County Bancorp, Inc. Announces Fourth Quarter Results and Record Net Income for the Year 2019

Strategic initiatives to improve credit quality and grow client deposits gaining momentum

Company Release - 1/23/2020 4:01 PM ET

Highlights

  • Net income of $3.3 million for the fourth quarter of 2019; $16.5 million for the year 2019
  • Diluted earnings per share of $0.47 for the fourth quarter of 2019; $2.36 for the year 2019
  • Client deposits (demand deposits, NOW, savings, money market accounts, and certificates of deposit) increased $17.4 million, or 2.1%, since September 30, 2019, and increased $81.2 million, or 10.8%, since December 31, 2018
  • Loans sold with servicing retained increased $90.5 million, or 13.7%, since December 31, 2018, resulting in $10.0 million of non-interest income
  • Substandard loans decreased $11.0 million, or 10.4%, since September 30, 2019

MANITOWOC, Wisc., Jan. 23, 2020 (GLOBE NEWSWIRE) -- County Bancorp, Inc. (the “Company”; Nasdaq: ICBK), the holding company of Investors Community Bank (the “Bank”), a community bank headquartered in Manitowoc, Wisconsin, today reported results for the fourth quarter and year ended December 31, 2019.  Net income was $3.3 million, or $0.47 diluted earnings per share, for the fourth quarter of 2019, compared to net income of $5.7 million, or $0.82 diluted earnings per share, for the third quarter of 2019 and $2.8 million, or $0.40 diluted earnings per share, for the fourth quarter of 2018.    

Tim Schneider, President of County Bancorp, Inc., noted, “In 2019, we focused on improving credit quality, reducing wholesale funding, and growing our client deposits. I am pleased to say that our strategic initiatives drove improvements across all three focus areas, resulting in record full-year net profit for County Bancorp. Our business is progressing at a solid pace, but we understand there is more work to be done. Our dairy portfolio continued to strengthen as milk prices improved throughout 2019, and the futures market is the strongest we have seen in years. As trade deals with Mexico, Canada and China near the finish line, we feel more optimistic about the future of agricultural export stability. We made great progress in 2019, which is a testament to the diligent and tireless work of our team, and we look to continue our momentum as we head into 2020.”

Loans and Total Assets

Total assets at December 31, 2019 were $1.4 billion, a decrease of $36.5 million, or 2.6%, and a decrease of $142.5 million, or 9.4%, from total assets as of September 30, 2019 and December 31, 2018, respectively.  Total loans were $1.0 billion at December 31, 2019, which represents a $45.0 million, or 4.2%, decrease from total loans at September 30, 2019, and a decrease of $171.5 million, or 14.2%, from total loans at December 31, 2018.

The decrease in total loans and assets were the result of our continued focus on loan participation sales and the resulting reduction in wholesale funding (brokered deposits, national certificates of deposit, and Federal Home Loan Bank (FHLB) advances) on our balance sheet.  Loan participations that the Company continued to service were $751.7 million at December 31, 2019, which was an increase of $14.9 million, or 2.0%, and $90.5 million, or 13.7%, over participated loans that the Company serviced at September 30, 2019 and December 31, 2018, respectively.  By increasing the amount of loans participated, the Company has been reducing credit risk from its balance sheet and increasing non-interest revenue streams.

Deposits

Total deposits at December 31, 2019 were $1.1 billion, a decrease of $41.3 million, or 3.6%, and a decrease of $121.9 million, or 10.0%, from total deposits as of September 30, 2019 and December 31, 2018, respectively.  Despite the decline in total deposits, client deposits (demand deposits, NOW accounts, savings accounts, money market accounts, and certificates of deposit) increased $17.4 million, or 2.1%, since September 30, 2019, and increased $81.2 million, or 10.8%, since December 31, 2018. 

During 2019, the Company focused on reducing its reliance on wholesale funding.  Due to the increases in loan participations and client deposit growth discussed above, the Company was able to decrease its dependence on brokered deposits and national certificates of deposit to $265.8 million at December 31, 2019.  This represents a decrease of $58.7 million, or 18.1%, from September 30, 2019, and a decrease of $203.1 million, or 43.3%, from December 31, 2018. 

