in
interest rates. Interest rate caps and floors are also used to minimize the
impact of fluctuating interest rates on earnings. If such contracts meet certain
requirements, they may qualify as fair value or cash flow hedges under SFAS 133.
SFAS 133 provides that the gain or loss on a derivative instrument designated
and qualifying as a fair value hedging instrument, as well as the offsetting
loss or gain on the hedged item attributable to the hedged risk, be recognized
currently in earnings in the same accounting period. The standard provides that
the effective portion of the gain or loss on a derivative instrument designated
and qualifying as a cash flow hedging instrument be reported as a component of
other comprehensive income and be classified into earnings in the same period or
periods in which the hedged transaction affects earnings. The remaining gain or
loss on the derivative instrument, if any, must be recognized currently in
earnings.
The Company has established a hedging policy statement which sets forth the
documentation and other requirements necessary to achieve hedge accounting under
SFAS 133. The Company's currently outstanding $25 million prime based interest
rate floor qualifies, and is now classified as, a cash flow hedge. On January 1,
2001, the Company recognized the interest rate floor on its balance sheet at its
then fair value of $436,000. The impact of the adoption of SFAS 133, as amended,
was an after tax charge to earnings of $113,000 and is presented in the
Company's 2001 consolidated financial statements as the cumulative effect of a
change in accounting principle. On March 31, 2001, the Company marked the
interest rate floor to its fair value of $592,000. The change in the floor's
time value of $55,000 was included in earnings and the change in the floor's
intrinsic value of $63,000 ($101,000 less applicable income taxes of $38,000)
was included in other comprehensive income. The interest rate floor contract,
which has a strike price of 8.50 percent, is currently "in the money" because
the prime rate is 7.50 percent. Therefore, the Company is presently accruing
income on the floor equal to 1.00 percent times the notional amount of $25.0
million, or $250,000 per year.
The Company has reviewed its other financial instruments and contracts in order
to identify any additional derivatives to be accounted for under SFAS 133, as
amended. Other noted derivatives could be considered clearly and closely related
to their host contracts or were otherwise excluded from derivative accounting
treatment under SFAS 133, as amended. As demonstrated above, the adoption of
SFAS 133 will increase volatility of earnings and other comprehensive income and
may result in changes in certain of the Company's business practices.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Comparison of Financial Condition at March 31, 2001 and December 31, 2000
Assets. Total assets increased $1.9 million, from $570.0 million at December 31,
2000 to $571.9 million at March 31, 2001. The following table presents the
Company's assets by category as of March 31, 2001 and December 31, 2000, as well
as the amount and percent of change between the two dates. Significant changes
are discussed in lettered explanations below the table (amounts are in
thousands):
Change
----------------------
March December
31, 31,
Assets 2001 2000 $ %
------------------------------ ---------- ---------- ---------- ----------
Cash and due from banks....... $ 17,965 $ 14,988 $ 2,977 20%
Interest-bearing deposits
with banks.................. 193 595 (402) (68)%
Investment securities
available for sale.......... 255,233 263,185 (7,952) (3)% (a)
Loans and leases, net......... 272,493 265,337 7,156 3% (a)
Premises, leasehold
improvements and
equipment, net.............. 15,096 14,873 223 2%
Interest receivable........... 3,889 3,854 35 1%
Other assets.................. 4,433 4,465 (32) (1)%
Deferred charges and
intangible assets, net...... 2,601 2,719 (118) (4)%
---------- ---------- ----------
Total assets............. $ 571,903 $ 570,016 $ 1,887 --
========== ========== ==========
--------------------
(a) The Company implemented a balance sheet leveraging strategy in 1999 and
2000 during which time it increased its earning asset portfolio by
purchasing investment securities funded by FHLB borrowings. This strategy,
combined with market interest rate developments, resulted in a low
loan-to-assets ratio relative to the Company's peers and unrealized gains
in the investment portfolio. During the quarter ended March 31, 2001, the
Company shifted a portion of its earning asset portfolio from investment
securities to loans in response to loan demand in its markets, including
the Arizona market, where BNC National Bank recently opened a loan
production office. Sales of investment securities during the quarter
generated realized gains of $718,000. These gains are included in
noninterest income in the Consolidated Statement of Income for the quarter.
