County Bancorp, Inc. (the “Company”; Nasdaq: ICBK), the holding
company of Investors Community Bank (the “Bank”), a community bank
headquartered in Manitowoc, Wisconsin, today reported results for
the fourth quarter and year ended December 31, 2019. Net
income was $3.3 million, or $0.47 diluted earnings per share, for
the fourth quarter of 2019, compared to net income of $5.7 million,
or $0.82 diluted earnings per share, for the third quarter of 2019
and $2.8 million, or $0.40 diluted earnings per share, for the
fourth quarter of 2018.
Tim Schneider, President of County Bancorp,
Inc., noted, “In 2019, we focused on improving credit quality,
reducing wholesale funding, and growing our client deposits. I
am pleased to say that our strategic initiatives drove improvements
across all three focus areas, resulting in record full-year net
profit for County Bancorp. Our business is progressing at a
solid pace, but we understand there is more work to be
done. Our dairy portfolio continued to strengthen as milk
prices improved throughout 2019, and the futures market is the
strongest we have seen in years. As trade deals with Mexico, Canada
and China near the finish line, we feel more optimistic about the
future of agricultural export stability. We made great
progress in 2019, which is a testament to the diligent and tireless
work of our team, and we look to continue our momentum as we head
into 2020.”
Loans and Total Assets
Total assets at December 31, 2019 were $1.4
billion, a decrease of $36.5 million, or 2.6%, and a decrease of
$142.5 million, or 9.4%, from total assets as of September 30, 2019
and December 31, 2018, respectively. Total loans were $1.0
billion at December 31, 2019, which represents a $45.0 million, or
4.2%, decrease from total loans at September 30, 2019, and a
decrease of $171.5 million, or 14.2%, from total loans at December
31, 2018.
The decrease in total loans and assets were the
result of our continued focus on loan participation sales and the
resulting reduction in wholesale funding (brokered deposits,
national certificates of deposit, and Federal Home Loan Bank (FHLB)
advances) on our balance sheet. Loan participations that the
Company continued to service were $751.7 million at December 31,
2019, which was an increase of $14.9 million, or 2.0%, and $90.5
million, or 13.7%, over participated loans that the Company
serviced at September 30, 2019 and December 31, 2018,
respectively. By increasing the amount of loans participated,
the Company has been reducing credit risk from its balance sheet
and increasing non-interest revenue streams.
Deposits
Total deposits at December 31, 2019 were $1.1
billion, a decrease of $41.3 million, or 3.6%, and a decrease of
$121.9 million, or 10.0%, from total deposits as of September 30,
2019 and December 31, 2018, respectively. Despite the decline
in total deposits, client deposits (demand deposits, NOW accounts,
savings accounts, money market accounts, and certificates of
deposit) increased $17.4 million, or 2.1%, since September 30,
2019, and increased $81.2 million, or 10.8%, since December 31,
2018.
During 2019, the Company focused on reducing its
reliance on wholesale funding. Due to the increases in loan
participations and client deposit growth discussed above, the
Company was able to decrease its dependence on brokered deposits
and national certificates of deposit to $265.8 million at December
31, 2019. This represents a decrease of $58.7 million, or
18.1%, from September 30, 2019, and a decrease of $203.1 million,
or 43.3%, from December 31, 2018.
Also during 2019, the Company paid off a portion
of its FHLB advances. At December 31, 2019, advances from the
FHLB totaled $44.4 million, which was a decrease of $45.0 million,
or 50.3%, since December 31, 2018.
Net Interest Income and
Margin
Net interest income was $9.5 million for the
three months ended December 31, 2019, which was a $0.7 million, or
7.0%, decrease from the three months ended September 30, 2019, and
a $1.2 million, or 11.6%, decrease from the three months ended
December 31, 2018. For the year ended December 31, 2019, net
interest income decreased $1.2 million, or 2.8%, to $40.8 million
from the same period in 2018. The decrease in net interest
income in the fourth quarter 2019 was the result of a lower average
loan balance due to loan payoffs and the increase in loan
participations sold. This was partially offset by a $58.7
million decrease in brokered deposits and national certificates of
deposit and the resulting decrease in interest expense. The
current quarter was also adversely impacted by a $10.2 million
increase in nonaccrual loans, as well as a 25 basis point decrease
in the Prime rate.
Net interest margin was 2.89% for the three
months ended December 31, 2019, which was a decrease from 2.95% for
the three months ended September 30, 2019. The decrease in
net interest margin was primarily due to the noted increase in
nonaccrual loans. Net interest margin was also impacted
during the fourth quarter of 2019 by a 25 basis point decrease in
the Prime rate, immediately impacting the yield of the loan
portfolio. This was partially offset by a decrease in rates
offered on savings, NOW and money market accounts.
The table below presents the effects of changing
rates and volumes on our net interest income for the periods
indicated.