Also during 2019, the Company paid off a portion of its FHLB advances.  At December 31, 2019, advances from the FHLB totaled $44.4 million, which was a decrease of $45.0 million, or 50.3%, since December 31, 2018.

Net Interest Income and Margin

Net interest income was $9.5 million for the three months ended December 31, 2019, which was a $0.7 million, or 7.0%, decrease from the three months ended September 30, 2019, and a $1.2 million, or 11.6%, decrease from the three months ended December 31, 2018.  For the year ended December 31, 2019, net interest income decreased $1.2 million, or 2.8%, to $40.8 million from the same period in 2018.  The decrease in net interest income in the fourth quarter 2019 was the result of a lower average loan balance due to loan payoffs and the increase in loan participations sold.  This was partially offset by a $58.7 million decrease in brokered deposits and national certificates of deposit and the resulting decrease in interest expense.  The current quarter was also adversely impacted by a $10.2 million increase in nonaccrual loans, as well as a 25 basis point decrease in the Prime rate.

Net interest margin was 2.89% for the three months ended December 31, 2019, which was a decrease from 2.95% for the three months ended September 30, 2019.  The decrease in net interest margin was primarily due to the noted increase in nonaccrual loans.  Net interest margin was also impacted during the fourth quarter of 2019 by a 25 basis point decrease in the Prime rate, immediately impacting the yield of the loan portfolio.  This was partially offset by a decrease in rates offered on savings, NOW and money market accounts.

The table below presents the effects of changing rates and volumes on our net interest income for the periods indicated.

  Three Months Ended December 31, 2019 v.
Three Months Ended September 30, 2019
  Three Months Ended December 31, 2019 v.
Three Months Ended December 31, 2018
 
  Increase (Decrease)
Due to Change in Average
  Increase (Decrease)
Due to Change in Average
 
  Volume  Rate  Net  Volume  Rate  Net 
  (dollars in thousands) 
Interest Income:                        
Investment securities $1  $(11) $(10) $(228) $(17) $(245)
Loans  (847)  (493)  (1,340)  (1,889)  44   (1,845)
Federal funds sold and
  interest-bearing deposits
   with banks
  (30)  (140)  (170)  126   92   218 
Total interest income  (876)  (644)  (1,520)  (1,991)  119   (1,872)
Interest Expense:                        
Savings, NOW, money
  market and interest
  checking
 $(15) $(385) $(400) $158  $(325) $(167)
Time deposits  (515)  123   (392)  (1,354)  1,029   (325)
Other borrowings  -   -   -   -   -   - 
FHLB advances  (22)  1   (21)  (226)  24   (202)
Junior subordinated debentures  1   6   7   2   25   27 
Total interest expense $(551) $(255) $(806) $(1,420) $753  $(667)
Net interest income $(325) $(389) $(714) $(571) $(634) $(1,205)

The following tables set forth average balance sheets, average yields and rates, and income and expenses for the period indicated.

  For the Three Months Ended 
  December 31, 2019  September 30, 2019  December 31, 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 $159,202  $1,106   2.78% $159,091  $1,117   2.81% $191,955  $1,351   2.82%
Loans (2)  1,061,432   13,691   5.16%  1,126,243   15,030   5.34%  1,207,883   15,536   5.14%
Interest bearing deposits due from
  other banks
  98,848   441   1.79%  104,253   612   2.35%  67,153   223   1.33%
Total interest-earning assets $1,319,482  $15,238   4.62% $1,389,587  $16,759   4.82% $1,466,991  $17,110   4.67%
Allowance for loan losses  (14,868)          (16,209)          (16,034)        
Other assets  77,934           78,664           61,316         
  Total assets $1,382,548          $1,452,042          $1,512,273         
                                     
