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 financial
results for the second quarter of 2020. Net income was $2.7
million, or $0.40 per diluted share, for the second quarter of
2020, compared to net income of $3.7 million, or $0.53 per diluted
share, for the second quarter of 2019. For the six months
ended June 30, 2020, there was a net loss of $2.5 million, or a
$0.40 loss per diluted share, compared to net income of $7.5
million, or $0.53 per share, for the six months ended June 30,
2019. The 2020 net loss included a $5.0 million goodwill
impairment charge, or $0.76 diluted loss per share. The
Company concluded goodwill was impaired after an estimate of the
fair value of the Company considering the uncertainty related to
COVID-19 and its potential impact on future earnings, as well as
comparable bank valuations. Excluding that charge, net income
for the six months ended June 30, 2020 would have been $2.5
million, or $0.36 per diluted share.
Tim Schneider, President of County Bancorp,
Inc., noted, “I am very pleased with how well our team has worked
through the current COVID-19 environment to fulfill our mission as
we partner with our local communities and businesses. With
the vast majority of our employees working remotely, we were able
to approve $106 million in SBA PPP loans to support our loyal and
new customers and more than 14,000 jobs through this crisis.
By executing against our strategic initiatives, we grew our client
deposits this quarter expect to invest our excess liquidity during
the second half of 2020 as we see increasing signs of stability and
health in our operating environment.”
Schneider continued, “Overall, credit quality
has held up well. However, we believe it will take some time
to see the total impact of COVID-19 on overall credit quality and
our provisions for loan losses. While we still have some
customers asking for payment deferral related to COVID-19, which
now totals $200 million, we witnessed a considerable rebound and
stabilization of milk prices during the month of June, which we
believe will benefit our agricultural borrowers. More specifically,
class III milk prices (cwt) rebounded from the April and May lows
of $12 to $13, to $16 to $21 in both June and in the futures for
the remainder of 2020.”
Schneider concluded, “Lastly, we successfully
raised $17.4 million in subordinated notes at the end of the second
quarter 2020. This opportunistic capital raise reinforces
County Bancorp’s value proposition and allows us to take advantage
of additional market opportunities for our customers and
communities. As part of our balanced capital allocation
approach, we continue to monitor additional pathways to enhance
shareholder value. We are pleased with the attractive pricing we
received in the fixed income markets and the ability to strengthen
our capital structure as we continue to execute against our short-
and long-term strategic priorities. This capital raise allows
us to keep our capital ratios strong and will enable us to continue
our current dividend payout and common stock buyback plan. Of
note, during the second quarter, we purchased 122,000 shares of
common stock. We are also very proud to rejoin the Russell
2000 and Russell 3000 Indexes during the second quarter of
2020. This membership is an important milestone for us as we
continue to execute our mission and serve our customers and
communities. We believe our inclusion will positively impact the
liquidity in our stock and create an opportunity to increase our
exposure and share our compelling story with a broader investment
audience.”
Loans and Securities
Total loans increased $75.1 million, or 7.4%,
during the second quarter of 2020 and decreased $60.3 million, or
5.3%, year-over-year to $1.1 billion. The increase in total
loans in the second quarter of 2020 was due primarily to SBA PPP
loans totaling $106.0 million as of June 30, 2020. 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 $762.1 million at June 30,
2020, an increase of $14.5 million, or 1.9%, compared to the first
quarter of 2020, and an increase of $66.4 million, or 9.5%,
year-over-year.
During the second quarter of 2020, investments
decreased $19.2 million, or 7.8%, compared to March 31, 2020 due in
part to the sale of $27.8 million of securities that resulted in a
gain of $0.6 million.
Deposits
Total deposits at June 30, 2020 were $1.1
billion, an increase of $53.1 million, or 5.2%, from March 31, 2020
and decreased $132.1 million, or 11.0%, year-over-year.
Client deposits (demand deposits, NOW accounts, savings accounts,
money market accounts, and certificates of deposit) increased
$101.9 million, or 12.9%, from March 31, 2020 and increased $94.4
million, or 11.8%, year-over-year. The increase in client
deposits from the prior quarter-end was partially driven by
customers who participated in the SBA PPP program. Deposits
related to those customers totaled approximately $58 million as of
June 30, 2020.
During the second quarter of 2020, the Company
took advantage of the Federal Reserve Bank’s Paycheck Protection
Program Liquidity Facility (“PPPLF”) and funded $99.7 million of
SBA PPP loans through borrowings under the PPPLF at an interest
rate of 0.35%. The Company’s overall focus remains on
funding loan growth with client deposits; however, these borrowings
helped bolster the Company’s overall liquidity. 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 $179.5 million at
June 30, 2020. This represents a decrease of $226.5 million,
or 55.8%, from June 30, 2019.
Net Interest Income and
Margin
- Net interest margin decreased both quarter-to-quarter and
year-over-year due primarily to the SBA PPP loans that were funded
during the second quarter of 2020 at annual yield of 1.0% and the
repricing of loans in the declining rate environment.
- Interest income on investment securities increased both
quarter-to-quarter and year-over-year 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 lower yields on the
previously mentioned PPP loans and the 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.
