ICBK County Bancorp Inc

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 first quarter of 2020.  Net loss was $5.2 million, or $0.78 diluted loss per share, for the first quarter of 2020, compared to net income of $3.8 million, or $0.54 diluted earnings per share, for the first quarter of 2019.  Net loss included a $5.0 million goodwill impairment charge as a result of the uncertainty related to COVID-19 and its potential impact on future earnings, as well as overall bank valuations.  Excluding that charge, diluted loss would have been $0.04 per share.

Tim Schneider, President of County Bancorp, Inc., noted, “As a result of the swift and decisive actions we took in response to the pandemic, there were several pushes and pulls to our financials this quarter.  Those included a goodwill impairment primarily related to market changes, the addition of approximately $2.0 million in provisions for loan losses and some increased margin compression due to the impact of the pandemic, and a $1.4 million write-down on one OREO property due to an updated appraised value.  We also recently updated our capital stress testing and it showed that we have more than sufficient capital to maintain our well-capitalized status in a severe adverse stress scenario. Out of an abundance of caution, we have started to extend out our wholesale funding maturities to better manage future liquidity risk and rates up scenarios.” 

Schneider continued, “We prioritized our team’s safety and now have the large majority of our team working efficiently from their home offices, and have closed all locations except the drive-thrus at three of our branch locations.  Even with these disruptions, I am so proud of how our team came together and continued to safely and effectively serve our clients. Through April 29, 2020, we have processed 812 Paycheck Protection Loans (“PPP”) through the SBA applications, totaling $104 million and representing almost 13,000 jobs protected.  Our team is prepared to weather any future temporary disruptions that the pandemic may cause to our business operations and those of our customers.  Our capital ratios remain strong and we will continue to stay balanced in our capital allocation approach, which includes a continuation of our current dividend payout and common stock buyback plan.  Of note, during the first quarter, we were able to purchase 256,000 shares of common stock.”

Loans and Securities

Total loans decreased $23.3 million, or 2.3%, during the first quarter of 2020 and $170.5 million year-over-year, or 14.4%, to $1.0 billion.  The decrease in total loans in the first quarter of 2020 was due to loan paydowns and a continued focus on selling loans in the secondary market.  The decrease in total loans year-over-year was the result of a continued focus on long-term liquidity.  Loan participations the Company continued to service were $747.6 million at March 31, 2020, a decrease of $4.2 million or 0.6% compared to the fourth quarter of 2019, but an increase of $72.3 million, or 10.7%, year-over-year.  By increasing the amount of loans participated, the Company has been reducing credit risk from its balance sheet and increasing non-interest revenue streams.

During the first quarter of 2020, investments increased $87.4 million, or 55.1%, compared to December 31, 2019 due to deploying cash into securities.

Deposits

Total deposits at March 31, 2020 were $1.0 billion, a decrease of $81.5 million, or 7.4%, sequentially and $156.3 million, or 13.3%, year-over-year.  Client deposits (demand deposits, NOW accounts, savings accounts, money market accounts, and certificates of deposit) decreased $43.9 million, or 5.3%, sequentially and increased $32.1 million, or 4.2%, year-over-year.  The decrease in client deposits from the sequential quarter was driven by the timing of farmer milk check deposits in December 2019, as well as overall declines in money market account balances across all product lines.

During the first quarter of 2020, the Company took advantage of the Federal Reserve Bank’s interest rate cuts and increased borrowings from FHLB by $65.0 million, with an average rate of 0.77%.  The Company’s overall focus remains on funding loan growth with client deposits; however, these borrowings help reduce interest rate risk and our lower cost of funds.  Due to the increases in loan participations and client deposit growth discussed above, the Company decreased its dependence on brokered deposits and national certificates of deposit to $228.3 million at March 31, 2020.  This represents a decrease of $188.5 million, or 45.2%, from March 31, 2019.   