Liabilities                                    
Savings, NOW, money market,
  interest checking
 $322,629  $876   1.09% $326,592  $1,276   1.56% $287,420  $1,043   1.45%
Time deposits  658,864   3,905   2.37%  745,032   4,298   2.31%  820,515   4,230   2.06%
Total interest-bearing deposits $981,493  $4,781   1.95% $1,071,624  $5,574   2.08% $1,107,935  $5,273   1.90%
Other borrowings  799   9   4.60%  804   9   4.60%  837   10   4.62%
FHLB advances  44,400   216   1.94%  48,857   237   1.94%  90,509   417   1.84%
Junior subordinated debentures  44,839   694   6.19%  44,800   687   6.14%  44,681   667   5.97%
Total interest-bearing liabilities $1,071,531  $5,700   2.13% $1,166,085  $6,507   2.23% $1,243,962  $6,367   2.05%
Non-interest bearing deposits  123,541           105,578           108,140         
Other liabilities  16,749           14,801           10,913         
  Total liabilities $1,211,821          $1,286,464          $1,363,015         
                                     
Shareholders' equity  170,727           165,578           149,258         
  Total liabilities and equity $1,382,548          $1,452,042          $1,512,273         
                                     
Net interest income     $9,538          $10,252          $10,743     
Interest rate spread (3)          2.49%          2.59%          2.62%
Net interest margin (4)          2.89%          2.95%          2.91%
Ratio of interest-earning assets to
  interest-bearing liabilities
  1.23           1.19           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.

For the year ended December 31, 2019, net interest margin improved slightly to 2.93% from 2.91% for the year ended December 31, 2018, despite a six basis point decrease in interest rate spread.  The increase in net interest margin in 2019 is due to a 3.2% decrease in the average balance of interest-earning assets.

  For the Year Ended 
  December 31, 2019  December 31, 2018 
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
 
  (dollars in thousands) 
Assets                        
Investment securities $172,500  $4,843   2.81% $169,302  $4,425   2.61%
Loans (2)  1,142,551   59,706   5.23%  1,193,254   58,706   4.92%
Interest bearing deposits due from other
  banks
  78,517   1,783   2.27%  77,545   1,086   1.40%
Total interest-earning assets $1,393,568  $66,332   4.76% $1,440,101  $64,217   4.46%
Allowance for loan losses  (16,460)          (15,037)        
Other assets  77,444           59,291         
  Total assets $1,454,552          $1,484,355         
                         
Liabilities                        
Savings, NOW, money market, interest
  checking
 $316,278   4,582   1.45% $282,746   3,398   1.20%
Time deposits  741,483   16,875   2.28%  801,892   15,251   1.90%
Total interest-bearing deposits $1,057,761  $21,457   2.03% $1,084,638  $18,649   1.72%
Other borrowings  913   43   4.71%  1,027   50   4.81%
FHLB advances  66,022   1,307   1.98%  105,218   1,759   1.67%
Junior subordinated debentures  44,781   2,743   6.13%  32,721   1,804   5.51%
Total interest-bearing liabilities $1,169,477  $25,550   2.18% $1,223,604  $22,262   1.82%
Non-interest bearing deposits  108,356           100,819         
Other liabilities  13,796           9,883         
  Total liabilities $1,291,629          $1,334,306         
                         
Shareholders' equity  162,923           150,049         
  Total liabilities and equity $1,454,552          $1,484,355         
                         
Net interest income     $40,782          $41,955     
Interest rate spread (3)          2.58%          2.64%
Net interest margin (4)          2.93%          2.91%
Ratio of interest-earning assets to interest-
  bearing liabilities
  1.19           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.


Non-Interest Income and Expense

  For the Three Months Ended 
  December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
 
  (dollars in thousands) 
  Non-Interest Income                    
Service charges $549  $348  $407  $353  $470 
Gain (loss) on sale of loans, net  34   87   26   (1)  54 
Loan servicing fees  1,778   1,677   1,563   1,519   1,553 
Loan servicing right origination  1,146   1,741   346   228   7 
Income on OREO  54   10   40   26   83 
Gain on sale of securities  -   -   341   -   - 
Other  161   171   164   625   153 
Total non-interest income $3,722  $4,034  $2,887  $2,750  $2,320 

Non-interest income for the three months ended December 31, 2019 decreased by $0.3 million, or 7.7%, to $3.7 million compared to the three months ended September 30, 2019, which was primarily the result of a decrease of $0.6 million of loan servicing right origination due to the $41.2 million in loans that were sold or participated during the third quarter compared to only $14.9 million in loans that were sold or participated during the fourth quarter. 

