County Bancorp, Inc. Announces Net Income of $3.7 Million for the Second Quarter of 2019

Company Release - 7/18/2019 8:30 AM ET

Highlights

  • Net income of $3.7 million for the second quarter of 2019; $7.5 million for the six months ended June 30, 2019
  • Diluted earnings per share of $0.53 for the second quarter of 2019; $1.07 for the six months ended June 30, 2019
  • Book value per share of $23.03 as of June 30, 2019, an increase of $0.67, or 3.0%, since March 31, 2019, and an increase of $1.53, or 7.1%, since December 31, 2018
  • Client deposits (demand deposits, money market accounts, and certificates of deposit) increased $39.6 million, or 5.2%, since March 31, 2019, and increased $96.3 million, or 13.7%, since June 30, 2018.
  • Brokered and national deposits decreased $62.9 million during the first half of 2019, a reduction of 13.4% since December 31, 2018

MANITOWOC, Wis., July 18, 2019 (GLOBE NEWSWIRE) -- County Bancorp, Inc. (the “Company”; Nasdaq: ICBK), the holding company of Investors Community Bank (the “Bank”), an agricultural and commercial community bank headquartered in Manitowoc, Wisconsin, reported net income of $3.7 million, or $0.53 diluted earnings per share, for the second quarter of 2019, compared to net income of $3.8 million, or $0.54 diluted earnings per share, for the first quarter of 2019 and $3.9 million, or $0.55 diluted earnings per share, for the second quarter of 2018.  This represents an annualized return on average assets of 1.00% for the three and six months ended June 30, 2019, compared to 1.04% and 1.10% for the three and six months ended June 30, 2018, respectively.

“We are very pleased with our most recent quarter and first half earnings, even though we still face some credit challenges in our agricultural portfolio due to the recent prolonged low milk price cycle,” stated Tim Schneider, President of the Company and CEO of the Bank.  “We are starting to see an improved milk price environment: the 12-month forward-looking average for class III milk increased from $16.00 to $17.04 per hundredweight on the Chicago Mercantile Exchange from March 31 to June 30, 2019. These improvements are encouraging, but it is going to take some time to see an impact on our overall classified assets.”

Schneider continued, “As previously announced, we are committed to reducing our wholesale funding, and we were able to make significant progress toward that in the first half of 2019, primarily through selling loan participations. We are also very pleased with our client deposit growth year-over-year and during this quarter.”

Loans and Total Assets

Total assets at June 30, 2019 were $1.5 billion, a decrease of $6.7 million, or 0.5%, and a decrease of $34.2 million, or 2.3%, over total assets as of March 31, 2019 and June 30, 2018, respectively.  Total loans were $1.1 billion at June 30, 2019, which represents a $35.1 million, or 3.0%, decrease over total loans at March 31, 2019, and a decrease of $33.7 million, or 2.9%, over total loans at June 30, 2018.

We continued to focus on participating loans off balance sheet during the second quarter of 2019.  During the second quarter of 2019, participated loans that the Company continued to service increased to $695.6 million at June 30, 2019 which was an increase of $20.4 million, or 3.0%, and $67.2 million, or 10.7%, over participated loans that the Company serviced at March 31, 2019 and June 30, 2018, respectively.

Deposits

Total deposits at June 30, 2019 were $1.2 billion, an increase of $28.9 million, or 2.5%, and a decrease of $5.3 million, or 0.4%, over total deposits as of March 31, 2019 and June 30, 2018, respectively.  Client deposits (demand deposits, money market accounts, and certificates of deposit) increased $39.6 million, or 5.2%, since March 31, 2019, and increased $96.3 million, or 13.7%, since June 30, 2018. 

Due to the increases in loan participations and client deposit growth, the Company decreased its reliance on brokered deposits and national certificates of deposit to $406.0 million at June 30, 2019.  This represents a decrease of $10.7 million, or 2.6%, from March 31, 2019, and a decrease of $101.5 million, or 20.0%, from June 30, 2018. 

During the second quarter of 2019, the Company also paid off a portion of its FHLB borrowings.  At June 30, 2019, borrowings from the FHLB totaled $59.4 million, which was a decrease of $41.0 million, or 40.8%, from March 31, 2019, and a decrease of $48.8 million, or 45.1%, from June 30, 2018.