Net Interest Income and Margin

• Net interest margin decreased both sequentially and year-over-year, due to actions taken by the Federal Reserve Bank related to COVID-19 during the first quarter of 2020 and the resulting decrease in rates across the yield curve.
• Interest income on investment securities increased in the linked quarter, due to shifting balances from interest-bearing deposits with banks to investment securities.
• Loan interest income decreased in the both linked and year-over-year periods as a result of the previously mentioned shift from loans held on balance sheet to loans sold and serviced.
• Interest expense on savings, NOW, money market, and interest checking accounts decreased despite the increase in average balance both in the linked quarter and year-over year due to the market driven drop in interest rates which contributed to an overall lower cost of funds.
• Interest expense on time deposits decreased in the linked quarter due to the Company’s continued focus on shifting away from brokered time deposit balances for funding. Year-over-year, time deposits also decreased due to the Company’s shift away from wholesale funding.
• Interest expense on FHLB advances increased in the linked quarter due to the overall increase in volume this quarter as FHLB advance rates were more competitive than other forms of wholesale funding. Year-over-year, FHLB advances interest expense decreased due to the Company’s shift away from wholesale funding.

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

		Three Months Ended March 31, 2020 v.Three Months Ended December 31, 2019												Three Months Ended March 31, 2020 v.Three Months Ended March 31, 2019
		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		$	239			$	(57	)		$	182			$	24			$	(96	)		$	(72	)
Loans			(415	)			(694	)			(1,109	)			(2,211	)			(708	)			(2,919	)
Federal funds sold and  interest-bearing  deposits with banks			(150	)			(67	)			(217	)			(144	)			104				(40	)
Total interest income			(326	)			(818	)			(1,144	)			(2,331	)			(700	)			(3,031	)
Interest Expense:
Savings, NOW, money market  and interest checking		$	35			$	(137	)		$	(102	)		$	188			$	(599	)		$	(411	)
Time deposits			(264	)			(68	)			(332	)			(1,135	)			469				(666	)
Other borrowings			3				(1	)			2				(1	)			1				-
FHLB advances			39				(22	)			17				(157	)			(63	)			(220	)
Junior subordinated  debentures			—				11				11				4				24				28
Total interest expense		$	(187	)		$	(217	)		$	(404	)		$	(1,101	)		$	(168	)		$	(1,269	)
Net interest income		$	(139	)		$	(601	)		$	(740	)		$	(1,230	)		$	(532	)		$	(1,762	)

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
		March 31, 2020										December 31, 2019										March 31, 2019
		AverageBalance (1)				Income/Expense			Yields/Rates			AverageBalance (1)				Income/Expense			Yields/Rates			AverageBalance (1)				Income/Expense			Yields/Rates
		(dollars in thousands)
Assets
Investment securities		$	196,353			$	1,289		2.63	%		$	159,202			$	1,106		2.78	%		$	192,963			$	1,361		2.82	%
Loans (2)			1,028,637				12,582		4.89	%			1,061,432				13,691		5.16	%			1,207,240				15,501		5.14	%
Interest bearing deposits due from  other banks			60,825				225		1.48	%			98,848				441		1.79	%			36,227				264		2.91	%
Total interest-earning assets		$	1,285,815			$	14,096		4.39	%		$	1,319,482			$	15,238		4.62	%		$	1,436,430			$	17,126		4.77	%
Allowance for loan losses			(15,330	)									(14,868	)									(17,005	)
Other assets			84,461										77,934										78,654
Total assets		$	1,354,946									$	1,382,548									$	1,498,079
Liabilities
Savings, NOW, money market,  interest checking		$	334,740			$	774		0.92	%		$	322,629			$	876		1.09	%		$	295,418			$	1,184		1.60	%
Time deposits			613,753				3,574		2.33	%			658,864				3,905		2.37	%			797,476				4,240		2.13	%
Total interest-bearing deposits		$	948,493			$	4,348		1.83	%		$	981,493			$	4,781		1.95	%		$	1,092,894			$	5,424		1.99	%
Other borrowings			1,259				11		3.49	%			799				9		4.60	%			844				11		5.27	%
FHLB advances			56,708				233		1.65	%			44,400				216		1.95	%			92,900				453		1.95	%
Junior subordinated debentures			44,871				706		6.29	%			44,839				694		6.19	%			44,606				678		6.08	%
Total interest-bearing liabilities		$	1,051,331			$	5,298		2.02	%		$	1,071,531			$	5,700		2.13	%		$	1,231,244			$	6,566		2.13	%
Non-interest bearing deposits			113,351										123,541										101,532
Other liabilities			16,877										16,749										11,362
Total liabilities		$	1,181,559									$	1,211,821									$	1,344,138
Shareholders' equity			173,387										170,727										153,941
Total liabilities and equity		$	1,354,946									$	1,382,548									$	1,498,079
Net interest income						$	8,798									$	9,538									$	10,560
Interest rate spread (3)									2.37	%									2.49	%									2.64	%
Net interest margin (4)									2.74	%									2.89	%									2.94	%
Ratio of interest-earning assets to  interest-bearing liabilities			1.22										1.23										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.

