##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC
 FORM 10-Q/A
 AMENDMENT NO. 1 TO
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___TO ___
 Commission File number 0-25033
 The Banc Corporation
 
  Delaware
    
    63-1201350(State or Other Jurisdiction of Incorporation)
    
    (IRS Employer Identification No.)
 17 North 20th Street, Birmingham, Alabama 35203
  
   þ o
 
 Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-Accelerated Filer o
  o þ
  Class
    
    Outstanding as of March 31, 2005Common stock, $.001 par value
    
    18,756,632




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TABLE OF CONTENTS  PART I            FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESEX-31.01 SECTION 302 CERTIFICATION OF THE CEOEX-31.02 SECTION 302 CERTIFICATION OF THE PFOEX-32.01 SECTION 906 CERTIFICATION OF THE CEOEX-32.02 SECTION 906 CERTIFICATION OF THE PFO    Table of Contents   Accounting for Derivative Instruments and Hedging
Activities
      2




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##### Table of Contents



(Restated)MARCH 31,
    
    
    DECEMBER 31,2005
    
    
    2004(UNAUDITED)AssetsCash and due from banks
    
    $
    25,018
    
    
    $
    23,489Interest-bearing deposits in other banks
    
    
    8,580
    
    
    
    11,411Federal funds sold
    
    
    7,000
    
    
    
    11,000Investment securities available for sale
    
    
    264,559
    
    
    
    288,308Mortgage loans held for sale
    
    
    21,991
    
    
    
    8,095Loans, net of unearned income
    
    
    942,391
    
    
    
    934,868Less: Allowance for loan losses
    
    
    (12,957
    )
    
    
    (12,543
    )Net loans
    
    
    929,434
    
    
    
    922,325Premises and equipment, net
    
    
    57,452
    
    
    
    60,434Accrued interest receivable
    
    
    6,672
    
    
    
    6,237Stock in FHLB and Federal Reserve Bank
    
    
    11,830
    
    
    
    11,787Cash surrender value of life insurance
    
    
    38,268
    
    
    
    38,369Other assets
    
    
    56,130
    
    
    
    41,673TOTAL ASSETS
    
    $
    1,426,934
    
    
    $
    1,423,128LIABILITIES AND STOCKHOLDERS EQUITYDepositsNoninterest-bearing
    
    $
    93,499
    
    
    $
    89,487Interest-bearing
    
    
    986,066
    
    
    
    977,719TOTAL DEPOSITS
    
    
    1,079,565
    
    
    
    1,067,206Advances from FHLB
    
    
    146,090
    
    
    
    156,090Federal funds borrowed and security repurchase agreements
    
    
    47,813
    
    
    
    49,456Notes payable
    
    
    3,913
    
    
    
    3,965Junior subordinated debentures owed to unconsolidated subsidiary trusts
    
    
    31,959
    
    
    
    31,959Accrued expenses and other liabilities
    
    
    18,593
    
    
    
    13,913TOTAL LIABILITIES
    
    
    1,327,933
    
    
    
    1,322,589Stockholders EquityConvertible preferred stock, par value $.001 per share; authorized 5,000,000 shares;
shares issued and outstanding 62,000 at March 31, 2005 and December 31, 2004
    
    
    
    
    
    
    Common stock, par value $.001 per share; authorized 25,000,000 shares;
shares issued 19,020,943 and 18,025,932, respectively;
outstanding 18,756,632 and 17,749,846, respectively
    
    
    19
    
    
    
    18Surplus  preferred
    
    
    6,193
    
    
    
    6,193 common stock
    
    
    76,324
    
    
    
    68,428Retained earnings
    
    
    21,430
    
    
    
    29,591Accumulated other comprehensive loss
    
    
    (2,559
    )
    
    
    (1,094
    )Treasury stock, at cost
    
    
    (368
    )
    
    
    (390
    )Unearned ESOP stock
    
    
    (1,705
    )
    
    
    (1,758
    )Unearned restricted stock
    
    
    (333
    )
    
    
    (449
    )TOTAL STOCKHOLDERS EQUITY
    
    
    99,001
    
    
    