Net Interest Income and Margin

Net interest income was $10.4 million for the three months ended June 30, 2019, which was a $0.1 million, or 1.2%, decrease from the three months ended March 31, 2019, and a $0.1 million, or 0.9%, increase from the three months ended June 30, 2018.  The primary reason for the second quarter decline in net interest income compared to the preceding quarter was the increase in loan participations that resulted in lower average loan balances during the period.

For the six months ended June 30, 2019, net interest income improved 1.9% to $21.0 million from $20.6 million for the six months ended June 30, 2018.

Net interest margin was 2.92% for the three months ended June 30, 2019, which was a decrease from 2.94% for the three months ended March 31, 2019, and an increase from 2.87% for the three months ended June 30, 2018.  A slight decline in net interest margin was realized over the linked quarter because while loan yields improved 12 basis points, the average loan balance declined by 2.6% and interest rates on deposits increased 10 basis points on a steady average balance.  Year-over-year second quarter net interest margin increased by five basis points primarily due to a 42 basis point improvement in loan yields, which was partially offset by a 42 basis point increase in cost of funds.

For the six months ended June 30, 2019, net interest margin improved slightly to 2.93% from 2.91% for the six months ended June 30, 2018, primarily as a result of a 45 basis point improvement in loan yields that was partially offset by a 46 basis point increase in cost of funds.

Non-Interest Income and Expense

Non-interest income for the three months ended June 30, 2019 increased by $0.1 million, or 5.0%, to $2.9 million compared to the three months ended March 31, 2019.  During the second quarter, the Company continued to reduce the valuation allowance on its loan servicing rights portfolio, which resulted in an increase of $0.1 million of loan servicing rights for the quarter.  The reduction of the valuation allowance is expected to continue throughout the remaining quarters of 2019.

Non-interest income for the three months ended June 30, 2019 increased $0.6 million, or 24.7%, compared to $2.3 million for the three months ended June 30, 2018.  The year-over-year increase was primarily due to the reduction of the valuation allowance discussed above, increases in loan servicing fees and rights which were the result of higher volumes of loans being serviced, and a $0.3 million gain on the sale of securities during the second quarter of 2019.

For the six months ended June 30, 2019, non-interest income improved to $5.6 million, an increase of $1.3 million, or 29.4%, over the six months ended June 30, 2018.  The increase was primarily the result of the reduction in the valuation allowance on the loan servicing rights portfolio and security sales discussed above, as well as the reduction of the allowance for unused commitments of $0.5 million, included in other non-interest income, in the first quarter of 2019.  The Company evaluated the need for this allowance during the first quarter of 2019 and concluded there was no sufficient evidence that represented credit loss inherent in these commitments to substantiate the necessity of this reserve and concluded to eliminate it.  The Company will continue to evaluate credit risk on these off-balance sheet commitments going forward. 

Non-interest expense for the three months ended June 30, 2019 increased by $0.1 million, or 1.9%, to $7.4 million compared to the three months ended March 31, 2019, and increased $0.5 million, or 7.3%, compared to the three months ended June 30, 2018.  Employee compensation and benefits decreased $0.3 million, or 6.3%, in the linked quarter due to lower payroll taxes resulting from social security tax limits being met during the first quarter, but was offset by a $0.3 million writedown of an agricultural OREO property.  The year-over-year increase was primarily due to a $0.3 million write-down on an OREO property during the second quarter of 2019 and small increases in information processing, professional fees, and business development.

Asset Quality

Non-performing assets as a percent of total assets decreased to 1.94% at June 30, 2019, from 2.07% at March 31, 2019, and 2.30% at June 30, 2018.  At June 30, 2019, non-performing assets were $28.8 million, a decrease of $2.1 million, or 6.8%, and $6.1 million, or 17.5%, at March 31, 2019 and June 30, 2018, respectively.  During the second quarter of 2019, $4.1 million of non-performing loans was transferred to OREO; however, two OREO properties were sold during the quarter resulting in a net increase of $3.7 million in OREO during the quarter ended June 30, 2019.