Non-Interest Income

• Loan servicing income increased in the linked quarter due to a 0.02% increase in loan servicing fees income spread during Q1 2020. Year-over-year, loan servicing fees increased due to a 0.07% increase in loan servicing fee spread and an increase in loans serviced.
• Loan servicing right origination income decreased in the linked quarter due to the decreases in loans sold and serviced; however, the loan servicing rights as a percent of loans serviced increased by 4.6% due to our election to switch to fair value accounting versus amortized cost to better reflect shareholder value and the value of future revenue streams.
• Other income decreased year-over-year due to a reduction of the allowance for unused commitments of $0.5 million during Q1 2019.  

		For the Three Months Ended
		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands)
Non-Interest Income
Service charges		$	342			$	549			$	348			$	407			$	353
Gain (loss) on sale of loans, net			38				34				87				26				(1	)
Loan servicing fees			1,831				1,778				1,677				1,563				1,519
Loan servicing right origination			289				1,146				1,741				346				228
Income on OREO			—				54				10				40				26
Gain on sale of securities			—				—				—				341				—
Other			203				161				171				164				625
Total non-interest income		$	2,703			$	3,722			$	4,034			$	2,887			$	2,750

		For the Three Months Ended
		March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
		(dollars in thousands)
Loan servicing rights, beginning of period		$	12,509			$	11,362			$	9,621			$	9,275			$	9,047
Changes in loan servicing rights:
Additions related to new loans			505				1,812				2,276				843				621
Impairment due to prepayment			(142	)			(296	)			(198	)			(190	)			(73	)
Amortization of existing asset			(73	)			(632	)			(584	)			(554	)			(550	)
Reduction of valuation allowance			—				263				247				247				230
Addition due to change in accounting principle			3,412				—				—				—				—
Total loan servicing right origination income			3,702				1,147				1,741				346				228
Loan servicing rights, end of period		$	16,211			$	12,509			$	11,362			$	9,621			$	9,275
Loans serviced, end of period			747,553				751,738				736,823				695,629				675,268
Loan servicing rights as a % of loans serviced			2.17	%			1.66	%			1.54	%			1.38	%			1.37	%
Total loan servicing fees		$	1,831			$	1,778			$	1,677			$	1,563			$	1,519
Average loans serviced			749,646				744,281				716,226				685,449				668,263
Annualized loan servicing fees as a  % of average loans serviced			0.98	%			0.96	%			0.94	%			0.91	%			0.91	%

Non-Interest Expense

• The write down of OREO in Q1 2020 was the result of an updated appraisal on a retail shopping center.
• The goodwill impairment in Q1 2020 was due to the anticipated reduction in future earnings and a decrease in bank trading multiples resulting from COVID-19.
• The decrease in employee compensation and benefits expense in the linked quarter was the result of higher incentive compensation expense during Q4 2019.
• The year-over-year increase in employee compensation and benefits expense was the result of a 5.1% increase in headcount and a $0.3 million increase in payroll taxes and options expense related to the 2019 incentive compensation that was paid during the first quarter of 2020.
• The decrease in other non-interest expense in the linked quarter is the result of an impairment that was recognized in Q4 2019 for an investment in a historical tax credit project that did not recur in Q1 2020.

