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 2021. Net income was $6.7
million, or $1.07 per diluted share, for the second quarter of
2021, compared to net income of $2.7 million, or $0.40 per diluted
share, for the second quarter of 2020. For the six months ended
June 30, 2021, net income was $10.7 million, or $1.69 per diluted
share, compared to a net loss of $2.5 million, or a $0.40 loss per
diluted share, for the six months ended June 30, 2020. The 2020 net
loss included a $5.0 million goodwill impairment charge, or $0.77
loss per diluted share.
"The momentum we generated at the beginning of
the year continued through the second quarter, reinforcing the
unique strengths of our people and franchise," said Tim Schneider,
President of County Bancorp, Inc. "In June, we announced the merger
with Nicolet Bankshares, a like-minded partner with a similar
culture, approach to service, and an unwavering commitment to our
people, customers, and community. This transaction will bring
together two high-performing and well-respected institutions with
unique sector experience and deep community relationships. The
combined entity will provide customers greater access to branches,
expert bankers, and innovative solutions, while enhancing
capabilities and is a natural transition for the team at County
Bancorp. As we work towards the merger's close, our focus remains
steadfast on delivering value to customers, supporting communities,
and caring for colleagues. I am excited about the opportunities
ahead and look forward to continuing working with the team here
with our new partners at Nicolet. We remain committed to the
markets and industries we serve, and above all, keeping banking
local.”
Loans and Securities
- Total
loans decreased sequentially by $9.8 million, or 1.0%, to $1.0
billion during the second quarter of 2021. The decrease in total
loans was primarily due to $ 15.6 million in Paycheck Protection
Program (“PPP”) loans that were forgiven by the Small Business
Administration (“SBA”) during the quarter, which was partially
offset by $2.7 million in additional PPP originations during the
quarter. The following table sets forth the total PPP loans at the
dates indicated:
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
|
# of Loans |
|
|
Balance |
|
|
Deferred Fee Income |
|
|
# of Loans |
|
|
Balance |
|
|
Deferred Fee Income |
|
|
|
(dollars in thousands) |
|
PPP 1oans - Round 1 |
|
|
69 |
|
|
$ |
3,285 |
|
|
$ |
82 |
|
|
|
127 |
|
|
$ |
13,674 |
|
|
$ |
301 |
|
PPP loans - Round 2 |
|
|
391 |
|
|
|
30,115 |
|
|
|
1,576 |
|
|
|
461 |
|
|
|
32,595 |
|
|
|
1,479 |
|
Total PPP loans |
|
|
460 |
|
|
$ |
33,400 |
|
|
$ |
1,658 |
|
|
|
588 |
|
|
$ |
46,269 |
|
|
$ |
1,780 |
|
% of Total loans |
|
|
|
|
|
|
3.33 |
% |
|
|
|
|
|
|
|
|
|
|
4.57 |
% |
|
|
|
|
- Loans sold that
the Company continued to service were $853.2 million as of June 30,
2021, an increase of $11.3 million, or 1.3%, compared to March 31,
2021, and an increase of $91.1 million, or 12.0%, compared to June
30, 2020.
- The Company sold
$35.3 million of securities during the second quarter of 2021 in an
effort to reduce duration risk, resulting in a loss of $1.5
million. The security sales were partially offset by $3.0 million
of security purchases during the second quarter of 2021.
- As of June 30,
2021, there were four customer relationships with loans in payment
deferral associated with COVID-19 customer support programs
totaling $2.9 million, a reduction of $3.2 million since March 31,
2021.
Deposits
- Total deposits as
of June 30, 2021 were $1.1 billion, an increase of $37.2 million,
or 3.4%, from March 31, 2021, and an increase of $62.7 million, or
5.8%, since June 30, 2020.
- Client deposits
(demand deposits, NOW accounts, savings accounts, money market
accounts, and certificates of deposit) increased by $44.8 million,
or 4.9%, from March 31, 2021, to $958.0 million. Year-over-year,
client deposits increased $64.4 million, or 7.2%, since June 30,
2020.
- The Company
decreased its brokered deposits and national certificate of
deposits by $7.6 million, or 4.1%, during the second quarter of
2021. Year-over-year, wholesale funding decreased by $1.8 million,
or 1.0%, since June 30, 2020.
Shareholders’ Equity
- During the second
quarter of 2021, the Company repurchased 91,453 shares of its
common stock, totaling $2.2 million, at a weighted average price of
$24.35 per share.
- Book value per
share increased to $27.68 per share on June 30, 2021, from $25.99
on March 31, 2020, and $25.18 on June 30, 2020.
Net Interest Income and
Margin
- Net
interest margin for the quarter ended June 30, 2021 was 3.22%, an
increase of 27 basis points compared to the sequential quarter and
an increase of 68 basis points year-over-year. The following table
shows the accretive effect the SBA PPP loans had on net interest
margin for the periods indicated.
|
|
For the Three Months Ended |
|
|
|
June 30,2021 |
|
March 31,2021 |
Net interest margin excluding PPP loans |
|
|
3.12 |
% |
|
|
2.74 |
% |
Accretion related to PPP loans: |
|
|
|
|
|
|
|
|
Impact of interest rate on PPP loans |
|
|
(0.03 |
)% |
|
|
(0.06 |
)% |
Impact of PPP fee income recognized |
|
|
0.14 |
% |
|
|
0.29 |
% |
Impact of interest expense on PPP Liquidity Facility program |
|
|
(0.01 |
)% |
|
|
(0.02 |
)% |
Total accretion related to PPP loans |
|
|
0.10 |
% |
|
|
0.21 |
% |
Total net interest margin |
|
|
3.22 |
% |
|
|
2.95 |
% |
- Net interest
margin was positively impacted by approximately 19 basis points
during the second quarter of 2021 due to the recovery of $0.7
million in interest income related to a nonaccrual loan
participation.
- Total
rates paid on interest-bearing deposits decreased by 19 basis
points to 0.72% for the three months ended June 30, 2021, compared
to the three months ended March 31, 2021, and decreased 87 basis
points compared to the three months ended June 30, 2020. The
decrease was primarily due to the Company’s success in gathering
lower-cost transactional deposits versus higher cost time deposits
and the market-driven drop in the federal funds rates.