The table below presents the effects of changing
rates and volumes on net interest income for the periods
indicated.
|
|
Three Months Ended June 30, 2020 v.Three Months Ended March 31,
2020 |
|
|
Three Months Ended June 30, 2020 v.Three Months Ended June 30,
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 |
|
$ |
238 |
|
|
$ |
(82 |
) |
|
$ |
156 |
|
|
$ |
323 |
|
|
$ |
(138 |
) |
|
$ |
185 |
|
Loans |
|
|
1,044 |
|
|
|
(1,495 |
) |
|
|
(451 |
) |
|
|
(987 |
) |
|
|
(2,366 |
) |
|
|
(3,353 |
) |
Federal funds sold and interest-bearing deposits with
banks |
|
|
13 |
|
|
|
(127 |
) |
|
|
(114 |
) |
|
|
(54 |
) |
|
|
(299 |
) |
|
|
(353 |
) |
Total interest income |
|
|
1,295 |
|
|
|
(1,704 |
) |
|
|
(409 |
) |
|
|
(718 |
) |
|
|
(2,803 |
) |
|
|
(3,521 |
) |
Interest
Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market and interest checking |
|
$ |
126 |
|
|
$ |
(375 |
) |
|
$ |
(249 |
) |
|
$ |
344 |
|
|
$ |
(1,135 |
) |
|
$ |
(791 |
) |
Time deposits |
|
|
(347 |
) |
|
|
(30 |
) |
|
|
(377 |
) |
|
|
(1,254 |
) |
|
|
88 |
|
|
|
(1,166 |
) |
Other borrowings |
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
FHLB advances |
|
|
132 |
|
|
|
(37 |
) |
|
|
95 |
|
|
|
393 |
|
|
|
(466 |
) |
|
|
(73 |
) |
Junior subordinated debentures |
|
|
3 |
|
|
|
28 |
|
|
|
31 |
|
|
|
5 |
|
|
|
48 |
|
|
|
53 |
|
Total interest expense |
|
$ |
(83 |
) |
|
$ |
(414 |
) |
|
$ |
(497 |
) |
|
$ |
(511 |
) |
|
$ |
(1,465 |
) |
|
$ |
(1,976 |
) |
Net interest income |
|
$ |
1,378 |
|
|
$ |
(1,290 |
) |
|
$ |
88 |
|
|
$ |
(207 |
) |
|
$ |
(1,338 |
) |
|
$ |
(1,545 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth average balances,
average yields and rates, and income and expenses for the period
indicated.
|
|
For the Three Months Ended |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
June 30, 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 |
|
$ |
237,082 |
|
|
$ |
1,444 |
|
|
2.44 |
% |
|
$ |
196,353 |
|
|
$ |
1,289 |
|
|
2.63 |
% |
|
$ |
176,237 |
|
|
$ |
1,259 |
|
|
2.86 |
% |
Loans (2) |
|
|
1,098,327 |
|
|
|
12,131 |
|
|
4.42 |
% |
|
|
1,028,637 |
|
|
|
12,582 |
|
|
4.89 |
% |
|
|
1,177,071 |
|
|
|
15,484 |
|
|
5.26 |
% |
Interest bearing deposits due from other banks |
|
|
64,142 |
|
|
|
111 |
|
|
0.69 |
% |
|
|
60,825 |
|
|
|
225 |
|
|
1.48 |
% |
|
|
73,769 |
|
|
|
465 |
|
|
2.52 |
% |
Total interest-earning assets |
|
$ |
1,399,551 |
|
|
$ |
13,686 |
|
|
3.91 |
% |
|
$ |
1,285,815 |
|
|
$ |
14,096 |
|
|
4.39 |
% |
|
$ |
1,427,077 |
|
|
$ |
17,208 |
|
|
4.82 |
% |
Allowance for loan losses |
|
|
(17,844 |
) |
|
|
|
|
|
|
|
|
|
(15,330 |
) |
|
|
|
|
|
|
|
|
|
(17,782 |
) |
|
|
|
|
|
|
|
Other assets |
|
|
85,716 |
|
|
|
|
|
|
|
|
|
|
84,461 |
|
|
|
|
|
|
|
|
|
|
76,806 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
$ |
1,354,946 |
|
|
|
|
|
|
|
|
|
$ |
1,486,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market, interest checking |
|
$ |
379,991 |
|
|
$ |
525 |
|
|
0.55 |
% |
|
$ |
334,740 |
|
|
$ |
774 |
|
|
0.92 |
% |
|
$ |
315,940 |
|
|
$ |
1,316 |
|
|
1.67 |
% |
Time deposits |
|
|
553,616 |
|
|
|
3,196 |
|
|
2.31 |
% |
|
|
613,753 |
|
|
|
3,574 |
|
|
2.33 |
% |
|
|
770,554 |
|
|
|
4,363 |
|
|
2.26 |
% |
Total interest-bearing deposits |
|
$ |
933,607 |
|
|
$ |
3,721 |
|
|
1.59 |
% |
|
$ |
948,493 |
|
|
$ |
4,348 |
|
|
1.83 |
% |
|
$ |
1,086,494 |
|
|
$ |
5,679 |
|
|
2.09 |
% |
Other borrowings |
|
|
66,910 |
|
|
|
15 |
|
|
0.09 |
% |
|
|
1,259 |
|
|
|
11 |
|
|
3.49 |
% |
|
|
1,204 |
|
|
|
13 |
|
|
4.47 |
% |
FHLB advances |
|
|
103,916 |
|
|
|
328 |
|
|
1.26 |
% |
|
|
56,708 |
|
|
|
233 |
|
|
1.65 |
% |
|
|
78,653 |
|
|
|
401 |
|
|
2.04 |
% |
Junior subordinated debentures |
|
|
45,090 |
|
|
|
737 |
|
|
6.53 |
% |
|
|
44,871 |
|
|
|
706 |
|
|
6.29 |
% |
|
|
44,762 |
|
|
|
683 |
|
|
6.11 |
% |
Total interest-bearing liabilities |
|
$ |
1,149,523 |
|
|
$ |
4,800 |
|
|
1.67 |
% |
|
$ |
1,051,331 |
|
|
$ |
5,298 |
|
|
2.02 |
% |
|
$ |
1,211,113 |
|
|
$ |
6,776 |
|
|
2.24 |
% |
Non-interest bearing deposits |
|
|
134,271 |
|
|
|
|
|
|
|
|
|
|
113,351 |
|
|
|
|
|
|
|
|
|
|
102,432 |
|
|
|
|
|
|
|
|
Other liabilities |
|
|
16,749 |
|
|
|
|
|
|
|
|
|
|
16,877 |
|
|
|
|
|
|
|
|
|
|
12,154 |
|
|
|
|
|
|
|
|
Total liabilities |
|
$ |
1,300,543 |
|
|
|
|
|
|
|
|
|
$ |
1,181,559 |
|
|
|
|
|
|
|
|
|
$ |
1,325,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
166,880 |
|
|
|
|
|
|
|
|
|
|
173,387 |
|
|
|
|
|
|
|
|
|
|
160,402 |
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
$ |
1,354,946 |
|
|
|
|
|
|
|
|
|
$ |
1,486,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
8,886 |
|
|
|
|
|
|
|
|
|
$ |
8,798 |
|
|
|
|
|
|
|
|
|
$ |
10,432 |
|
|
|
|
Interest rate spread (3) |
|
|
|
|
|
|
|
|
|
2.24 |
% |
|
|
|
|
|
|
|
|
|
2.37 |
% |
|
|
|
|
|
|
|
|
|
2.59 |
% |
Net interest margin (4) |
|
|
|
|
|
|
|
|
|
2.54 |
% |
|
|
|
|
|
|
|
|
|
2.74 |
% |
|
|
|
|
|
|
|
|
|
2.92 |
% |
Ratio of interest-earning
assets to interest-bearing liabilities |
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
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
- Loan servicing income increased in the linked quarter due
primarily to a 0.03% increase in loan servicing fees as a percent
of average loans serviced during the second quarter.