|
|
Three Months Ended December 31, 2019 v.Three Months Ended September
30, 2019 |
|
|
Three Months Ended December 31, 2019 v.Three Months Ended December
31, 2018 |
|
|
|
Increase (Decrease)Due to Change in Average |
|
|
Increase (Decrease)Due to Change in Average |
|
|
|
Volume |
|
|
Rate |
|
|
Net |
|
|
Volume |
|
|
Rate |
|
|
Net |
|
|
|
(dollars in thousands) |
|
Interest
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
|
$ |
1 |
|
|
$ |
(11 |
) |
|
$ |
(10 |
) |
|
$ |
(228 |
) |
|
$ |
(17 |
) |
|
$ |
(245 |
) |
Loans |
|
|
(847 |
) |
|
|
(493 |
) |
|
|
(1,340 |
) |
|
|
(1,889 |
) |
|
|
44 |
|
|
|
(1,845 |
) |
Federal funds sold and interest-bearing deposits
with banks |
|
|
(30 |
) |
|
|
(140 |
) |
|
|
(170 |
) |
|
|
126 |
|
|
|
92 |
|
|
|
218 |
|
Total interest income |
|
|
(876 |
) |
|
|
(644 |
) |
|
|
(1,520 |
) |
|
|
(1,991 |
) |
|
|
119 |
|
|
|
(1,872 |
) |
Interest
Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market and interest checking |
|
$ |
(15 |
) |
|
$ |
(385 |
) |
|
$ |
(400 |
) |
|
$ |
158 |
|
|
$ |
(325 |
) |
|
$ |
(167 |
) |
Time deposits |
|
|
(515 |
) |
|
|
123 |
|
|
|
(392 |
) |
|
|
(1,354 |
) |
|
|
1,029 |
|
|
|
(325 |
) |
Other borrowings |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
FHLB advances |
|
|
(22 |
) |
|
|
1 |
|
|
|
(21 |
) |
|
|
(226 |
) |
|
|
24 |
|
|
|
(202 |
) |
Junior subordinated debentures |
|
|
1 |
|
|
|
6 |
|
|
|
7 |
|
|
|
2 |
|
|
|
25 |
|
|
|
27 |
|
Total interest expense |
|
$ |
(551 |
) |
|
$ |
(255 |
) |
|
$ |
(806 |
) |
|
$ |
(1,420 |
) |
|
$ |
753 |
|
|
$ |
(667 |
) |
Net interest income |
|
$ |
(325 |
) |
|
$ |
(389 |
) |
|
$ |
(714 |
) |
|
$ |
(571 |
) |
|
$ |
(634 |
) |
|
$ |
(1,205 |
) |
The following tables set forth average balance
sheets, average yields and rates, and income and expenses for the
period indicated.
|
|
For the Three Months Ended |
|
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
December 31, 2018 |
|
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
|
(dollars in thousands) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
|
$ |
159,202 |
|
|
$ |
1,106 |
|
|
|
2.78 |
% |
|
$ |
159,091 |
|
|
$ |
1,117 |
|
|
|
2.81 |
% |
|
$ |
191,955 |
|
|
$ |
1,351 |
|
|
|
2.82 |
% |
Loans (2) |
|
|
1,061,432 |
|
|
|
13,691 |
|
|
|
5.16 |
% |
|
|
1,126,243 |
|
|
|
15,030 |
|
|
|
5.34 |
% |
|
|
1,207,883 |
|
|
|
15,536 |
|
|
|
5.14 |
% |
Interest bearing deposits due from other banks |
|
|
98,848 |
|
|
|
441 |
|
|
|
1.79 |
% |
|
|
104,253 |
|
|
|
612 |
|
|
|
2.35 |
% |
|
|
67,153 |
|
|
|
223 |
|
|
|
1.33 |
% |
Total interest-earning assets |
|
$ |
1,319,482 |
|
|
$ |
15,238 |
|
|
|
4.62 |
% |
|
$ |
1,389,587 |
|
|
$ |
16,759 |
|
|
|
4.82 |
% |
|
$ |
1,466,991 |
|
|
$ |
17,110 |
|
|
|
4.67 |
% |
Allowance for loan losses |
|
|
(14,868 |
) |
|
|
|
|
|
|
|
|
|
|
(16,209 |
) |
|
|
|
|
|
|
|
|
|
|
(16,034 |
) |
|
|
|
|
|
|
|
|
Other assets |
|
|
77,934 |
|
|
|
|
|
|
|
|
|
|
|
78,664 |
|
|
|
|
|
|
|
|
|
|
|
61,316 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,382,548 |
|
|
|
|
|
|
|
|
|
|
$ |
1,452,042 |
|
|
|
|
|
|
|
|
|
|
$ |
1,512,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market, interest checking |
|
$ |
322,629 |
|
|
$ |
876 |
|
|
|
1.09 |
% |
|
$ |
326,592 |
|
|
$ |
1,276 |
|
|
|
1.56 |
% |
|
$ |
287,420 |
|
|
$ |
1,043 |
|
|
|
1.45 |
% |
Time deposits |
|
|
658,864 |
|
|
|
3,905 |
|
|
|
2.37 |
% |
|
|
745,032 |
|
|
|
4,298 |
|
|
|
2.31 |
% |
|
|
820,515 |
|
|
|
4,230 |
|
|
|
2.06 |
% |
Total interest-bearing deposits |
|
$ |
981,493 |
|
|
$ |
4,781 |
|
|
|
1.95 |
% |
|
$ |
1,071,624 |
|
|
$ |
5,574 |
|
|
|
2.08 |
% |
|
$ |
1,107,935 |
|
|
$ |
5,273 |
|
|
|
1.90 |
% |
Other borrowings |
|
|
799 |
|
|
|
9 |
|
|
|
4.60 |
% |
|
|
804 |
|
|
|
9 |
|
|
|
4.60 |
% |
|
|
837 |
|
|
|
10 |
|
|
|
4.62 |
% |
FHLB advances |
|
|
44,400 |
|
|
|
216 |
|
|
|
1.94 |
% |
|
|
48,857 |
|
|
|
237 |
|
|
|
1.94 |
% |
|
|
90,509 |
|
|
|
417 |
|
|
|
1.84 |
% |
Junior subordinated debentures |
|
|
44,839 |
|
|
|
694 |
|
|
|
6.19 |
% |
|
|
44,800 |
|
|
|
687 |
|
|
|
6.14 |
% |
|
|
44,681 |
|
|
|
667 |
|
|
|
5.97 |
% |
Total interest-bearing liabilities |
|
$ |
1,071,531 |
|
|
$ |
5,700 |
|
|
|
2.13 |
% |
|
$ |
1,166,085 |
|
|
$ |
6,507 |
|
|
|
2.23 |
% |
|
$ |
1,243,962 |
|
|
$ |
6,367 |
|
|
|
2.05 |
% |
Non-interest bearing deposits |
|
|
123,541 |
|
|
|
|
|
|
|
|
|
|
|
105,578 |
|
|
|
|
|
|
|
|
|
|
|
108,140 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
16,749 |
|
|
|
|
|