Allowance for Credit Losses. The following table sets forth information
regarding changes in the Company's allowance for credit losses for the three
month period ending March 31, 2001 (amounts are in thousands):
Three Months
Ended
March 31,
2001
------------
Balance, beginning of period.............. $ 3,588
Provision for credit losses............... 350
Loans charged off......................... (28)
Loans recovered........................... 46
------------
Balance, end of period.................... $ 3,956
============
Ending loan portfolio .................... $ 276,449
============
Allowance for credit losses as a
percentage of ending loan
portfolio............................... 1.43%
As of March 31, 2001, the Company's allowance for credit losses was 1.43 percent
of total loans as compared to 1.33 percent at December 31, 2000. Net recoveries
as a percentage of average loans for the three month period ended March 31, 2001
were 0.01 percent. Net charge-offs as a percentage of average loans for the
three month period ended March 31, 2000 were 0.14 percent.
The Company maintains its allowance for credit losses at a level considered
adequate to provide for an estimate of probable losses related to specifically
identified loans as well as probable losses inherent in the remaining loan and
lease portfolio that have been incurred as of each balance sheet date. The loan
and lease portfolio and other credit exposures are reviewed regularly to
evaluate the adequacy of the allowance for credit losses. In determining the
level of the allowance, the Company evaluates the allowance necessary for
specific nonperforming loans and also estimates losses inherent in other credit
exposures. Continuous credit monitoring processes and the quarterly analysis is
the principal method relied upon by management to ensure that changes in
estimated credit loss levels are reflected in the Company's allowance for credit
losses on a timely basis.
Estimating the risk and amount of loss on any loan is subjective and ultimate
losses may vary from current estimates. Although management believes that the
allowance for credit losses is adequate to cover losses inherent in the loan
portfolio as well as other credit exposures, there can be no assurance that the
allowance will prove sufficient to cover actual losses in the future. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the adequacy of the Company's allowance for credit
losses. Such agencies may require the Company to make additional provisions to
the allowance based upon their judgments about information available to them at
the time of the examination.
Nonperforming Assets. The following table sets forth information concerning the
Company's nonperforming assets as of the dates indicated (amounts are in
thousands):
March 31, December 31,
2001 2000
------------- -------------
Nonperforming loans:
Loans 90 days or more delinquent and
still accruing interest................... $ 661 $ 221
Nonaccrual loans............................ 343 343
Restructured loans.......................... 9 16
------------- -------------
Total nonperforming loans..................... 1,013 580
Other real estate owned and
repossessed assets........................ 30 84
------------- -------------
Total nonperforming assets.................... $ 1,043 $ 664
============= =============
Allowance for credit losses................... $ 3,956 $ 3,588
============= =============
Ratio of total nonperforming assets to
total assets ............................... .18% .12%
Ratio of total nonperforming loans to
total loans................................. .37% .22%
Ratio of allowance for credit losses
to total nonperforming loans................ 391% 619%
Nonperforming loans consist of loans 90 or more days past due for which the
Company continues to accrue interest, nonaccrual loans and loans on which the
original terms have been restructured.
Restructured loans are those for which concessions, including the reduction of
interest rates below a rate otherwise available to that borrower or the deferral
of interest or principal, have been granted due to the borrower's weakened
financial condition. Other real estate owned and repossessed assets includes
property acquired by the Company in foreclosure proceedings or under agreements
with delinquent borrowers.
Liabilities. Total liabilities increased $659,000, from $533.0 million at
December 31, 2000 to $533.6 million at March 31, 2001. The following table
presents the Company's liabilities by category as of March 31, 2001 and December
31, 2000 as well as the amount and percent of change between the two dates.