The table below presents the effects of changing
rates and volumes on net interest income for the periods
indicated.
|
|
Three Months Ended June 30, 2021 v.Three Months Ended March 31,
2021 |
|
Three Months Ended June 30, 2021 v.Three Months Ended June 30
2020 |
|
|
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 |
|
$ |
95 |
|
|
$ |
251 |
|
|
$ |
346 |
|
|
$ |
971 |
|
|
$ |
117 |
|
|
$ |
1,088 |
|
Loans (excluding PPP) |
|
|
65 |
|
|
|
737 |
|
|
|
802 |
|
|
|
(657 |
) |
|
|
(94 |
) |
|
|
(751 |
) |
PPP loans - round 1 |
|
|
(551 |
) |
|
|
(129 |
) |
|
|
(680 |
) |
|
|
— |
|
|
|
185 |
|
|
|
185 |
|
PPP loans - round 2 |
|
|
131 |
|
|
|
223 |
|
|
|
354 |
|
|
|
— |
|
|
|
436 |
|
|
|
436 |
|
Total loans |
|
|
(355 |
) |
|
|
831 |
|
|
|
476 |
|
|
|
(657 |
) |
|
|
527 |
|
|
|
(130 |
) |
Federal funds sold and interest-bearing deposits with banks |
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
(45 |
) |
|
|
(62 |
) |
|
|
(107 |
) |
Total interest income |
|
|
(259 |
) |
|
|
1,081 |
|
|
|
822 |
|
|
|
269 |
|
|
|
582 |
|
|
|
851 |
|
Interest
Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market and interest checking |
|
$ |
22 |
|
|
$ |
(39 |
) |
|
$ |
(17 |
) |
|
$ |
389 |
|
|
$ |
(551 |
) |
|
$ |
(162 |
) |
Time deposits |
|
|
37 |
|
|
|
(374 |
) |
|
|
(337 |
) |
|
|
(507 |
) |
|
|
(1,336 |
) |
|
|
(1,843 |
) |
Other borrowings |
|
|
(7 |
) |
|
|
2 |
|
|
|
(5 |
) |
|
|
(3 |
) |
|
|
31 |
|
|
|
28 |
|
FHLB advances |
|
|
(40 |
) |
|
|
1 |
|
|
|
(39 |
) |
|
|
(8 |
) |
|
|
(86 |
) |
|
|
(94 |
) |
Junior subordinated debentures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
363 |
|
|
|
7 |
|
|
|
370 |
|
Total interest expense |
|
$ |
12 |
|
|
$ |
(410 |
) |
|
$ |
(398 |
) |
|
$ |
234 |
|
|
$ |
(1,935 |
) |
|
$ |
(1,701 |
) |
Net interest income |
|
$ |
(271 |
) |
|
$ |
1,491 |
|
|
$ |
1,220 |
|
|
$ |
35 |
|
|
$ |
2,517 |
|
|
$ |
2,552 |
|
The following table sets forth average balances,
average yields and rates, and income and expenses for the periods
indicated.
|
|
For the Three Months Ended |
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
June 30, 2020 |
|
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
|
(dollars in thousands) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
|
$ |
386,637 |
|
|
$ |
2,533 |
|
|
2.63 |
% |
|
$ |
372,235 |
|
|
$ |
2,187 |
|
|
2.38 |
% |
|
$ |
237,082 |
|
|
$ |
1,445 |
|
|
2.44 |
% |
Loans excluding PPP loans (2) |
|
|
974,525 |
|
|
|
11,281 |
|
|
4.64 |
% |
|
|
969,429 |
|
|
|
10,479 |
|
|
4.38 |
% |
|
|
995,010 |
|
|
|
12,033 |
|
|
4.86 |
% |
PPP loans - Round 1 (2) |
|
|
9,344 |
|
|
|
282 |
|
|
12.11 |
% |
|
|
27,252 |
|
|
|
961 |
|
|
14.30 |
% |
|
|
103,317 |
|
|
|
97 |
|
|
0.38 |
% |
PPP loans - Round 2 (2) |
|
|
33,080 |
|
|
|
437 |
|
|
5.30 |
% |
|
|
16,857 |
|
|
|
83 |
|
|
2.01 |
% |
|
|
— |
|
|
|
— |
|
|
— |
|
Total loans (2) |
|
|
1,016,949 |
|
|
|
12,000 |
|
|
4.73 |
% |
|
|
1,013,538 |
|
|
|
11,523 |
|
|
4.61 |
% |
|
|
1,098,327 |
|
|
|
12,130 |
|
|
4.42 |
% |
Interest bearing deposits due from other banks |
|
|
22,085 |
|
|
|
4 |
|
|
0.07 |
% |
|
|
19,949 |
|
|
|
5 |
|
|
0.10 |
% |
|
|
64,142 |
|
|
|
111 |
|
|
0.69 |
% |
Total interest-earning assets |
|
$ |
1,425,671 |
|
|
$ |
14,537 |
|
|
4.09 |
% |
|
$ |
1,405,722 |
|
|
$ |
13,715 |
|
|
3.96 |
% |
|
$ |
1,399,551 |
|
|
$ |
13,686 |
|
|
3.91 |
% |
Allowance for loan losses |
|
|
(15,305 |
) |
|
|
|
|
|
|
|
|
|
(14,932 |
) |
|
|
|
|
|
|
|
|
|
(17,844 |
) |
|
|
|
|
|
|
|
Other assets |
|
|
91,039 |
|
|
|
|
|
|
|
|
|
|
90,109 |
|
|
|
|
|
|
|
|
|
|
85,716 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,501,405 |
|
|
|
|
|
|
|
|
|
$ |
1,480,899 |
|
|
|
|
|
|
|
|
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market, interest checking |
|
$ |
507,089 |
|
|
$ |
363 |
|
|
0.29 |
% |
|
$ |
477,159 |
|
|
$ |
380 |
|
|
0.32 |
% |
|
$ |
379,991 |
|
|
$ |
525 |
|
|
0.55 |
% |
Time deposits |
|
|
452,443 |
|
|
|
1,353 |
|
|
1.20 |
% |
|
|
442,626 |
|
|
|
1,690 |
|
|
1.55 |
% |
|
|
553,616 |
|
|
|
3,196 |
|
|
2.31 |
% |
Total interest-bearing deposits |
|
$ |
959,532 |
|
|
$ |
1,716 |
|
|
0.72 |
% |
|
$ |
919,785 |
|
|
$ |
2,070 |
|
|
0.91 |
% |
|
$ |
933,607 |
|
|
$ |
3,721 |
|
|
1.59 |
% |
Other borrowings |
|
|
43,803 |
|
|
|
43 |
|
|
0.39 |
% |
|
|
51,220 |
|
|
|
48 |
|
|
0.38 |
% |
|
|
66,910 |
|
|
|
15 |
|
|
0.09 |
% |
FHLB advances |
|
|
101,352 |
|
|
|
234 |
|
|
0.93 |
% |
|
|
116,311 |
|
|
|
273 |
|
|
0.95 |
% |
|
|
103,916 |
|
|
|
328 |
|
|
1.27 |
% |
Junior subordinated debentures |
|
|
67,213 |
|
|
|
1,106 |
|
|
6.60 |
% |
|
|
67,123 |
|
|
|
1,106 |
|
|
6.68 |
% |
|
|
45,090 |
|
|
|
736 |
|
|
6.52 |
% |
Total interest-bearing liabilities |
|
$ |
1,171,900 |
|
|
$ |
3,099 |
|
|
1.06 |
% |
|
$ |
1,154,439 |
|
|
$ |
3,497 |
|
|
1.23 |
% |
|
$ |
1,149,523 |
|
|
$ |
4,800 |
|
|
1.67 |
% |
Non-interest-bearing deposits |
|
|
146,242 |
|
|
|
|
|
|
|
|
|
|
138,814 |
|
|
|
|
|
|
|
|
|
|
134,271 |
|
|
|
|
|
|
|
|
Other liabilities |
|
|
12,741 |
|
|
|
|
|
|
|
|
|
|
15,190 |
|
|
|
|
|
|
|
|
|
|
16,749 |
|
|
|
|
|
|
|
|
Total liabilities |
|
$ |
1,330,883 |
|
|
|
|
|
|
|
|
|
$ |
1,308,443 |
|
|
|
|
|
|
|
|
|
$ |
1,300,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
170,522 |
|
|
|
|
|
|
|
|
|
|
172,456 |
|
|
|
|
|
|
|
|
|
|
166,880 |
|
|
|
|
|
|
|
|
Total liabilities and
equity |
|
$ |
1,501,405 |
|
|
|
|
|
|
|
|
|
$ |
1,480,899 |
|
|
|
|
|
|
|
|
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
11,438 |
|
|
|
|
|
|
|
|
|
$ |
10,218 |
|
|
|
|
|
|
|
|
|
$ |
8,886 |
|
|
|
|
Interest rate spread (3) |
|
|
|
|
|
|
|
|
|
3.03 |
% |
|
|
|
|
|
|
|
|
|
2.73 |
% |
|
|
|
|
|
|
|
|
|
2.24 |
% |
Net interest margin (4) |
|
|
|
|
|
|
|
|
|
3.22 |
% |
|
|
|
|
|
|
|
|
|
2.95 |
% |
|
|
|
|
|
|
|
|
|
2.54 |
% |
Ratio of interest-earning
assets to interest-bearing liabilities |
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
1.22 |
|
|
|
|
|
|
|
|
(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.
