County Bancorp, Inc. Announces Record Earnings for the Third Quarter of 2019

Company Release - 10/17/2019 5:00 PM ET

Highlights

  • Record net income of $5.7 million for the third quarter of 2019; $13.1 million for the nine months ended September 30, 2019
  • Diluted earnings per share of $0.82 for the third quarter of 2019; $1.89 for the nine months ended September 30, 2019
  • Book value per share of $23.89 as of September 30, 2019, an increase of $0.86, or 3.7%, since June 30, 2019, and an increase of $2.39, or 11.1%, since December 31, 2018
  • Adverse classified asset ratio improved to 45.67% at September 30, 2019 from 53.21% at June 30, 2019.
  • Non-performing assets decreased $0.8 million, an improvement of 2.6%, since June 30, 2019, and decreased $7.7 million, or 21.6%, since September 30, 2018
  • Client deposits (demand deposits, money market accounts, and certificates of deposit) increased $19.1 million, or 2.4%, since June 30, 2019, and increased $100.2 million, or 13.9%, since September 30, 2018.
  • Brokered and national deposits decreased $81.5 million during the third quarter of 2019, a reduction of 20.1%, and decreased $166.2 million, or 33.9%, since September 30, 2018

MANITOWOC, Wis., Oct. 17, 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 $5.7 million, or $0.82 diluted earnings per share, for the third quarter of 2019, compared to net income of $3.7 million, or $0.53 diluted earnings per share, for the second quarter of 2019 and $3.5 million, or $0.50 diluted earnings per share, for the third quarter of 2018.  This represents an annualized return on average assets of 1.57% for the three months ended September 30, 2019, compared to 0.94% for the three months ended September 30, 2018.  The annualized return on average assets for the nine months ended September 30, 2019 was 1.19% compared to 1.04% for the same period of 2018.  Third quarter earnings were largely impacted by a credit to provision for loan losses of $1.2 million for third quarter of 2019 compared to a $0.9 million provision expense for the second quarter of 2019, and a $1.0 million provision expense for the third quarter of 2018.

“We are very pleased with the improvement we have seen in our credit portfolio this quarter,” stated Tim Schneider, President of the Company and CEO of the Bank.  “We continue to see an improved milk price environment: the 12-month forward looking average for class III milk increased from $15.88 to $17.12 per hundredweight on the Chicago Mercantile Exchange from December 31, 2018 to September 30, 2019. These trends are encouraging, but still have work to do to continue to improve our asset quality.”

Schneider continued, “As previously announced, we are still committed to reducing our wholesale funding.  We were able to make significant progress this quarter and year-over-year, primarily through the additional liquidity from selling loan participations, which has also led to solid growth in our loan servicing income. We are also very pleased with our client deposit growth year-over-year and during the quarter.”

Loans and Total Assets

Total assets at September 30, 2019 were $1.4 billion, a decrease of $69.7 million, or 4.7%, and a decrease of $100.0 million, or 6.6%, over total assets as of June 30, 2019 and September 30, 2018, respectively.  Total loans were $1.1 billion at September 30, 2019, which represents a $67.0 million, or 5.8%, decrease over total loans at June 30, 2019, and a decrease of $122.2 million, or 10.2%, over total loans at September 30, 2018.

The decrease in total loans and assets was the result of our continued focus on reducing loans on our balance sheet through the sale of loan participations during 2019.  Participated loans that the Company continued to service were $736.8 million at September 30, 2019, which was an increase of $41.2 million, or 5.9%, and $91.9 million, or 14.3%, over participated loans that the Company serviced at June 30, 2019 and September 30, 2018, respectively.  By increasing the amount of loans participated, the Company is reducing credit risk from its balance sheet and increasing non-interest revenue streams.

Deposits

Total deposits at September 30, 2019 were $1.1 billion, a decrease of $62.4 million, or 5.2%, and a decrease of $66.0 million, or 5.5%, over total deposits as of June 30, 2019 and September 30, 2018, respectively.  Despite the decline in total deposits, client deposits (demand deposits, money market accounts, and certificates of deposit) increased $19.1 million, or 2.4%, since June 30, 2019, and increased $100.2 million, or 13.9%, since September 30, 2018. 