Substandard loans were $117.8 million at June 30, 2019, compared to $107.5 million at March 31, 2019 and $93.8 million at June 30, 2018.  Adverse classified asset ratio (a non-GAAP measure) increased to 53.21% at June 30, 2019 from 48.59% and 47.34% at March 31, 2019 and June 30, 2018, respectively.  The increase in substandard loans and the adverse classified ratio was the result of the prolonged strain of Wisconsin’s agricultural economy; however, we are actively managing these credits, and we are optimistic about the industry’s outlook as there was a 6.5% increase in the 12-month future price of class III milk from March 31, 2019 to June 30, 2019.

A provision for loan losses of $0.9 million was recorded for the three months ended June 30, 2019 compared to a provision of $0.8 million and $0.5 million for the three months ended March 31, 2019 and June 30, 2018, respectively.  For the six months ended June 30, 2019, a provision for loan losses was $1.6 million compared to $0.6 million for the six months ended June 30, 2018.  The increase in provision in the linked quarter and year-over- year was directly related the $2.1 million in net charge-offs that took place during the second quarter of 2019 which related to a commercial real estate relationship that lost its primary tenant, as well as an increase in special mention and substandard loans during the second quarter of 2019.

The allowance for loan losses was $16.3 million at June 30, 2019 compared to $16.5 million at December 31, 2018.  The $0.2 million decrease in the allowance during the first six months of 2019 was the result of a reduction in general reserves due to the decreases in total loans.

Conference Call

The Company will host an earnings call today, July 18, 2019, at 1:30 p.m., CDT, conducted by Timothy J. Schneider, President, and Glen L. Stiteley, CFO.  The earnings call will be broadcast over the Internet on the Company’s website at http://investors.icbk.com.  From the top menu, select “News”, then “Event Calendar.”  In addition, you may listen to the Company’s earnings call via telephone by dialing (844) 835-9984.  Investors should visit the Company’s website or call in to the dial-in number set forth above at least 10 minutes prior to the scheduled start of the call.  

A replay of the earnings call will be available until July 18, 2020, by visiting the Company’s website at http://investors.icbk.com.

About County Bancorp, Inc.

County Bancorp, Inc., a Wisconsin corporation and registered bank holding company founded in May 1996, and its wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin.  The state of Wisconsin is often referred to as “America’s Dairyland,” and one of the niches it has developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending.  It also serves business and retail customers throughout Wisconsin, with a focus on northeastern and central Wisconsin.  Its customers are served from its full-service locations in Manitowoc, Appleton, Green Bay, and Stevens Point and its loan production offices in Darlington, Eau Claire, Fond du Lac, and Sheboygan.

Forward-Looking Statements

This press release includes "forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking statements presented in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Factors that may cause actual results to differ materially from those made or suggested by the forward-looking statements contained in this press release include those identified in the Company’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission.  Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Investor Relations Contact
Glen L. Stiteley
EVP - CFO, Investors Community Bank
Phone: (920) 686-5658
Email: gstiteley@icbk.com


                
County Bancorp, Inc.
Consolidated Financial Summary
(Unaudited)
 June 30,
2019
  March 31,
2019
  December
31,
2018
  September
30,
2018
  June 30,
2018
 
    
  (dollars in thousands, except per share data) 
Period-End Balance Sheet:                    
  Assets                    
  Cash and cash equivalents $116,251  $62,426  $61,087  $49,996  $81,044 
  Securities available for sale, at fair value  158,561   192,210   195,945   190,185   187,505 
  Loans held for sale  7,448   2,750   2,949   13,770   11,468 
  Agricultural loans  713,602   722,107   724,508   714,310   702,426 
  Commercial loans  383,542   403,490   415,672   417,146   407,609 
  Multi-family real estate loans  46,683   52,974   62,321   66,403   65,713 
  Residential real estate loans  3,753   4,172   4,522   4,965   5,437 
  Installment and consumer other  252   220   272   113   339 
  Total loans  1,147,832   1,182,963   1,207,295   1,202,937   1,181,524 
  Allowance for loan losses  (16,258)  (17,493)  (16,505)  (16,143)  (15,129)
  Net loans  1,131,574   1,165,470   1,190,790   1,186,794   1,166,395 
  Other assets  70,812   68,532   70,057   74,223   72,465 
  Total Assets $1,484,646  $1,491,388  $1,520,828  $1,514,968  $1,518,877 
                     