|
|
|
|
|
|
14,801 |
|
|
|
|
|
|
|
|
|
|
|
10,913 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
$ |
1,211,821 |
|
|
|
|
|
|
|
|
|
|
$ |
1,286,464 |
|
|
|
|
|
|
|
|
|
|
$ |
1,363,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
170,727 |
|
|
|
|
|
|
|
|
|
|
|
165,578 |
|
|
|
|
|
|
|
|
|
|
|
149,258 |
|
|
|
|
|
|
|
|
|
Total liabilities and
equity |
|
$ |
1,382,548 |
|
|
|
|
|
|
|
|
|
|
$ |
1,452,042 |
|
|
|
|
|
|
|
|
|
|
$ |
1,512,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
9,538 |
|
|
|
|
|
|
|
|
|
|
$ |
10,252 |
|
|
|
|
|
|
|
|
|
|
$ |
10,743 |
|
|
|
|
|
Interest rate spread (3) |
|
|
|
|
|
|
|
|
|
|
2.49 |
% |
|
|
|
|
|
|
|
|
|
|
2.59 |
% |
|
|
|
|
|
|
|
|
|
|
2.62 |
% |
Net interest margin (4) |
|
|
|
|
|
|
|
|
|
|
2.89 |
% |
|
|
|
|
|
|
|
|
|
|
2.95 |
% |
|
|
|
|
|
|
|
|
|
|
2.91 |
% |
Ratio of interest-earning
assets to interest-bearing liabilities |
|
|
1.23 |
|
|
|
|
|
|
|
|
|
|
|
1.19 |
|
|
|
|
|
|
|
|
|
|
|
1.18 |
|
|
|
|
|
|
|
|
|
- Average balances are calculated on amortized cost.
- Includes loan fee income, nonaccruing loan balances, and
interest received on such loans.
- Interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of average
interest-bearing liabilities.
- Net interest margin represents net interest income divided by
average total interest-earning assets.
For the year ended December 31, 2019, net
interest margin improved slightly to 2.93% from 2.91% for the year
ended December 31, 2018, despite a six basis point decrease in
interest rate spread. The increase in net interest margin in
2019 is due to a 3.2% decrease in the average balance of
interest-earning assets.
|
|
For the Year Ended |
|
|
|
December 31, 2019 |
|
|
December 31, 2018 |
|
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
AverageBalance (1) |
|
|
Income/Expense |
|
|
Yields/Rates |
|
|
|
(dollars in thousands) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
|
$ |
172,500 |
|
|
$ |
4,843 |
|
|
|
2.81 |
% |
|
$ |
169,302 |
|
|
$ |
4,425 |
|
|
|
2.61 |
% |
Loans (2) |
|
|
1,142,551 |
|
|
|
59,706 |
|
|
|
5.23 |
% |
|
|
1,193,254 |
|
|
|
58,706 |
|
|
|
4.92 |
% |
Interest bearing deposits due from other banks |
|
|
78,517 |
|
|
|
1,783 |
|
|
|
2.27 |
% |
|
|
77,545 |
|
|
|
1,086 |
|
|
|
1.40 |
% |
Total interest-earning assets |
|
$ |
1,393,568 |
|
|
$ |
66,332 |
|
|
|
4.76 |
% |
|
$ |
1,440,101 |
|
|
$ |
64,217 |
|
|
|
4.46 |
% |
Allowance for loan losses |
|
|
(16,460 |
) |
|
|
|
|
|
|
|
|
|
|
(15,037 |
) |
|
|
|
|
|
|
|
|
Other assets |
|
|
77,444 |
|
|
|
|
|
|
|
|
|
|
|
59,291 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,454,552 |
|
|
|
|
|
|
|
|
|
|
$ |
1,484,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market, interest checking |
|
$ |
316,278 |
|
|
|
4,582 |
|
|
|
1.45 |
% |
|
$ |
282,746 |
|
|
|
3,398 |
|
|
|
1.20 |
% |
Time deposits |
|
|
741,483 |
|
|
|
16,875 |
|
|
|
2.28 |
% |
|
|
801,892 |
|
|
|
15,251 |
|
|
|
1.90 |
% |
Total interest-bearing deposits |
|
$ |
1,057,761 |
|
|
$ |
21,457 |
|
|
|
2.03 |
% |
|
$ |
1,084,638 |
|
|
$ |
18,649 |
|
|
|
1.72 |
% |
Other borrowings |
|
|
913 |
|
|
|
43 |
|
|
|
4.71 |
% |
|
|
1,027 |
|
|
|
50 |
|
|
|
4.81 |
% |
FHLB advances |
|
|
66,022 |
|
|
|
1,307 |
|
|
|
1.98 |
% |
|
|
105,218 |
|
|
|
1,759 |
|
|
|
1.67 |
% |
Junior subordinated debentures |
|
|
44,781 |
|
|
|
2,743 |
|
|
|
6.13 |
% |
|
|
32,721 |
|
|
|
1,804 |
|
|
|
5.51 |
% |
Total interest-bearing liabilities |
|
$ |
1,169,477 |
|
|
$ |
25,550 |
|
|
|
2.18 |
% |
|
$ |
1,223,604 |
|
|
$ |
22,262 |
|
|
|
1.82 |
% |
Non-interest bearing deposits |
|
|
108,356 |
|
|
|
|
|
|
|
|
|
|
|
100,819 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
13,796 |
|
|
|
|
|
|
|
|
|
|
|
9,883 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
$ |
1,291,629 |
|
|
|
|
|
|
|
|
|
|
$ |
1,334,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
162,923 |
|
|
|
|
|
|
|
|
|
|
|
150,049 |
|
|
|
|
|
|
|
|
|
Total liabilities and
equity |
|
$ |
1,454,552 |
|
|
|
|
|
|
|
|
|
|
$ |
1,484,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
40,782 |
|
|
|
|
|
|
|
|
|
|
$ |
41,955 |
|
|
|
|
|
Interest rate spread (3) |
|
|
|
|
|
|
|
|
|
|
2.58 |
% |
|
|
|
|
|
|
|
|
|
|
2.64 |
% |
Net interest margin (4) |
|
|
|
|
|
|
|
|
|
|
2.93 |
% |
|
|
|
|
|
|
|
|
|
|
2.91 |
% |
Ratio of interest-earning
assets to interest- bearing liabilities |
|
|
1.19 |
|
|
|
|
|
|
|
|
|
|
|
1.18 |
|
|
|
|
|
|
|
|
|
- Average balances are calculated on amortized cost.
