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

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TO BUSINESS EDITORS:

BNCCORP, INC. Reports Growth Surge In Loans And Deposits And First

Quarter Net Income Of $1.8 Million, Or $0.41 Per Diluted Share

BISMARCK, N.D., April 24, 2014 /PRNewswire/ -- BNCCORP, INC. (BNC or

the Company) (OTCQB Markets: BNCC), which operates community banking

and wealth management businesses in North Dakota, Arizona and

Minnesota, and has mortgage banking offices in Illinois, Kansas,

Nebraska, Minnesota, Arizona and North Dakota, today reported

financial results for the first quarter ended March 31, 2014.

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

diluted share. This compared to net income of $3.785 million, or $1.00

per diluted share, in the first quarter of 2013. Results for the first

quarter of 2014 reflect lower non-interest income, which is impacted

by lower mortgage banking revenues due to rising interest rates. This

was partially offset by significantly higher net interest income and

lower non-interest expenses when compared to the prior year first

quarter. A reversal of provisions for credit losses increased pre-tax

earnings by $200 thousand in the first quarter of 2014, compared to a

provision of $700 thousand in the first quarter of 2013. Deposits

surged in the first quarter, increasing by $79.6 million, or 11.0%, in

the first quarter. While this surge fueled $85 million of asset

growth, we anticipate clients will redeploy approximately $40 million

of these funds in the second quarter of 2014. Nonperforming assets

decreased to $6.1 million, or 0.66% of total assets, at March 31,

2014, compared to $6.7 million, or 0.79% of total assets, at December

31, 2013, and $13.6 million, or 1.70% of total assets, at March 31,

2013.

Timothy J. Franz, BNCCORP President and Chief Executive Officer, said,

"Growing our core bank is a key strategy and we successfully continued

our momentum this quarter. Growth in total assets and deposits,

combined with the improving net interest margin, demonstrates that we

are executing. We were solidly profitable, despite the expected

decrease in mortgage banking revenues due to the trend in interest

rates. Our people are focused, the pipeline of business is strong and

the North Dakota market remains robust. We look forward to

capitalizing on these conditions as 2014 continues."

Mr. Franz continued, "We are pleased to report the U.S. Treasury

auctioned its investment in our preferred stock issued pursuant to the

TARP program in the first quarter of 2014, thus ending our

participation in this program. American taxpayers profited from their

investment in BNC as private investors paid a full price for our

shares. The new owners of our preferred stock are sophisticated

investors familiar with community banking. Their willingness to pay a

full price can be viewed as a vote of confidence in our financial

condition and prospects."

First Quarter Results

Net interest income for the first quarter of 2014 was $6.205 million,

an increase of $1.572 million, or 33.9%, from $4.633 million in the

same period of 2013. The net interest margin in the first quarter of

2014 increased to 3.20% compared to 2.61% in the same period of 2013.

Interest income rose as the average balance of interest earning assets

increased to $787.3 million from $720.4 million, or $66.9 million when

compared to the first quarter of 2013. The average loans held for

investment increased $37.0 million, or 13.0%, compared to the prior

year first quarter. On average, loans held for sale decreased by $54.5

million when compared to the first quarter of 2013 due to lower

mortgage banking activity. This lower balance was more than offset by

the increase of $125.6 million in average investment securities. The

yield on earning assets increased to 3.66% in the first quarter of

2014, compared to 3.18% in the first quarter of 2013.

Interest expense decreased despite exceptional growth in deposits, as

we have been able to lower the rates paid on deposits. The cost of

interest bearing liabilities declined to 0.57% in the current quarter,

compared to 0.70% in the same period of 2013.

A reversal of provisions for loan losses increased pre-tax earnings by

$200 thousand in the first quarter of 2014 compared to a provision for

loan losses of $700 thousand in the first quarter of 2013. The

reduction of the allowance for credit losses reflects stabilized risk

in our loan portfolio, strong allowance coverage of nonperforming and

classified loans, and net recoveries in the first quarter of 2014.

