BNCCORP, INC. REPORTS SECOND QUARTER NET INCOME OF $574 THOUSAND, OR $0.16 PER DILUTED SHARE, COMMUNITY BANKING SEGMENT REPORTED NET INCOME OF $2.8 MILLION, OR $0.79 PER DILUTED SHARE

BISMARCK, N.D., Aug. 1, 2023

• For the quarter, the Community Banking segment reported net income of $2.8 million, or $0.79 per diluted share, unchanged from the same period of 2022.
• The Mortgage Banking segment reported a net loss of $1.9 million for the quarter, including $1.4 million of one-time expenses associated with the sale of assets and assumption of liabilities on June 16, 2023, compared to a net loss of $580 thousand in the 2022 period.
• Net interest margin increased to 3.68% for the second quarter of 2023 compared to 3.31% during the second quarter of 2022.
• There were no outstanding borrowings as of June 30, 2023, unchanged from December 31, 2022. Estimated liquid assets remain strong at $164.4 million with an additional $165.0 million of borrowing capacity at June 30, 2023.
• New loans held for investment origination activity during the second quarter of 2023 resulted in an increase of $10.8 million, or 1.7%, in loans held for investment.
• Loans held for investment-to-deposit ratio increased to 79.7% from 75.2% at December 31, 2022 and 70.3% at June 30, 2022.
• Allowance for credit losses as of June 30, 2023 was 1.40% of loans held for investment compared to 1.43% as of December 31, 2022.
• Non-performing assets slightly increased to $1.5 million as of June 30, 2023, compared to $1.4 million as of December 31, 2022.

BISMARCK, N.D., Aug. 1, 2023 /PRNewswire/ -- BNCCORP, INC. (BNC or the Company) (OTCQX Markets: BNCC), which operates community banking and wealth management businesses in North Dakota and Arizona, today reported financial results for the second quarter ended June 30, 2023.

Management Commentary

"With the sale of our mortgage division completed, we are laser focused on the performance of our core banking franchise. Our liquidity, credit quality, and capital positions remain strong and our customer relationships have proven to be deep," said Daniel J. Collins, BNC's President and Chief Executive Officer. "We saw those strengths at work in the second quarter where, despite the rapid pace of interest rate increases and the economic uncertainty many feel, our quality net loan growth continued."

Mr. Collins continued, "It is noteworthy that competition for deposits increased significantly in the second quarter as national news prompted greater focus on deposit rates. While customers with deposit balances beyond their near-term needs redeployed portions of their cash to high-yielding instruments, here again we see our strong customer relationship focus mitigating some of that impact."

Collins continued, "Looking ahead to the remainder of 2023, we are focused on growing our community banking business relationships as well as reviewing our post mortgage infrastructure. Our objectives are to continue a measured trend of loan growth and to protect our strong financial position. Credit quality continues to be a critical metric for us as a good indicator of future performance and as a good fulcrum on which to balance opportunity and risk. Our inherently conservative approach has served us well over the years and will continue to be our guiding star in 2023 and beyond. Accordingly, we remain confident that our superior customer service and broad range of financial products will continue to meet the needs of existing and future clients."