  Liabilities and Shareholders' Equity                    
  Demand deposits $111,022  $101,434  $121,436  $103,862  $95,459 
  NOW accounts and interest checking  54,253   49,902   51,779   46,811   51,674 
  Savings  6,621   6,210   5,770   6,616   6,833 
  Money market accounts  239,337   225,975   218,929   208,233   204,332 
  Time deposits  387,899   376,034   356,484   352,531   344,619 
  Brokered deposits  256,475   269,917   308,504   317,291   323,561 
  National time deposits  149,570   146,805   160,445   173,440   183,953 
  Total deposits  1,205,177   1,176,277   1,223,347   1,208,784   1,210,431 
  FHLB advances  59,400   100,400   89,400   102,400   108,200 
  Subordinated debentures  44,781   44,742   44,703   44,663   44,725 
  Other liabilities  12,564   11,952   11,293   11,134   9,439 
  Total Liabilities  1,321,922   1,333,371   1,368,743   1,366,981   1,372,795 
                     
  Shareholders' equity  162,724   158,017   152,085   147,987   146,082 
  Total Liabilities and Shareholders' Equity $1,484,646  $1,491,388  $1,520,828  $1,514,968  $1,518,877 
                     
Stock Price Information:                    
  High - Quarter-to-date $18.92  $19.69  $26.00  $28.20  $29.26 
  Low - Quarter-to-date $16.24  $16.74  $17.37  $24.29  $25.72 
  Market price - Quarter-end $17.09  $17.60  $17.37  $25.10  $27.50 
  Book value per share $23.03  $22.36  $21.50  $20.91  $20.63 
  Tangible book value per share (1) $22.23  $21.54  $20.65  $20.07  $19.77 
  Common shares outstanding  6,717,908   6,709,254   6,709,480   6,694,230   6,693,447 

(1) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.

                
  June 30,
2019
  March 31,
2019
  December
31,
2018
  September
30,
2018
  June 30,
2018
 
    
  (dollars in thousands) 
Loans by risk category:                    
  Sound/Acceptable/Satisfactory/
    Low Satisfactory
 $836,988  $896,328  $908,172  $901,643  $896,509 
  Watch  167,824   174,642   171,670   171,890   186,399 
  Special Mention  25,255   4,501   6,566   11,036   4,783 
  Substandard Performing  56,336   46,075   65,501   61,851   46,751 
  Substandard Impaired  61,429   61,417   55,386   56,517   47,082 
  Total loans  1,147,832   1,182,963   1,207,295   1,202,937   1,181,524 
  Loans sold with servicing retained  695,629   675,268   661,257   644,879   628,435 
  Total loans and loans sold with
    servicing retained
 $1,843,461  $1,858,231  $1,868,552  $1,847,816  $1,809,959 
                     
Non-Performing Assets:                    
  Nonaccrual loans $20,096  $25,880  $22,983  $27,881  $26,305 
  Other real estate owned (2)  8,693   5,019   6,568   7,851   8,607 
  Total non-performing assets $28,789  $30,899  $29,551  $35,732  $34,912 
                     
Performing TDRs not on nonaccrual $28,892  $21,111  $18,258  $11,863  $11,173 
                     
Non-performing assets as a % of total loans  2.51%  2.61%  2.45%  2.97%  2.95%
Non-performing assets as a % of total assets  1.94%  2.07%  1.94%  2.36%  2.30%
Adverse classified asset ratio (1)  53.21%  48.59%  57.12%  51.89%  47.34%
Allowance for loan losses as a % of
  nonaccrual loans
  80.90%  67.59%  71.81%  57.90%  57.51%
Allowance for loan losses as a % of total
  loans
  1.42%  1.48%  1.37%  1.34%  1.28%
Net charge-offs (recoveries) quarter-to-date $2,111  $(236) $1,210  $(21) $16 
Provision for loan loss quarter-to-date $876  $752  $1,572  $993  $533 

(1) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.
(2) The quarters ending June 30, 2018 and September 30, 2018, do not include $0.4 million of bank property transferred from premises and equipment, which is not considered a non-performing asset.  For the quarter ended December 31, 2018, and all subsequent quarters, that bank property was considered classified due to the length of the holding period.