    100,539TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,426,934
    
    
    $
    1,423,128
  3




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##### Table of Contents



THREE MONTHS ENDEDMARCH 31,2005
    
    
    2004(Restated)INTEREST INCOMEInterest and fees on loans
    
    $
    14,878
    
    
    $
    13,567Interest on investment securities Taxable
    
    
    2,925
    
    
    
    1,713Exempt from Federal income tax
    
    
    58
    
    
    
    15Interest on federal funds sold
    
    
    82
    
    
    
    34Interest and dividends on other investments
    
    
    243
    
    
    
    165Total interest income
    
    
    18,186
    
    
    
    15,494INTEREST EXPENSEInterest on deposits
    
    
    6,037
    
    
    
    4,277Interest on other borrowed funds
    
    
    1,844
    
    
    
    1,666Interest on subordinated debentures
    
    
    698
    
    
    
    626Total interest expense
    
    
    8,579
    
    
    
    6,569NET INTEREST INCOME
    
    
    9,607
    
    
    
    8,925Provision for loan losses
    
    
    750
    
    
    
    NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
    
    
    8,857
    
    
    
    8,925NONINTEREST INCOMEService charges and fees on deposits
    
    
    1,112
    
    
    
    1,391Mortgage banking income
    
    
    446
    
    
    
    404Investment securities (losses) gains
    
    
    (909
    )
    
    
    391Change in fair value of derivatives
    
    
    (230
    )
    
    
    Gain on sale of branches
    
    
    
    
    
    
    739Increase in cash surrender value of life insurance
    
    
    351
    
    
    
    403Other income
    
    
    477
    
    
    
    646TOTAL NONINTEREST INCOME
    
    
    1,247
    
    
    
    3,974NONINTEREST EXPENSESSalaries and employee benefits
    
    
    5,402
    
    
    
    5,586Occupancy, furniture and equipment expense
    
    
    1,981
    
    
    
    2,164Management separation costs
    
    
    12,377
    
    
    
    Other operating expenses
    
    
    3,562
    
    
    
    3,602TOTAL NONINTEREST EXPENSES
    
    
    23,322
    
    
    
    11,352(Loss) income before income taxes
    
    
    (13,218
    )
    
    
    1,547INCOME TAX (BENEFIT) EXPENSE
    
    
    (5,057
    )
    
    
    319NET (LOSS) INCOME
    
    $
    (8,161
    )
    
    $
    1,228BASIC NET (LOSS) INCOME PER COMMON SHARE
    
    $
    (0.44
    )
    
    $
    0.07DILUTED NET (LOSS) INCOME PER COMMON SHARE
    
    $
    (0.44
    )
    
    $
    0.07WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
    
    
    18,406
    
    
    
    17,559WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, ASSUMING DILUTION
    
    
    18,406
    
    
    
    18,572
  4




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##### Table of Contents



THREE MONTHS ENDEDMARCH 312005
    
    
    2004NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES
    
    $
    (20,000
    )
    
    $
    4,169CASH FLOWS FROM INVESTING ACTIVITIES:Net decrease (increase) in interest-bearing deposits in other banks
    
    
    2,831
    
    
    
    (36,591
    )Net decrease (increase) in federal funds sold
    
    
    4,000
    
    
    
    (9,000
    )Proceeds from sales of securities available for sale
    
    
    
    
    
    
    59,269Proceeds from maturities of investment securities available for sale
    
    
    15,489
    
    
    
    23,434Purchases of investment securities available for sale
    
    
    (5,040
    )
    
    
    (111,104
    )Net (increase) decrease in loans
    
    
    (5,690
    )
    
    
    5,209Net sales (purchases) of premises and equipment
    
    
    2,093
    
    
    
    (1,426
    )Net cash paid in branch sale
    
    
    
    
    
    
    (6,626
    )Purchase of life insurance
    
    
    
    
    
    
    (5,000
    )Increase in other investments
    
    
    (43
    )
    
    
    (1,750
    )Net cash provided (used) by investing activities
    
    
    13,640
    
    
    
    (83,585
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in deposit accounts
    
    
    12,130
    
    
    
    48,839Net (decrease) increase in FHLB advances and other borrowed funds
    
    
    (11,643
    )
    
    
    39,142Payments made on notes payable
    
    
    (53
    )
    