Year-over-year, loan servicing fees increased due primarily to a
0.10% increase in loan servicing fees as a percent of average loans
serviced and an increase in loans serviced.
- Loan servicing right origination decreased in the linked
quarter and year-over-year; however, loan servicing rights as a
percent of loans serviced increased to 2.14% at June 30, 2020 from
1.38% at June 30, 2019.
- $27.8 million of securities were sold during the second quarter
of 2020 which resulted in a $0.6 million gain.
|
|
For the Three Months Ended |
|
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands) |
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
$ |
368 |
|
|
$ |
342 |
|
|
$ |
549 |
|
|
$ |
348 |
|
|
$ |
407 |
|
Gain on sale of loans, net |
|
|
4 |
|
|
|
38 |
|
|
|
34 |
|
|
|
87 |
|
|
|
26 |
|
Loan servicing fees |
|
|
1,923 |
|
|
|
1,831 |
|
|
|
1,778 |
|
|
|
1,677 |
|
|
|
1,563 |
|
Loan servicing right origination |
|
|
275 |
|
|
|
289 |
|
|
|
1,146 |
|
|
|
1,741 |
|
|
|
346 |
|
Income on OREO |
|
|
3 |
|
|
|
— |
|
|
|
54 |
|
|
|
10 |
|
|
|
40 |
|
Gain on sale of securities |
|
|
570 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
341 |
|
Other |
|
|
237 |
|
|
|
203 |
|
|
|
161 |
|
|
|
171 |
|
|
|
164 |
|
Total non-interest income |
|
$ |
3,380 |
|
|
$ |
2,703 |
|
|
$ |
3,722 |
|
|
$ |
4,034 |
|
|
$ |
2,887 |
|
|
|
For the Three Months Ended |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|
|
|
|
|
|
(dollars in thousands) |
|
Loan servicing rights, end of period |
|
$ |
16,486 |
|
|
$ |
16,211 |
|
|
$ |
12,509 |
|
|
$ |
11,362 |
|
|
$ |
9,621 |
|
Loans serviced, end of
period |
|
|
762,058 |
|
|
|
747,553 |
|
|
|
751,738 |
|
|
|
736,823 |
|
|
|
695,629 |
|
Loan servicing rights as a %
of loans serviced |
|
|
2.16 |
% |
|
|
2.17 |
% |
|
|
1.66 |
% |
|
|
1.54 |
% |
|
|
1.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loan servicing fees |
|
$ |
1,923 |
|
|
$ |
1,831 |
|
|
$ |
1,778 |
|
|
$ |
1,677 |
|
|
$ |
1,563 |
|
Average loans serviced |
|
|
754,806 |
|
|
|
749,646 |
|
|
|
744,281 |
|
|
|
716,226 |
|
|
|
685,449 |
|
Annualized loan servicing fees
as a % of average loans serviced |
|
|
1.02 |
% |
|
|
0.98 |
% |
|
|
0.96 |
% |
|
|
0.94 |
% |
|
|
0.91 |
% |
Non-Interest Expense
- The decrease in employee compensation and benefits expense in
the linked quarter was the result of an increase in deferred loan
costs (which is comprised primarily of salary expenses) associated
with the PPP loans that were capitalized during the second quarter.
The year-over-year increase in employee compensation and
benefits expense was mainly the result of a 7.1% increase in
headcount.
- Goodwill was considered impaired and fully written-off in the
first quarter 2020.
- There was no write-down of OREO properties in the second
quarter of 2020 compared to writedowns in the linked quarter and
year-over-year.