Provision for Loan Losses
- A recovery of
provision for loan losses of $4.3 million was recorded for the
three months ended June 30, 2021, compared to a provision for loan
losses of $0.2 million for the three months ended March 31, 2021.
The recovery of provision during for the second quarter was
primarily the result of a $30.0 million decrease in substandard
rated loans and corresponding release of specific reserves, and the
upgrade of $44.6 million of watch rated loans to a pass
rating.
- During the second
quarter of 2021, the Company eliminated the qualitative factor for
industries affected by COVID-19, and implemented an economic factor
tied to Wisconsin unemployment. This change accounted for $0.3
million of the reduction in the allowance for loan losses.
- Year-over-over,
provision for loan losses decreased $5.4 million, or 474.6%,
compared to the three months ended June 30, 2020. The reduction was
primarily the result of the improvement in asset quality and the
reduction in the inherent risk associated with COVID-19.
Non-Interest Income
- Total non-interest
income for the three months ended June 30, 2021 decreased $1.5
million, or 39.4%, to $2.3 million from the three months ended
March 31, 2021, and decreased $1.3 million, or 35.7%, from the
three months ended June 30, 2020, primarily due to the loss on
security sales discussed above.
- Loan
servicing fees increased quarter-over-quarter and year-over-year
primarily due a four and six basis point increase, respectively in
weighted average servicing fees. In addition, loans sold with
servicing retained increased $11.3 million, or 1.3%, and $91.1
million, or 12.0%, from March 31, 2021 and June 30, 2020,
respectively.
|
|
For the Three Months Ended |
|
|
|
June 30,2021 |
|
|
March 31,2021 |
|
|
December 31,2020 |
|
|
September 30,2020 |
|
|
June 30,2020 |
|
|
|
(dollars in thousands) |
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
$ |
165 |
|
|
$ |
119 |
|
|
$ |
108 |
|
|
$ |
108 |
|
|
$ |
139 |
|
Crop insurance commission |
|
|
291 |
|
|
|
301 |
|
|
|
517 |
|
|
|
271 |
|
|
|
229 |
|
Gain on sale of residential loans, net |
|
|
89 |
|
|
|
93 |
|
|
|
219 |
|
|
|
17 |
|
|
|
4 |
|
Loan servicing fees |
|
|
2,278 |
|
|
|
2,158 |
|
|
|
1,974 |
|
|
|
2,054 |
|
|
|
1,923 |
|
Gain on sale of service-retained loans, net |
|
|
1,784 |
|
|
|
1,587 |
|
|
|
1,828 |
|
|
|
1,268 |
|
|
|
1,041 |
|
Loan servicing right pay-down losses |
|
|
(1,162 |
) |
|
|
(1,119 |
) |
|
|
(635 |
) |
|
|
(551 |
) |
|
|
(766 |
) |
Total loan servicing right income |
|
|
622 |
|
|
|
468 |
|
|
|
1,193 |
|
|
|
717 |
|
|
|
275 |
|
Gain (loss) on sale of securities |
|
|
(1,453 |
) |
|
|
— |
|
|
|
— |
|
|
|
101 |
|
|
|
570 |
|
Referral fees |
|
|
— |
|
|
|
319 |
|
|
|
64 |
|
|
|
110 |
|
|
|
121 |
|
Other |
|
|
259 |
|
|
|
254 |
|
|
|
283 |
|
|
|
294 |
|
|
|
240 |
|
Total non-interest income |
|
$ |
2,251 |
|
|
$ |
3,712 |
|
|
$ |
4,358 |
|
|
$ |
3,672 |
|
|
$ |
3,501 |
|
|
|
For the Three Months Ended |
|
|
|
June 30,2021 |
|
|
March 31,2021 |
|
|
December 31,2020 |
|
|
September 30,2020 |
|
|
June 30,2020 |
|
|
|
(dollars in thousands) |
|
Loan servicing rights, end of period |
|
$ |
19,478 |
|
|
$ |
18,864 |
|
|
$ |
18,396 |
|
|
$ |
17,203 |
|
|
$ |
16,486 |
|
Loans serviced, end of
period |
|
|
853,176 |
|
|
|
841,893 |
|
|
|
812,560 |
|
|
|
797,819 |
|
|
|
762,058 |
|
Loan servicing rights as a %
of loans serviced |
|
|
2.28 |
% |
|
|
2.24 |
% |
|
|
2.26 |
% |
|
|
2.16 |
% |
|
|
2.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loan servicing fees |
|
$ |
2,278 |
|
|
$ |
2,158 |
|
|
$ |
1,974 |
|
|
$ |
2,054 |
|
|
$ |
1,923 |
|
Average loans serviced |
|
|
847,535 |
|
|
|
827,227 |
|
|
|
805,190 |
|
|
|
779,939 |
|
|
|
754,806 |
|
Annualized loan servicing fees
as a % of average loans serviced |
|
|
1.08 |
% |
|
|
1.04 |
% |
|
|
0.98 |
% |
|
|
1.05 |
% |
|
|
1.02 |
% |
Non-Interest Expense
- Total non-interest
expense for the three months ended June 30, 2021, was virtually
unchanged from the first quarter of 2021 at $8.8 million, and
increased $1.3 million, or 17.4%, from the three months ended June
30, 2020.