- Includes loan fee income, nonaccruing loan balances, and
interest received on such loans.
- Interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of average
interest-bearing liabilities.
- Net interest margin represents net interest income divided by
average total interest-earning assets.
Non-Interest Income and
Expense
|
|
For the Three Months Ended |
|
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands) |
|
Non-Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
$ |
549 |
|
|
$ |
348 |
|
|
$ |
407 |
|
|
$ |
353 |
|
|
$ |
470 |
|
Gain (loss) on sale of loans, net |
|
|
34 |
|
|
|
87 |
|
|
|
26 |
|
|
|
(1 |
) |
|
|
54 |
|
Loan servicing fees |
|
|
1,778 |
|
|
|
1,677 |
|
|
|
1,563 |
|
|
|
1,519 |
|
|
|
1,553 |
|
Loan servicing right origination |
|
|
1,146 |
|
|
|
1,741 |
|
|
|
346 |
|
|
|
228 |
|
|
|
7 |
|
Income on OREO |
|
|
54 |
|
|
|
10 |
|
|
|
40 |
|
|
|
26 |
|
|
|
83 |
|
Gain on sale of securities |
|
|
- |
|
|
|
- |
|
|
|
341 |
|
|
|
- |
|
|
|
- |
|
Other |
|
|
161 |
|
|
|
171 |
|
|
|
164 |
|
|
|
625 |
|
|
|
153 |
|
Total non-interest income |
|
$ |
3,722 |
|
|
$ |
4,034 |
|
|
$ |
2,887 |
|
|
$ |
2,750 |
|
|
$ |
2,320 |
|
Non-interest income for the three months ended
December 31, 2019 decreased by $0.3 million, or 7.7%, to $3.7
million compared to the three months ended September 30, 2019,
which was primarily the result of a decrease of $0.6 million of
loan servicing right origination due to the $41.2 million in loans
that were sold or participated during the third quarter compared to
only $14.9 million in loans that were sold or participated during
the fourth quarter.
Non-interest income for the three months ended
December 31, 2019 increased $1.4 million, or 60.4%, compared to
$2.3 million for the three months ended December 31, 2018.
The year-over-year increase was primarily due to the increase in
loan participations sold and related loan servicing right
origination income compared to the fourth quarter of 2018.
|
|
For the Three Months Ended |
|
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|
March 31, 2019 |
|
|
December 31, 2018 |
|
|
|
(dollars in thousands) |
|
Loan servicing rights,
beginning of period |
|
$ |
11,362 |
|
|
$ |
9,621 |
|
|
$ |
9,275 |
|
|
$ |
9,047 |
|
|
$ |
9,040 |
|
Changes in loan
servicing rights: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions related to new loans |
|
|
1,811 |
|
|
|
2,276 |
|
|
|
843 |
|
|
|
621 |
|
|
|
596 |
|
Impairment due to prepayment |
|
|
(296 |
) |
|
|
(198 |
) |
|
|
(190 |
) |
|
|
(73 |
) |
|
|
(37 |
) |
Amortization of existing asset |
|
|
(632 |
) |
|
|
(584 |
) |
|
|
(554 |
) |
|
|
(550 |
) |
|
|
(552 |
) |
Reduction of valuation allowance |
|
|
263 |
|
|
|
247 |
|
|
|
247 |
|
|
|
230 |
|
|
|
- |
|
Total loan servicing
right origination income |
|
|
1,146 |
|
|
|
1,741 |
|
|
|
346 |
|
|
|
228 |
|
|
|
7 |
|
Loan servicing rights, end of
period |
|
$ |
12,508 |
|
|
$ |
11,362 |
|
|
$ |
9,621 |
|
|
$ |
9,275 |
|
|
$ |
9,047 |
|
Loans serviced, end of
period |
|
|
751,738 |
|
|
|
736,823 |
|
|
|
695,629 |
|
|
|
675,268 |
|
|
|
661,257 |
|
Loan servicing rights as a %
of loans serviced |
|
|
1.66 |
% |
|
|
1.54 |
% |
|
|
1.38 |
% |
|
|
1.37 |
% |
|
|
1.37 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loan servicing
fees |
|
$ |
1,778 |
|
|
$ |
1,677 |
|
|
$ |
1,563 |
|
|
$ |
1,519 |
|
|
$ |
1,553 |
|
Average loans serviced |
|
|
744,281 |
|
|
|
716,226 |
|
|
|
685,449 |
|
|
|
668,263 |
|
|
|
653,068 |
|
Annualized loan servicing fees
as a % of average loans serviced |
|
|
0.96 |
% |
|
|
0.94 |
% |
|
|
0.91 |
% |
|
|
0.91 |
% |
|
|
0.95 |
% |
Loan servicing right origination and loan
serving fee income was positively impacted during the second half
of the year in 2019 due to the higher volumes of loan participation
sales as well as higher loan servicing fee spreads.