    
  For the Three Months Ended 
  June 30,
2019
  March 31,
2019
  December
31,
2018
  September
30,
2018
  June 30,
2018
 
    
  (dollars in thousands, except per share data) 
Selected Income Statement Data:                    
Interest and Dividend Income                    
Loans, including fees $15,484  $15,501  $15,536  $15,113  $14,366 
Taxable securities  1,177   1,186   1,168   945   982 
Tax-exempt securities  82   175   183   344   14 
Federal funds sold and other  465   264   223   249   401 
Total interest and dividend
  income
  17,208   17,126   17,110   16,651   15,763 
                     
Interest Expense                    
Deposits  5,678   5,424   5,273   4,980   4,600 
FHLB advances and other borrowed
  funds
  415   464   427   411   487 
Subordinated debentures  683   678   667   656   338 
Total interest expense  6,776   6,566   6,367   6,047   5,425 
Net interest income  10,432   10,560   10,743   10,604   10,338 
Provision for loan losses  876   752   1,572   993   533 
Net interest income after provision
  for loan losses
  9,556   9,808   9,171   9,611   9,805 
                     
Non-Interest Income                    
Services charges  407   353   470   394   445 
Gain (loss) on sale of loans, net  26   (1)  54   41   45 
Loan servicing fees  1,563   1,519   1,553   1,521   1,486 
Loan servicing right origination  346   228   7   (46)  127 
Income on OREO  40   26   83   96   45 
Gain on sale of securities  341   -   -   -   - 
Other  164   625   153   151   168 
Total non-interest income  2,887   2,750   2,320   2,157   2,316 
                     
Non-Interest Expense                    
Employee compensation and
  benefits
  4,199   4,482   4,059   4,394   4,114 
Occupancy  283   389   245   332   278 
Information processing  591   563   641   529   529 
Professional fees  417   399   497   351   359 
Business development  347   325   259   258   260 
OREO expenses  121   51   106   46   152 
Writedown of OREO  250   -   688   81   104 
Net loss (gain) on sale of OREO  9   (136)  (54)  (28)  (149)
Depreciation and amortization  328   337   408   302   324 
Other  901   895   689   758   966 
Total non-interest expense  7,446   7,305   7,538   7,023   6,937 
  Income before income taxes  4,997   5,253   3,953   4,745   5,184 
  Income tax expense  1,293   1,491   1,123   1,228   1,334 
  NET INCOME $3,704  $3,762  $2,830  $3,517  $3,850 
                     
  Basic $0.53  $0.54  $0.41  $0.51  $0.56 
  Diluted $0.53  $0.54  $0.40  $0.50  $0.55 
  Dividends declared $0.05  $0.05  $0.07  $0.07  $0.07 


   For the Three Months Ended 
  June 30,
2019
  March 31,
2019
  December
31,
2018
  September
30,
2018
  June 30,
2018
 
    
  (dollars in thousands, except share data) 
Other Data:                    
  Return on average assets  1.00%  1.00%  0.75%  0.94%  1.04%
  Return on average shareholders'
    equity
  9.24%  9.78%  7.58%  9.51%  10.63%
  Return on average common
    shareholders' equity (1)
  9.41%  9.99%  7.70%  9.75%  10.96%
  Efficiency ratio (1)  55.38%  55.91%  52.85%  54.62%  55.18%
  Tangible common equity to
    tangible assets (1)
  10.10%  9.73%  9.14%  8.90%  8.75%
                     
Common Share Data:                    
  Net income from continuing
    operations
 $3,704  $3,762  $2,830  $3,517  $3,850 
  Less:  Preferred stock dividends  118   117   111   106   99 
   Income available to common
     shareholders
 $3,586  $3,645  $2,719  $3,411  $3,751 
                     
  Weighted average number of common
    shares issued
  7,159,072   7,153,174   7,127,544   7,108,202   7,101,978 
  Less: Weighted average treasury
    shares
  443,920   443,729   443,694   443,140   442,102 
  Less: Weighted average non-
    vested restricted units
    awards
  30,483   16,260   28,701   29,537   30,692 
  Weighted average number of
    common shares outstanding
  6,745,635   6,725,705   6,712,551   6,694,599   6,690,568 
  Effect of dilutive options  20,731   21,323   45,116   63,346   79,368 
  Weighted average number of
    common shares outstanding
    used to calculate diluted
    earnings per common share
  6,766,366   6,747,028   6,757,667   6,757,945   6,769,936 

(1) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.