		For the Three Months Ended
		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands, except per share data)
Non-Interest Expense
Employee compensation and  benefits		$	5,260			$	5,696			$	4,735			$	4,199			$	4,482
Occupancy			354				417				313				283				389
Information processing			670				645				683				591				563
Professional fees			401				371				483				417				399
Business development			366				335				351				347				325
OREO expenses			116				59				57				121				51
Writedown of OREO			1,360				376				—				250				—
Net loss (gain) on sale of OREO			4				(231	)			160				9				(136	)
Depreciation and amortization			301				319				319				328				337
Goodwill impairment			5,038				—				—				—				—
Other			1,148				2,278				567				901				895
Total non-interest expense		$	15,018			$	10,265			$	7,668			$	7,446			$	7,305

Asset Quality

• The decrease in substandard loans and the adverse classified asset ratio in the linked quarter were primarily due to the improved milk prices in 2019 and 2020 prior to the COVID-19 pandemic which caused the average 12-month future price of Class III milk to drop by 17.8% on the Chicago Mercantile Exchange from December 31, 2019 to March 31, 2020. 

		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands)
Loans by risk category(1):
Sound/Acceptable/Satisfactory/  Low Satisfactory		$	706,247			$	724,444			$	771,567			$	837,094			$	896,933
Watch			219,459				216,098				202,615				175,995				180,419
Special Mention			15,036				9,239				9,346				25,254				4,501
Substandard Performing			34,179				49,774				71,133				83,992				70,060
Substandard Impaired			37,515				36,218				26,106				25,497				31,050
Total loans		$	1,012,436			$	1,035,773			$	1,080,767			$	1,147,832			$	1,182,963
Adverse classified asset ratio (2)			32.35	%			39.85	%			45.67	%			53.21	%			48.59	%

(1)     Troubled debt restructurings are presented in their internal risk rating category rather than reclassified to substandard impaired.  Prior quarters have been reclassified to reflect this change.

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

Non-Performing Assets

• Non-performing assets decreased in the linked quarter by $1.2 million. Year-over-year, non-performing assets increased due to a $7.8 million increase in non-accrual agricultural loans, which was partially offset by a $1.6 million improvement in commercial non-accrual loans and a $1.8 million decrease in OREO properties.
• A provision for loan losses of $2.2 million was recorded for the three months ended March 31, 2020 compared to a provision of $0.8 million for the three months ended March 31, 2019.  The increase in provision is the result of the additional qualitative factor of $2.0 million related to customers that are at a higher risk of being impacted by COVID-19 based on the information currently known.  We will continue to evaluate the impact of COVID-19 and the unprecedented Federal support of small businesses as we estimate provisions in future periods.

		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands)
Non-Performing Assets:
Nonaccrual loans		$	32,051			$	30,968			$	20,776			$	20,096			$	25,880
Other real estate owned			3,247				5,521				7,252				8,693				5,019
Total non-performing assets		$	35,298			$	36,489			$	28,028			$	28,789			$	30,899
Performing TDRs not on  nonaccrual		$	21,853			$	21,784			$	28,520			$	28,892			$	21,111
Non-performing assets as a % of total  loans			3.49	%			3.52	%			2.59	%			2.51	%			2.61	%
Non-performing assets as a % of total  assets			2.61	%			2.65	%			1.98	%			1.94	%			2.07	%
Allowance for loan losses as a % of  total loans			1.73	%			1.47	%			1.39	%			1.42	%			1.48	%
Net charge-offs (recoveries) quarter-  to-date		$	(62	)		$	(253	)		$	39			$	2,111			$	(236	)