Non-interest income for the three months ended December 31, 2019 increased $1.4 million, or 60.4%, compared to $2.3 million for the three months ended December 31, 2018.  The year-over-year increase was primarily due to the increase in loan participations sold and related loan servicing right origination income compared to the fourth quarter of 2018.

  For the Three Months Ended 
  December 31, 2019  September 30, 2019  June 30, 2019  March 31, 2019  December 31, 2018 
  (dollars in thousands) 
Loan servicing rights, beginning of period $11,362  $9,621  $9,275  $9,047  $9,040 
  Changes in loan servicing rights:                    
  Additions related to new loans  1,811   2,276   843   621   596 
  Impairment due to prepayment  (296)  (198)  (190)  (73)  (37)
  Amortization of existing asset  (632)  (584)  (554)  (550)  (552)
  Reduction of valuation allowance  263   247   247   230   - 
  Total loan servicing right origination income  1,146   1,741   346   228   7 
Loan servicing rights, end of period $12,508  $11,362  $9,621  $9,275  $9,047 
Loans serviced, end of period  751,738   736,823   695,629   675,268   661,257 
Loan servicing rights as a % of loans serviced  1.66%  1.54%  1.38%  1.37%  1.37%
                     
  Total loan servicing fees $1,778  $1,677  $1,563  $1,519  $1,553 
Average loans serviced  744,281   716,226   685,449   668,263   653,068 
Annualized loan servicing fees as a
  % of average loans serviced
  0.96%  0.94%  0.91%  0.91%  0.95%

Loan servicing right origination and loan serving fee income was positively impacted during the second half of the year in 2019 due to the higher volumes of loan participation sales as well as higher loan servicing fee spreads.

  For the Three Months Ended 
  December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
 
  (dollars in thousands, except per share data) 
  Non-Interest Expense                    
Employee compensation and
  benefits
 $5,696  $4,735  $4,199  $4,482  $4,059 
Occupancy  417   313   283   389   245 
Information processing  645   683   591   563   641 
Professional fees  371   483   417   399   497 
Business development  335   351   347   325   259 
OREO expenses  59   57   121   51   106 
Write-down of OREO  376   -   250   -   688 
Net loss (gain) on sale of OREO  (231)  160   9   (136)  (54)
Depreciation and amortization  319   319   328   337   408 
Other  2,278   567   901   895   689 
Total non-interest expense $10,265  $7,668  $7,446  $7,305  $7,538 

Non-interest expense for the three months ended December 31, 2019 increased by $2.6 million, or 33.9%, to $10.3 million compared to the three months ended September 30, 2019.  Employee compensation and benefits increased $1.0 million, or 20.3%, in the linked quarter due to the additional accrual of $0.9 million for incentive compensation related to current year financial results.  The year-over-year increase was also the result of a 5.3% increase in head count and a 21.7% increase in insurance benefits in 2019.  Other non-interest expense increased from impairment recognized from an investment in a historical tax credit project of $1.1 million.  The impairment was offset by a $1.4 million benefit to income tax expense when the credit was earned.  The three months ended December 31, 2019 was also adversely affected by decline in market values of three OREO properties which resulted in write-downs totaling $0.4 million. 

  December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
 
  (dollars in thousands) 
Loans by risk category:                    
  Sound/Acceptable/Satisfactory/
  Low Satisfactory
 $724,444  $771,568  $836,988  $896,328  $908,172 
  Watch  207,173   193,942   167,824   174,642   171,670 
  Special Mention  9,239   9,346   25,255   4,501   6,566 
  Substandard Performing  30,478   44,183   56,336   46,075   65,501 
  Substandard Impaired  64,439   61,728   61,429   61,417   55,386 
  Total loans $1,035,773  $1,080,767  $1,147,832  $1,182,963  $1,207,295 
Adverse classified asset ratio (1)  39.85%  45.67%  53.21%  48.59%  57.12%