    
   For the Three Months Ended 
Non-GAAP Financial Measures: June 30,
2019
  March 31,
2019
  December
31,
2018
  September
30,
2018
  June 30,
2018
 
    
  (dollars in thousands) 
Return on average common
  shareholders' equity
  reconciliation:
                    
  Return on average shareholders'
    equity
  9.24%  9.78%  7.58%  9.51%  10.63%
  Effect of excluding average
    preferred shareholders'
    equity
  0.17%  0.21%  0.12%  0.24%  0.33%
  Return on average common
    shareholders' equity
  9.41%  9.99%  7.70%  9.75%  10.96%
                     
Efficiency ratio GAAP to non-GAAP
  reconciliation:
                    
  Non-interest expense $7,446  $7,305  $7,538  $7,023  $6,937 
  Less: net gain (loss) on sales and
    write-downs of OREO
  (259)  136   (634)  (53)  45 
  Adjusted non-interest expense
    (non-GAAP)
 $7,187  $7,441  $6,904  $6,970  $6,982 
                     
  Net interest income $10,432  $10,560  $10,743  $10,604  $10,338 
  Non-interest income  2,887   2,750   2,320   2,157   2,316 
  Less: net gain on sales of
    securities
  (341)  -   -   -   - 
  Operating revenue $12,978  $13,310  $13,063  $12,761  $12,654 
  Efficiency ratio  55.38%  55.91%  52.85%  54.62%  55.18%

               

                
  June 30,
2019
  March 31,
2019
  December
31,
2018
  September
30,
2018
  June 30,
2018
 
    
  (dollars in thousands, except per share data) 
Tangible book value per share and
  tangible common equity to tangible
  assets reconciliation:
                    
  Common equity $154,724  $150,017  $144,085  $139,987  $138,082 
  Less: Goodwill  5,038   5,038   5,038   5,038   5,038 
  Less: Core deposit intangible, net of
    amortization
  354   430   513   603   701 
    Tangible common equity (non-GAAP) $149,332  $144,549  $138,534  $134,346  $132,343 
  Common shares outstanding  6,717,908   6,709,254   6,709,480   6,694,230   6,693,447 
  Tangible book value per share $22.23  $21.54  $20.65  $20.07  $19.77 
                     
  Total assets $1,484,646  $1,491,388  $1,520,828  $1,514,968  $1,518,877 
  Less: Goodwill  5,038   5,038   5,038   5,038   5,038 
  Less: Core deposit intangible, net of
    amortization
  354   430   513   603   701 
  Tangible assets (non-GAAP) $1,479,254  $1,485,920  $1,515,277  $1,509,327  $1,513,138 
  Tangible common equity to tangible assets  10.10%  9.73%  9.14%  8.90%  8.75%
                     
Adverse classified asset ratio:                    
  Substandard loans $117,765  $107,492  $120,887  $118,368  $93,833 
  Less: Impaired performing restructured loans  (8,276)  (6,382)  (5,078)  (13,657)  (2,081)
  Net substandard loans $109,489  $101,110  $115,809  $104,711  $91,752 
  Other real estate owned  8,693   5,019   6,568   7,851   8,607 
  Substandard unused commitments  1,458   976   1,625   1,191   959 
  Less: Substandard government guarantees  (7,821)  (5,864)  (7,111)  (9,374)  (8,356)
  Total adverse classified assets (non-GAAP) $111,819  $101,241  $116,891  $104,379  $92,962 
                     
  Total equity (Bank) $196,036  $191,287  $185,458  $180,359  $177,911 
  Accumulated other comprehensive loss
    (gain) on available for sale securities
  (2,166)  (436)  2,221   4,152   2,795 
  Allowance for loan losses  16,258   17,493   16,505   16,143   15,129 
  Allowance for unused commitments  -   -   475   510   522 
  Adjusted total equity (non-GAAP) $210,128  $208,344  $204,659  $201,164  $196,357 
  Adverse classified asset ratio  53.21%  48.59%  57.12%  51.89%  47.34%


    
  For the Three Months Ended 
  June 30, 2019  March 31, 2019  June 30, 2018 
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
 