Significant changes are discussed in lettered explanations below the table
(amounts are in thousands):
Change
----------------------
March December
31, 31,
Liabilities 2001 2000 $ %
------------------------------ ---------- ---------- ---------- ----------
DEPOSITS:
Noninterest - bearing......... $ 38,391 $ 31,459 $ 6,932 22% (a)
Interest - bearing -
Savings, NOW and money
market.................... 160,380 169,425 (9,045) (5)% (b)
Time deposits $100,000
and over.................. 74,950 61,720 13,230 21% (c)
Other time deposits......... 98,424 99,860 (1,436) (1)%
Short-term borrowings......... 15,615 33,228 (17,613) (53)% (d)
FHLB borrowings............... 119,200 117,200 2,000 2%
Long-term borrowings.......... 12,615 12,642 (27) --
Other liabilities............. 14,037 7,419 6,618 89% (e)
---------- ---------- ----------
Total liabilities......... $ 533,612 $ 532,953 $ 659 --
========== ========== ==========
-------------------
(a) A commercial customer that experiences significant balance fluctuations had
a large demand deposit account balance at March 31, 2001.
(b) Fluctuations in this line item are typical when comparing March 31 period
end balances to December 31 balances due to increases in commercial deposit
account balances which often occur at year end.
(c) Brokered and national market certificates of deposit ("CD's") totaled $41.1
and $14.4 million, respectively, at March 31, 2001 compared to $30.7 and
$9.0 million, respectively, at December 31, 2000. The Company increased its
brokered and national market CD's as part of its liquidity planning and
balance sheet management strategies including forecasted loan fundings.
Additionally, during early 2001, pricing on wholesale funds, such as
brokered and national market CD's, adjusted swiftly to monetary easings by
the Federal Reserve making them favorable funding alternatives when
compared to competing for deposits in the Company's local markets where
pricing adjusted more slowly to the Federal Reserve's easings.
(d) Federal funds purchased totaled $32.7 million at December 31, 2000 compared
to $15.2 million at March 31, 2001. These short-term borrowings can vary
significantly from day to day depending upon customer transactions and
liquidity management activities of the Company.
(e) Increase is primarily attributable to an investment security transaction
pending settlement on March 31, 2001.
Stockholders' Equity. The Company's equity capital increased $1.4 million
between December 31, 2000 and March 31, 2001. This increase was primarily
attributable to $680,000 of earnings recorded for the three months ended March
31, 2001, a $690,000 increase in the net unrealized holding gain on securities
available for sale and a $63,000 fair market value adjustment to the Company's
$25 million interest rate floor accounted for as a cash flow hedge.
Capital Adequacy and Expenditures. BNCCORP's management actively monitors
compliance with bank regulatory capital requirements, including risk-based and
leverage capital measures. Under the risk-based capital method of capital
measurement, the ratio computed is dependent on the amount and composition of
assets recorded on the balance sheet, and the amount and composition of
off-balance- sheet items, in addition to the level of capital. The following
table includes the risk-based and leverage capital ratios of the Company and its
banking subsidiary as of March 31, 2001:
Tier 1 Total
Risk- Risk- Tier 1
Based Based Leverage
Ratio Ratio Ratio
--------- --------- ---------
BNCCORP, consolidated....... 8.99% 12.11% 5.93%
BNC National Bank........... 10.12% 11.19% 6.66%
As of March 31, 2001, BNCCORP and its subsidiary bank exceeded capital adequacy
requirements and the bank was considered "well capitalized" under prompt
corrective action provisions.
Comparison of Operating Results for the
Three Months Ended March 31, 2001 and 2000
General. Net income and earnings per share from continuing operations increased
to $789,000 and $0.33, respectively, for the quarter ended March 31, 2001 as
compared with $433,000 and $0.18, respectively for the same period one year
earlier. Net income for the three months ended March 31, 2001 was $680,000, or
basic and diluted earnings per share of $0.28. For the same period in 2000, the
Company recorded earnings of $555,000, or basic and diluted earnings per share
of $0.23. The 2001-period net income included a non-recurring charge of $0.05
per basic and diluted share for the cumulative effect of a change in accounting
principle while the year-ago quarter reflected an extraordinary gain from early
extinguishment of debt of $0.05 per basic and diluted share. The returns on
average assets and average stockholders' equity, from continuing operations,
were 0.57 and 10.69 percent, respectively, for the three months ended March 31,
2001 as compared with 0.35 and 7.66 percent for the same period one year
earlier.