|
|
For the Three Months Ended |
|
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands, except per share data) |
|
Non-Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
$ |
5,696 |
|
|
$ |
4,735 |
|
|
$ |
4,199 |
|
|
$ |
4,482 |
|
|
$ |
4,059 |
|
Occupancy |
|
|
417 |
|
|
|
313 |
|
|
|
283 |
|
|
|
389 |
|
|
|
245 |
|
Information processing |
|
|
645 |
|
|
|
683 |
|
|
|
591 |
|
|
|
563 |
|
|
|
641 |
|
Professional fees |
|
|
371 |
|
|
|
483 |
|
|
|
417 |
|
|
|
399 |
|
|
|
497 |
|
Business development |
|
|
335 |
|
|
|
351 |
|
|
|
347 |
|
|
|
325 |
|
|
|
259 |
|
OREO expenses |
|
|
59 |
|
|
|
57 |
|
|
|
121 |
|
|
|
51 |
|
|
|
106 |
|
Write-down of OREO |
|
|
376 |
|
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
|
688 |
|
Net loss (gain) on sale of OREO |
|
|
(231 |
) |
|
|
160 |
|
|
|
9 |
|
|
|
(136 |
) |
|
|
(54 |
) |
Depreciation and amortization |
|
|
319 |
|
|
|
319 |
|
|
|
328 |
|
|
|
337 |
|
|
|
408 |
|
Other |
|
|
2,278 |
|
|
|
567 |
|
|
|
901 |
|
|
|
895 |
|
|
|
689 |
|
Total non-interest expense |
|
$ |
10,265 |
|
|
$ |
7,668 |
|
|
$ |
7,446 |
|
|
$ |
7,305 |
|
|
$ |
7,538 |
|
Non-interest expense for the three months ended
December 31, 2019 increased by $2.6 million, or 33.9%, to $10.3
million compared to the three months ended September 30,
2019. Employee compensation and benefits increased $1.0
million, or 20.3%, in the linked quarter due to the additional
accrual of $0.9 million for incentive compensation related to
current year financial results. The year-over-year increase
was also the result of a 5.3% increase in head count and a 21.7%
increase in insurance benefits in 2019. Other non-interest
expense increased from impairment recognized from an investment in
a historical tax credit project of $1.1 million. The
impairment was offset by a $1.4 million benefit to income tax
expense when the credit was earned. The three months ended
December 31, 2019 was also adversely affected by decline in market
values of three OREO properties which resulted in write-downs
totaling $0.4 million.
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands) |
|
Loans by risk
category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sound/Acceptable/Satisfactory/ Low Satisfactory |
|
$ |
724,444 |
|
|
$ |
771,568 |
|
|
$ |
836,988 |
|
|
$ |
896,328 |
|
|
$ |
908,172 |
|
Watch |
|
|
207,173 |
|
|
|
193,942 |
|
|
|
167,824 |
|
|
|
174,642 |
|
|
|
171,670 |
|
Special Mention |
|
|
9,239 |
|
|
|
9,346 |
|
|
|
25,255 |
|
|
|
4,501 |
|
|
|
6,566 |
|
Substandard
Performing |
|
|
30,478 |
|
|
|
44,183 |
|
|
|
56,336 |
|
|
|
46,075 |
|
|
|
65,501 |
|
Substandard
Impaired |
|
|
64,439 |
|
|
|
61,728 |
|
|
|
61,429 |
|
|
|
61,417 |
|
|
|
55,386 |
|
Total loans |
|
$ |
1,035,773 |
|
|
$ |
1,080,767 |
|
|
$ |
1,147,832 |
|
|
$ |
1,182,963 |
|
|
$ |
1,207,295 |
|
Adverse classified asset ratio
(1) |
|
|
39.85 |
% |
|
|
45.67 |
% |
|
|
53.21 |
% |
|
|
48.59 |
% |
|
|
57.12 |
% |
(1) This is a non-GAAP financial
measure. A reconciliation to GAAP is included at the end of
this earnings release
Substandard loans were $94.9 million at December
31, 2019, compared to $105.9 million at September 30, 2019 and
$120.9 million at December 31, 2018. Adverse classified asset
ratio (a non-GAAP measure) decreased to 39.85% at December 31, 2019
from 45.67% and 57.12% at September 30, 2019 and December 31, 2018,
respectively. The decrease in substandard loans and the
adverse classified ratio were in part the result of improving milk
prices. The average 12-month future price of class III milk
on the Chicago Mercantile Exchange rose to $17.40 at December 31,
2019 compared to $17.12 at September 30, 2019 and $15.88 at
December 31, 2018.