Due to the increases in loan participations and client deposit growth, the Company was able to further decrease its reliance on brokered deposits and national certificates of deposit to $324.5 million at September 30, 2019.  This represents a decrease of $81.5 million, or 20.1%, from June 30, 2019, and a decrease of $166.2 million, or 33.9%, from September 30, 2018. 

During the third quarter of 2019, the Company continued to pay off portions of its FHLB borrowings.  At September 30, 2019, borrowings from the FHLB totaled $44.4 million, which was a decrease of $15.0 million, or 25.3%, from June 30, 2019, and a decrease of $58.0 million, or 56.6%, from September 30, 2018.

Net Interest Income and Margin

Net interest income was $10.3 million for the three months ended September 30, 2019, which was a $0.1 million, or 1.7%, decrease from the three months ended June 30, 2019, and a $0.4 million, or 3.3%, decrease from the three months ended September 30, 2018.  The decrease in net interest income quarter-over-quarter and year-over-year was the result of a lower average loan balance due to loan payoffs and the increase in loan participations discussed above.

Net interest margin was 2.95% for the three months ended September 30, 2019, which was an increase from 2.92% for the three months ended June 30, 2019, and an increase from 2.89% for the three months ended September 30, 2018.  The increase in net interest margin over the linked quarter was primarily due to a decline in average loans from loan participation sales that took place primarily the last half of the quarter.  Year-over-year third quarter net interest margin increased by six basis points primarily due to a 32 basis point increase in loan yields, which was partially offset by a 29 basis point increase in cost of funds.

   
 For the Three Months Ended 
 September 30, 2019  June 30, 2019  September 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$159,091  $1,117   2.81% $176,237  $1,259   2.86% $189,448  $1,289   2.72%
Loans (2) 1,126,243   15,030   5.34%  1,177,071   15,484   5.26%  1,204,122   15,113   5.02%
Interest bearing deposits due from other banks 104,253   612   2.35%  73,769   465   2.52%  62,560   249   1.59%
Total interest-earning assets$1,389,587  $16,759   4.82% $1,427,077  $17,208   4.82% $1,456,130  $16,651   4.57%
                                    
Allowance for loan losses (16,209)          (17,782)          (15,445)        
Other assets 78,664           76,806           58,921         
Total assets$1,452,042          $1,486,101          $1,499,606         
                                    
Liabilities                                   
Savings, NOW, money market, interest checking$326,592  $1,276   1.56% $315,940  $1,316   1.67% $276,468  $907   1.31%
Time deposits 745,032   4,298   2.31%  770,554   4,363   2.26%  830,168   4,073   1.96%
Total interest-bearing deposits$1,071,624  $5,574   2.08% $1,086,494  $5,679   2.09% $1,106,636  $4,980   1.80%
Other borrowings 804   9   4.60%  1,204   13   4.47%  839   10   4.61%
FHLB advances 48,857   237   1.94%  78,653   401   2.04%  92,443   401   1.74%
Junior subordinated debentures 44,800   687   6.14%  44,762   683   6.11%  44,659   656   5.88%
Total interest-bearing liabilities$1,166,085  $6,507   2.23% $1,211,113   6,776   2.24% $1,244,577  $6,047   1.94%
                                    
Non-interest-bearing deposits 105,578           102,432           97,947         
Other liabilities 14,801           12,154           9,136         
Total liabilities$1,286,464          $1,325,699          $1,351,660         
                                    
Shareholders' equity 165,578           160,402           147,946         
Total liabilities and equity$1,452,042          $1,486,101          $1,499,606         
                                    
Net interest income    $10,252          $10,432          $10,604     
Interest rate spread (3)         2.59%          2.58%          2.63%
Net interest margin (4)         2.95%          2.92%          2.89%
Ratio of interest-earning assets to interest-bearing liabilities 1.19           1.18           1.17         
 
(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.
 