(1)   This is a non-GAAP financial measure.  A reconciliation to GAAP is included at the end of this earnings release

Substandard loans were $94.9 million at December 31, 2019, compared to $105.9 million at September 30, 2019 and $120.9 million at December 31, 2018.  Adverse classified asset ratio (a non-GAAP measure) decreased to 39.85% at December 31, 2019 from 45.67% and 57.12% at September 30, 2019 and December 31, 2018, respectively.  The decrease in substandard loans and the adverse classified ratio were in part the result of improving milk prices.  The average 12-month future price of class III milk on the Chicago Mercantile Exchange rose to $17.40 at December 31, 2019 compared to $17.12 at September 30, 2019 and $15.88 at December 31, 2018.

  December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
 
  (dollars in thousands) 
Non-Performing Assets:                    
  Nonaccrual loans $30,968  $20,776  $20,096  $25,880  $22,983 
  Other real estate owned  5,521   7,252   8,693   5,019   6,568 
  Total non-performing assets $36,489  $28,028  $28,789  $30,899  $29,551 
                     
  Performing TDRs not on
  nonaccrual
 $21,784  $28,520  $28,892  $21,111  $18,258 
                     
Non-performing assets as a % of total
   loans
  3.52%  2.59%  2.51%  2.61%  2.45%
Non-performing assets as a % of total
  assets
  2.65%  1.98%  1.94%  2.07%  1.94%
Allowance for loan losses as a % of
  total loans
  1.47%  1.39%  1.42%  1.48%  1.37%
Net charge-offs (recoveries) quarter-
  to-date
 $(253) $39  $2,111  $(236) $1,210 

At December 31, 2019, non-performing assets were $36.5 million, an increase of $8.5 million, compared to September 30, 2019.  Non-performing assets as a percent of total assets increased to 2.65% at December 31, 2019, from 1.98% at September 30, 2019.  The increases were primarily due to an increase in non-accrual loans of $10.2 million in the fourth quarter related to one agriculture customer for $6.0 million and one commercial customer for $3.9 million, which was partially offset by two OREO properties that were sold during the fourth quarter of 2019, resulting in a decrease of $1.7 million in OREO.

A credit to provision for loan losses of $0.1 million was recorded for the three months ended December 31, 2019 compared to a credit of $1.2 million for the three months ended September 30, 2019.  The credit provision in the fourth quarter of 2019 was primarily a result of the reduction of the size of the loan portfolio, improved economic factors, and upgrades to credit ratings, which was partially offset by a $1.9 million impairment to a substandard commercial credit.  In addition, during the fourth quarter of 2019, the Company recovered a $0.4 million loan that was previously charged-off.   

The allowance for loan losses was $15.3 million at December 31, 2019 compared to $16.5 million at December 31, 2018.  The $1.2 million decrease in the allowance during 2019 was the result of a reduction in general reserves due to the decreases in total loans, improvement of economic factors, and the credit upgrades discussed previously.  Despite the decrease in allowance year-over-year, the allowance as a percent of total loans increased from 1.37% at December 31, 2018 to 1.47% at December 31, 2019.

Conference Call

The Company will host an earnings call tomorrow, January 24, 2020, 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 Investors.ICBK.com.  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 January 25, 2021, by visiting the Company’s website at Investors.ICBK.com/QuarterlyResults.

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)
 December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
 
  (dollars in thousands, except per share data) 
Period-End Balance Sheet:                    
  Assets                    
  Cash and cash equivalents $129,011  $120,845  $116,251  $62,426  $61,087 
  Securities available for sale, at fair
  value
  160,361   154,962   158,561   192,210   195,945 
  Loans held for sale  2,151   4,192   7,448   2,750   2,949 
  Agricultural loans  659,725   673,742   713,602   722,107   724,508 
  Commercial loans  331,723   360,132   383,542   403,490   415,672 
  Multi-family real estate loans  41,070   43,487   46,683   52,974   62,321 
  Residential real estate loans  2,888   3,183   3,753   4,172   4,522 
  Installment and consumer other  367   223   252   220   272 
  Total loans  1,035,773   1,080,767   1,147,832   1,182,963   1,207,295 
  Allowance for loan losses  (15,267)  (15,065)  (16,258)  (17,493)  (16,505)
  Net loans  1,020,506   1,065,702   1,131,574   1,165,470   1,190,790 
  Other assets  66,485   69,263   70,812   68,532   70,256 
  Total Assets $1,378,514  $1,414,964  $1,484,646  $1,491,388  $1,521,027 
                     