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands) |
|
Non-Performing
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
|
$ |
30,968 |
|
|
$ |
20,776 |
|
|
$ |
20,096 |
|
|
$ |
25,880 |
|
|
$ |
22,983 |
|
Other real estate
owned |
|
|
5,521 |
|
|
|
7,252 |
|
|
|
8,693 |
|
|
|
5,019 |
|
|
|
6,568 |
|
Total non-performing assets |
|
$ |
36,489 |
|
|
$ |
28,028 |
|
|
$ |
28,789 |
|
|
$ |
30,899 |
|
|
$ |
29,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing TDRs not
on nonaccrual |
|
$ |
21,784 |
|
|
$ |
28,520 |
|
|
$ |
28,892 |
|
|
$ |
21,111 |
|
|
$ |
18,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a %
of total loans |
|
|
3.52 |
% |
|
|
2.59 |
% |
|
|
2.51 |
% |
|
|
2.61 |
% |
|
|
2.45 |
% |
Non-performing assets as a %
of total assets |
|
|
2.65 |
% |
|
|
1.98 |
% |
|
|
1.94 |
% |
|
|
2.07 |
% |
|
|
1.94 |
% |
Allowance for loan losses as a
% of total loans |
|
|
1.47 |
% |
|
|
1.39 |
% |
|
|
1.42 |
% |
|
|
1.48 |
% |
|
|
1.37 |
% |
Net charge-offs (recoveries)
quarter- to-date |
|
$ |
(253 |
) |
|
$ |
39 |
|
|
$ |
2,111 |
|
|
$ |
(236 |
) |
|
$ |
1,210 |
|
At December 31, 2019, non-performing assets were
$36.5 million, an increase of $8.5 million, compared to September
30, 2019. Non-performing assets as a percent of total assets
increased to 2.65% at December 31, 2019, from 1.98% at September
30, 2019. The increases were primarily due to an increase in
non-accrual loans of $10.2 million in the fourth quarter related to
one agriculture customer for $6.0 million and one commercial
customer for $3.9 million, which was partially offset by two OREO
properties that were sold during the fourth quarter of 2019,
resulting in a decrease of $1.7 million in OREO.
A credit to provision for loan losses of $0.1
million was recorded for the three months ended December 31, 2019
compared to a credit of $1.2 million for the three months ended
September 30, 2019. The credit provision in the fourth
quarter of 2019 was primarily a result of the reduction of the size
of the loan portfolio, improved economic factors, and upgrades to
credit ratings, which was partially offset by a $1.9 million
impairment to a substandard commercial credit. In addition,
during the fourth quarter of 2019, the Company recovered a $0.4
million loan that was previously charged-off.
The allowance for loan losses was $15.3 million
at December 31, 2019 compared to $16.5 million at December 31,
2018. The $1.2 million decrease in the allowance during 2019
was the result of a reduction in general reserves due to the
decreases in total loans, improvement of economic factors, and the
credit upgrades discussed previously. Despite the decrease in
allowance year-over-year, the allowance as a percent of total loans
increased from 1.37% at December 31, 2018 to 1.47% at December 31,
2019.
Conference Call
The Company will host an earnings call tomorrow,
January 24, 2020, at 8:30 a.m., CDT, conducted by Timothy J.
Schneider, President, and Glen L. Stiteley, CFO. The earnings
call will be broadcast over the Internet on the Company’s website
at Investors.ICBK.com. In addition, you may listen to the
Company’s earnings call via telephone by dialing (844)
835-9984. Investors should visit the Company’s website or
call in to the dial-in number set forth above at least 10 minutes
prior to the scheduled start of the call.
A replay of the earnings call will be available
until January 25, 2021, by visiting the Company’s website at
Investors.ICBK.com/QuarterlyResults.
About County Bancorp, Inc.
County Bancorp, Inc., a Wisconsin corporation
and registered bank holding company founded in May 1996, and its
wholly-owned subsidiary Investors Community Bank, a
Wisconsin-chartered bank, are headquartered in Manitowoc,
Wisconsin. The state of Wisconsin is often referred to as
“America’s Dairyland,” and one of the niches it has developed is
providing financial services to agricultural businesses statewide,
with a primary focus on dairy-related lending. It also serves
business and retail customers throughout Wisconsin, with a focus on
northeastern and central Wisconsin. Its customers are served
from its full-service locations in Manitowoc, Appleton, Green Bay,
and Stevens Point and its loan production offices in Darlington,
Eau Claire, Fond du Lac, and Sheboygan.
Forward-Looking Statements
This press release includes "forward-looking
statements” within the meaning of such term in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are subject to known and unknown risks and
uncertainties, many of which may be beyond the Company’s control.