Net interest income for the nine months ended September 30, 2019 was $31.2 million which was the same as to the nine month ended September 30, 2018, primarily as a result of the combination of a higher average loan yield on a smaller average balance of the loan portfolio.

For the nine months ended September 30, 2019, net interest margin improved slightly to 2.94% from 2.92% for the nine months ended September 30, 2018, primarily as a result of a 40 basis point increase 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 September 30, 2019 increased by $1.1 million, or 39.7%, to $4.0 million compared to the three months ended June 30, 2019, which was primarily the result of an increase of $1.4 million of loan servicing right origination due to the $41.2 million in loans that were sold or participated during the third quarter.  The Company also continued to reduce the valuation allowance on its loan servicing rights portfolio which resulted in an additional servicing rights income of $0.2 million.   

Non-interest income for the three months ended September 30, 2019 increased $1.9 million, or 87.0%, compared to $2.2 million for the three months ended September 30, 2018.  The year-over-year increase was primarily due to the increase in loan participations discussed above.

    
  For the Three Months Ended 
  September 30,
2019
 June 30,
2019
 March 31,
2019
  December 31,
2018
  September 30,
2018
 
                    
  (dollars in thousands, except per share data)
Non-Interest Income                   
Services charges $348 $407  $353  $470  $394 
Gain (loss) on sale of loans, net  87  26   (1)  54   41 
Loan servicing fees  1,677  1,563   1,519   1,553   1,521 
Loan servicing right origination  1,741  346   228   7   (46)
Income on OREO  10  40   26   83   96 
Gain on sale of securities  -  341   -   -   - 
Other  171  164   625   153   151 
Total non-interest income $4,034 $2,887  $2,750  $2,320  $2,157 
                    

For the nine months ended September 30, 2019, non-interest income improved to $9.7 million, an increase of $3.2 million, or 48.5%, over the nine months ended September 30, 2018.  The increase was primarily due to the increase in servicing fees as the result of the reduction of the servicing right valuation allowance totaling $0.8 million and the increase in fees generated by the $91.9 million of loans that were participated since September 30, 2018.  In addition, the Company eliminated its allowance for unused commitments, which resulted in an increase of $0.5 million in other non-interest income.  The Company evaluated the need for this allowance during the first quarter of 2019 and concluded there was not 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. 

Non-interest expense for the three months ended September 30, 2019 increased by $0.2 million, or 3.0%, to $7.7 million compared to the three months ended June 30, 2019, and increased $0.6 million, or 9.2%, compared to the three months ended September 30, 2018.  Employee compensation and benefits increased $0.5 million, or 12.8%, in the linked quarter due in part to additional accrual of $0.3 million for incentive compensation related to anticipated current year financial results.  The increased employee compensation and benefits was partially offset by a $0.2 million small bank assessment credit that was received from the FDIC, which reduced other non-interest expense.  This one-time credit was awarded to banks with total assets less than $10 billion due to the FDIC’s Reserve fund exceeding its target balance.  The year-over-year increase was due in part to a $0.2 million loss on the sale an OREO property during the third quarter of 2019 and small increases in information processing, professional fees, and business development.

  For the Three Months Ended 
  September 30,
2019
 June 30,
2019
  March 31,
2019
  December 31,
2018
  September 30,
2018
 
                   
  (dollars in thousands, except per share data) 
Non-Interest Expense                  
Employee compensation and benefits $4,735  $4,199  $4,482  $4,059  $4,394 
Occupancy  313   283   389   245   332 
Information processing  683   591   563   641   529 
Professional fees  483   417   399   497   351 
Business development  351   347   325   259   258 
OREO expenses  57   121   51   106   46 
Writedown of OREO  -   250   -   688   81 
Net loss (gain) on sale of OREO  160   9   (136)  (54)  (28)
Depreciation and amortization  319   328   337   408   302 
Other  567   901   895   689   758 
Total non-interest expense $7,668  $7,446  $7,305  $7,538  $7,023 
                     

Asset Quality

At September 30, 2019, non-performing assets were $28.0 million, a decrease of $0.8 million, or 2.6%, and $7.7 million, or 21.6%, compared to June 30, 2019 and September 30, 2018, respectively.  Non-performing assets as a percent of total assets increased to 1.98% at September 30, 2019, from 1.94% at June 30, 2019, due to the reduction in total assets and decreased from 2.36% at September 30, 2018.  During the third quarter of 2019, two OREO properties were sold, resulting in a decrease of $1.4 million in OREO.