- The decrease in other non-interest expense in the linked
quarter was primarily is the result of a loss of $0.3 million
recognized on the sale-leaseback of the Manitowoc branch in the
first quarter and reduced travel and education expenses as a result
of the COVID-19 pandemic.
|
|
For the Three Months Ended |
|
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands, except per share data) |
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
$ |
4,594 |
|
|
$ |
5,260 |
|
|
$ |
5,696 |
|
|
$ |
4,735 |
|
|
$ |
4,199 |
|
Occupancy |
|
|
305 |
|
|
|
354 |
|
|
|
417 |
|
|
|
313 |
|
|
|
283 |
|
Information processing |
|
|
663 |
|
|
|
670 |
|
|
|
645 |
|
|
|
683 |
|
|
|
591 |
|
Professional fees |
|
|
480 |
|
|
|
401 |
|
|
|
371 |
|
|
|
483 |
|
|
|
417 |
|
Business development |
|
|
333 |
|
|
|
366 |
|
|
|
335 |
|
|
|
351 |
|
|
|
347 |
|
OREO expenses |
|
|
44 |
|
|
|
116 |
|
|
|
59 |
|
|
|
57 |
|
|
|
121 |
|
Writedown of OREO |
|
|
— |
|
|
|
1,360 |
|
|
|
376 |
|
|
|
— |
|
|
|
250 |
|
Net loss (gain) on sale of OREO |
|
|
— |
|
|
|
4 |
|
|
|
(231 |
) |
|
|
160 |
|
|
|
9 |
|
Depreciation and amortization |
|
|
303 |
|
|
|
301 |
|
|
|
319 |
|
|
|
319 |
|
|
|
328 |
|
Goodwill impairment |
|
|
— |
|
|
|
5,038 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
743 |
|
|
|
1,148 |
|
|
|
2,278 |
|
|
|
567 |
|
|
|
901 |
|
Total non-interest expense |
|
$ |
7,465 |
|
|
$ |
15,018 |
|
|
$ |
10,265 |
|
|
$ |
7,668 |
|
|
$ |
7,446 |
|
Asset Quality
- The increase in substandard loans and the adverse classified
asset ratio in the linked quarter were primarily due to the
downgrade of four agricultural customers and a single hotel
customer.
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands) |
|
Loans by risk category(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sound/Acceptable/Satisfactory/ Low Satisfactory |
|
$ |
798,945 |
|
|
$ |
706,247 |
|
|
$ |
724,444 |
|
|
$ |
771,567 |
|
|
$ |
837,094 |
|
Watch |
|
|
198,044 |
|
|
|
219,459 |
|
|
|
216,098 |
|
|
|
202,615 |
|
|
|
175,995 |
|
Special Mention |
|
|
1,856 |
|
|
|
15,036 |
|
|
|
9,239 |
|
|
|
9,346 |
|
|
|
25,254 |
|
Substandard Performing |
|
|
47,741 |
|
|
|
34,179 |
|
|
|
49,774 |
|
|
|
71,133 |
|
|
|
83,992 |
|
Substandard Impaired |
|
|
40,938 |
|
|
|
37,515 |
|
|
|
36,218 |
|
|
|
26,106 |
|
|
|
25,497 |
|
Total loans |
|
$ |
1,087,524 |
|
|
$ |
1,012,436 |
|
|
$ |
1,035,773 |
|
|
$ |
1,080,767 |
|
|
$ |
1,147,832 |
|
Adverse classified asset ratio
(2) |
|
|
41.73 |
% |
|
|
32.35 |
% |
|
|
39.85 |
% |
|
|
45.67 |
% |
|
|
53.21 |
% |
(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 increased in the linked quarter by $2.8
million, or 7.9%, sequentially. Year-over-year,
non-performing assets increased $9.3 million, or 32.3%, due to a
$5.8 million increase in non-accrual agricultural loans and a $9.6
million increase in non-accrual commercial loans, which were
partially offset by a $6.1 million decrease in OREO
properties.
- A provision for loan losses of $1.1 million was recorded for
the three months ended June 30, 2020 compared to a provision of
$0.9 million for the three months ended June 30, 2019. The
increase in provision was the result of the increase in substandard
impaired loans.
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands) |
|
Non-Performing Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
|
$ |
35,456 |
|
|
$ |
32,051 |
|
|
$ |
30,968 |
|
|
$ |
20,776 |
|
|
$ |
20,096 |
|
Other real estate owned |
|
|
2,629 |
|
|
|
3,247 |
|
|
|
5,521 |
|
|
|
7,252 |
|
|
|
8,693 |
|
Total non-performing assets |
|
$ |
38,085 |
|
|
$ |
35,298 |
|
|
$ |
36,489 |
|
|
$ |
28,028 |
|
|
$ |
28,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing TDRs not on nonaccrual |
|
$ |
21,986 |
|
|
$ |
21,853 |
|
|
$ |
21,784 |
|
|
$ |
28,520 |
|
|
$ |
28,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a %
of total loans |
|
|
3.50 |
% |
|
|
3.49 |
% |
|
|
3.52 |
% |
|
|
2.59 |
% |
|
|
2.51 |
% |
Non-performing assets as a %
of total assets |
|
|
2.52 |
% |
|
|
2.61 |
% |
|
|
2.65 |
% |
|
|
1.98 |
% |
|
|
1.94 |
% |
Allowance for loan losses as a
% of total loans |
|
|
1.71 |
% |
|
|
1.73 |
% |
|
|
1.47 |
% |
|
|
1.39 |
% |
|
|
1.42 |
% |
Net charge-offs (recoveries)
quarter- to-date |
|
$ |
120 |
|
|
$ |
(62 |
) |
|
$ |
(253 |
) |
|
$ |
39 |
|
|
$ |
2,111 |
|
Corporate Updates
At the annual organizational meeting of the
Company’s and the Bank’s boards of directors, Chair William Censky
informed the boards that he did not wish to seek re-election as
chair of the Company and the Bank. Censky, who is one of the
Company's co-founders, has served as chair since the Company's
inception in 1996 and will remain a director on the boards of
directors of both the Company and the Bank.
According to Timothy Schneider, CEO of Investors
Community Bank and President of County Bancorp, Inc., "We are
grateful for Bill's leadership and strategic contributions over the
past 23 years. His focus on excellence as well as his unwavering
support for the bank, its employees and our communities has been
vital to our success."
On July 21, 2020, the respective boards
appointed current independent director Andrew Steimle as the new
chair of the boards of directors of both the Company and the Bank.