The Company cautions you that the forward-looking statements
presented in this press release are not a guarantee of future
events, and that actual events may differ materially from those
made in or suggested by the forward-looking information contained
in this press release. Forward-looking statements generally
can be identified by the use of forward-looking terminology such as
"may," "plan," "seek," "will," "expect," "intend," "estimate,"
"anticipate," "believe" or "continue" or the negative thereof or
variations thereon or similar terminology. Factors that may cause
actual results to differ materially from those made or suggested by
the forward-looking statements contained in this press release
include those identified in the Company’s most recent annual report
on Form 10-K and subsequent filings with the Securities and
Exchange Commission. Any forward-looking statements presented
herein are made only as of the date of this press release, and the
Company does not undertake any obligation to update or revise any
forward-looking statements to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
Investor Relations ContactGlen L. StiteleyEVP -
CFO, Investors Community BankPhone: (920) 686-5658 Email:
gstiteley@icbk.com
County Bancorp,
Inc.Consolidated Financial
Summary(Unaudited) |
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands, except per share data) |
|
Period-End Balance
Sheet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
129,011 |
|
|
$ |
120,845 |
|
|
$ |
116,251 |
|
|
$ |
62,426 |
|
|
$ |
61,087 |
|
Securities available
for sale, at fair value |
|
|
160,361 |
|
|
|
154,962 |
|
|
|
158,561 |
|
|
|
192,210 |
|
|
|
195,945 |
|
Loans held for
sale |
|
|
2,151 |
|
|
|
4,192 |
|
|
|
7,448 |
|
|
|
2,750 |
|
|
|
2,949 |
|
Agricultural loans |
|
|
659,725 |
|
|
|
673,742 |
|
|
|
713,602 |
|
|
|
722,107 |
|
|
|
724,508 |
|
Commercial loans |
|
|
331,723 |
|
|
|
360,132 |
|
|
|
383,542 |
|
|
|
403,490 |
|
|
|
415,672 |
|
Multi-family real
estate loans |
|
|
41,070 |
|
|
|
43,487 |
|
|
|
46,683 |
|
|
|
52,974 |
|
|
|
62,321 |
|
Residential real estate
loans |
|
|
2,888 |
|
|
|
3,183 |
|
|
|
3,753 |
|
|
|
4,172 |
|
|
|
4,522 |
|
Installment and
consumer other |
|
|
367 |
|
|
|
223 |
|
|
|
252 |
|
|
|
220 |
|
|
|
272 |
|
Total loans |
|
|
1,035,773 |
|
|
|
1,080,767 |
|
|
|
1,147,832 |
|
|
|
1,182,963 |
|
|
|
1,207,295 |
|
Allowance for loan
losses |
|
|
(15,267 |
) |
|
|
(15,065 |
) |
|
|
(16,258 |
) |
|
|
(17,493 |
) |
|
|
(16,505 |
) |
Net loans |
|
|
1,020,506 |
|
|
|
1,065,702 |
|
|
|
1,131,574 |
|
|
|
1,165,470 |
|
|
|
1,190,790 |
|
Other assets |
|
|
66,485 |
|
|
|
69,263 |
|
|
|
70,812 |
|
|
|
68,532 |
|
|
|
70,256 |
|
Total Assets |
|
$ |
1,378,514 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
$ |
1,491,388 |
|
|
$ |
1,521,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
138,489 |
|
|
$ |
117,224 |
|
|
$ |
111,022 |
|
|
$ |
101,434 |
|
|
$ |
121,436 |
|
NOW accounts and
interest checking |
|
|
63,781 |
|
|
|
56,637 |
|
|
|
54,253 |
|
|
|
49,902 |
|
|
|
51,779 |
|
Savings |
|
|
15,708 |
|
|
|
6,981 |
|
|
|
6,621 |
|
|
|
6,210 |
|
|
|
5,770 |
|
Money market
accounts |
|
|
242,539 |
|
|
|
248,608 |
|
|
|
239,337 |
|
|
|
225,975 |
|
|
|
218,929 |
|
Time deposits |
|
|
375,100 |
|
|
|
388,759 |
|
|
|
387,899 |
|
|
|
376,034 |
|
|
|
356,484 |
|
Brokered deposits |
|
|
166,340 |
|
|
|
206,474 |
|
|
|
256,475 |
|
|
|
269,917 |
|
|
|
308,504 |
|
National time
deposits |
|
|
99,485 |
|
|
|
118,070 |
|
|
|
149,570 |
|
|
|
146,805 |
|
|
|
160,445 |
|
Total deposits |
|
|
1,101,442 |
|
|
|
1,142,753 |
|
|
|
1,205,177 |
|
|
|
1,176,277 |
|
|
|
1,223,347 |
|
FHLB advances |
|
|
44,400 |
|
|
|
44,400 |
|
|
|
59,400 |
|
|
|
100,400 |
|
|
|
89,400 |
|
Subordinated
debentures |
|
|
44,858 |
|
|
|
44,820 |
|
|
|
44,781 |
|
|
|
44,742 |
|
|
|
44,703 |
|
Other liabilities |
|
|
16,051 |
|
|
|
14,239 |
|
|
|
12,564 |
|
|
|
11,952 |
|
|
|
11,293 |
|
Total Liabilities |
|
|
1,206,751 |
|
|
|
1,246,212 |
|
|
|
1,321,922 |
|
|
|
1,333,371 |
|
|
|
1,368,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
171,763 |
|
|
|
168,752 |
|
|
|
162,724 |
|
|
|
158,017 |
|
|
|
152,284 |
|
Total
Liabilities and Shareholders'
Equity |
|
$ |
1,378,514 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
$ |
1,491,388 |
|
|
$ |
1,521,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Price
Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High -
Quarter-to-date |
|
$ |
27.98 |
|
|
$ |
20.99 |
|
|
$ |
18.92 |
|
|
$ |
19.69 |
|
|
$ |
26.00 |
|
Low -
Quarter-to-date |
|
$ |
18.76 |
|
|
$ |
16.80 |
|
|
$ |
16.24 |
|
|
$ |
16.74 |
|
|
$ |
17.37 |
|
Market price -
Quarter-end |
|
$ |
25.63 |
|
|
$ |
19.62 |
|
|
$ |
17.09 |
|
|
$ |
17.60 |
|
|
$ |
17.37 |
|
Book value per
share |
|
$ |
24.32 |
|
|
$ |
23.89 |
|
|
$ |
23.03 |
|
|
$ |
22.36 |
|
|
$ |
21.50 |
|
Tangible book value per
share (1) |
|
$ |
23.54 |
|
|
$ |
23.10 |
|
|
$ |
22.23 |
|
|
$ |
21.54 |
|
|
$ |
20.68 |
|
Common shares
outstanding |
|
|
6,734,132 |
|
|
|
6,727,908 |
|
|
|
6,717,908 |
|
|
|
6,709,254 |
|
|
|
6,709,480 |
|
(1)
This is a non-GAAP financial measure. A reconciliation to
GAAP is included below.