    
    (52
    )Proceeds from sale of common stock
    
    
    7,455
    
    
    
    Net cash provided by financing activities
    
    
    7,889
    
    
    
    87,929Net increase in cash and due from banks
    
    
    1,529
    
    
    
    8,513Cash and due from banks at beginning of period
    
    
    23,489
    
    
    
    31,679CASH AND DUE FROM BANKS AT END OF PERIOD
    
    $
    25,018
    
    
    $
    40,192
  5




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##### Table of Contents



Restated Results of Operations and Financial Condition
 Accounting for
Derivative Instruments and Hedging Activities
     6




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##### Table of Contents



Condensed Consolidated
    
    March 31, 2005Statement of Condition
    
    As previously(In thousands)
    
    Reported
    
    

RestatedOther assets
    
    $
    56,045
    
    
    $
    56,130Interest-bearing deposits
    
    
    985,837
    
    
    
    986,066Retained earnings
    
    
    21,575
    
    
    
    21,430
 For the three months endedMarch 31, 2005Condensed Consolidated
    
    AsStatement of Operations
    
    previously(In thousands, except per share data)
    
    Reported
    
    


RestatedChange in fair value of derivatives
    
    $
    
    
    
    $
    (230
    )Loss before income tax benefit
    
    
    (12,988
    )
    
    
    (13,218
    )Income tax benefit
    
    
    (4,972
    )
    
    
    (5,057
    )Net loss
    
    
    (8,016
    )
    
    
    (8,161
    )Basic and diluted net loss per common
share
    
    $
    (0.44
    )
    
    $
    (0.44
    )
      7




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8




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##### Table of Contents



Alabama
    
    
    FloridaRegion
    
    
    Region
    
    
    Combined(Restated)
    
    
    
    
    
    
    (Restated)Three months ended March 31, 2005Net interest income
    
    $
    6,778
    
    
    $
    2,829
    
    
    $
    9,607Provision for loan losses
    
    
    733
    
    
    
    17
    
    
    
    750Noninterest income
    
    
    923
    
    
    
    324
    
    
    
    1,247Noninterest expense(2) (3)
    
    
    22,174
    
    
    
    1,148
    
    
    
    23,322Income tax (benefit) expense
    
    
    (5,639
    )
    
    
    582
    
    
    
    (5,057
    )Net (loss) income
    
    
    (9,567
    )
    
    
    1,406
    
    
    
    (8,161
    )Total assets
    
    
    1,151,859
    
    
    
    275,075
    
    
    
    1,426,934Three months ended March 31, 2004Net interest income
    
    $
    6,327
    
    
    $
    2,598
    
    
    $
    8,925Provision for loan losses(1)
    
    
    972
    
    
    
    (972
    )
    
    
    Noninterest income(1)
    
    
    3,604
    
    
    
    370
    
    
    
    3,974Noninterest expense(2)
    
    
    8,875
    
    
    
    2,477
    
    
    
    11,352Income tax (benefit) expense
    
    
    (104
    )
    
    
    423
    
    
    
    319Net income
    
    
    188
    
    
    
    1,040
    
    
    
    1,228Total assets(1)
    
    
    1,034,729
    
    
    
    214,008
    
    
    
    1,248,737
 
 (1)
    
    See Note 4 concerning branch sales. Also, in January 2004, certain loans were transferred
from the Florida segment to our special assets department which is included in the Alabama
segment.(2)
    
    Noninterest expense for the Alabama region includes all expenses for the holding company,
which have not been prorated to the Florida region.(3)
    
    See Notes 3 and 4 concerning the amount of management separation charges and loss on the sale
of assets. 9




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##### Table of Contents



Three Months EndedMarch 312005
    
    
    2004(Restated)Numerator:For basic and diluted, net (loss) income
    
    $
    (8,161
    )
    
    $
    1,228Denominator:For basic, weighted average common shares outstanding
    
    
    18,406
    
    
    
    17,559Effect of dilutive stock options and convertible preferred
    
    
    
    
    
    
    1,013Average diluted common shares outstanding
    
    
    18,406
    
    
    
    18,572Basic and diluted net (loss) income per common share
    
    $
    (.44
    )
    