  Liabilities and Shareholders' Equity                    
  Demand deposits $138,489  $117,224  $111,022  $101,434  $121,436 
  NOW accounts and interest checking  63,781   56,637   54,253   49,902   51,779 
  Savings  15,708   6,981   6,621   6,210   5,770 
  Money market accounts  242,539   248,608   239,337   225,975   218,929 
  Time deposits  375,100   388,759   387,899   376,034   356,484 
  Brokered deposits  166,340   206,474   256,475   269,917   308,504 
  National time deposits  99,485   118,070   149,570   146,805   160,445 
  Total deposits  1,101,442   1,142,753   1,205,177   1,176,277   1,223,347 
  FHLB advances  44,400   44,400   59,400   100,400   89,400 
  Subordinated debentures  44,858   44,820   44,781   44,742   44,703 
  Other liabilities  16,051   14,239   12,564   11,952   11,293 
  Total Liabilities  1,206,751   1,246,212   1,321,922   1,333,371   1,368,743 
                     
  Shareholders' equity  171,763   168,752   162,724   158,017   152,284 
  Total Liabilities and Shareholders'
  Equity
 $1,378,514  $1,414,964  $1,484,646  $1,491,388  $1,521,027 
                     
Stock Price Information:                    
  High - Quarter-to-date $27.98  $20.99  $18.92  $19.69  $26.00 
  Low - Quarter-to-date $18.76  $16.80  $16.24  $16.74  $17.37 
  Market price - Quarter-end $25.63  $19.62  $17.09  $17.60  $17.37 
  Book value per share $24.32  $23.89  $23.03  $22.36  $21.50 
  Tangible book value per share (1) $23.54  $23.10  $22.23  $21.54  $20.68 
  Common shares outstanding  6,734,132   6,727,908   6,717,908   6,709,254   6,709,480 

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

  For the Three Months Ended  For the Year Ended 
  December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
  December 31,
2019
  December 31,
2018
 
  (dollars in thousands, except per share data) 
Selected Income Statement
  Data:
                            
  Interest and Dividend
  Income
                            
Loans, including fees  13,691  $15,030  $15,484  $15,501  $15,536  $59,706  $58,706 
Taxable securities  1,106   1,117   1,177   1,186   1,168   4,586   3,727 
Tax-exempt securities  -   -   82   175   183   257   698 
Federal funds sold and other  442   612   465   264   223   1,783   1,086 
Total interest and
  dividend income
  15,239   16,759   17,208   17,126   17,110   66,332   64,217 
                             
  Interest Expense                            
Deposits  4,781   5,574   5,678   5,424   5,273   21,457   18,649 
FHLB advances and other
  borrowed funds
  225   246   415   464   427   1,350   1,809 
Subordinated debentures  695   687   683   678   667   2,743   1,804 
Total interest expense  5,701   6,507   6,776   6,566   6,367   25,550   22,262 
Net interest income  9,538   10,252   10,432   10,560   10,743   40,782   41,955 
Provision for loan losses  (51)  (1,154)  876   752   1,572   423   3,195 
Net interest income after
  provision for loan losses
  9,589   11,406   9,556   9,808   9,171   40,359   38,760 
                             
  Non-Interest Income                            
Services charges  549   348   407   353   470   1,657   1,674 
Gain (loss) on sale of
  loans, net
  34   87   26   (1)  54   146   172 
Loan servicing fees  1,778   1,677   1,563   1,519   1,553   6,537   6,012 
Loan servicing right
  origination
  1,146   1,741   346   228   7   3,461   98 
Income on OREO  54   10   40   26   83   130   256 
Gain on sale of securities  -   -   341   -   -   341   - 
Other  161   171   164   625   153   1,121   621 
Total non-interest
  income
  3,722   4,034   2,887   2,750   2,320   13,393   8,833 
                             