Net Interest Income. Net interest income for the three month period ended March
31, 2001 increased $534,000, or 16.5 percent. Net interest margin increased to
2.91 percent for the quarter ended March 31, 2001 from 2.86 percent for the same
period one year earlier.
The following table presents average balances, interest earned or paid,
associated yields on interest-earning assets and costs on interest-bearing
liabilities for the three month periods ended March 31, 2001 and 2000, as well
as the changes between the periods presented. Significant factors contributing
to the increase in net interest income and net interest margin are discussed in
lettered notes below the table (amounts are in thousands):
Three Months Ended March 31,
-----------------------------------------------------------
2001 2000 Change
----------------------------- ----------------------------- -----------------------------
Interest Average Interest Average Interest Average
Average earned yield Average earned yield Average earned yield
balance or paid or cost balance or paid or cost balance or paid or cost
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Interest-earning
assets
Federal funds sold/
interest bearing
due from...........$ 1,434 $ 20 5.66% $ 5,651 $ 50 3.56% $(4,217) $ (30) 2.10%
Investments.......... 259,280 4,355 6.81% 200,166 3,428 6.87% 59,114 927 -0.06%(a)
Loans................ 269,766 6,118 9.20% 253,782 5,705 9.04% 15,984 413 0.16%(b)
Allowance for
loan losses...... (3,635) -- (3,150) -- (485) --
--------- --------- --------- --------- --------- ---------
Total interest-
earning assets...$526,845 10,493 8.08% $456,449 9,183 8.09% $ 70,396 1,310 -0.01%
========= --------- ========= --------- ========= ---------
Interest-bearing
liabilities
NOW & money
market accounts....$154,397 1,724 4.53% $125,207 1,547 4.97% $ 29,190 177 -0.44%(c)
Savings.............. 3,449 18 2.12% 4,655 24 2.07% (1,206) (6) 0.05%
Certificates of
deposit under
$100,000........... 96,811 1,417 5.94% 117,488 1,518 5.20% (20,677) (101) 0.74%(c)
Certificates of
deposit $100,000
and over........... 65,895 1,060 6.52% 44,959 639 5.72% 20,936 421 0.80%(d)
--------- --------- --------- --------- --------- ---------
Interest - bearing
deposits......... 320,552 4,219 5.34% 292,309 3,728 5.13% 28,243 491 0.21%
Short-term
borrowings......... 6,256 95 6.16% 1,705 24 5.66% 4,551 71 0.50%
FHLB borrowings...... 144,894 2,108 5.90% 126,789 1,851 5.87% 18,105 257 0.03%(e)
Long-term
borrowings......... 12,636 293 9.40% 14,167 336 9.54% (1,531) (43) -0.14%
--------- --------- --------- --------- --------- ---------
Total borrowings... 163,786 2,496 6.18% 142,661 2,211 6.23% 21,125 285 -0.05%
--------- --------- --------- --------- --------- ---------
Total interest-
bearing
liabilities......$484,338 6,715 5.62% $434,970 5,939 5.49% $ 49,368 776 0.13%
========= --------- ========= --------- ========= ---------
income/spread.... $ 3,778 2.46% $ 3,244 2.60% $ 534 -0.15%
========= ========= =========
Net interest
margin........... 2.91% 2.86% 0.05%
Notation:
Noninterest-bearing
deposits...........$ 32,007 -- $ 27,258 -- $ 4,749 --
--------- --------- ---------
Total deposits.....$ 352,559 $ 4,219 4.85% $319,567 $ 3,728 4.69% $ 32,992 $ 491 0.16%
========= ========= ========= ========= ========= =========
Taxable equivalents:
Total interest-
earning assets...$ 526,845 $ 10,590 8.15% $456,449 $ 9,286 8.18% $ 70,396 $ 1,304 -0.03%
Net interest
income/spread.... -- $ 3,875 2.53% -- $ 3,347 2.69% -- $ 528 -0.16%
Net interest
margin........... -- -- 2.98% -- -- 2.95% -- -- 0.03%
-------------------------
(a) The average balance of investment securities in the first quarer of 2001
exceeded the average for the first quarter of 2000 because the Company was
completing its leveraging strategy throughout the first four months of 2000
during which time it was adding investment securities funded with FHLB
borrowings. Although the Company sold investment securities during the
quarter ended March 31, 2001 and used the proceeds to fund loan growth,
average balances still exceeded those in the comparable quarter one year
earlier.