Non-interest income for the first quarter of 2014 was $4.284 million,

a decrease of $7.040 million, or 62.2%, from $11.324 million in the

first quarter of 2013. The decrease primarily relates to a decline in

mortgage banking revenues, which aggregated $2.282 million, compared

to $8.247 million in the first quarter of 2013. Mortgage banking

revenues continue to be significantly impacted in 2014 by the increase

in interest rates that began in 2013. The 2014 first quarter included

gains on sales of SBA loans of $240 thousand, compared to $755

thousand in the same period of 2013. This decrease is primarily due to

temporary delays and we anticipate a rebound of gains on sales of

loans in the second quarter of 2014. Bank fees and service charges

were $704 thousand in the first quarter of 2014, an increase of 14.1%

compared to the first quarter of 2013. These fees continue to rise

with the growth in our deposits and our success in gaining new

accounts. Wealth management revenues increased by $62 thousand, or

19.0%, in the first quarter of 2014 compared to the same period in

2013 as our North Dakota customers are increasingly utilizing our

wealth management services.

Non-interest expense for the first quarter of 2014 was $8.090 million,

a decrease of $1.307 million, or 13.9%, from $9.397 million in the

first quarter of 2013. This decrease primarily relates to lower

mortgage banking volume.

In the first quarter of 2014, we recorded an income tax expense of

$807 thousand. The effective tax rate was 31.05%. We recorded income

tax expense of $2.075 million in the first quarter of 2013, which

resulted in an effective tax rate of 35.41%. The 2014 rate reduction

relates primarily to the impact of tax exempt investments made

throughout 2013.

Net income available to common shareholders was $1.420 million, or

$0.41 per diluted share, for the first quarter of 2014 after

accounting for dividends accrued on preferred stock and the

amortization of issuance discounts on preferred stock. These costs

aggregated $372 thousand in the first quarter of 2014 and $324

thousand in the same period of 2013. The costs associated with $20.1

million of preferred stock increased in the first quarter of 2014 as

the annual dividend rate increased to 9% from 5% in mid quarter. Net

income available to common shareholders in the first quarter of 2013

was $3.461 million, or $1.00 per diluted share.

Assets, Liabilities and Equity

Total assets were $928.0 million at March 31, 2014, an increase of

$84.9 million, or 10.1%, compared to $843.1 million at December 31,

2013. The increases in recent periods have been funded primarily by

growing deposits in North Dakota as this region is experiencing robust

economic conditions. As previously noted, we anticipate that

approximately $40 million of client assets will be redeployed in the

second quarter of 2014 and our balance sheet will downsize as these

funds are deployed.

Loans held for investment, which aggregated $324.2 million at March

31, 2014, increased by $41.2 million, or 14.6%, since March 31, 2013.

Loans held for sale have decreased by $5.5 million since December 31,

2013 as mortgage banking production has been reduced by the recent

increase in interest rates.

Total deposits were $802.9 million at March 31, 2014, increasing by

$79.6 million from 2013 year-end. Over recent years we have continued

to witness growth in our North Dakota branches, particularly branches

located near the Bakken Formation.

Trust assets under management or administration increased to $252.1

million at March 31, 2014, compared to $249.7 million at December 31,

2013 and $221.9 million at March 31, 2013. Our wealth management

department is capturing wealth being created by the exceptionally

strong economic conditions in North Dakota both in personal trust and

pension plan services and bolstered by strong equity markets.

Capital

Banks and their bank holding companies operate under separate

regulatory capital requirements.

At March 31, 2014, BNCCORP's tier 1 leverage ratio was 11.28%, the

tier 1 risk-based capital ratio was 22.48%, and the total risk-based

capital ratio was 23.76%.

At March 31, 2014, BNCCORP's tangible common equity as a percent of

assets was 5.61% compared to 5.79% at December 31, 2013. Common

shareholder equity at March 31, 2014 was $52.1 million, and we had

preferred stock and subordinated debentures outstanding which

aggregated $43.5 million at March 31, 2014.

Book value per common share of the Company was $15.45 as of March 31,

2014, compared to $14.45 at December 31, 2013. Book value per common

share, excluding accumulated other comprehensive income (loss), was

$15.31 as of March 31, 2014, compared to $14.89 at December 31, 2013.

At March 31, 2014, BNC National Bank had a tier 1 leverage ratio of

10.21%, a tier 1 risk-based capital ratio of 20.65%, and a total

risk-based capital ratio of 21.92%.

At March 31, 2014, tangible common equity of BNC National Bank was

9.36% of total Bank assets.

In July of 2013, the Federal Reserve issued new regulatory capital

standards for community banks which incorporate some of the capital

requirements addressed in the Basel III framework and begin to be

effective January 1, 2015. We have estimated our regulatory capital

ratios under the new Basel III framework and expect to be in

compliance with these standards.

Asset Quality

Nonperforming assets were $6.1 million at March 31, 2014, down from

$6.7 million at December 31, 2013 and $13.6 million at March 31, 2013.