Substandard loans were $105.9 million at September 30, 2019, compared to $117.8 million at June 30, 2019 and $118.4 million at September 30, 2018.  Adverse classified asset ratio (a non-GAAP measure) decreased to 45.67% at September 30, 2019 from 53.21% and 51.89% at June 30, 2019 and September 30, 2018, respectively.  The decrease in substandard loans and the adverse classified ratio was in part the result of a combination of an improving milk price outlook and concerted efforts by our dairy customers to manage their expenses wherever they reasonably can.  We are actively managing these credits, and we are optimistic about the industry’s outlook as there was a 4.7% increase in the 12-month future price of class III milk on the Chicago Mercantile Exchange from June 30, 2019 to September 30, 2019.

A credit to provision for loan losses of $1.2 million was recorded for the three months ended September 30, 2019 compared to a provision of $0.9 million for the three months ended June 30, 2019, and a provision of $1.0 million for the three months ended September 30, 2018.  For the nine months ended September 30, 2019, a provision for loan losses was $0.5 million compared to $1.6 million for the nine months ended September 30, 2018.  The decrease in provision in the linked quarter and year-over- year was directly related to the decrease in the dairy loan portfolio as the result of the increase in loan participations, improvements in milk price, and upgrade to credit ratings.  The upgrade of $26.1 million of substandard performing and special mention loans to the watch risk category in the third quarter resulted in $0.8 million reduction to the allowance for loan losses. 

           
  September 30,
2019
 June 30,
2019
 March 31,
2019
 December 31,
2018
 September 30,
2018
                     
  (dollars in thousands) 
Loans by risk category:                    
Sound/Acceptable/Satisfactory/Low Satisfactory $771,568  $836,988  $896,328  $908,172  $901,643 
Watch  193,942   167,824   174,642   171,670   171,890 
Special Mention  9,346   25,255   4,501   6,566   11,036 
Substandard Performing  44,183   56,336   46,075   65,501   61,851 
Substandard Impaired  61,728   61,429   61,417   55,386   56,517 
Total loans $1,080,767  $1,147,832  $1,182,963  $1,207,295  $1,202,937 
                     

The allowance for loan losses was $15.1 million at September 30, 2019 compared to $16.5 million at December 31, 2018.  The $1.4 million decrease in the allowance during the first nine months of 2019 was the result of a reduction in general reserves due to the decreases in total loans and the credit upgrades discussed previously.

Conference Call

The Company will host an earnings call tomorrow, October 18, 2019, at 8:30 a.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 October 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)
 September 30,
2019 
 June 30,
2019 
 March 31,
2019 
 December 31,
2018 
 September 30,
2018 
                     
  (dollars in thousands, except per share data) 
Period-End Balance Sheet:                    
Assets                    
Cash and cash equivalents $120,845  $116,251  $62,426  $61,087  $49,996 
Securities available for sale, at fair value  154,962   158,561   192,210   195,945   190,185 
Loans held for sale  4,192   7,448   2,750   2,949   13,770 
Agricultural loans  673,742   713,602   722,107   724,508   714,310 
Commercial loans  360,132   383,542   403,490   415,672   417,146 
Multi-family real estate loans  43,487   46,683   52,974   62,321   66,403 
Residential real estate loans  3,183   3,753   4,172   4,522   4,965 
Installment and consumer other  223   252   220   272   113 
Total loans  1,080,767   1,147,832   1,182,963   1,207,295   1,202,937 
Allowance for loan losses  (15,065)  (16,258)  (17,493)  (16,505)  (16,143)
Net loans  1,065,702   1,131,574   1,165,470   1,190,790   1,186,794 
Other assets  69,263   70,812   68,532   70,256   74,223 
Total Assets $1,414,964  $1,484,646  $1,491,388  $1,521,027  $1,514,968 
                     