(b) Increased average loans outstanding for the quarter ended March 31, 2001,
as compared to the same quarter one year earlier, reflects loan volume
generated in all of the Company's markets.
(c) Increased average balances of NOW and money market accounts represents
additional growth in the Company's Wealthbuilder deposit accounts, floating
rate accounts indexed to the 90-day T-bill rate. Activity in these accounts
has contributed to a decrease in CD's under $100,000 as some customers have
elected to place renewing time deposits into the favorably-priced and more
liquid Wealthbuilder deposit products.
(d) The Company increased its brokered and national market CD's during the
quarter ended March 31, 2001 as part of its liquidity and balance sheet
management strategies. Additionally, balances in this category increased
while balances in the CD's under $100,000 decreased as pricing on wholesale
funds, such as brokered and national market CD's, adjusted swiftly to
recent monetary easings by the Federal Reserve making such deposits
favorable funding alternatives when compared to competing for deposits in
the Company's local markets where pricing sometimes adjusts more slowly to
movements in national interest rates.
(e) The increased volume of FHLB borrowings is attributable to the completion
of the leveraging strategy discussed in (a) above offset somewhat by
increased use of other funding sources, such as brokered and national
market certificates of deposit, in the first quarter of 2001.
Provision for Credit Losses. The provision for credit losses was $350,000 for
the quarter ended March 31, 2001 as compared to $482,000 for the same period one
year earlier. See "Comparison of Financial Condition at March 31, 2001 and
December 31, 2000 - Allowance for Credit Losses."
Noninterest Income. The following table presents the major categories of the
Company's noninterest income for the three month periods ended March 31, 2001
and 2000 as well as the amount and percent of change between the periods.
Significant changes are discussed in lettered explanations following the table
(amounts are in thousands):
For the Three Increase
Months Ended (Decrease)
March 31, 2001 - 2000
--------------- ---------------
Noninterest Income 2001 2000 $ %
------- ------- ------- -------
Net gain on sales of securities ......$ 718 $ 46 $ 672 1,461%(a)
Insurance commissions................. 508 568 (60) (11)%(b)
Brokerage income...................... 349 421 (72) (17)%(c)
Trust and financial services.......... 283 262 21 8%
Service charges....................... 167 133 34 26%
Fees on loans......................... 164 214 (50) (23)%(d)
Rental income......................... 19 16 3 19%
Other................................. 119 103 16 16%
------- ------- -------
Total noninterest income...........$ 2,327 $ 1,763 $ 564 32%
======= ======= =======
(a) The company sold investment securities in the first quarter of 2001 and
used the proceeds to fund loan growth experienced during the quarter. See
"Comparison of Financial Condition at March 31, 2001 and December 31, 2000
- Assets," note (a).
(b) Decrease is largely attributable to decrease in contingency payments from
insurance companies resulting from high disaster claims incurred in the
state of North Dakota in 2000.
(c) Decline in brokerage revenue is attributable to difficult market conditions
in the first quarter of 2001.
(d) Loan fees included in noninterest income may vary from quarter to quarter
depending upon the structure of the loan transactions effected during the
quarter.
Noninterest Expense. The following table presents the major categories of the
Company's noninterest expense for the three month periods ended March 31, 2001
and 2000 as well as the amount and percent of change between the periods.