- Employee
compensation and benefits expense increased for the three months
ended June 30, 2021, by $0.8 million to $6.4 million compared to
the three months ended March 31, 2021. The change was primarily the
result of an additional accrual of $0.9 million related to
additional benefits.
- During
the three months ended June 30, 2021, the Company sold the excess
land in Appleton, Wisconsin, that surrounded the location of its
new branch that is currently under construction. As a result of the
sale, the Company recorded a gain on fixed assets of $1.1
million.
|
|
For the Three Months Ended |
|
|
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands) |
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
$ |
6,426 |
|
|
$ |
5,582 |
|
|
$ |
6,687 |
|
|
$ |
4,766 |
|
|
$ |
4,594 |
|
Occupancy |
|
|
293 |
|
|
|
279 |
|
|
|
297 |
|
|
|
321 |
|
|
|
305 |
|
Information processing |
|
|
664 |
|
|
|
661 |
|
|
|
656 |
|
|
|
641 |
|
|
|
663 |
|
Professional fees |
|
|
450 |
|
|
|
802 |
|
|
|
582 |
|
|
|
555 |
|
|
|
480 |
|
Business development |
|
|
289 |
|
|
|
307 |
|
|
|
136 |
|
|
|
305 |
|
|
|
333 |
|
OREO expenses |
|
|
52 |
|
|
|
23 |
|
|
|
20 |
|
|
|
47 |
|
|
|
44 |
|
Writedown of OREO |
|
|
— |
|
|
|
— |
|
|
|
148 |
|
|
|
— |
|
|
|
— |
|
Net loss (gain) on sale of
OREO |
|
|
— |
|
|
|
17 |
|
|
|
(326 |
) |
|
|
9 |
|
|
|
— |
|
Net loss (gain) on sale of fixed assets |
|
|
(1,075 |
) |
|
|
(6 |
) |
|
|
9 |
|
|
|
(2 |
) |
|
|
(1 |
) |
Merger expenses |
|
|
385 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Depreciation and
amortization |
|
|
484 |
|
|
|
257 |
|
|
|
289 |
|
|
|
295 |
|
|
|
303 |
|
Other |
|
|
797 |
|
|
|
842 |
|
|
|
996 |
|
|
|
730 |
|
|
|
744 |
|
Total non-interest expense |
|
$ |
8,765 |
|
|
$ |
8,764 |
|
|
$ |
9,494 |
|
|
$ |
7,667 |
|
|
$ |
7,465 |
|
Asset Quality
- Through the annual
review process and the improved agricultural economy, during the
second quarter of 2021, watch rated loans decreased by $44.6
million, or 26.9%, and $76.8 million, or 38.8%, compared to March
31, 2021 and June 30, 2020, respectively, primarily as the result
of 34 dairy customers upgraded to a low satisfactory rating. This
improvement in asset quality is expected to continue throughout
2021 as we complete the annual review process.
-
Substandard performing loans decreased by $11.2 million, or 28.8%,
to $27.7 million at June 30, 2021, compared to March 31, 2021 due
to the upgrade of 2 customer relationships.
-
Substandard impaired loans decreased by $18.7 million, or 38.2%, to
$30.4 million at June 30, 2021, compared to March 31, 2021 due to
the upgrade of five agriculture customer relationships. The
following table presents loan balances by credit grade as of the
dates indicated:
|
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands) |
|
Loans by risk category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sound/Acceptable/Satisfactory/Low Satisfactory |
|
$ |
821,970 |
|
|
$ |
757,160 |
|
|
$ |
716,313 |
|
|
$ |
800,451 |
|
|
$ |
798,945 |
|
Watch |
|
|
121,242 |
|
|
|
165,823 |
|
|
|
190,101 |
|
|
|
185,254 |
|
|
|
198,044 |
|
Special Mention |
|
|
566 |
|
|
|
605 |
|
|
|
2,501 |
|
|
|
1,851 |
|
|
|
1,856 |
|
Substandard Performing |
|
|
27,742 |
|
|
|
38,961 |
|
|
|
40,420 |
|
|
|
41,577 |
|
|
|
47,741 |
|
Substandard Impaired |
|
|
30,370 |
|
|
|
49,115 |
|
|
|
46,950 |
|
|
|
46,793 |
|
|
|
40,938 |
|
Total loans |
|
$ |
1,001,890 |
|
|
$ |
1,011,664 |
|
|
$ |
996,285 |
|
|
$ |
1,075,926 |
|
|
$ |
1,087,524 |
|
Adverse classified asset ratio
(1) |
|
|
24.72 |
% |
|
|
39.61 |
% |
|
|
39.43 |
% |
|
|
42.64 |
% |
|
|
41.73 |
% |
(1) 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 second quarter of 2021 by
$13.7 million, or 30.7%, compared to the first quarter of 2021 due
to $9.4 million of agricultural loans being restored to accrual
status and the payoff of a $4.0 million commercial real estate
relationship.
-
Performing troubled debt restructurings (“TDRs”) not on nonaccrual
decreased $5.9 million, or 43.4%, to $7.6 million on June 30, 2021
from March 31, 2021. The decrease was primarily due to five
agriculture customers that had loans that were re-underwritten and
were no longer a TDR due to improved performance and financial
trends.