Liabilities and Shareholders' Equity                    
Demand deposits $117,224  $111,022  $101,434  $121,436  $103,862 
NOW accounts and interest checking  56,637   54,253   49,902   51,779   46,811 
Savings  6,981   6,621   6,210   5,770   6,616 
Money market accounts  248,608   239,337   225,975   218,929   208,233 
Time deposits  388,759   387,899   376,034   356,484   352,531 
Brokered deposits  206,474   256,475   269,917   308,504   317,291 
National time deposits  118,070   149,570   146,805   160,445   173,440 
Total deposits  1,142,753   1,205,177   1,176,277   1,223,347   1,208,784 
FHLB advances  44,400   59,400   100,400   89,400   102,400 
Subordinated debentures  44,820   44,781   44,742   44,703   44,663 
Other liabilities  14,239   12,564   11,952   11,492   11,134 
Total Liabilities  1,246,212   1,321,922   1,333,371   1,368,942   1,366,981 
                     
Shareholders' equity  168,752   162,724   158,017   152,085   147,987 
Total Liabilities and Shareholders' Equity $1,414,964  $1,484,646  $1,491,388  $1,521,027  $1,514,968 
                     
Stock Price Information:                    
High - Quarter-to-date $20.99  $18.92  $19.69  $26.00  $28.20 
Low - Quarter-to-date $16.80  $16.24  $16.74  $17.37  $24.29 
Market price - Quarter-end $19.62  $17.09  $17.60  $17.37  $25.10 
Book value per share $23.89  $23.03  $22.36  $21.50  $20.91 
Tangible book value per share (1) $23.10  $22.23  $21.54  $20.68  $20.07 
Common shares outstanding  6,727,908   6,717,908   6,709,254   6,709,480   6,694,230 
 
(1)  This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.
 


  September 30,
2019
 June 30,
2019 
 March 31,
2019 
 December 31,
2018 
 September 30,
2018 
                   
  (dollars in thousands) 
Loans by risk category:                  
Sound/Acceptable/Satisfactory/Low Satisfactory $771,568  $836,988  $896,328  $908,172  $901,643 
Watch  193,942   167,824   174,642   171,670   171,890 
Special Mention  9,346   25,255   4,501   6,566   11,036 
Substandard Performing  44,183   56,336   46,075   65,501   61,851 
Substandard Impaired  61,728   61,429   61,417   55,386   56,517 
Total loans  1,080,767   1,147,832   1,182,963   1,207,295   1,202,937 
Loans sold with servicing retained  736,823   695,629   675,268   661,257   644,879 
Total loans and loans sold with servicing retained $1,817,590  $1,843,461  $1,858,231  $1,868,552  $1,847,816 
                     
Non-Performing Assets:                    
Nonaccrual loans $20,776  $20,096  $25,880  $22,983  $27,881 
Other real estate owned (1)  7,252   8,693   5,019   6,568   7,851 
Total non-performing assets $28,028  $28,789  $30,899  $29,551  $35,732 
                     
Performing TDRs not on nonaccrual $28,520  $28,892  $21,111  $18,258  $11,863 
                     
Non-performing assets as a % of total loans  2.59%  2.51%  2.61%  2.45%  2.97%
Non-performing assets as a % of total assets  1.98%  1.94%  2.07%  1.94%  2.36%
Adverse classified asset ratio (2)  45.67%  53.21%  48.59%  57.12%  51.89%
Allowance for loan losses as a % of nonaccrual loans  72.51%  80.90%  67.59%  71.81%  57.90%
Allowance for loan losses as a % of total loans  1.39%  1.42%  1.48%  1.37%  1.34%
Net charge-offs (recoveries) quarter-to-date $39  $2,111  $(236) $1,210  $(21)
Provision for loan loss quarter-to-date $(1,154) $876  $752  $1,572  $993 
 
(1) The quarter ended September 30, 2018, does 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.
(2) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.
 