Significant changes are discussed in lettered explanations following the table
(amounts are in thousands):
For the Three Increase
Months Ended (Decrease)
March 31, 2001 - 2000
--------------- ---------------
Noninterest Expense 2001 2000 $ %
------- ------- ------- -------
Salaries and employee benefits...... $ 2,349 $ 2,030 $ 319 16% (a)
Depreciation and amortization....... 450 387 63 16% (b)
Occupancy........................... 449 327 122 37% (c)
Professional services............... 299 397 (98) (25)% (d)
Minority interest income of
subsidiaries...................... 233 -- 233 100% (e)
Office supplies, telephone and
postage........................... 230 217 13 6%
Marketing and promotion............. 156 114 42 37%
FDIC and other assessments.......... 48 47 1 2%
Other............................... 417 382 35 9%
------- ------- -------
Total noninterest expense........ $ 4,631 $ 3,901 $ 730 19%
======= ======= =======
Efficiency ratio.................... 75.86% 77.91% (2)%
======= =======
---------------
(a) Average full time equivalent employees for the quarter ended March 31, 2001
were 188 as compared to 176 for the first quarter 2000. The increase is
attributable to staff additions for the Tempe, Arizona loan production
office and to support loan growth at other locations.
(b) The increase in depreciation and amortization is largely attributable to
completion of the Fargo office building during the second quarter of 2000.
(c) Occupancy expenses have increased due to the Fargo facility's opening in
2000 as well as expenses associated with the opening of BNC National Bank's
loan and deposit production office in Tempe, Arizona in January 2001.
(d) The decrease in professional services expenses is attributable to a
decrease in legal fees.
(e) This is the expense associated with the Company's trust preferred offering
which closed in July 2000.
Income Tax Expense. Income tax expense for the quarter ended March 31, 2001
increased $144,000 as compared to the same period in 2000 due to the increase in
pre-tax income. The estimated effective tax rates for the three month periods
ended March 31, 2001 and 2000 were 29.8 and 30.6 percent, respectively.
Earnings per Common Share. See Note 3 to the interim Consolidated Financial
Statements included under Item 1 for a summary of the EPS calculation for the
three month periods ended March 31, 2001 and 2000.
Liquidity
Liquidity. Liquidity risk management encompasses the Company's ability to meet
all present and future financial obligations in a timely manner. The objectives
of liquidity management policies are to maintain adequate liquid assets,
liability diversification among instruments, maturities and customers and a
presence in both the wholesale purchased funds market and the retail deposit
market.
The Consolidated Statements of Cash Flows in the interim consolidated financial
statements included under Item 1 present data on cash and cash equivalents
provided by and used in operating, investing and financing activities. In
addition to liquidity from core deposit growth, together with repayments and
maturities of loans and investments, the Company utilizes brokered deposits,
sells securities under agreements to repurchase and borrows overnight federal
funds. The Company's banking subsidiary is a member of the FHLB, which affords
it the opportunity to borrow funds on terms ranging from overnight to ten years
and beyond. Borrowings from the FHLB are generally collateralized by the bank's
mortgage loans and various investment securities.
The Company has also obtained funding through the issuance of subordinated notes
and trust preferred securities. The indenture pursuant to which the Company's
subordinated notes were issued contains covenants which, among other matters,
restrict or limit the ability of BNCCORP and its subsidiaries, under certain
circumstances, to pay cash dividends, redeem or repurchase stock or make other
capital distributions, or allow liens or other encumbrances on property owned or
acquired. The Company was in compliance with the indenture covenants as of March
31, 2001 and December 31, 2000.
The following table sets forth, for the three months ended March 31, 2001 and
2000, a summary of the Company's major sources and (uses) of funds. The summary
information is derived from the Consolidated Statements of Cash Flows included
under Item 1 (amounts are in thousands):
For the Three
Months Ended
March 31,
-----------------------
Major Sources and Uses of Funds 2001 2000
---------- ----------
Proceeds from sales and maturities
of investment securities................ $ 63,884 $ 5,668
Net increase (decrease) in deposits....... 9,681 (4,753)
Purchases of investment securities........ (54,103) (99,469)
Net increase (decrease) in
short-term and FHLB
borrowings.............................. (15,613) 84,225
Net (increase) decrease in loans.......... (7,552) 5,654
Given the uncertain nature of customer demands as well as the Company's desire
to take advantage of earnings enhancement opportunities, the Company must have
adequate sources of on- and off-balance sheet funds that can be acquired in time
of need. Accordingly, in addition to the liquidity provided by balance sheet
cash flows, liquidity is supplemented with additional sources such as credit
lines with the FHLB, federal funds lines with correspondent banks, wholesale and
retail repurchase agreements, brokered certificates of deposit and direct
non-brokered national certificates of deposit through national deposit networks.