Conference Call

The Company will host an earnings call tomorrow, May 1, 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 May 1, 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 ContactGlen L. StiteleyEVP - CFO, Investors Community BankPhone: (920) 686-5658 Email: gstiteley@icbk.com     

County Bancorp, Inc.Consolidated Financial Summary(Unaudited)		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands, except per share data)
Period-End Balance Sheet:
Assets
Cash and cash equivalents		$	21,545			$	129,011			$	120,845			$	116,251			$	62,426
Securities available for sale, at fair  value			246,148				158,733				154,962				158,561				192,210
Loans held for sale			14,388				2,151				4,192				7,448				2,750
Agricultural loans			642,066				659,725				673,742				713,602				722,107
Commercial loans			325,310				331,723				360,132				383,542				403,490
Multi-family real estate loans			42,198				41,070				43,487				46,683				52,974
Residential real estate loans			2,753				2,888				3,183				3,753				4,172
Installment and consumer other			109				367				223				252				220
Total loans			1,012,436				1,035,773				1,080,767				1,147,832				1,182,963
Allowance for loan losses			(17,547	)			(15,267	)			(15,065	)			(16,258	)			(17,493	)
Net loans			994,889				1,020,506				1,065,702				1,131,574				1,165,470
Other assets			78,004				68,378				69,263				70,812				68,532
Total Assets		$	1,354,974			$	1,378,779			$	1,414,964			$	1,484,646			$	1,491,388
Liabilities and Shareholders' Equity
Demand deposits		$	117,434			$	138,489			$	117,224			$	111,022			$	101,434
NOW accounts and interest checking			64,873				63,781				56,637				54,253				49,902
Savings			6,566				15,708				6,981				6,621				6,210
Money market accounts			237,889				242,539				248,608				239,337				225,975
Time deposits			364,930				375,100				388,759				387,899				376,034
Brokered deposits			161,882				166,340				206,474				256,475				269,917
National time deposits			66,386				99,485				118,070				149,570				146,805
Total deposits			1,019,960				1,101,442				1,142,753				1,205,177				1,176,277
FHLB advances			109,400				44,400				44,400				59,400				100,400
Subordinated debentures			44,896				44,858				44,820				44,781				44,742
Other liabilities			15,672				16,050				14,239				12,564				11,952
Total Liabilities			1,189,928				1,206,750				1,246,212				1,321,922				1,333,371
Shareholders' equity			165,046				172,029				168,752				162,724				158,017
Total Liabilities and Shareholders'  Equity		$	1,354,974			$	1,378,779			$	1,414,964			$	1,484,646			$	1,491,388
Stock Price Information:
High - Quarter-to-date		$	27.19			$	27.98			$	20.99			$	18.92			$	19.69
Low - Quarter-to-date		$	13.55			$	18.76			$	16.80			$	16.24			$	16.74
Market price - Quarter-end		$	18.50			$	25.63			$	19.62			$	17.09			$	17.60
Book value per share		$	24.17			$	24.32			$	23.89			$	23.03			$	22.36
Tangible book value per share (1)		$	24.15			$	23.58			$	23.10			$	22.23			$	21.54
Common shares outstanding			6,496,790				6,734,132				6,727,908				6,717,908				6,709,254