|
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands) |
|
Non-Performing Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
|
$ |
30,071 |
|
|
$ |
43,973 |
|
|
$ |
41,624 |
|
|
$ |
41,351 |
|
|
$ |
35,456 |
|
Other real estate owned |
|
|
914 |
|
|
|
739 |
|
|
|
1,077 |
|
|
|
3,064 |
|
|
|
2,629 |
|
Total non-performing
assets |
|
$ |
30,985 |
|
|
$ |
44,712 |
|
|
$ |
42,701 |
|
|
$ |
44,415 |
|
|
$ |
38,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing TDRs not on
nonaccrual |
|
$ |
7,641 |
|
|
$ |
13,495 |
|
|
$ |
18,592 |
|
|
$ |
19,036 |
|
|
$ |
21,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a %
of total loans |
|
|
3.09 |
% |
|
|
4.42 |
% |
|
|
4.29 |
% |
|
|
4.13 |
% |
|
|
3.50 |
% |
Non-performing assets as a %
of total assets |
|
|
2.04 |
% |
|
|
3.00 |
% |
|
|
2.90 |
% |
|
|
2.98 |
% |
|
|
2.52 |
% |
Allowance for loan losses as a
% of total loans |
|
|
1.14 |
% |
|
|
1.49 |
% |
|
|
1.49 |
% |
|
|
1.73 |
% |
|
|
1.71 |
% |
Net charge-offs (recoveries)
quarter-to-date |
|
$ |
(662 |
) |
|
$ |
(32 |
) |
|
$ |
3,386 |
|
|
$ |
(1 |
) |
|
$ |
120 |
|
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 (1) the possibility that any of the
anticipated benefits of the proposed merger will not be realized or
will not be realized within the expected time period; (2) the risk
that integration of the Company’s operations with those of Nicolet
will be materially delayed or will be more costly or difficult than
expected; (3) the parties’ inability to meet expectations regarding
the timing of the proposed merger; (4) changes to tax legislation
and their potential effects on the accounting for the merger; (5)
the inability to complete the proposed merger due to the failure of
Nicolet’s or the Company’s shareholders to adopt the Merger
Agreement; (6) the failure to satisfy other conditions to
completion of the proposed merger, including receipt of required
regulatory and other approvals; (7) the failure of the proposed
merger to close for any other reason; (8) diversion of management’s
attention from ongoing business operations and opportunities due to
the proposed merger; (9) the challenges of integrating and
retaining key employees; (10) the effect of the announcement of the
proposed merger on Nicolet’s, the Company’s or the combined
company’s respective customer and employee relationships and
operating results; (11) the possibility that the proposed merger
may be more expensive to complete than anticipated, including as a
result of unexpected factors or events; (12) dilution caused by
Nicolet’s issuance of additional shares of Nicolet common stock in
connection with the merger; (13) risks and uncertainties relating
to Nicolet’s proposed acquisition of Mackinac Financial Corporation
(“Mackinac”), including but not limited to the failure of the
proposed acquisition to close for any reason and risks and
uncertainties relating to the Mackinac’s business, the combined
business of Mackinac and Nicolet, and the combined businesses of
Nicolet, the Company and Mackinac; and (14) the effects of the
COVID-19 pandemic and its 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.
Important Information and Where to Find
It
Certain communications in this release relate to
the proposed merger transaction involving Nicolet and the Company.
In connection with the proposed merger, Nicolet and the Company
will file a joint proxy statement/prospectus on Form S-4 and other
relevant documents concerning the merger with the Securities and
Exchange Commission (the “SEC”). BEFORE MAKING ANY VOTING
OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE
SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY
REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT NICOLET, THE COMPANY AND THE
PROPOSED MERGER. When available, the joint proxy
statement/prospectus will be delivered to shareholders of Nicolet
and the Company. Investors may obtain copies of the joint proxy
statement/prospectus and other relevant documents (as they become
available) free of charge at the SEC’s website (www.sec.gov).
Copies of the documents filed with the SEC by Nicolet will be
available free of charge on Nicolet’s website at
www.nicoletbank.com. Copies of the documents filed with the SEC by
the Company will be available free of charge on the Company’s
website at Investors.ICBK.com/documents.
Nicolet, the Company and certain of their
directors, executive officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies from the shareholders of Nicolet and the shareholders of
the Company in connection with the proposed merger. Information
about the directors and executive officers of Nicolet and the
Company will be included in the joint proxy statement/prospectus
for the proposed transaction filed with the SEC. Information about
the directors and executive officers of Nicolet is also included in
the proxy statement for its 2021 annual meeting of shareholders,
which was filed with the SEC on March 2, 2021. Information about
the directors and executive officers of the Company is also
included in the proxy statement for its 2021 annual meeting of
shareholders, which was filed with the SEC on April 5, 2021.
Additional information regarding the interests of such participants
and other persons who may be deemed participants in the transaction
will be included in the joint proxy statement/prospectus and the