Steimle has served on both boards of directors since April 2008. He
is a business and real estate attorney practicing in Wisconsin and
is a founding partner of Steimle Birschbach LLC.
Additionally, the Company’s board of directors appointed director
Kathi P. Seifert as Chair of the Nominating and Governance
Committee and director Vicki L. Leinbach as Chair of the
Compensation Committee.
Conference Call
The Company will host an earnings call tomorrow,
July 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 July 24, 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, including the effects of the COVID-19 pandemic
and its potential effects on the economic environment, our
customers and our operations, as well as, any changes to federal,
state, or local government laws, regulations, or orders in
connection with the pandemic. 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) |
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands, except per share data) |
|
Period-End Balance
Sheet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
127,432 |
|
|
$ |
21,545 |
|
|
$ |
129,011 |
|
|
$ |
120,845 |
|
|
$ |
116,251 |
|
Securities available for sale, at fair value |
|
|
226,971 |
|
|
|
246,148 |
|
|
|
158,733 |
|
|
|
154,962 |
|
|
|
158,561 |
|
Loans held for sale |
|
|
11,847 |
|
|
|
14,388 |
|
|
|
2,151 |
|
|
|
4,192 |
|
|
|
7,448 |
|
Agricultural loans |
|
|
624,340 |
|
|
|
642,066 |
|
|
|
659,725 |
|
|
|
673,742 |
|
|
|
713,602 |
|
Commercial loans |
|
|
328,368 |
|
|
|
325,310 |
|
|
|
331,723 |
|
|
|
360,132 |
|
|
|
383,542 |
|
Paycheck Protection Plan loans |
|
|
103,317 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Multi-family real estate loans |
|
|
30,439 |
|
|
|
42,198 |
|
|
|
41,070 |
|
|
|
43,487 |
|
|
|
46,683 |
|
Residential real estate loans |
|
|
975 |
|
|
|
2,753 |
|
|
|
2,888 |
|
|
|
3,183 |
|
|
|
3,753 |
|
Installment and consumer other |
|
|
85 |
|
|
|
109 |
|
|
|
367 |
|
|
|
223 |
|
|
|
252 |
|
Total loans |
|
|
1,087,524 |
|
|
|
1,012,436 |
|
|
|
1,035,773 |
|
|
|
1,080,767 |
|
|
|
1,147,832 |
|
Allowance for loan losses |
|
|
(18,569 |
) |
|
|
(17,547 |
) |
|
|
(15,267 |
) |
|
|
(15,065 |
) |
|
|
(16,258 |
) |
Net loans |
|
|
1,068,955 |
|
|
|
994,889 |
|
|
|
1,020,506 |
|
|
|
1,065,702 |
|
|
|
1,131,574 |
|
Other assets |
|
|
78,712 |
|
|
|
78,004 |
|
|
|
68,378 |
|
|
|
69,263 |
|
|
|
70,812 |
|
Total Assets |
|
$ |
1,513,917 |
|
|
$ |
1,354,974 |
|
|
$ |
1,378,779 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
149,963 |
|
|
$ |
117,434 |
|
|
$ |
138,489 |
|
|
$ |
117,224 |
|
|
$ |
111,022 |
|
NOW accounts and interest checking |
|
|
81,656 |
|
|
|
64,873 |
|
|
|
63,781 |
|
|
|
56,637 |
|
|
|
54,253 |
|
Savings |
|
|
8,369 |
|
|
|
6,566 |
|
|
|
15,708 |
|
|
|
6,981 |
|
|
|
6,621 |
|
Money market accounts |
|
|
307,083 |
|
|
|
237,889 |
|
|
|
242,539 |
|
|
|
248,608 |
|
|
|
239,337 |
|
Time deposits |
|
|
346,482 |
|
|
|
364,930 |
|
|
|
375,100 |
|
|
|
388,759 |
|
|
|
387,899 |
|
Brokered deposits |
|
|
121,503 |
|
|
|
161,882 |
|
|
|
166,340 |
|
|
|
206,474 |
|
|
|
256,475 |
|
National time deposits |
|
|
57,997 |
|
|
|
66,386 |
|
|
|
99,485 |
|
|
|
118,070 |
|
|
|
149,570 |
|
Total deposits |
|
|
1,073,053 |
|
|
|
1,019,960 |
|
|
|
1,101,442 |
|
|
|
1,142,753 |
|
|
|
1,205,177 |
|
Federal Reserve Discount Window advances |
|
|
99,693 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
FHLB advances |
|
|
93,400 |
|
|
|
109,400 |
|
|
|
44,400 |
|
|
|
44,400 |
|
|
|
59,400 |
|
Subordinated debentures |
|
|
61,910 |
|
|
|
44,896 |
|
|
|
44,858 |
|
|
|
44,820 |
|
|
|
44,781 |
|
Other liabilities |
|
|
17,336 |
|
|
|
15,672 |
|
|
|
16,050 |
|
|
|
14,239 |
|
|
|
12,564 |
|
Total Liabilities |
|
|
1,345,392 |
|
|
|
1,189,928 |
|
|
|
1,206,750 |
|
|
|
1,246,212 |
|
|
|
1,321,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
168,525 |
|
|
|
165,046 |
|
|
|
172,029 |
|
|
|
168,752 |
|
|
|
162,724 |
|
Total Liabilities and Shareholders'
Equity |
|
$ |
1,513,917 |
|
|
$ |
1,354,974 |
|
|
$ |
1,378,779 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Price
Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High - Quarter-to-date |
|
$ |
24.67 |
|
|
$ |
27.19 |
|
|
$ |
27.98 |
|
|
$ |
20.99 |
|
|
$ |
18.92 |
|
Low - Quarter-to-date |
|
$ |
17.13 |
|
|
$ |
13.55 |
|
|
$ |
18.76 |
|
|
$ |
16.80 |
|
|
$ |
16.24 |
|
Market price - Quarter-end |
|
$ |
20.93 |
|
|
$ |
18.50 |
|
|
$ |
25.63 |
|
|
$ |
19.62 |
|
|
$ |
17.09 |
|
Book value per share |
|
$ |
25.18 |
|
|
$ |
24.17 |
|
|
$ |
24.32 |
|
|
$ |
23.89 |
|
|
$ |
23.03 |
|
Tangible book value per share (1) |
|
$ |
25.16 |
|
|
$ |
24.15 |
|
|
$ |
23.58 |
|
|
$ |
23.10 |
|
|
$ |
22.23 |
|
Common shares outstanding |
|
|
6,375,150 |
|
|
|
6,496,790 |
|
|
|
6,734,132 |
|
|
|
6,727,908 |
|
|
|
6,717,908 |
|
(1) This is a non-GAAP financial measure. A reconciliation
to GAAP is included below.