The Company regularly measures its liquidity position and believes that its
management policies and guidelines will ensure adequate levels of liquidity to
fund anticipated needs of on- and off-balance sheet items. In addition, a
contingency funding plan identifies actions to be taken in response to an
adverse liquidity event.
Forward Looking Statements
Statements included in Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," 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 21E of the
Securities Exchange Act of 1934, as amended. The Company cautions readers that
forward looking statements, including without limitation, those relating to the
Company's 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 economic conditions; competition for the Company's
customers from other providers of financial services; possible adverse effects
of changes in interest rates; risks associated with the Company's acquisition
strategy; and other risks which are difficult to predict and many of which are
beyond the control of the Company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's business activities generate market and other risks. Market risk
arises from changes in interest rates, exchange rates, commodity prices and
equity prices and represents the possibility that changes in future market rates
or prices will have a negative impact on the Company's earnings or value. The
Company's principal market risk is interest rate risk which arises from changes
in interest rates. Interest rate risk can result from: (1) Re-pricing risk -
timing differences in the maturity/re-pricing of assets, liabilities and
off-balance sheet contracts; (2) Options risk - the effect of embedded options,
such as loan prepayments, interest rate caps/floors and deposit withdrawals; (3)
Basis risk - risk resulting from unexpected changes in the spread between two or
more different rates of similar maturity, and the resulting impact on the
behavior of lending and funding rates; and (4) Yield curve risk - risk resulting
from unexpected changes in the spread between two or more rates of different
maturities from the same type of instrument. The Company has risk management
policies to monitor and limit exposure to interest rate risk. To date the
Company has not conducted trading activities as a means of managing interest
rate risk. BNCCORP's asset/liability management process is utilized to manage
the Company's interest rate risk. The measurement of interest rate risk
associated with financial instruments is meaningful only when all related and
offsetting on- and off-balance-sheet transactions are aggregated, and the
resulting net positions are identified.
Interest rate risk exposure is actively managed with the goal of minimizing the
impact of interest rate volatility on current earnings and on the market value
of equity. In general, the assets and liabilities generated through ordinary
business activities do not naturally create offsetting positions with respect to
repricing or maturity characteristics. Access to the derivatives market can be
an important element in maintaining the Company's interest rate risk position
within policy guidelines. Using off-balance-sheet instruments, principally
interest rate floors and caps, the interest rate sensitivity of specific
on-balance-sheet transactions, as well as pools of assets or liabilities, is
adjusted to maintain the desired interest rate risk profile.
The Company's primary tool in measuring and managing interest rate risk is net
interest income simulation. This exercise includes management assumptions
regarding the level of interest rate or balance changes on indeterminate
maturity deposit products (savings, NOW, money market and demand deposits) for a
given level of market rate changes. These assumptions have been developed
through a combination of historical analysis and future expected pricing
behavior. Interest rate caps and floors are included to the extent that they are
exercised in the 12-month simulation period. Additionally, changes in prepayment
behavior of the residential mortgage and mortgage-backed securities portfolios
in each rate environment are captured using industry estimates of prepayment
speeds for various coupon segments of the portfolio. Finally, the impact of
planned growth and anticipated new business activities is factored into the
simulation model.
It is the Company's objective to manage its exposure to interest rate risk,
bearing in mind that the Company will always be in the business of taking on
rate risk and that rate risk immunization is not entirely possible. Also, it is
recognized that as exposure to interest rate risk is reduced, so too may the
overall level of net interest income.