other relevant documents filed with the SEC when they become
available.
No Offer or Solicitation
This release shall not constitute an offer to
sell or the solicitation of an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation,
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Investor Relations ContactGlen L. StiteleyEVP -
CFO, Investors Community BankPhone: (920) 686-5658 Email:
gstiteley@icbk.com
|
County Bancorp,
Inc.Consolidated Financial
Summary(Unaudited) |
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands, except per share data) |
|
Period-End Balance Sheet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
72,745 |
|
|
$ |
17,820 |
|
|
$ |
19,500 |
|
|
$ |
53,283 |
|
|
$ |
127,432 |
|
Securities available-for-sale,
at fair value |
|
|
349,334 |
|
|
|
385,240 |
|
|
|
352,854 |
|
|
|
298,476 |
|
|
|
226,971 |
|
Loans held for sale |
|
|
15,805 |
|
|
|
5,789 |
|
|
|
35,976 |
|
|
|
2,593 |
|
|
|
11,847 |
|
Agricultural loans |
|
|
613,514 |
|
|
|
609,482 |
|
|
|
606,881 |
|
|
|
619,617 |
|
|
|
624,340 |
|
Commercial loans |
|
|
319,878 |
|
|
|
317,625 |
|
|
|
313,265 |
|
|
|
317,782 |
|
|
|
328,368 |
|
Paycheck Protection Plan
loans |
|
|
33,400 |
|
|
|
46,249 |
|
|
|
37,790 |
|
|
|
98,421 |
|
|
|
103,317 |
|
Multi-family real estate
loans |
|
|
30,310 |
|
|
|
33,287 |
|
|
|
33,457 |
|
|
|
35,496 |
|
|
|
30,439 |
|
Residential real estate
loans |
|
|
4,563 |
|
|
|
4,776 |
|
|
|
4,627 |
|
|
|
4,489 |
|
|
|
975 |
|
Installment and consumer
other |
|
|
225 |
|
|
|
245 |
|
|
|
265 |
|
|
|
121 |
|
|
|
85 |
|
Total loans |
|
|
1,001,890 |
|
|
|
1,011,664 |
|
|
|
996,285 |
|
|
|
1,075,926 |
|
|
|
1,087,524 |
|
Allowance for loan losses |
|
|
(11,466 |
) |
|
|
(15,082 |
) |
|
|
(14,808 |
) |
|
|
(18,649 |
) |
|
|
(18,569 |
) |
Net loans |
|
|
990,424 |
|
|
|
996,582 |
|
|
|
981,477 |
|
|
|
1,057,277 |
|
|
|
1,068,955 |
|
Other assets |
|
|
88,764 |
|
|
|
85,897 |
|
|
|
82,551 |
|
|
|
80,426 |
|
|
|
78,712 |
|
Total
Assets |
|
$ |
1,517,072 |
|
|
$ |
1,491,328 |
|
|
$ |
1,472,358 |
|
|
$ |
1,492,055 |
|
|
$ |
1,513,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
158,880 |
|
|
$ |
139,838 |
|
|
$ |
163,202 |
|
|
$ |
158,798 |
|
|
$ |
149,963 |
|
NOW accounts and interest
checking |
|
|
136,180 |
|
|
|
95,591 |
|
|
|
96,624 |
|
|
|
78,026 |
|
|
|
81,656 |
|
Savings |
|
|
9,059 |
|
|
|
8,431 |
|
|
|
7,367 |
|
|
|
11,900 |
|
|
|
8,369 |
|
Money market accounts |
|
|
394,486 |
|
|
|
390,741 |
|
|
|
344,250 |
|
|
|
325,900 |
|
|
|
307,083 |
|
Time deposits |
|
|
259,386 |
|
|
|
278,591 |
|
|
|
304,580 |
|
|
|
322,992 |
|
|
|
346,482 |
|
Brokered deposits |
|
|
159,087 |
|
|
|
159,034 |
|
|
|
80,456 |
|
|
|
101,808 |
|
|
|
121,503 |
|
National time deposits |
|
|
18,648 |
|
|
|
26,302 |
|
|
|
44,347 |
|
|
|
50,747 |
|
|
|
57,997 |
|
Total deposits |
|
|
1,135,726 |
|
|
|
1,098,528 |
|
|
|
1,040,826 |
|
|
|
1,050,171 |
|
|
|
1,073,053 |
|
Federal Reserve Discount
Window advances |
|
|
34,174 |
|
|
|
47,255 |
|
|
|
47,531 |
|
|
|
99,693 |
|
|
|
99,693 |
|
FHLB advances |
|
|
88,000 |
|
|
|
100,000 |
|
|
|
129,000 |
|
|
|
84,600 |
|
|
|
93,400 |
|
Subordinated debentures |
|
|
67,519 |
|
|
|
67,179 |
|
|
|
67,111 |
|
|
|
67,025 |
|
|
|
61,910 |
|
Other liabilities |
|
|
16,841 |
|
|
|
12,028 |
|
|
|
16,114 |
|
|
|
20,656 |
|
|
|
17,336 |
|
Total
Liabilities |
|
|
1,342,260 |
|
|
|
1,324,990 |
|
|
|
1,300,582 |
|
|
|
1,322,145 |
|
|
|
1,345,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
174,812 |
|
|
|
166,338 |
|
|
|
171,776 |
|
|
|
169,910 |
|
|
|
168,525 |
|
Total
Liabilities and
Shareholders' Equity |
|
$ |
1,517,072 |
|
|
$ |
1,491,328 |
|
|
$ |
1,472,358 |
|
|
$ |
1,492,055 |
|
|
$ |
1,513,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Price
Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High - Quarter-to-date |
|
$ |
35.82 |
|
|
$ |
26.46 |
|
|
$ |
23.72 |
|
|
$ |
22.00 |
|
|
$ |
24.67 |
|
Low - Quarter-to-date |
|
$ |
22.85 |
|
|
$ |
19.66 |
|
|
$ |
18.20 |
|
|
$ |
17.04 |
|
|
$ |
17.13 |
|
Market price -
Quarter-end |
|
$ |
33.96 |
|
|
$ |
23.97 |
|
|
$ |
22.08 |
|
|
$ |
18.80 |
|
|
$ |
20.93 |
|
Book value per share |
|
$ |
27.68 |
|
|
$ |
25.99 |
|
|
$ |
26.42 |
|
|
$ |
25.72 |
|
|
$ |
25.18 |
|
Tangible book value per share
(1) |
|
$ |
27.68 |
|
|
$ |
25.98 |
|
|
$ |
25.71 |
|
|
$ |
25.16 |
|
|
$ |
24.15 |
|
Common shares outstanding |
|
|
6,026,748 |
|
|
|
6,094,450 |
|
|
|
6,197,965 |
|
|
|
6,294,675 |
|
|
|
6,375,150 |
|
(1) This is a non-GAAP
financial measure. A reconciliation to GAAP is included below.
|
|
|
For the Three Months Ended |
|
|
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands, except per share data) |
|
Selected Income Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
12,000 |
|
|
$ |
11,523 |
|
|
$ |
12,737 |
|
|
$ |
11,594 |
|
|
$ |
12,009 |
|
Taxable securities |
|
|
2,205 |
|
|
|
1,887 |
|
|
|
1,777 |
|
|
|
1,293 |
|
|
|
1,283 |
|
Tax-exempt securities |
|
|
261 |
|
|
|
246 |
|
|
|
201 |
|
|
|
167 |
|
|
|
162 |
|
Federal funds sold and other |
|
|
71 |
|
|
|
58 |
|
|
|
10 |
|
|
|
52 |
|
|
|
111 |
|
Total interest and
dividend income |
|
|
14,537 |
|
|
|
13,714 |
|
|
|
14,725 |
|
|
|
13,106 |
|
|
|
13,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,716 |
|
|
|
2,069 |
|
|
|
2,482 |
|
|
|
2,914 |
|
|
|
3,721 |
|
FHLB advances and other borrowed funds |
|
|
277 |
|
|
|
321 |
|
|
|
362 |
|
|
|
456 |
|
|
|
343 |
|
Subordinated debentures |