  Non-Interest Expense                            
Employee compensation and
  benefits
  5,696   4,735   4,199   4,482   4,059   19,112   16,785 
Occupancy  417   313   283   389   245   1,402   1,059 
Information processing  645   683   591   563   641   2,482   2,164 
Professional fees  371   483   417   399   497   1,670   1,522 
Business development  335   351   347   325   259   1,358   1,076 
OREO expenses  59   57   121   51   106   288   444 
Writedown of OREO  376   -   250   -   688   626   873 
Net loss (gain) on sale of
  OREO
  (231)  160   9   (136)  (54)  (198)  (189)
Depreciation and
  amortization
  319   319   328   337   408   1,303   1,348 
Other  2,278   567   901   895   689   4,641   3,201 
Total non-interest
  expense
  10,265   7,668   7,446   7,305   7,538   32,684   28,283 
  Income before income taxes  3,046   7,772   4,997   5,253   3,953   21,068   19,310 
Income tax expense  (258)  2,090   1,293   1,491   1,123   4,616   5,059 
  NET INCOME $3,304  $5,682  $3,704  $3,762  $2,830  $16,452  $14,251 
                             
  Basic $0.47  $0.82  $0.53  $0.54  $0.41  $2.37  $2.06 
  Diluted $0.47  $0.82  $0.53  $0.54  $0.40  $2.36  $2.04 
  Dividends declared $0.05  $0.05  $0.05  $0.05  $0.07  $0.20  $0.28 


   For the Three Months Ended  For the Year Ended 
  December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
  December 31,
2019
  December 31,
2018
 
  (dollars in thousands, except share data) 
Other Data:                            
  Return on average assets(1)  0.96%  1.57%  1.00%  1.00%  0.75%  1.13%  0.96%
  Return on average
  shareholders' equity(1)
  7.74%  13.73%  9.24%  9.78%  7.58%  10.10%  9.50%
  Return on average common
  shareholders' equity (1)(2)
  7.83%  14.14%  9.41%  9.99%  7.70%  10.31%  9.74%
  Efficiency ratio (1)(2)  76.32%  52.55%  55.38%  55.91%  52.85%  59.92%  54.42%
  Tangible common equity to
  tangible assets (2)
  11.54%  11.03%  10.10%  9.73%  9.16%  11.54%  9.16%
                             
Common Share Data:                            
  Net income from continuing
  operations
 $3,304  $5,682  $3,704  $3,762  $2,830  $16,452  $14,251 
  Less:  Preferred stock
  dividends
  117   120   118   117   111   472   413 
  Income available to common
  shareholders
 $3,187  $5,562  $3,586  $3,645  $2,719  $15,980  $13,838 
                             
  Weighted average number of
  common shares issued
  7,173,290   7,168,785   7,159,072   7,153,174   7,143,204   7,163,650   7,132,985 
  Less: Weighted average
  treasury shares
  443,920   443,920   443,920   443,729   443,694   443,873   442,206 
  Plus: Weighted average non-
  vested restricted stock units
  32,125   32,125   30,483   16,260   13,041   27,804   13,272 
  Weighted average number of
  common shares outstanding
  6,761,495   6,756,990   6,745,635   6,725,705   6,712,551   6,747,581   6,704,051 
  Effect of dilutive options  44,630   19,160   20,731   21,323   45,116   21,344   68,876 
  Weighted average number
  of common shares
  outstanding used to
  calculate diluted earnings
   per common share
  6,806,125   6,776,150   6,766,366   6,747,028   6,757,667   6,768,925   6,772,927 
  1. Annualized
  2. This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.
   For the Three Months Ended  For the Year Ended 
Non-GAAP Financial
  Measures:
 December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
  December 31,
2019
  December 31,
2018
 
  (dollars in thousands) 
Return on average common
  shareholders' equity
  reconciliation:
                            
