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Consolidated interest expense in the first quarter of 2025 was $4.1 million, an increase of $331 thousand from the 2024 period. The cost of core deposits in the first quarter of 2025 rose modestly to 1.88% versus 1.74% in the first quarter of 2024. The consolidated average balance of deposits increased by $25.3 million compared to the first quarter of 2024. The cost of interest-bearing liabilities was 2.42% during the first quarter of 2025, compared to 2.33% in the same period of 2024. The Company has experienced a migration from non-interest bearing deposits to higher rate products over recent periods along with an increase in deposit balances.

Net interest income for the first quarter of 2025 was $7.9 million, a decrease of $8 thousand, or 0.1%, from the first quarter of 2024. Net interest margin was 3.49% in the first quarter of 2025 compared to 3.52% reported in the prior year period.

Non-interest income during the first quarter of 2025 was $1.4 million, compared to $1.5 million in the 2024 first quarter. Bank charges and service fees were $125 thousand lower quarter-over-quarter primarily due to a reduction in deposits held in one-way sell positions. Using an associated banking network, the Company generates fee income on deposits not otherwise deployed by placing those deposits with other financial institutions to meet their liquidity needs. The deposits can be reclaimed for liquidity use by the Company at any time. Fees derived from the movement of deposits off the balance sheet can fluctuate significantly based on our customers' excess funding needs. As of March 31, 2025, off-balance sheet deposits were $18.1 million compared to $38.9 million as of March 31, 2024.

Non-interest expense during the first quarter of 2025 decreased $78 thousand, or 1.1%, year-over-year, primarily due to a $22 thousand reduction in data processing expense and a $113 thousand reduction in other expenses. The decrease in other expenses is a result of lower loan workout costs and lower director fees versus the previous period. The Company reported a modest increase in salary and employee benefits of $45 thousand, or 1.1% on a quarter-over-quarter basis. Merit based and inflationary increases in salaries and employee benefits were partially offset by lower headcount.

In the first quarter of 2025, consolidated income tax expense was $542 thousand, compared to $535 thousand in the first quarter of 2024. The Company maintained an effective tax rate of 23.5% for both periods presented.

Tangible book value per common share on March 31, 2025 was $27.62, compared to $26.60 at December 31, 2024. The Company's tangible common equity capital ratio increased to 10.06% as of March 31, 2025, compared to 9.68% on December 31, 2024.

Assets and Liabilities

Total assets were $966.6 million at March 31, 2025 versus $966.7 million at December 31, 2024. Total loans held for investment were $699.3 million on March 31, 2025 compared to $698.7 million on December 31, 2024. Debt securities decreased $1.7 million from year-end 2024, primarily due to normal amortization, while cash and cash equivalent balances totaled $102.9 million on March 31, 2025 compared to $100.8 million on December 31, 2024.

Total deposits increased $11.3 million to $848.8 million as of March 31, 2025, from a balance of $837.5 million on December 31, 2024. The Company also maintains off-balance sheet transactional deposits accounts and off-balance sheet time deposit accounts. Off-balance sheet deposits can fluctuate significantly as customers' cash sources or uses change. The Company remains committed to cultivating new deposit relationships and prioritizing liquidity.

The following table provides additional detail on the Company's total deposit relationships:

The Company remains highly focused on meeting the needs of its customers and ensuring deposit rates reflect changing market conditions. The Company estimates that deposit insurance and other deposit protection programs secure approximately 71% of its customers' deposit balances. This fact, combined with the Company's strong balance sheet and management's sustained focus on fostering a relationship-focused culture, has allowed the Company to maintain a significant deposit base.

Trust assets under administration decreased 1.2%, or $5.1 million, to $422.9 million at March 31, 2025, from $428.0 million at December 31, 2024. The Company has benefited from the acquisition of new assets under administration in 2025, but also experienced declines in the market value of financial assets attributable to declines in the broader financial markets.

Asset Quality

The allowance for credit losses was $9.3 million as of March 31, 2025, versus $9.2 million on December 31, 2024. The allowance for credit losses as a percentage of loans held for investment on March 31, 2025 increased from 1.32% as of December 31, 2024 to 1.33% at current quarter end.