|
|
1,106 |
|
|
|
1,106 |
|
|
|
1,107 |
|
|
|
1,082 |
|
|
|
736 |
|
Total interest expense |
|
|
3,099 |
|
|
|
3,496 |
|
|
|
3,951 |
|
|
|
4,452 |
|
|
|
4,800 |
|
Net interest income |
|
|
11,438 |
|
|
|
10,218 |
|
|
|
10,774 |
|
|
|
8,654 |
|
|
|
8,765 |
|
Provision for loan losses |
|
|
(4,278 |
) |
|
|
242 |
|
|
|
(455 |
) |
|
|
79 |
|
|
|
1,142 |
|
Net interest income after provision for loan losses |
|
|
15,716 |
|
|
|
9,976 |
|
|
|
11,229 |
|
|
|
8,575 |
|
|
|
7,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services charges |
|
|
165 |
|
|
|
119 |
|
|
|
108 |
|
|
|
108 |
|
|
|
139 |
|
Crop insurance commission |
|
|
291 |
|
|
|
301 |
|
|
|
517 |
|
|
|
271 |
|
|
|
229 |
|
Gain on sale of residential loans, net |
|
|
89 |
|
|
|
93 |
|
|
|
219 |
|
|
|
17 |
|
|
|
4 |
|
Loan servicing fees |
|
|
2,278 |
|
|
|
2,158 |
|
|
|
1,974 |
|
|
|
2,054 |
|
|
|
1,923 |
|
Gain on sale of service-retained loans, net |
|
|
1,784 |
|
|
|
1,587 |
|
|
|
1,828 |
|
|
|
1,268 |
|
|
|
1,041 |
|
Loan servicing right pay-down losses |
|
|
(1,162 |
) |
|
|
(1,119 |
) |
|
|
(635 |
) |
|
|
(551 |
) |
|
|
(766 |
) |
Total loan servicing right income |
|
|
622 |
|
|
|
468 |
|
|
|
1,193 |
|
|
|
717 |
|
|
|
275 |
|
Gain (loss) on sale of securities |
|
|
(1,453 |
) |
|
|
— |
|
|
|
— |
|
|
|
101 |
|
|
|
570 |
|
Referral fees (1) |
|
|
— |
|
|
|
319 |
|
|
|
64 |
|
|
|
110 |
|
|
|
121 |
|
Other |
|
|
259 |
|
|
|
254 |
|
|
|
283 |
|
|
|
294 |
|
|
|
240 |
|
Total non-interest income |
|
|
2,251 |
|
|
|
3,712 |
|
|
|
4,358 |
|
|
|
3,672 |
|
|
|
3,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
6,426 |
|
|
|
5,582 |
|
|
|
6,687 |
|
|
|
4,766 |
|
|
|
4,594 |
|
Occupancy |
|
|
293 |
|
|
|
279 |
|
|
|
297 |
|
|
|
321 |
|
|
|
305 |
|
Information processing |
|
|
664 |
|
|
|
661 |
|
|
|
656 |
|
|
|
641 |
|
|
|
663 |
|
Professional fees |
|
|
450 |
|
|
|
802 |
|
|
|
582 |
|
|
|
555 |
|
|
|
480 |
|
Business development |
|
|
289 |
|
|
|
307 |
|
|
|
136 |
|
|
|
305 |
|
|
|
333 |
|
OREO expenses |
|
|
52 |
|
|
|
23 |
|
|
|
20 |
|
|
|
47 |
|
|
|
44 |
|
Writedown of OREO |
|
|
— |
|
|
|
— |
|
|
|
148 |
|
|
|
— |
|
|
|
— |
|
Net loss (gain) on sale of OREO |
|
|
— |
|
|
|
17 |
|
|
|
(326 |
) |
|
|
9 |
|
|
|
— |
|
Net loss (gain) on sale of fixed assets |
|
|
(1,075 |
) |
|
|
(6 |
) |
|
|
9 |
|
|
|
(2 |
) |
|
|
(1 |
) |
Merger expenses |
|
|
385 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Depreciation and amortization |
|
|
484 |
|
|
|
257 |
|
|
|
289 |
|
|
|
295 |
|
|
|
303 |
|
Other |
|
|
797 |
|
|
|
842 |
|
|
|
996 |
|
|
|
730 |
|
|
|
744 |
|
Total non-interest expense |
|
|
8,765 |
|
|
|
8,764 |
|
|
|
9,494 |
|
|
|
7,667 |
|
|
|
7,465 |
|
Income before income
taxes |
|
|
9,202 |
|
|
|
4,924 |
|
|
|
6,093 |
|
|
|
4,580 |
|
|
|
3,659 |
|
Income tax expense |
|
|
2,459 |
|
|
|
996 |
|
|
|
1,575 |
|
|
|
1,164 |
|
|
|
926 |
|
NET
INCOME |
|
$ |
6,743 |
|
|
$ |
3,928 |
|
|
$ |
4,518 |
|
|
$ |
3,416 |
|
|
$ |
2,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.08 |
|
|
$ |
0.62 |
|
|
$ |
0.70 |
|
|
$ |
0.52 |
|
|
$ |
0.40 |
|
Diluted earnings per
share |
|
$ |
1.07 |
|
|
$ |
0.62 |
|
|
$ |
0.70 |
|
|
$ |
0.52 |
|
|
$ |
0.40 |
|
Dividends declared per
share |
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.07 |
|
|
$ |
0.07 |
|
(1) Referral fees in prior quarters reclassed
to non-interest income to match current classification
|
|
For the Three Months Ended |
|
|
|
June 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands, except share data) |
|
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
(1) |
|
|
1.80 |
% |
|
|
1.06 |
% |
|
|
1.23 |
% |
|
|
0.91 |
% |
|
|
0.74 |
% |
Return on average
shareholders' equity (1) |
|
|
15.82 |
% |
|
|
9.11 |
% |
|
|
10.56 |
% |
|
|
8.05 |
% |
|
|
6.55 |
% |
Return on average common
shareholders' equity (1)(2) |
|
|
16.40 |
% |
|
|
9.29 |
% |
|
|
10.88 |
% |
|
|
8.25 |
% |
|
|
6.63 |
% |
Efficiency ratio (1)(2) |
|
|
64.98 |
% |
|
|
62.84 |
% |
|
|
63.86 |
% |
|
|
62.66 |
% |
|
|
63.83 |
% |
Equity to assets ratio |
|
|
11.52 |
% |
|
|
11.15 |
% |
|
|
11.67 |
% |
|
|
11.39 |
% |
|
|
11.13 |
% |
Tangible common equity to
tangible assets (2) |
|
|
10.99 |
% |
|
|
10.62 |
% |
|
|
11.12 |
% |
|
|
10.85 |
% |
|
|
10.60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing
operations |
|
$ |
6,743 |
|
|
$ |
3,928 |
|
|
$ |
4,518 |
|
|
$ |
3,416 |
|
|
$ |
2,733 |
|
Less: Preferred stock
dividends |
|
|
79 |
|
|
|
81 |
|
|
|
80 |
|
|
|
80 |
|
|
|
99 |
|
Income available to common
shareholders |
|
$ |
6,664 |
|
|
$ |
3,847 |
|
|
$ |
4,438 |
|
|
$ |
3,336 |
|
|
$ |
2,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares issued |
|
|
7,242,997 |
|
|
|
7,218,358 |
|
|
|
7,206,238 |
|
|
|
7,202,000 |
|
|
|
7,198,901 |
|
Less: Weighted average
treasury shares |
|
|
1,179,271 |
|
|
|
1,080,089 |
|
|
|
957,573 |
|
|
|
882,153 |
|
|
|
759,294 |
|
Plus: Weighted average
non-vested restricted stock units |
|
|
97,915 |
|
|
|
63,991 |
|
|
|
67,529 |
|
|
|
66,492 |
|
|
|
65,291 |
|
Weighted average number of
common shares outstanding |
|
|
6,161,641 |
|
|
|
6,202,260 |
|
|
|
6,316,194 |
|
|
|
6,386,339 |
|
|
|
6,504,898 |
|
Effect of dilutive
options |
|
|
46,438 |
|
|
|
34,465 |
|
|
|
28,025 |
|
|
|
20,915 |
|
|
|
28,511 |
|
Weighted average number of
common shares outstanding used to calculate diluted earnings per
common share |
|
|
6,208,079 |
|
|
|
6,236,725 |
|