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands, except per share data) |
|
Selected Income
Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
12,130 |
|
|
$ |
12,582 |
|
|
$ |
13,691 |
|
|
$ |
15,030 |
|
|
$ |
15,484 |
|
Taxable securities |
|
|
1,283 |
|
|
|
1,282 |
|
|
|
1,106 |
|
|
|
1,117 |
|
|
|
1,177 |
|
Tax-exempt securities |
|
|
162 |
|
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
82 |
|
Federal funds sold and other |
|
|
111 |
|
|
|
225 |
|
|
|
442 |
|
|
|
612 |
|
|
|
465 |
|
Total interest and dividend
income |
|
|
13,686 |
|
|
|
14,095 |
|
|
|
15,239 |
|
|
|
16,759 |
|
|
|
17,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
3,721 |
|
|
|
4,347 |
|
|
|
4,781 |
|
|
|
5,574 |
|
|
|
5,678 |
|
FHLB advances and other borrowed funds |
|
|
343 |
|
|
|
244 |
|
|
|
225 |
|
|
|
246 |
|
|
|
415 |
|
Subordinated debentures |
|
|
736 |
|
|
|
706 |
|
|
|
695 |
|
|
|
687 |
|
|
|
683 |
|
Total interest expense |
|
|
4,800 |
|
|
|
5,297 |
|
|
|
5,701 |
|
|
|
6,507 |
|
|
|
6,776 |
|
Net interest income |
|
|
8,886 |
|
|
|
8,798 |
|
|
|
9,538 |
|
|
|
10,252 |
|
|
|
10,432 |
|
Provision for loan losses |
|
|
1,142 |
|
|
|
2,218 |
|
|
|
(51 |
) |
|
|
(1,154 |
) |
|
|
876 |
|
Net interest income after provision for loan losses |
|
|
7,744 |
|
|
|
6,580 |
|
|
|
9,589 |
|
|
|
11,406 |
|
|
|
9,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services charges |
|
|
368 |
|
|
|
342 |
|
|
|
549 |
|
|
|
348 |
|
|
|
407 |
|
Gain on sale of loans, net |
|
|
4 |
|
|
|
38 |
|
|
|
34 |
|
|
|
87 |
|
|
|
26 |
|
Loan servicing fees |
|
|
1,923 |
|
|
|
1,831 |
|
|
|
1,778 |
|
|
|
1,677 |
|
|
|
1,563 |
|
Loan servicing right origination |
|
|
275 |
|
|
|
289 |
|
|
|
1,146 |
|
|
|
1,741 |
|
|
|
346 |
|
Income on OREO |
|
|
3 |
|
|
|
— |
|
|
|
54 |
|
|
|
10 |
|
|
|
40 |
|
Gain on sale of securities |
|
|
570 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
341 |
|
Other |
|
|
237 |
|
|
|
203 |
|
|
|
161 |
|
|
|
171 |
|
|
|
164 |
|
Total non-interest income |
|
|
3,380 |
|
|
|
2,703 |
|
|
|
3,722 |
|
|
|
4,034 |
|
|
|
2,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
4,594 |
|
|
|
5,260 |
|
|
|
5,696 |
|
|
|
4,735 |
|
|
|
4,199 |
|
Occupancy |
|
|
305 |
|
|
|
354 |
|
|
|
417 |
|
|
|
313 |
|
|
|
283 |
|
Information processing |
|
|
663 |
|
|
|
670 |
|
|
|
645 |
|
|
|
683 |
|
|
|
591 |
|
Professional fees |
|
|
480 |
|
|
|
401 |
|
|
|
371 |
|
|
|
483 |
|
|
|
417 |
|
Business development |
|
|
333 |
|
|
|
366 |
|
|
|
335 |
|
|
|
351 |
|
|
|
347 |
|
OREO expenses |
|
|
44 |
|
|
|
116 |
|
|
|
59 |
|
|
|
57 |
|
|
|
121 |
|
Writedown of OREO |
|
|
— |
|
|
|
1,360 |
|
|
|
376 |
|
|
|
— |
|
|
|
250 |
|
Net loss (gain) on sale of OREO |
|
|
— |
|
|
|
4 |
|
|
|
(231 |
) |
|
|
160 |
|
|
|
9 |
|
Depreciation and amortization |
|
|
303 |
|
|
|
301 |
|
|
|
319 |
|
|
|
319 |
|
|
|
328 |
|
Goodwill impairment |
|
|
— |
|
|
|
5,038 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
743 |
|
|
|
1,148 |
|
|
|
2,278 |
|
|
|
567 |
|
|
|
901 |
|
Total non-interest expense |
|
|
7,465 |
|
|
|
15,018 |
|
|
|
10,265 |
|
|
|
7,668 |
|
|
|
7,446 |
|
Income before income taxes |
|
|
3,659 |
|
|
|
(5,735 |
) |
|
|
3,046 |
|
|
|
7,772 |
|
|
|
4,997 |
|
Income tax expense |
|
|
926 |
|
|
|
(547 |
) |
|
|
(258 |
) |
|
|
2,090 |
|
|
|
1,293 |
|
NET INCOME (LOSS) |
|
$ |
2,733 |
|
|
$ |
(5,188 |
) |
|
$ |
3,304 |
|
|
$ |
5,682 |
|
|
$ |
3,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
|
$ |
0.40 |
|
|
$ |
(0.79 |
) |
|
$ |
0.47 |
|
|
$ |
0.82 |
|
|
$ |
0.53 |
|
Diluted earnings (loss) per share |
|
$ |
0.40 |
|
|
$ |
(0.78 |
) |
|
$ |
0.47 |
|
|
$ |
0.82 |
|
|
$ |
0.53 |
|
Dividends declared per share |
|
$ |
0.07 |
|
|
$ |
0.07 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
|
For the Three Months Ended |
|
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands, except share data) |
|
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(1) |
|
|
0.74 |
% |
|
|
(1.53 |
)% |
|
|
0.96 |
% |
|
|
1.57 |
% |
|
|
1.00 |
% |
Return on average shareholders' equity(1) |
|
|
6.55 |
% |
|
|
(11.97 |
)% |
|
|
7.74 |
% |
|
|
13.73 |
% |
|
|
9.24 |
% |
Return on average common shareholders' equity (1)(2) |
|
|
6.63 |
% |
|
|
(12.81 |
)% |
|
|
7.83 |
% |
|
|
14.14 |
% |
|
|
9.41 |
% |
Efficiency ratio (1)(2) |
|
|
63.83 |
% |
|
|
74.92 |
% |
|
|
76.32 |
% |
|
|
52.55 |
% |
|
|
55.38 |
% |
Tangible common equity to tangible assets (2) |
|
|
10.60 |
% |
|
|
11.58 |
% |
|
|
11.56 |
% |
|
|
11.03 |
% |
|
|