Past due loans of 31-89 days decreased to $517 thousand as of March 31, 2025, compared to $1.2 million as of December 31, 2024. Nonperforming assets were $7.3 million on March 31, 2025, compared to $6.3 million on December 31, 2024. The ratio of nonperforming assets-to-total-assets was 0.75% at March 31, 2025 versus 0.65% at December 31, 2024. At March 31, 2025, $5.4 million, or 75%, of the $7.3 million in nonperforming loans were SBA loans supported by material government guarantees. When excluding the loan balances covered by government guarantees, the Company's non-performing assets-to-total-assets ratio was 0.32% on March 31, 2025.

The Company continues to monitor the evolving significant macroeconomic and geopolitical environment for possible impacts to the loan portfolio. As of March 31, 2025, classified loans were $5.0 million compared to $4.7 million of classified loans at December 31, 2024. As of March 31, 2025 and December 31, 2024, the Company had $14.0 million and $12.2 million, respectively, of potentially problematic loans, which are risk-rated as "special mention". As of March 31, 2025, $10.5 million of the loan balances are secured by hotels. While the Company has experienced an increase in special mention loans for this industry, the loans are not concentrated to a geographical location or specific property type. The remainder of the loans within the hotel industry are pass rated as of March 31, 2025.

BNC's loans held for investment are geographically concentrated in North Dakota and Arizona, comprising 54% and 24%, respectively, of the Company's total loans held for investment portfolio.

The North Dakota economy is influenced by the energy and agriculture industries. Changes in energy supply and demand, along with market sentiment have recently caused a decrease in oil prices that, if prolonged, could have a negative impact on the oil industry and ancillary services. Potential risks to North Dakota's energy and agriculture industries include the possibility of adverse national legislation, potential effects of trade policy, and changes in economic conditions. Depending on the severity of their impact, these factors could present potential challenges to credit quality in North Dakota.

The Arizona economy continues to diversify but continues to be influenced by the leisure and travel industries. Positive trends in both industries have been noted, but an extended slowdown in these industries may negatively impact credit quality in Arizona. While the Company's portfolio includes various sized loans spread over a large number of industry sectors, it has meaningful concentrations of loans to the hospitality and commercial real estate industries.

The following table approximately describes the Company's concentrations by industry:

Capital

Banks and bank holding companies operate under separate regulatory capital requirements. As of March 31, 2025, the Company's capital ratios exceeded all regulatory capital thresholds, including the capital conservation buffer.

A summary of the Company's and the Bank's capital ratios is presented below:

The Common Equity Tier 1 ratio, which is generally a comparison of a bank's core equity capital to its total risk weighted assets, is a measure of the current risk profile of the Bank's asset base from a regulatory perspective. The Tier 1 leverage ratio, which is based on average assets, does not consider the mix of risk-weighted assets.

The Company regularly evaluates the sufficiency of its capital to ensure compliance with regulatory capital standards and to serve as a source of strength for the Bank. The Company manages capital by assessing the composition of capital and the amounts available for growth, risk, or other purposes.

The Company made an election at the adoption of BASEL III to exclude changes in accumulated other comprehensive income from the calculation of regulatory ratios.

Share Repurchases

In December 2020, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of up to 175,000 shares of BNCCORP, INC. outstanding common stock. During the first quarter of 2024, the Company repurchased 50,000 shares of common stock for a total cost of $1.2 million, or approximately $23.25 per share. The Company has made no other share repurchases of common stock. As of March 31, 2025, there was 125,000 shares remaining under the current authorized share repurchase program.

About BNCCORP, INC.

BNCCORP, INC., headquartered in Bismarck, ND, 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 and Arizona from 11 locations.

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", "at the present time", "plan", "optimistic", "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 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 or future pandemics 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; risks associated with our acquisition and growth strategies; and other risks, including the potential impact of the imposition of tariffs or retaliatory tariffs, 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.

This press release contains references to financial measures, which are not defined in GAAP. Such non-GAAP financial measures include tangible common equity to total period end assets ratio. These non-GAAP financial measures have been included as the Company believes they are helpful for investors to analyze and evaluate the Company's financial condition.

FOR FURTHER INFORMATION:
WEBSITE: www.bnccorp.com

(Financial tables attached)