    $
    .07
          March 31, 2005
    
    
    December 31, 2004(In thousands)10.6% junior subordinated debentures owed to TBC Capital Statutory
Trust II due September 7, 2030
    
    $
    15,464
    
    
    $
    15,4646-month LIBOR plus 3.75% junior subordinated debentures owed to TBC Capital
Statutory Trust III due July 25, 2031
    
    
    16,495
    
    
    
    16,495Total junior subordinated debentures owed to unconsolidated subsidiary trusts
    
    $
    31,959
    
    
    $
    31,959
  10




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##### Table of Contents



March 31, 2005Allocated shares
    
    
    55,328Estimated shares committed to be released
    
    
    6,675Unreleased shares
    
    
    211,397Total ESOP shares
    
    
    273,400Fair value of unreleased shares
    
    $
    2,807,818
 11
    Table of Contents  For the three months endedMarch 31,
    
    March 31,2005
    
    2004(Restated)Net (loss) income:As reported
    
    $
    (8,161
    )
    
    $
    1,228Pro forma
    
    
    (10,322
    )
    
    
    919(Loss) earnings per common share:As reported
    
    $
    (.44
    )
    
    $
    .07Pro forma
    
    
    (.56
    )
    
    
    .05Diluted (loss) earnings per common share:As reported
    
    $
    (.44
    )
    
    $
    .07Pro forma
    
    
    (.56
    )
    
    
    .05
  March 31,2005
    
    
    2004Risk free interest rate
    
    
    4.34
    %
    
    
    3.84
    %Volatility factor
    
    
    .41
    
    
    
    .32Weighted average life of options
    
    
    7.0
    
    
    
    7.0Dividend yield
    
    
    0.00
    
    
    
    0.00
 12
    Table of Contents  ITEM
2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
 Basis
of Presentation
   Restated Results of Operations and Financial Condition
 Accounting for Derivative
Instruments and Hedging Activities
    Overview
   13
    Table of Contents  Results
of Operations
    14
    Table of Contents  15
    Table of Contents  THREE MONTHS ENDED MARCH 31,2005
    

    2004AVERAGE
    
    
    INCOME/
    
    
    YIELD/
    
    
    AVERAGE
    
    
    INCOME/
    
    
    YIELD/BALANCE
    
    
    EXPENSE
    
    
    RATE
    
    
    BALANCE
    
    
    EXPENSE
    
    
    RATE(Dollars in thousands)ASSETSInterest-earning assets:Loans, net of unearned income(1)
    
    $
    953,891
    
    
    $
    14,878
    
    
    
    6.33
    %
    
    $
    858,225
    
    
    $
    13,567
    
    
    
    6.36
    %Investment securitiesTaxable
    
    
    276,595
    
    
    
    2,925
    
    
    
    4.29
    
    
    
    160,538
    
    
    
    1,713
    
    
    
    4.29Tax-exempt(2)
    
    
    6,632
    
    
    
    88
    
    
    
    5.38
    
    
    
    1,316
    
    
    
    23
    
    
    
    7.03Total investment securities
    
    
    283,227
    
    
    
    3,013
    
    
    
    4.31
    
    
    
    161,854
    
    
    
    1,736
    
    
    
    4.31Federal funds sold
    
    
    13,589
    
    
    
    82
    
    
    
    2.45
    
    
    
    14,440
    
    
    
    34
    
    
    
    .95Other investments
    
    
    26,380
    
    
    
    243
    
    
    
    3.74
    
    
    
    36,570
    
    
    
    165
    
    
    
    1.81Total interest-earning assets
    
    
    1,277,087
    
    
    
    18,216
    
    
    
    5.78
    
    
    
    1,071,089
    
    
    
    15,502
    
    
    
    5.82Noninterest-earning assets:Cash and due from banks
    
    
    27,483
    
    
    
    
    
    
    
    
    
    
    
    25,832Premises and equipment
    
    
    59,959
    
    
    
    
    
    
    
    
    
    
    
    58,018Accrued interest and other assets
    
    
    79,797
    
    
    
    
    
    
    
    
    
    
    
    78,153Allowance for loan losses
    
    
    (12,802
    )
    
    
    
    
    
    
    
    
    
    
    (25,492
    )Total assets
    
    $
    1,431,524
    
    
    
    
    
    
    
    
    