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

		For the Three Months Ended
		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands, except per share data)
Selected Income Statement Data:
Interest and Dividend Income
Loans, including fees			12,582			$	13,691			$	15,030			$	15,484			$	15,501
Taxable securities			1,282				1,106				1,117				1,177				1,186
Tax-exempt securities			6				—				—				82				175
Federal funds sold and other			225				442				612				465				264
Total interest and dividend  income			14,095				15,239				16,759				17,208				17,126
Interest Expense
Deposits			4,347				4,781				5,574				5,678				5,424
FHLB advances and other  borrowed funds			244				225				246				415				464
Subordinated debentures			706				695				687				683				678
Total interest expense			5,297				5,701				6,507				6,776				6,566
Net interest income			8,798				9,538				10,252				10,432				10,560
Provision for loan losses			2,218				(51	)			(1,154	)			876				752
Net interest income after provision  for loan losses			6,580				9,589				11,406				9,556				9,808
Non-Interest Income
Services charges			342				549				348				407				353
Gain (loss) on sale of loans, net			38				34				87				26				(1	)
Loan servicing fees			1,831				1,778				1,677				1,563				1,519
Loan servicing right origination			289				1,146				1,741				346				228
Income on OREO			—				54				10				40				26
Gain on sale of securities			—				—				—				341				—
Other			203				161				171				164				625
Total non-interest income			2,703				3,722				4,034				2,887				2,750
Non-Interest Expense
Employee compensation and  benefits			5,260				5,696				4,735				4,199				4,482
Occupancy			354				417				313				283				389
Information processing			670				645				683				591				563
Professional fees			401				371				483				417				399
Business development			366				335				351				347				325
OREO expenses			116				59				57				121				51
Writedown of OREO			1,360				376				—				250				—
Net loss (gain) on sale of OREO			4				(231	)			160				9				(136	)
Depreciation and amortization			301				319				319				328				337
Goodwill impairment			5,038				—				—				—				—
Other			1,148				2,278				567				901				895
Total non-interest expense			15,018				10,265				7,668				7,446				7,305
Income before income taxes			(5,735	)			3,046				7,772				4,997				5,253
Income tax expense			(547	)			(258	)			2,090				1,293				1,491
NET INCOME		$	(5,188	)		$	3,304			$	5,682			$	3,704			$	3,762
Basic		$	(0.79	)		$	0.47			$	0.82			$	0.53			$	0.54
Diluted		$	(0.78	)		$	0.47			$	0.82			$	0.53			$	0.54
Dividends declared		$	0.07			$	0.05			$	0.05			$	0.05			$	0.05

		For the Three Months Ended
		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands, except share data)
Other Data:
Return on average assets(1)			(1.53	)%			0.96	%			1.57	%			1.00	%			1.00	%
Return on average  shareholders' equity(1)			(11.97	)%			7.74	%			13.73	%			9.24	%			9.78	%
Return on average common  shareholders' equity (1)(2)			(12.81	)%			7.83	%			14.14	%			9.41	%			9.99	%
Efficiency ratio (1)(2)			74.92	%			76.32	%			52.55	%			55.38	%			55.91	%
Tangible common equity to  tangible assets (2)			11.58	%			11.54	%			11.03	%			10.10	%			9.73	%
Common Share Data:
Net income from continuing  operations		$	(5,188	)		$	3,304			$	5,682			$	3,704			$	3,762
Less:  Preferred stock  dividends			108				117				120				118				117
Income available to common  shareholders		$	(5,296	)		$	3,187			$	5,562			$	3,586			$	3,645
Weighted average number of  common shares issued			7,182,945				7,173,290				7,168,785				7,159,072				7,153,174
Less: Weighted average  treasury shares			518,740				443,920				443,920				443,920				443,729
Plus: Weighted average non-  vested restricted stock units			39,785				32,125				32,125				30,483				16,260
Weighted average number of  common shares outstanding			6,703,990				6,761,495				6,756,990				6,745,635				6,725,705
Effect of dilutive options			49,072				44,630				19,160				20,731				21,323
Weighted average number  of common shares  outstanding used to   calculate diluted earnings  per common share			6,753,062				6,806,125				6,776,150				6,766,366				6,747,028