  Return on average
  shareholders' equity
  7.74%  13.73%  9.24%  9.78%  7.58%  10.10%  9.50%
  Effect of excluding average
  preferred shareholders'
  equity
  0.09%  0.41%  0.17%  0.21%  0.12%  0.21%  0.24%
  Return on average common
  shareholders' equity
  7.83%  14.14%  9.41%  9.99%  7.70%  10.31%  9.74%
                             
Efficiency ratio GAAP to
  non-GAAP reconciliation:
                            
  Non-interest expense $10,265  $7,668  $7,446  $7,305  $7,538  $32,684  $28,283 
  Less: net gain (loss) on sales
  and write-downs of OREO
  (145)  (160)  (259)  136   (634)  (428)  (642)
  Adjusted non-interest
  expense (non-GAAP)
 $10,120  $7,508  $7,187  $7,441  $6,904  $32,256  $27,641 
                             
  Net interest income $9,538  $10,252  $10,432  $10,560  $10,743  $40,782  $41,955 
  Non-interest income  3,722   4,034   2,887   2,750   2,320   13,393   8,833 
  Less: net gain on sales of
  securities
  -   -   (341)  -   -   (341)  - 
  Operating revenue $13,260  $14,286  $12,978  $13,310  $13,063  $53,834  $50,788 
  Efficiency ratio  76.32%  52.55%  55.38%  55.91%  52.85%  59.92%  54.42%

               

Non-GAAP Financial
  Measures:
 December 31,
2019
  September 30,
2019
  June 30,
2019
  March 31,
2019
  December 31,
2018
 
  (dollars in thousands, except per share data) 
Tangible book value per share and
  tangible common equity to tangible
  assets reconciliation:
                    
  Common equity $163,763  $160,752  $154,724  $150,017  $144,284 
  Less: Goodwill  5,038   5,038   5,038   5,038   5,038 
  Less: Core deposit intangible, net of
  amortization
  225   286   354   430   513 
  Tangible common equity
  (non-GAAP)
 $158,500  $155,428  $149,332  $144,549  $138,733 
  Common shares outstanding  6,734,132   6,727,908   6,717,908   6,709,254   6,709,480 
  Tangible book value per share $23.54  $23.10  $22.23  $21.54  $20.68 
                     
  Total assets $1,378,514  $1,414,964  $1,484,646  $1,491,388  $1,521,027 
  Less: Goodwill  5,038   5,038   5,038   5,038   5,038 
  Less: Core deposit intangible, net of
  amortization
  225   286   354   603   701 
  Tangible assets (non-GAAP) $1,373,251  $1,409,640  $1,479,254  $1,485,747  $1,515,288 
  Tangible common equity to tangible
  assets
  11.54%  11.03%  10.10%  9.73%  9.16%
                     
Adverse classified asset ratio:                    
  Substandard loans $94,917  $105,911  $117,765  $107,492  $120,887 
  Less: Impaired performing restructured
  loans
  (8,925)  (8,672)  (8,276)  (6,382)  (5,078)
  Net substandard loans $85,992  $97,239  $109,489  $101,110  $115,809 
  Other real estate owned  5,521   7,252   8,693   5,019   6,568 
  Substandard unused commitments  2,849   991   1,458   976   1,625 
  Less: Substandard government
  guarantees
  (7,892)  (7,746)  (7,821)  (5,864)  (7,111)
  Total adverse classified assets
  (non-GAAP)
 $86,470  $97,736  $111,819  $101,241  $116,891 
                     
  Total equity (Bank) $204,240  $201,967  $196,036  $191,287  $185,458 
  Accumulated other comprehensive loss
  (gain) on available for sale securities
  (2,505)  (3,016)  (2,166)  (436)  2,221 
  Allowance for loan losses  15,267   15,065   16,258   17,493   16,505 
  Allowance for unused commitments  -   -   -   -   475 
  Adjusted total equity (non-GAAP) $217,002  $214,016  $210,128  $208,344  $204,659 
  Adverse classified asset ratio  39.85%  45.67%  53.21%  48.59%  57.12%

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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