The ratio of total nonperforming assets to total assets was 0.66% at

March 31, 2014 and 0.79% at December 31, 2013. There was no provision

for other real estate costs in the first quarter of 2014 or 2013.

Nonperforming loans were $5.0 million at March 31, 2014, down from

$5.6 million at December 31, 2013, and $10.3 million at March 31,

2013. The ratio of the allowance for credit losses to total

nonperforming loans as of March 31, 2014 was 196%, compared to 175% at

December 31, 2013, and 96% at March 31, 2013.

The allowance for credit losses was $9.9 million at March 31, 2014,

compared to $9.8 million at December 31, 2013. The allowance for

credit losses as a percentage of total loans at March 31, 2014 was

2.80%, compared to 2.81% at December 31, 2013. The allowance for

credit losses as a percentage of loans and leases held for investment

at March 31, 2014 was 3.04%, compared to 3.10% at December 31, 2013.

At March 31, 2014, BNCCORP had $12.2 million of classified loans, $5.0

million of loans on non-accrual and $1.1 million of other real estate

owned. At December 31, 2013, the Company had $13.5 million of

classified loans, $4.7 million of loans on non-accrual and $1.1

million of other real estate owned. At March 31, 2013, the Company

had $13.8 million of classified loans, $10.2 million of loans on

non-accrual and $3.3 million of other real estate owned.

BNCCORP, INC., headquartered in Bismarck, N.D., is a registered bank

holding company dedicated to providing banking and wealth management

services to businesses and consumers in its local markets. The Company

operates community banking and wealth management businesses in North

Dakota, Arizona and Minnesota from 14 locations. BNC also conducts

mortgage banking from 15 offices in Illinois, Kansas, Nebraska,

Minnesota, Arizona and North Dakota.

This news release may contain "forward-looking statements" within the

meaning of the safe harbor provisions of the Private Securities

Litigation Reform Act of 1995 with respect to the financial condition,

results of operations, plans, objectives, future performance and

business of BNC. Forward-looking statements, which may be based upon

beliefs, expectations and assumptions of our management and on

information currently available to management are generally

identifiable by the use of words such as "expect", "believe",

"anticipate", "plan", "intend", "estimate", "may", "will", "would",

"could", "should", "future" and other expressions relating to future

periods. Examples of forward-looking statements include, among others,

statements we make regarding our belief that we have exceptional

liquidity, our expectations regarding future market conditions and our

ability to capture opportunities and pursue growth strategies, our

expected operating results such as revenue growth and earnings, and

our expectations of the effects of the regulatory environment on our

earnings for the foreseeable future. Forward-looking statements are

neither historical facts nor assurances of future performance. Our

actual results and financial condition may differ materially from

those indicated in the forward-looking statements. Therefore, you

should not rely on any of these forward-looking statements. Important

factors that could cause our actual results and financial condition to

differ materially from those indicated in the forward-looking

statements include, but are not limited to: the impact of current and

future regulation; the risks of loans and investments, including

dependence on local and regional economic conditions; competition for

our customers from other providers of financial services; possible

adverse effects of changes in interest rates, including the effects of

such changes on mortgage banking revenues and derivative contracts and

associated accounting consequences; risks associated with our

acquisition and growth strategies; and other risks which are difficult

to predict and many of which are beyond our control. In addition, all

statements in this news release, including forward-looking statements,

speak only of the date they are made, and the Company undertakes no

obligation to update any statement in light of new information or

future events.

(Financial tables attached)

BNCCORP, INC. CONSOLIDATED FINANCIAL DATA (Unaudited)

For the Quarter Ended March 31,

(In thousands, except per share data) 2014 2013

SELECTED INCOME STATEMENT DATA

Interest income $ 7,104 $ 5,649

Interest expense 899 1,016

Net interest income 6,205 4,633

Provision (reduction) for credit losses (200) 700

Non-interest income 4,284 11,324

Non-interest expense 8,090 9,397

Income before income taxes 2,599 5,860

Income tax expense 807 2,075

Net income 1,792 3,785

Preferred stock costs 372 324

Net income available to common shareholders $ 1,420 $ 3,461

EARNINGS PER SHARE DATA

Basic earnings per common share $ 0.42 $ 1.05

Diluted earnings per common share $ 0.41 $ 1.00

BNCCORP, INC. CONSOLIDATED FINANCIAL DATA (Unaudited)