    
    $
    1,207,600LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing liabilities:Demand deposits
    
    $
    302,756
    
    
    
    1,110
    
    
    
    1.49
    
    
    $
    237,751
    
    
    
    681
    
    
    
    1.15Savings deposits
    
    
    28,214
    
    
    
    11
    
    
    
    0.16
    
    
    
    30,397
    
    
    
    13
    
    
    
    0.17Time deposits
    
    
    658,162
    
    
    
    4,916
    
    
    
    3.03
    
    
    
    544,141
    
    
    
    3,583
    
    
    
    2.65Other borrowings
    
    
    202,603
    
    
    
    1,857
    
    
    
    3.69
    
    
    
    172,047
    
    
    
    1,666
    
    
    
    3.89Subordinated debentures
    
    
    31,959
    
    
    
    685
    
    
    
    8.69
    
    
    
    31,959
    
    
    
    626
    
    
    
    7.88Total interest-bearing liabilities
    
    
    1,223,694
    
    
    
    8,579
    
    
    
    2.84
    
    
    
    1,016,295
    
    
    
    6,569
    
    
    
    2.60Noninterest-bearing liabilities:Demand deposits
    
    
    95,483
    
    
    
    
    
    
    
    
    
    
    
    81,250Accrued interest and other liabilities
    
    
    11,429
    
    
    
    
    
    
    
    
    
    
    
    9,468Stockholders equity
    
    
    100,918
    
    
    
    
    
    
    
    
    
    
    
    100,587Total liabilities and stockholders equity
    
    $
    1,431,524
    
    
    
    
    
    
    
    
    
    
    $
    1,207,600Net interest income/net interest spread
    
    
    
    
    
    
    9,637
    
    
    
    2.94
    %
    
    
    
    
    
    
    8,933
    
    
    
    3.22
    %Net yield on earning assets
    
    
    
    
    
    
    
    
    
    
    3.06
    %
    
    
    
    
    
    
    
    
    
    
    3.35
    %Taxable equivalent adjustment:Investment securities(2)
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    8Net interest income
    
    
    
    
    
    $
    9,607
    
    
    
    
    
    
    
    
    
    
    $
    8,925
 
 (1)
    
    Nonaccrual loans are included in loans, net of unearned income. No adjustment has been
made for these loans in the calculation of yields.(2)
    
    Interest income and yields are presented on a fully taxable equivalent basis using a tax rate
of 34 percent. 16
    Table of Contents  THREE MONTHS ENDED MARCH 31 (1)2005 VS. 2004INCREASE
    
    
    CHANGES DUE TO(DECREASE)
    
    
    RATE
    
    
    VOLUME(Dollars in thousands)Increase (decrease) in:Income from interest-earning assets:Interest and fees on loans
    
    $
    1,311
    
    
    $
    (69
    )
    
    $
    1,380Interest on securities:Taxable
    
    
    1,212
    
    
    
    
    
    
    
    1,212Tax-exempt
    
    
    65
    
    
    
    (7
    )
    
    
    72Interest on federal funds
    
    
    48
    
    
    
    50
    
    
    
    (2
    )Interest on other investments
    
    
    78
    
    
    
    134
    
    
    
    (56
    )Total interest income
    
    
    2,714
    
    
    
    108
    
    
    
    2,606Expense from interest-bearing liabilities:Interest on demand deposits
    
    
    429
    
    
    
    223
    
    
    
    206Interest on savings deposits
    
    
    (2
    )
    
    
    (1
    )
    
    
    (1
    )Interest on time deposits
    
    
    1,333
    
    
    
    542
    
    
    
    791Interest on other borrowings
    
    
    191
    
    
    
    (78
    )
    
    
    269Interest on subordinated debentures
    
    
    59
    
    
    
    59
    
    
    
    Total interest expense
    
    
    2,010
    
    
    
    745
    
    
    
    1,265Net interest income
    
    $
    704
    
    
    $
    (637
    )
    
    $
    1,341
 
 (1)
    
    The change in interest due to both rate and volume has been allocated to volume and rate
changes in proportion to the relationship of the absolute dollar amounts of the changes in
each.     17
    Table of Contents  Financial
Condition
     18
    Table of Contents  MARCH 31, 2005
    