10.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
2,733 |
|
|
$ |
(5,188 |
) |
|
$ |
3,304 |
|
|
$ |
5,682 |
|
|
$ |
3,704 |
|
Less: Preferred stock dividends |
|
|
99 |
|
|
|
108 |
|
|
|
117 |
|
|
|
120 |
|
|
|
118 |
|
Income available to common shareholders |
|
$ |
2,634 |
|
|
$ |
(5,296 |
) |
|
$ |
3,187 |
|
|
$ |
5,562 |
|
|
$ |
3,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares issued |
|
|
7,198,901 |
|
|
|
7,182,945 |
|
|
|
7,173,290 |
|
|
|
7,168,785 |
|
|
|
7,159,072 |
|
Less: Weighted average treasury shares |
|
|
759,294 |
|
|
|
518,740 |
|
|
|
443,920 |
|
|
|
443,920 |
|
|
|
443,920 |
|
Plus: Weighted average non- vested restricted stock
units |
|
|
65,291 |
|
|
|
39,785 |
|
|
|
32,125 |
|
|
|
32,125 |
|
|
|
30,483 |
|
Weighted average number of common shares outstanding |
|
|
6,504,898 |
|
|
|
6,703,990 |
|
|
|
6,761,495 |
|
|
|
6,756,990 |
|
|
|
6,745,635 |
|
Effect of dilutive options |
|
|
28,511 |
|
|
|
49,072 |
|
|
|
44,630 |
|
|
|
19,160 |
|
|
|
20,731 |
|
Weighted average number of common shares outstanding
used to calculate diluted earnings per common
share |
|
|
6,533,409 |
|
|
|
6,753,062 |
|
|
|
6,806,125 |
|
|
|
6,776,150 |
|
|
|
6,766,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized (2) This is a non-GAAP financial
measure. A reconciliation to GAAP is included below.
Non-GAAP Financial Measures:
|
|
For the Three Months Ended |
|
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
|
|
|
Return on average common
shareholders' equity
reconciliation(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average shareholders' equity |
|
|
6.55 |
% |
|
|
(11.97 |
)% |
|
|
7.74 |
% |
|
|
13.73 |
% |
|
|
9.24 |
% |
Effect of excluding average preferred shareholders'
equity |
|
|
0.08 |
% |
|
|
(0.84 |
)% |
|
|
0.09 |
% |
|
|
0.41 |
% |
|
|
0.17 |
% |
Return on average common shareholders' equity |
|
|
6.63 |
% |
|
|
(12.81 |
)% |
|
|
7.83 |
% |
|
|
14.14 |
% |
|
|
9.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
(2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
$ |
7,465 |
|
|
$ |
15,018 |
|
|
$ |
10,265 |
|
|
$ |
7,668 |
|
|
$ |
7,446 |
|
Less: goodwill impairment |
|
|
— |
|
|
|
(5,038 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Less: net loss on sales and write-downs of OREO |
|
|
— |
|
|
|
(1,364 |
) |
|
|
(145 |
) |
|
|
(160 |
) |
|
|
(259 |
) |
Adjusted non-interest expense (non-GAAP) |
|
$ |
7,465 |
|
|
$ |
8,616 |
|
|
$ |
10,120 |
|
|
$ |
7,508 |
|
|
$ |
7,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
8,886 |
|
|
$ |
8,798 |
|
|
$ |
9,538 |
|
|
$ |
10,252 |
|
|
$ |
10,432 |
|
Non-interest income |
|
|
3,380 |
|
|
|
2,703 |
|
|
|
3,722 |
|
|
|
4,034 |
|
|
|
2,887 |
|
Less: net gain on sales of securities |
|
|
(570 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(341 |
) |
Operating revenue |
|
$ |
11,696 |
|
|
$ |
11,501 |
|
|
$ |
13,260 |
|
|
$ |
14,286 |
|
|
$ |
12,978 |
|
Efficiency ratio |
|
|
63.83 |
% |
|
|
74.92 |
% |
|
|
76.32 |
% |
|
|
52.55 |
% |
|
|
55.38 |
% |
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
June 30,2020 |
|
|
June 30,2019 |
|
|
June 30,2020 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands, except per share data) |
|
Adjusted diluted earnings per share(3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
2,733 |
|
|
$ |
3,704 |
|
|
$ |
(2,454 |
) |
|
$ |
7,466 |
|
Less: preferred stock dividends |
|
|
(99 |
) |
|
|
(118 |
) |
|
|
(207 |
) |
|
|
(235 |
) |
Plus: Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
5,038 |
|
|
|
— |
|
Adjusted income available to common shareholders for basic
earnings per common share |
|
$ |
2,634 |
|
|
$ |
3,586 |
|
|
$ |
2,377 |
|
|
$ |
7,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
6,504,898 |
|
|
|
6,745,635 |
|
|
|
6,604,187 |
|
|
|
6,735,725 |
|
Effect of dilutive options |
|
|
28,511 |
|
|
|
20,731 |
|
|
|
39,548 |
|
|
|
21,170 |
|
Weighted average number of common shares outstanding used to
calculate diluted earnings per common share |
|
|
6,533,409 |
|
|
|
6,766,366 |
|
|
|
6,643,735 |
|
|
|
6,756,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per
share |
|
$ |
0.40 |
|
|
$ |
0.53 |
|
|
$ |
0.36 |
|
|
$ |
1.07 |
|
(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. (3) In
our judgment, the adjustment made to diluted earnings per share
allows investors to better assess our income related to core
operations by removing the volatility associated with the goodwill
impairment which was a one-time, non-cash expense.