For the Quarter Ended March 31,

(In thousands, except share data) 2014 2013

ANALYSIS OF NON-INTEREST INCOME

Bank charges and service fees $ 704 $ 617

Wealth management revenues 389 327

Mortgage banking revenues 2,282 8,247

Gains on sales of loans, net 240 755

Gains on sales of securities, net 523 1,210

Other 146 168

Total non-interest income $ 4,284 $ 11,324

ANALYSIS OF NON-INTEREST EXPENSE

Salaries and employee benefits $ 4,239 $ 5,035

Professional services 675 969

Data processing fees 718 720

Marketing and promotion 654 509

Occupancy 482 518

Regulatory costs 151 324

Depreciation and amortization 305 305

Office supplies and postage 157 155

Other real estate costs 12 77

Other 697 785

Total non-interest expense $ 8,090 $ 9,397

WEIGHTED AVERAGE SHARES

Common shares outstanding (a) 3,349,588 3,297,352

Incremental shares from assumed conversion of options and contingent shares 127,871 169,532

Adjusted weighted average shares (b) 3,477,459 3,466,884

(a) Denominator for basic earnings per common share

(b) Denominator for diluted earnings per common share

BNCCORP, INC. CONSOLIDATED FINANCIAL DATA (Unaudited)

As of

(In thousands, except share, per share and full time equivalent data) March 31, 2014 December, 2013 March 31, 2013

SELECTED BALANCE SHEET DATA

Total assets $ 928,024 $ 843,123 $ 799,400

Loans held for sale-mortgage banking 27,414 32,870 66,037

Loans and leases held for investment 324,183 317,928 282,949

Total loans 351,597 350,798 348,986

Allowance for credit losses (9,858) (9,847) (9,873)

Investment securities available for sale 437,893 435,719 319,488

Other real estate, net 1,056 1,056 3,336

Earning assets 870,384 787,519 739,854

Total deposits (a) 802,862 723,229 681,712

Core deposits (a) 738,587 658,704 616,712

Other borrowings 45,611 42,399 38,529

Cash and cash equivalents (a) 101,591 18,871 89,534

OTHER SELECTED DATA

Net unrealized gains (losses) in accumulated other comprehensive income $ 454 $ (1,468) $ 3,980

Trust assets under management or administration $ 252,063 $ 249,691 $ 221,894

Total common stockholders' equity $ 52,119 $ 48,767 $ 50,322

Book value per common share $ 15.45 $ 14.45 $ 15.25

Book value per common share excluding accumulated other comprehensive income, net $ 15.31 $ 14.89 $ 14.04

Full time equivalent employees 254 236 277

Common shares outstanding 3,373,463 3,374,601 3,300,652

CAPITAL RATIOS

Tier 1 leverage (Consolidated) 11.28% 10.94% 11.26%

Tier 1 risk-based capital (Consolidated) 22.48% 21.67% 22.84%

Total risk-based capital (Consolidated) 23.76% 23.15% 24.50%

Tangible common equity (Consolidated) 5.61% 5.79% 6.29%

Tier 1 leverage (BNC National Bank) 10.21% 10.06% 10.64%

Tier 1 risk-based capital (BNC National Bank) 20.65% 20.13% 21.89%

Total risk-based capital (BNC National Bank) 21.92% 21.40% 23.15%

Tangible common equity (BNC National Bank) 9.36% 9.82% 10.97%

(a) It is expected that $40 million of the deposit growth during the first of 2014 will be redeployed by our clients in the second quarter of 2014.

BNCCORP, INC. CONSOLIDATED FINANCIAL DATA (Unaudited)

For the Quarter Ended March 31,

(In thousands) 2014 2013

AVERAGE BALANCES

Total assets $ 842,888 $ 782,970

Loans held for sale-mortgage banking 24,104 78,572

Loans and leases held for investment 322,090 285,110

Total loans 346,194 363,682

Investment securities available for sale 429,304 303,348

Earning assets 787,305 720,392

Total deposits 722,471 663,619

Core deposits 657,892 612,793

Total equity 71,959 70,224

Cash and cash equivalents 29,937 71,298

KEY RATIOS

Return on average common stockholders' equity (a) 11.23% 30.81%

Return on average assets (b) 0.86% 1.96%

Net interest margin 3.20% 2.61%

Efficiency ratio 77.13% 58.89%

Efficiency ratio (BNC National Bank) 71.59% 56.38%

(a) Return on average common stockholders' equity is calculated by using the net income available to common shareholders as the numerator and equity (less preferred stock and accumulated other comprehensive income) as the denominator.

(b) Return on average assets is calculated by using net income as the numerator and average total assets as the denominator.