    
  (dollars in thousands) 
Assets                                    
Investment securities $176,237  $1,259   2.86% $192,963  $1,361   2.82% $158,260  $996   2.52%
Loans (2)  1,177,071   15,484   5.26%  1,207,240   15,501   5.14%  1,187,719   14,367   4.84%
Interest bearing deposits due from
  other banks
  73,769   465   2.52%  36,227   264   2.92%  100,646   400   1.59%
Total interest-earning assets $1,427,077  $17,208   4.82% $1,436,430  $17,126   4.77% $1,446,625  $15,763   4.36%
                                     
Allowance for loan losses  (17,782)          (17,005)          (14,918)        
Other assets  76,806           78,654           57,878         
Total assets $1,486,101          $1,498,079          $1,489,585         
                                     
Liabilities                                    
Savings, NOW, money market,
  interest checking
 $315,940  $1,316   1.67% $295,418  $1,184   1.60% $279,958  $789   1.13%
Time deposits  770,554   4,363   2.26%  797,476   4,240   2.13%  819,037   3,811   1.86%
Total interest-bearing deposits $1,086,494  $5,679   2.09% $1,092,894  $5,424   1.99% $1,098,995  $4,600   1.67%
Other borrowings  1,204   13   4.47%  844   11   5.27%  1,167   14   4.79%
FHLB advances  78,653   401   2.04%  92,900   453   1.95%  117,327   473   1.61%
Junior subordinated debentures  44,762   683   6.11%  44,606   678   6.08%  25,547   338   5.29%
Total interest-bearing
  liabilities
 $1,211,113  $6,776   2.24% $1,231,244  $6,566   2.13% $1,243,036  $5,425   1.75%
                                     
Non-interest-bearing deposits  102,432           101,532           93,876         
Other liabilities  12,154           11,362           7,829         
Total liabilities $1,325,699          $1,344,138          $1,344,741         
                                     
Shareholders' equity  160,402           153,941           144,844         
Total liabilities and equity $1,486,101          $1,498,079          $1,489,585         
                                     
Net interest income     $10,432          $10,560          $10,338     
Interest rate spread (3)          2.59%          2.64%          2.61%
Net interest margin (4)          2.92%          2.94%          2.87%
Ratio of interest-earning assets to
  interest-bearing liabilities
  1.18           1.17           1.16         

(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average total interest-earning assets.


    
  For the Six Months Ended 
  June 30, 2019  June 30, 2018 
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
 
    
  (dollars in thousands) 
Assets                        
Investment securities $186,076  $2,620   2.82% $147,553  $1,785   2.42%
Loans (2)  1,192,073   30,985   5.20%  1,180,294   28,057   4.75%
Interest bearing deposits due from other
  banks
  55,102   729   2.65%  87,012   614   1.41%
Total interest-earning assets $1,433,251  $34,334   4.79% $1,414,859  $30,456   4.31%
                         
Allowance for loan losses  (17,396)          (14,323)        
Other assets  76,613           52,395         
Total assets $1,492,468          $1,452,931         
                         
Liabilities                        
Savings, NOW, money market, interest
  checking
 $307,903   2,500   1.62% $278,889   1,448   1.04%
Time deposits  781,672   8,602   2.20%  783,202   6,948   1.77%
Total interest-bearing deposits $1,089,575  $11,102   2.04% $1,062,091  $8,396   1.58%
Other borrowings  1,025   25   4.80%  1,226   30   4.94%
FHLB advances  85,737   854   1.99%  119,187   941   1.58%
Junior subordinated debentures  44,742   1,361   6.09%  20,566   481   4.68%
Total interest-bearing liabilities $1,221,079  $13,342   2.19% $1,203,070  $9,848   1.64%
                         
Non-interest-bearing deposits  102,050           98,728         
Other liabilities  11,797           7,698         
Total liabilities $1,334,926          $1,309,496         
                         
Shareholders' equity  157,542           143,435         
Total liabilities and equity $1,492,468          $1,452,931         
                         
Net interest income     $20,992          $20,608     
Interest rate spread (3)          2.61%          2.67%
Net interest margin (4)          2.93%          2.91%
Ratio of interest-earning assets to interest-
  bearing liabilities
  1.17           1.18         
                         

(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average total interest-earning assets.

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Source: County Bancorp, Inc.

Manitowoc Phone:
(920) 686-9998

Stevens Point Phone:
(715) 254-3400

Appleton Phone:
(920) 739-2660

Green Bay Phone:
(920) 884-1166