  For the Three Months Ended 
  September 30,
2019 
 June 30,
2019 
 March 31,
2019 
 December 31,
2018 
 September 30,
2018 
                     
  (dollars in thousands, except per share data) 
Selected Income Statement Data:                    
Interest and Dividend Income                    
Loans, including fees $15,030  $15,484  $15,501  $15,536  $15,113 
Taxable securities  1,117   1,177   1,186   1,168   945 
Tax-exempt securities  -   82   175   183   344 
Federal funds sold and other  612   465   264   223   249 
Total interest and dividend income  16,759   17,208   17,126   17,110   16,651 
                     
Interest Expense                    
Deposits  5,574   5,678   5,424   5,273   4,980 
FHLB advances and other borrowed funds  246   415   464   427   411 
Subordinated debentures  687   683   678   667   656 
Total interest expense  6,507   6,776   6,566   6,367   6,047 
Net interest income  10,252   10,432   10,560   10,743   10,604 
Provision for loan losses  (1,154)  876   752   1,572   993 
Net interest income after provision for loan losses  11,406   9,556   9,808   9,171   9,611 
                     
Non-Interest Income                    
Services charges  348   407   353   470   394 
Gain (loss) on sale of loans, net  87   26   (1)  54   41 
Loan servicing fees  1,677   1,563   1,519   1,553   1,521 
Loan servicing right origination  1,741   346   228   7   (46)
Income on OREO  10   40   26   83   96 
Gain on sale of securities  -   341   -   -   - 
Other  171   164   625   153   151 
Total non-interest income  4,034   2,887   2,750   2,320   2,157 
                     
Non-Interest Expense                    
Employee compensation and benefits  4,735   4,199   4,482   4,059   4,394 
Occupancy  313   283   389   245   332 
Information processing  683   591   563   641   529 
Professional fees  483   417   399   497   351 
Business development  351   347   325   259   258 
OREO expenses  57   121   51   106   46 
Writedown of OREO  -   250   -   688   81 
Net loss (gain) on sale of OREO  160   9   (136)  (54)  (28)
Depreciation and amortization  319   328   337   408   302 
Other  567   901   895   689   758 
Total non-interest expense  7,668   7,446   7,305   7,538   7,023 
Income before income taxes  7,772   4,997   5,253   3,953   4,745 
Income tax expense  2,090   1,293   1,491   1,123   1,228 
NET INCOME $5,682  $3,704  $3,762  $2,830  $3,517 
                     
Basic $0.82  $0.53  $0.54  $0.41  $0.51 
Diluted $0.82  $0.53  $0.54  $0.40  $0.50 
Dividends declared $0.05  $0.05  $0.05  $0.07  $0.07 


   For the Three Months Ended 
  September 30,
2019 
 June 30,
2019 
 March 31,
2019 
 December 31,
2018 
 September 30,
2018 
                     
  (dollars in thousands, except share data) 
Other Data:                    
Return on average assets(1)  1.57%  1.00%  1.00%  0.75%  0.94%
Return on average shareholders' equity(1)  13.73%  9.24%  9.78%  7.58%  9.51%
Return on average common shareholders' equity (1)(2)  14.14%  9.41%  9.99%  7.70%  9.75%
Efficiency ratio (1)(2)  52.55%  55.38%  55.91%  52.85%  55.39%
Tangible common equity to tangible assets (2)  11.03%  10.10%  9.73%  9.15%  8.90%
                     
Common Share Data:                    
Net income from continuing operations $5,682  $3,704  $3,762  $2,830  $3,517 
Less:  Preferred stock dividends  120   118   117   111   106 
Income available to common shareholders $5,562  $3,586  $3,645  $2,719  $3,411 
                     
Weighted average number of common shares issued  7,168,785   7,159,072   7,153,174   7,177,212   7,108,202 
Less: Weighted average treasury shares  443,920   443,920   443,729   442,206   443,140 
Less: Weighted average non-vested restricted units awards  32,125   30,483   16,260   30,955   29,537 
Weighted average number of common shares outstanding  6,756,990   6,745,635   6,712,551   6,704,051   6,694,599 
Effect of dilutive options  19,160   20,731   21,323   68,876   63,346 
Weighted average number of common shares outstanding used
to calculate diluted earnings per common share
  6,776,150   6,766,366   6,733,874   6,772,927   6,757,945 
                     
(1)  Annualized
(2) This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.
 