BNCCORP, INC. CONSOLIDATED FINANCIAL DATA (Unaudited)

As of

(In thousands) March 31, 2014 December 31, 2013 March 31, 2013

ASSET QUALITY

Loans 90 days or more delinquent and still accruing interest $ - $ 96 $ 41

Non-accrual loans 5,038 4,656 10,229

Total nonperforming loans $ 5,038 $ 5,617 $ 10,270

Other real estate, net 1,056 1,056 3,336

Total nonperforming assets $ 6,094 $ 6,673 $ 13,606

Allowance for credit losses $ 9,858 $ 9,847 $ 9,873

Troubled debt restructured loans $ 8,424 $ 8,544 $ 12,329

Ratio of total nonperforming loans to total loans 1.43% 1.60% 2.94%

Ratio of total nonperforming assets to total assets 0.66% 0.79% 1.70%

Ratio of nonperforming loans to total assets 0.54% 0.67% 1.28%

Ratio of allowance for credit losses to loans and leases held for investment 3.04% 3.10% 3.49%

Ratio of allowance for credit losses to total loans 2.80% 2.81% 2.83%

Ratio of allowance for credit losses to nonperforming loans 196% 175% 96%

For the Quarter

(In thousands) Ended March 31,

2014 2013

Changes in Nonperforming Loans:

Balance, beginning of period $ 5,617 $ 10,512

Additions to nonperforming - 725

Charge-offs (30) (894)

Reclassified back to performing - -

Principal payments received (549) (73)

Transferred to repossessed assets - -

Transferred to other real estate owned - -

Balance, end of period $ 5,038 $ 10,270

BNCCORP, INC. CONSOLIDATED FINANCIAL DATA (Unaudited)

(In thousands) For the Quarter Ended March 31,

2014 2013

Changes in Allowance for Credit Losses:

Balance, beginning of period $ 9,847 $ 10,091

Provision (reduction) (200) 700

Loans charged off (46) (944)

Loan recoveries 257 26

Balance, end of period $ 9,858 $ 9,873

Ratio of net charge-offs to average total loans 0.061% (0.252)%

Ratio of net charge-offs to average total loans, annualized 0.244% (1.010)%

(In thousands) For the Quarter Ended March 31,

2014 2013

Changes in Other Real Estate:

Balance, beginning of period $ 1,056 $ 5,131

Transfers from nonperforming loans - -

Real estate sold - (1,795)

Net gains (losses) on sale of assets - -

Provision - -

Balance, end of period $ 1,056 $ 3,336

As of

(In thousands) March 31, 2014 December 31, 2013 March 31, 2013

Other real estate $ 1,754 $ 3,250 $ 4,931

Valuation allowance (698) (2,194) (1,595)

Other real estate, net $ 1,056 $ 1,056 $ 3,336

BNCCORP, INC. CONSOLIDATED FINANCIAL DATA (Unaudited)

As of

(In thousands) March 31, 2014 December 31, 2013

CREDIT CONCENTRATIONS

North Dakota

Commercial and industrial $ 69,517 $ 73,277

Construction 11,004 13,082

Agricultural 14,516 16,847

Land and land development 11,534 10,611

Owner-occupied commercial real estate 28,993 28,435

Commercial real estate 43,268 35,654

Small business administration 2,325 2,188

Consumer 32,302 31,695

Subtotal $ 213,459 $ 211,789

Arizona

Commercial and industrial $ 4,858 $ 3,021

Construction - -

Agricultural - -

Land and land development 4,940 5,102

Owner-occupied commercial real estate 1,436 1,571

Commercial real estate 18,349 16,306

Small business administration 17,186 15,502

Consumer 2,560 2,248

Subtotal $ 49,329 $ 43,750

Minnesota

Commercial and industrial $ 273 $ 794

Construction - -

Agricultural 21 21

Land and land development 572 578

Owner-occupied commercial real estate - -

Commercial real estate 15,481 15,589

Small business administration 95 91

Consumer 1,125 1,241

Subtotal $ 17,567 $ 18,314

SOURCE BNCCORP, INC.

-0- 04/24/2014

/CONTACT: Timothy J. Franz, CEO, Telephone: (612) 305-2213; or Daniel Collins, CFO, Telephone: (612) 305-2210

/Web Site: http://www.bnccorp.com

(OTC-PINK:BNCC /

OTC-QB:BNCC) /

CO: BNCCORP, INC.

ST: North Dakota

IN: FIN OTC

SU: ERN

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