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:		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands)
Return on average common  shareholders' equity  reconciliation(1):
Return on average  shareholders' equity			(11.97	)%			7.74	%			13.73	%			9.24	%			9.78	%
Effect of excluding average  preferred shareholders'  equity			(0.84	)%			0.09	%			0.41	%			0.17	%			0.21	%
Return on average common  shareholders' equity			(12.81	)%			7.83	%			14.14	%			9.41	%			9.99	%
Efficiency ratio GAAP to  non-GAAP reconciliation(2):
Non-interest expense		$	15,018			$	10,265			$	7,668			$	7,446			$	7,305
Less: goodwill impairment			(5,038	)			—				—				—				—
Less: net gain (loss) on sales  and write-downs of OREO			(1,364	)			(145	)			(160	)			(259	)			136
Adjusted non-interest  expense (non-GAAP)		$	8,616			$	10,120			$	7,508			$	7,187			$	7,441
Net interest income		$	8,798			$	9,538			$	10,252			$	10,432			$	10,560
Non-interest income			2,703				3,722				4,034				2,887				2,750
Less: net gain on sales of  securities			—				—				—				(341	)			—
Operating revenue		$	11,501			$	13,260			$	14,286			$	12,978			$	13,310
Efficiency ratio			74.92	%			76.32	%			52.55	%			55.38	%			55.91	%

1. Management uses the return on average common shareholders’ equity in order to review our core operating results and our performance.
2. In our judgment, the adjustments made to non-interest expense allow investors to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business.

Non-GAAP Financial  Measures:		March 31,2020				December 31,2019				September 30,2019				June 30,2019				March 31,2019
		(dollars in thousands, except per share data)
Tangible book value per share and  tangible common equity to tangible  assets reconciliation(1):
Common equity		$	157,046			$	164,029			$	160,752			$	154,724			$	150,017
Less: Goodwill			—				5,038				5,038				5,038				5,038
Less: Core deposit intangible, net of  amortization			171				225				286				354				430
Tangible common equity  (non-GAAP)		$	156,875			$	158,766			$	155,428			$	149,332			$	144,549
Common shares outstanding			6,496,790				6,734,132				6,727,908				6,717,908				6,709,254
Tangible book value per share		$	24.15			$	23.58			$	23.10			$	22.23			$	21.54
Total assets		$	1,354,974			$	1,378,779			$	1,414,964			$	1,484,646			$	1,491,388
Less: Goodwill			—				5,038				5,038				5,038				5,038
Less: Core deposit intangible, net of  amortization			171				225				286				603				701
Tangible assets (non-GAAP)		$	1,354,803			$	1,373,516			$	1,409,640			$	1,479,005			$	1,485,649
Tangible common equity to tangible  assets			11.58	%			11.56	%			11.03	%			10.10	%			9.73	%
Adverse classified asset ratio(2):
Substandard loans		$	71,694			$	85,992			$	97,239			$	109,489			$	101,110
Other real estate owned			3,247				5,521				7,252				8,693				5,019
Substandard unused commitments			2,840				2,849				991				1,458				976
Less: Substandard government  guarantees			(7,699	)			(7,892	)			(7,746	)			(7,821	)			(5,864	)
Total adverse classified assets  (non-GAAP)		$	70,082			$	86,470			$	97,736			$	111,819			$	101,241
Total equity (Bank)		$	204,089			$	204,240			$	201,967			$	196,036			$	191,287
Accumulated other comprehensive loss  (gain) on available for sale securities			(5,012	)			(2,505	)			(3,016	)			(2,166	)			(436	)
Allowance for loan losses			17,547				15,267				15,065				16,258				17,493
Adjusted total equity (non-GAAP)		$	216,624			$	217,002			$	214,016			$	210,128			$	208,344
Adverse classified asset ratio			32.35	%			39.85	%			45.67	%			53.21	%			48.59	%

1. In our judgment, the adjustments made to book value, equity and assets allow investors to better assess our capital adequacy and net worth by removing the effect of goodwill and intangible assets that are unrelated to our core business.
2. The adjustments made to non-performing assets allow management to better assess asset quality and monitor the amount of capital coverage necessary for non-performing assets.