   For the Three Months Ended
Non-GAAP Financial Measures: September 30,
2019
 June 30,
2019
 March 31,
2019
 December 31,
2018
 September 30,
2018
                   
  (dollars in thousands) 
Return on average common shareholders' equity reconciliation:                    
Return on average shareholders' equity  13.73%  9.24%  9.78%  7.58%  9.51%
Effect of excluding average preferred shareholders' equity  0.41%  0.17%  0.21%  0.12%  0.24%
Return on average common shareholders' equity  14.14%  9.41%  9.99%  7.70%  9.75%
                     
Efficiency ratio GAAP to non-GAAP reconciliation:                    
Non-interest expense $7,668  $7,446  $7,305  $7,538  $7,023 
Less: net gain (loss) on sales and write-downs of OREO  (160)  (259)  136   (634)  45 
Adjusted non-interest expense (non-GAAP) $7,508  $7,187  $7,441  $6,904  $7,068 
                     
Net interest income $10,252  $10,432  $10,560  $10,743  $10,604 
Non-interest income  4,034   2,887   2,750   2,320   2,157 
Less: net gain on sales of securities  -   (341)  -   -   - 
Operating revenue $14,286  $12,978  $13,310  $13,063  $12,761 
Efficiency ratio  52.55%  55.38%  55.91%  52.85%  55.39%
                     

               

  September 30,
2019 
 June 30,
2019 
 March 31,
2019 
 December 31,
2018 
 September 30,
2018 
                   
  (dollars in thousands, except per share data) 
Tangible book value per share and tangible common equity to tangible assets reconciliation:                    
Common equity $160,752  $154,724  $150,017  $144,284  $139,987 
Less: Goodwill  5,038   5,038   5,038   5,038   5,038 
Less: Core deposit intangible, net of amortization  286   354   430   513   603 
Tangible common equity (non-GAAP) $155,428  $149,332  $144,549  $138,733  $134,346 
Common shares outstanding  6,727,908   6,717,908   6,709,254   6,709,480   6,694,230 
Tangible book value per share $23.10  $22.23  $21.54  $20.68  $20.07 
                     
Total assets $1,414,964  $1,484,646  $1,491,388  $1,521,027  $1,514,968 
Less: Goodwill  5,038   5,038   5,038   5,038   5,038 
Less: Core deposit intangible, net of amortization  286   354   430   603   701 
Tangible assets (non-GAAP) $1,409,640  $1,479,254  $1,485,920  $1,515,386  $1,509,229 
Tangible common equity to tangible assets  11.03%  10.10%  9.73%  9.15%  8.90%
                     
Adverse classified asset ratio:                    
Substandard loans $105,911  $117,765  $107,492  $120,887  $118,368 
Less: Impaired performing restructured loans  (8,672)  (8,276)  (6,382)  (5,078)  (13,657)
Net substandard loans $97,239  $109,489  $101,110  $115,809  $104,711 
Other real estate owned  7,252   8,693   5,019   6,568   7,851 
Substandard unused commitments  991   1,458   976   1,625   1,191 
Less: Substandard government guarantees  (7,746)  (7,821)  (5,864)  (7,111)  (9,374)
Total adverse classified assets (non-GAAP) $97,736  $111,819  $101,241  $116,891  $104,379 
                     
Total equity (Bank) $201,967  $196,036  $191,287  $185,458  $180,359 
Accumulated other comprehensive loss (gain) on available for sale securities  (3,016)  (2,166)  (436)  2,221   4,152 
Allowance for loan losses  15,065   16,258   17,493   16,505   16,143 
Allowance for unused commitments  -   -   -   475   510 
Adjusted total equity (non-GAAP) $214,016  $210,128  $208,344  $204,659  $201,164 
Adverse classified asset ratio  45.67%  53.21%  48.59%  57.12%  51.89%

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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