The Company monitors the results of net interest income simulation on a
quarterly basis at regularly scheduled asset/liability management committee
meetings. Each quarter net interest income is simulated for the upcoming
12-month horizon in seven interest scenarios. The scenarios modeled are parallel
interest ramps of +/- 100bp, 200bp, and 300bp along with a rates unchanged
scenario. The parallel movement of interest rates means all projected market
interest rates move up or down by the same amount. A ramp in interest rates
means that the projected change in market interest rates occurs over the
12-month horizon projected. For example, in the +100bp scenario, the projected
prime rate will increase from its starting point of 8.00 percent at March 31,
2001 to 9.00 percent 12 months later. The prime rate in this example will
increase 1/12th of the overall increase of 100 basis points each month.
The net interest income simulation results for the twelve month period ending
March 31, 2002 is shown below. The growth assumption used for this simulation
was based on the growth projections the Company anticipates over the next 12
months given trends since the beginning of 2001. The impact of each interest
rate scenario on projected net interest income is displayed before and after
factoring in the estimated impact of the $25.0 million interest rate floor which
is accounted for as a cash flow hedge.
Net Interest Income Simulation
(amounts in thousands)
Movement in interest rates -300bp -200bp -100bp Unchanged +100bp +200bp +300bp
-------- -------- -------- --------- -------- -------- ---------
Projected 12-month net
interest income....... $ 18,010 $ 17,986 $ 17,921 $ 17,822 $ 17,689 $ 17,535 $ 17,386
Dollar change from
rates unchanged
scenario. ............ 188 164 99 -- (133) (287) (436)
Percentage change
from rates unchanged
scenario.............. 1.05% 0.92% 0.56% -- -0.75% -1.61% -2.45%
Benefit/(cost) from
$25MM floor (1)....... 259 122 (15) (152) (442) (555) (585)
Total net interest
income impact
with floor............ 18,269 18,108 17,906 17,670 17,247 16,980 16,801
Dollar change from
flat w/floor.......... 599 438 236 -- (423) (690) (869)
Percentage change
from unchanged
w/floor............... 3.39% 2.48% 1.34% -- -2.39% -3.90% -4.92%
POLICY LIMITS +/-....... 9.00% 6.00% 3.00% -- 3.00% 6.00% 9.00%
(1) In September 1998, the Company purchased an interest rate floor. The
notional amount of the floor is $25.0 million with a maturity date of
September 29, 2003. The floor's reference rate is the prime rate with a
strike of 8.50 percent. The floor is accounted for as a cash flow hedge
under SFAS 133.
The Company's rate sensitivity position over the projected twelve month horizon
is liability sensitive. This is evidenced by the projected decrease of net
interest income in the rising interest rate scenarios, and the increase in net
interest income in falling rate scenarios. The primary reason for this interest
rate risk profile is the growth of the Wealthbuilder deposit products along with
the continued growth in these products that is projected into 2001 and 2002, as
well as the growth and mix of components of the asset side of the balance sheet.
The Company's general policy is to limit the percentage change in projected net
interest income to +/- 3, 6, and 9 percent from the rates unchanged scenario for
the +/-100bp, 200bp, and 300bp interest rate ramp scenarios, respectively. The
Company was within its policy limits for each projected scenario in the table
above.
Since there are limitations inherent in any methodology used to estimate the
exposure to changes in market interest rates, these analyses are not intended to
be a forecast of the actual effect of changes in market interest rates such as
those indicated above on the Company. Further, this analysis is based on the
Company's assets and liabilities as of March 31, 2001 (with forward adjustments
for planned growth and anticipated business activities) and does not contemplate
any actions the Company might undertake in response to changes in market
interest rates.
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) None.
(b) Reports on Form 8-K
None.
Signatures
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.
Date: May 10, 2001 By /s/ Gregory K. Cleveland
---------------------------------------
Gregory K. Cleveland
President
Chief Executive Officer
By /s/ Brenda L. Rebel
---------------------------------------
Brenda L. Rebel
Treasurer
Chief Financial Officer