    
    DECEMBER 31, 2004PERCENT OF
    
    
    
    
    
    
    PERCENT OFAMOUNT
    
    
    TOTAL
    
    
    AMOUNT
    
    
    TOTALCommercial and industrial
    
    $
    135,495
    
    
    
    14.3
    %
    
    $
    131,979
    
    
    
    14.1
    %Real estate  construction and land development
    
    
    272,319
    
    
    
    28.9
    
    
    
    249,188
    
    
    
    26.6Real estate  mortgageSingle-family
    
    
    230,863
    
    
    
    24.5
    
    
    
    250,718
    
    
    
    26.8Commercial
    
    
    248,282
    
    
    
    26.3
    
    
    
    242,279
    
    
    
    25.9Other
    
    
    25,814
    
    
    
    2.7
    
    
    
    25,745
    
    
    
    2.7Consumer
    
    
    24,484
    
    
    
    2.6
    
    
    
    28,431
    
    
    
    3.0Other
    
    
    6,636
    
    
    
    .7
    
    
    
    8,045
    
    
    
    .9Total loans
    
    
    943,893
    
    
    
    100.0
    %
    
    
    936,385
    
    
    
    100.0
    %Unearned income
    
    
    (1,502
    )
    
    
    
    
    
    
    (1,517
    )Allowance for loan losses
    
    
    (12,957
    )
    
    
    
    
    
    
    (12,543
    )Net loans
    
    $
    929,434
    
    
    
    
    
    
    $
    922,325
       March 31, 2005
    
    
    December 31, 2004(In thousands)10.6% junior subordinated debentures owed to TBC Capital Statutory
Trust II due September 7, 2030
    
    $
    15,464
    
    
    $
    15,4646-month LIBOR plus 3.75% junior subordinated debentures owed to TBC Capital
Statutory Trust III due July 25, 2031
    
    
    16,495
    
    
    
    16,495Total junior subordinated debentures owed to unconsolidated subsidiary trusts
    
    $
    31,959
    
    
    $
    31,959
 19
    Table of Contents  20
    Table of Contents  THREE-MONTHPERIOD ENDED
    
    
    YEAR ENDEDMARCH 31,
    
    
    DECEMBER 31,2005
    
    
    2004(Dollars in thousands)Allowance for loan losses at beginning of period
    
    $
    12,543
    
    
    $
    25,174Charge-offs:Commercial and industrial
    
    
    41
    
    
    
    7,690Real estate  construction and land development
    
    
    1
    
    
    
    765Real estate  mortgageSingle-family
    
    
    87
    
    
    
    1,012Commercial
    
    
    210
    
    
    
    5,820Other
    
    
    
    
    
    
    86Consumer
    
    
    125
    
    
    
    1,881Other
    
    
    91
    
    
    
    87Total charge-offs
    
    
    555
    
    
    
    17,341Recoveries:Commercial and industrial
    
    
    82
    
    
    
    1,468Real estate  construction and land development
    
    
    10
    
    
    
    4Real estate  mortgageSingle-family
    
    
    29
    
    
    
    470Commercial
    
    
    1
    
    
    
    737Other
    
    
    10
    
    
    
    97Consumer
    
    
    48
    
    
    
    549Other
    
    
    39
    
    
    
    410Total recoveries
    
    
    219
    
    
    
    3,735Net charge-offs
    
    
    336
    
    
    
    13,606Provision for loan losses
    
    
    750
    
    
    
    975Allowance for loan losses at end of period
    
    $
    12,957
    
    
    $
    12,543Loans at end of period, net of unearned income
    
    $
    942,391
    
    
    $
    934,868Average loans, net of unearned income
    
    
    953,891
    
    
    
    894,406Ratio of ending allowance to ending loans
    
    
    1.37
    %
    
    
    1.34
    %Ratio of net charge-offs to average loans(1)
    
    
    0.14
    %
    
    
    1.52
    %Net charge-offs as a percentage of:Provision for loan losses
    
    
    44.8
    %
    
    
    1395.49
    %Allowance for loan losses(1)
    
    
    10.52
    %
    
    
    108.47
    %Allowance for loan losses as a percentage of nonperforming loans
    
    
    183.97
    %
    
    
    169.36
    %
 
 (1)
    