|
|
6,344,219 |
|
|
|
6,407,254 |
|
|
|
6,533,409 |
|
(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 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands) |
|
Return on average common
shareholders' equity reconciliation
(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
shareholders' equity |
|
|
15.82 |
% |
|
|
9.11 |
% |
|
|
10.56 |
% |
|
|
8.05 |
% |
|
|
6.55 |
% |
Effect of excluding average
preferred shareholders' equity |
|
|
0.58 |
% |
|
|
0.18 |
% |
|
|
0.32 |
% |
|
|
0.20 |
% |
|
|
0.08 |
% |
Return on average common
shareholders' equity |
|
|
16.40 |
% |
|
|
9.29 |
% |
|
|
10.88 |
% |
|
|
8.25 |
% |
|
|
6.63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
$ |
8,765 |
|
|
$ |
8,764 |
|
|
$ |
9,494 |
|
|
$ |
7,667 |
|
|
$ |
7,465 |
|
Net gain (loss) on sales and
write-downs of OREO |
|
|
— |
|
|
|
(17 |
) |
|
|
178 |
|
|
|
(9 |
) |
|
|
— |
|
Net gain (loss) on sale of
fixed assets |
|
|
1,075 |
|
|
|
6 |
|
|
|
(9 |
) |
|
|
2 |
|
|
|
1 |
|
Adjusted non-interest
expense (non-GAAP) |
|
$ |
9,840 |
|
|
$ |
8,753 |
|
|
$ |
9,663 |
|
|
$ |
7,660 |
|
|
$ |
7,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
11,438 |
|
|
$ |
10,218 |
|
|
$ |
10,774 |
|
|
$ |
8,654 |
|
|
$ |
8,765 |
|
Non-interest income |
|
|
2,251 |
|
|
|
3,712 |
|
|
|
4,358 |
|
|
|
3,672 |
|
|
|
3,501 |
|
Net loss (gain) on sales of
securities |
|
|
1,453 |
|
|
|
— |
|
|
|
— |
|
|
|
(101 |
) |
|
|
(570 |
) |
Operating revenue |
|
$ |
15,142 |
|
|
$ |
13,930 |
|
|
$ |
15,132 |
|
|
$ |
12,225 |
|
|
$ |
11,696 |
|
Efficiency ratio |
|
|
64.98 |
% |
|
|
62.84 |
% |
|
|
63.86 |
% |
|
|
62.66 |
% |
|
|
63.83 |
% |
|
|
For the Three Months Ended |
|
|
|
June 30,2021 |
|
|
June 30,2020 |
|
|
|
(dollars in thousands, except per share data) |
|
Adjusted diluted earnings per
share(3): |
|
|
|
|
|
|
|
|
Net income from continuing
operations |
|
$ |
6,743 |
|
|
$ |
2,733 |
|
Less: preferred stock
dividends |
|
|
(79 |
) |
|
|
(99 |
) |
Plus: goodwill impairment |
|
|
— |
|
|
|
— |
|
Adjusted income available to
common shareholders for basic earnings per common share |
|
$ |
6,664 |
|
|
$ |
2,634 |
|
Weighted average number of
common shares outstanding |
|
|
6,161,641 |
|
|
|
6,504,898 |
|
Effect of dilutive
options |
|
|
46,438 |
|
|
|
28,511 |
|
Weighted average number of
common shares outstanding used to calculate diluted earnings per
common share |
|
|
6,208,079 |
|
|
|
6,533,409 |
|
Adjusted diluted earnings per
share |
|
$ |
1.07 |
|
|
$ |
0.40 |
|
(1) Management uses the return on average
common shareholders’ equity 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 30,2021 |
|
March 31,2021 |
|
December 31,2020 |
|
September 30,2020 |
|
June 30,2020 |
|
|
(dollars in thousands, except per share data) |
|
Tangible book value per share
and tangible common equity to
tangible assets reconciliation
(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity |
|
$ |
166,812 |
|
|
$ |
158,338 |
|
|
$ |
163,776 |
|
|
$ |
161,910 |
|
|
$ |
160,525 |
|
Less: Core deposit intangible,
net of amortization |
|
|
12 |
|
|
|
29 |
|
|
|
54 |
|
|
|
86 |
|
|
|
125 |
|
Tangible common equity
(non-GAAP) |
|
$ |
166,800 |
|
|
$ |
158,309 |
|
|
$ |
163,722 |
|
|
$ |
161,824 |
|
|
$ |
160,400 |
|
Common shares outstanding |
|
|
6,026,748 |
|
|
|
6,094,450 |
|
|
|
6,197,965 |
|
|
|
6,294,675 |
|
|
|
6,375,150 |
|
Tangible book value per
share |
|
$ |
27.68 |
|
|
$ |
25.98 |
|
|
$ |
26.42 |
|
|
$ |
25.71 |
|
|
$ |
25.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,517,072 |
|
|
$ |
1,491,328 |
|
|
$ |
1,472,358 |
|
|
$ |
1,492,055 |
|
|
$ |
1,513,917 |
|
Less: Core deposit intangible,
net of amortization |
|
|
12 |
|
|
|
29 |
|
|
|
54 |
|
|
|
86 |
|
|
|
125 |
|
Tangible assets
(non-GAAP) |
|
$ |
1,517,060 |
|
|
$ |
1,491,299 |
|
|
$ |
1,472,304 |
|
|
$ |
1,491,969 |
|
|
$ |
1,513,792 |
|
Tangible common equity to
tangible assets |
|
|
10.99 |
% |
|
|
10.62 |
% |
|
|
11.12 |
% |
|
|
10.85 |
% |
|
|
10.60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adverse classified
asset ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Substandard loans |
|
$ |
58,112 |
|
|
$ |
88,076 |
|
|
$ |
87,370 |
|
|
$ |
88,370 |
|
|
$ |
88,680 |
|
Other real estate owned |
|
|
914 |
|
|
|
739 |
|
|
|
1,077 |
|
|
|
3,064 |
|
|
|
2,629 |
|
Substandard unused
commitments |
|
|
2,130 |
|
|
|
5,091 |
|
|
|
4,049 |
|
|
|
5,124 |
|
|
|
3,230 |
|
Less: Substandard government
guarantees |
|
|
(8,007 |
) |
|
|
(8,485 |
) |
|
|
(8,960 |
) |
|
|
(7,002 |
) |
|
|
(6,336 |
) |
Total adverse classified
assets (non-GAAP) |
|
$ |
53,149 |
|
|
$ |
85,421 |
|
|
$ |
83,536 |
|
|
$ |
89,556 |
|
|
$ |
88,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity (Bank) |
|
$ |
209,416 |
|
|
$ |
202,200 |
|
|
$ |
205,743 |
|
|
$ |
200,011 |
|
|
$ |
201,507 |
|
Accumulated other
comprehensive gain on available for sale securities |
|
|
(5,854 |
) |
|
|
(1,652 |
) |
|
|
(8,686 |
) |
|
|
(8,640 |
) |
|
|
(8,734 |
) |
Allowance for loan losses |
|
|
11,466 |
|
|
|
15,082 |
|
|
|
14,808 |
|
|
|
18,649 |
|
|
|
18,569 |
|
Adjusted total equity
(non-GAAP) |
|
$ |
215,028 |
|
|
$ |
215,630 |
|
|
$ |
211,865 |
|
|
$ |
210,020 |
|
|
$ |
211,342 |
|
Adverse classified asset
ratio |
|
|
24.72 |
% |
|
|
39.61 |
% |
|
|
39.43 |
% |
|
|
42.64 |
% |
|
|
41.73 |
% |
(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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