Non-GAAP Financial Measures (continued):
|
|
June 30,2020 |
|
|
March 31,2020 |
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
|
|
|
|
|
(dollars in thousands, except per share data) |
|
Tangible book value per share and
tangible common equity to tangible assets
reconciliation(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity |
|
$ |
160,526 |
|
|
$ |
157,046 |
|
|
$ |
164,029 |
|
|
$ |
160,752 |
|
|
$ |
154,724 |
|
Less: Goodwill |
|
|
— |
|
|
|
— |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
Less: Core deposit intangible, net of amortization |
|
|
125 |
|
|
|
171 |
|
|
|
225 |
|
|
|
286 |
|
|
|
354 |
|
Tangible common equity (non-GAAP) |
|
$ |
160,401 |
|
|
$ |
156,875 |
|
|
$ |
158,766 |
|
|
$ |
155,428 |
|
|
$ |
149,332 |
|
Common shares outstanding |
|
|
6,375,150 |
|
|
|
6,496,790 |
|
|
|
6,734,132 |
|
|
|
6,727,908 |
|
|
|
6,717,908 |
|
Tangible book value per share |
|
$ |
25.16 |
|
|
$ |
24.15 |
|
|
$ |
23.58 |
|
|
$ |
23.10 |
|
|
$ |
22.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,513,917 |
|
|
$ |
1,354,974 |
|
|
$ |
1,378,779 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
Less: Goodwill |
|
|
— |
|
|
|
— |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
Less: Core deposit intangible, net of amortization |
|
|
125 |
|
|
|
171 |
|
|
|
225 |
|
|
|
603 |
|
|
|
701 |
|
Tangible assets (non-GAAP) |
|
$ |
1,513,792 |
|
|
$ |
1,354,803 |
|
|
$ |
1,373,516 |
|
|
$ |
1,409,323 |
|
|
$ |
1,478,907 |
|
Tangible common equity to tangible assets |
|
|
10.60 |
% |
|
|
11.58 |
% |
|
|
11.56 |
% |
|
|
11.03 |
% |
|
|
10.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adverse classified
asset ratio(2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Substandard loans |
|
$ |
88,680 |
|
|
$ |
71,694 |
|
|
$ |
85,992 |
|
|
$ |
97,239 |
|
|
$ |
109,489 |
|
Other real estate owned |
|
|
2,629 |
|
|
|
3,247 |
|
|
|
5,521 |
|
|
|
7,252 |
|
|
|
8,693 |
|
Substandard unused commitments |
|
|
3,230 |
|
|
|
2,840 |
|
|
|
2,849 |
|
|
|
991 |
|
|
|
1,458 |
|
Less: Substandard government guarantees |
|
|
(6,336 |
) |
|
|
(7,699 |
) |
|
|
(7,892 |
) |
|
|
(7,746 |
) |
|
|
(7,821 |
) |
Total adverse classified assets (non-GAAP) |
|
$ |
88,203 |
|
|
$ |
70,082 |
|
|
$ |
86,470 |
|
|
$ |
97,736 |
|
|
$ |
111,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity (Bank) |
|
$ |
201,507 |
|
|
$ |
204,089 |
|
|
$ |
204,240 |
|
|
$ |
201,967 |
|
|
$ |
196,036 |
|
Accumulated other comprehensive loss (gain) on available for
sale securities |
|
|
(8,734 |
) |
|
|
(5,012 |
) |
|
|
(2,505 |
) |
|
|
(3,016 |
) |
|
|
(2,166 |
) |
Allowance for loan losses |
|
|
18,569 |
|
|
|
17,547 |
|
|
|
15,267 |
|
|
|
15,065 |
|
|
|
16,258 |
|
Adjusted total equity (non-GAAP) |
|
$ |
211,342 |
|
|
$ |
216,624 |
|
|
$ |
217,002 |
|
|
$ |
214,016 |
|
|
$ |
210,128 |
|
Adverse classified asset ratio |
|
|
41.73 |
% |
|
|
32.35 |
% |
|
|
39.85 |
% |
|
|
45.67 |
% |
|
|
53.21 |
% |
(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.
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