    Annualized.   21
    Table of Contents  MARCH 31,
    
    
    DECEMBER 31,2005
    
    
    2004(Dollars in Thousands)Nonaccrual
    
    $
    7,014
    
    
    $
    6,344Accruing loans 90 days or more delinquent
    
    
    29
    
    
    
    431Restructured
    
    
    
    
    
    
    631Total nonperforming loans
    
    
    7,043
    
    
    
    7,406Other real estate owned
    
    
    2,971
    
    
    
    4,906Repossessed assets
    
    
    4
    
    
    
    103Total nonperforming assets
    
    $
    10,018
    
    
    $
    12,415Nonperforming loans as a percent of loans
    
    
    .75
    %
    
    
    .79
    %Nonperforming assets as a percent of loans plus nonperforming assets
    
    
    1.06
    %
    
    
    1.32
    %
   MARCH 31
    
    
    DECEMBER 31,2005
    
    
    2004(Dollars in thousands)Commercial and industrial
    
    $
    1,636
    
    
    $
    2,445Real estate  construction and land development
    
    
    229
    
    
    
    187Real estate  mortgagesSingle-family
    
    
    1,926
    
    
    
    2,060Commercial
    
    
    2,961
    
    
    
    2,273Other
    
    
    127
    
    
    
    183Consumer
    
    
    164
    
    
    
    250Other
    
    
    
    
    
    
    8Total nonperforming loans
    
    $
    7,043
    
    
    $
    7,406
   OUTSTANDING
    
    
    SPECIFICBALANCE
    
    
    ALLOWANCECommercial and industrial
    
    $
    2,253
    
    
    $
    1,097Real estate  construction and land development
    
    
    229
    
    
    
    57Real estate  mortgagesCommercial
    
    
    2,762
    
    
    
    686Other
    
    
    113
    
    
    
    19Total
    
    $
    5,357
    
    
    $
    1,859
 22
    Table of Contents  MARCH 31, 2005Allocated shares
    
    
    55,328Estimated shares committed to be released
    
    
    6,675Unreleased shares
    
    
    211,397Total ESOP shares
    
    
    273,400Fair value of unreleased shares
    
    $
    2,807,818
 23
    Table of Contents  FOR CAPITALADEQUACY
    
    
    TO BE WELLACTUAL
    
    
    PURPOSES
    
    
    CAPITALIZEDAMOUNT
    
    
    RATIO
    
    
    AMOUNT
    
    
    RATIO
    
    
    AMOUNT
    
    
    RATIOTotal Risk-Based CapitalCorporation
    
    $
    125,862
    
    
    
    11.34
    %
    
    $
    88,754
    
    
    
    8.00
    %
    
    $
    110,942
    
    
    
    10.00
    %The Bank
    
    
    123,966
    
    
    
    11.37
    %
    
    
    87,238
    
    
    
    8.00
    %
    
    
    109,047
    
    
    
    10.00
    %Tier 1 Risk-Based CapitalCorporation
    
    
    111,609
    
    
    
    10.06
    %
    
    
    44,377
    
    
    
    4.00
    %
    
    
    66,565
    
    
    
    6.00
    %The Bank
    
    
    111,009
    
    
    
    10.18
    %
    
    
    43,619
    
    
    
    4.00
    %
    
    
    65,428
    
    
    
    6.00
    %Leverage CapitalCorporation
    
    
    111,609
    
    
    
    7.90
    %
    
    
    56,484
    
    
    
    4.00
    %
    
    
    70,605
    
    
    
    5.00
    %The Bank
    
    
    111,009
    
    
    
    7.98
    %
    
    
    55,610
    
    
    
    4.00
    %
    
    
    69,513
    
    
    
    5.00
    %
 Liquidity
  Forward-Looking
Statements
    24
    Table of Contents  25
    Table of Contents  26
    Table of Contents  The Banc Corporation(Registrant)Date: February 17, 2006
    
    By:
    
    /s/ C. Stanley BaileyC. Stanley Bailey
Chief Executive OfficerDate: February 17, 2006
    
    By:
    
    /s/ James C. GossettJames C. GossettChief Accounting Officer(Principal Financial and Accounting Officer)
 27