|
|
For the Three Months Ended |
|
|
For the Year Ended |
|
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
December 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands, except per share data) |
|
Selected Income
Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
|
13,691 |
|
|
$ |
15,030 |
|
|
$ |
15,484 |
|
|
$ |
15,501 |
|
|
$ |
15,536 |
|
|
$ |
59,706 |
|
|
$ |
58,706 |
|
Taxable securities |
|
|
1,106 |
|
|
|
1,117 |
|
|
|
1,177 |
|
|
|
1,186 |
|
|
|
1,168 |
|
|
|
4,586 |
|
|
|
3,727 |
|
Tax-exempt securities |
|
|
- |
|
|
|
- |
|
|
|
82 |
|
|
|
175 |
|
|
|
183 |
|
|
|
257 |
|
|
|
698 |
|
Federal funds sold and other |
|
|
442 |
|
|
|
612 |
|
|
|
465 |
|
|
|
264 |
|
|
|
223 |
|
|
|
1,783 |
|
|
|
1,086 |
|
Total interest and dividend
income |
|
|
15,239 |
|
|
|
16,759 |
|
|
|
17,208 |
|
|
|
17,126 |
|
|
|
17,110 |
|
|
|
66,332 |
|
|
|
64,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
4,781 |
|
|
|
5,574 |
|
|
|
5,678 |
|
|
|
5,424 |
|
|
|
5,273 |
|
|
|
21,457 |
|
|
|
18,649 |
|
FHLB advances and other borrowed funds |
|
|
225 |
|
|
|
246 |
|
|
|
415 |
|
|
|
464 |
|
|
|
427 |
|
|
|
1,350 |
|
|
|
1,809 |
|
Subordinated debentures |
|
|
695 |
|
|
|
687 |
|
|
|
683 |
|
|
|
678 |
|
|
|
667 |
|
|
|
2,743 |
|
|
|
1,804 |
|
Total interest expense |
|
|
5,701 |
|
|
|
6,507 |
|
|
|
6,776 |
|
|
|
6,566 |
|
|
|
6,367 |
|
|
|
25,550 |
|
|
|
22,262 |
|
Net interest income |
|
|
9,538 |
|
|
|
10,252 |
|
|
|
10,432 |
|
|
|
10,560 |
|
|
|
10,743 |
|
|
|
40,782 |
|
|
|
41,955 |
|
Provision for loan losses |
|
|
(51 |
) |
|
|
(1,154 |
) |
|
|
876 |
|
|
|
752 |
|
|
|
1,572 |
|
|
|
423 |
|
|
|
3,195 |
|
Net interest income after provision for loan losses |
|
|
9,589 |
|
|
|
11,406 |
|
|
|
9,556 |
|
|
|
9,808 |
|
|
|
9,171 |
|
|
|
40,359 |
|
|
|
38,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services charges |
|
|
549 |
|
|
|
348 |
|
|
|
407 |
|
|
|
353 |
|
|
|
470 |
|
|
|
1,657 |
|
|
|
1,674 |
|
Gain (loss) on sale of loans, net |
|
|
34 |
|
|
|
87 |
|
|
|
26 |
|
|
|
(1 |
) |
|
|
54 |
|
|
|
146 |
|
|
|
172 |
|
Loan servicing fees |
|
|
1,778 |
|
|
|
1,677 |
|
|
|
1,563 |
|
|
|
1,519 |
|
|
|
1,553 |
|
|
|
6,537 |
|
|
|
6,012 |
|
Loan servicing right origination |
|
|
1,146 |
|
|
|
1,741 |
|
|
|
346 |
|
|
|
228 |
|
|
|
7 |
|
|
|
3,461 |
|
|
|
98 |
|
Income on OREO |
|
|
54 |
|
|
|
10 |
|
|
|
40 |
|
|
|
26 |
|
|
|
83 |
|
|
|
130 |
|
|
|
256 |
|
Gain on sale of securities |
|
|
- |
|
|
|
- |
|
|
|
341 |
|
|
|
- |
|
|
|
- |
|
|
|
341 |
|
|
|
- |
|
Other |
|
|
161 |
|
|
|
171 |
|
|
|
164 |
|
|
|
625 |
|
|
|
153 |
|
|
|
1,121 |
|
|
|
621 |
|
Total non-interest
income |
|
|
3,722 |
|
|
|
4,034 |
|
|
|
2,887 |
|
|
|
2,750 |
|
|
|
2,320 |
|
|
|
13,393 |
|
|
|
8,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
5,696 |
|
|
|
4,735 |
|
|
|
4,199 |
|
|
|
4,482 |
|
|
|
4,059 |
|
|
|
19,112 |
|
|
|
16,785 |
|
Occupancy |
|
|
417 |
|
|
|
313 |
|
|
|
283 |
|
|
|
389 |
|
|
|
245 |
|
|
|
1,402 |
|
|
|
1,059 |
|
Information processing |
|
|
645 |
|
|
|
683 |
|
|
|
591 |
|
|
|
563 |
|
|
|
641 |
|
|
|
2,482 |
|
|
|
2,164 |
|
Professional fees |
|
|
371 |
|
|
|
483 |
|
|
|
417 |
|
|
|
399 |
|
|
|
497 |
|
|
|
1,670 |
|
|
|
1,522 |
|
Business development |
|
|
335 |
|
|
|
351 |
|
|
|
347 |
|
|
|
325 |
|
|
|
259 |
|
|
|
1,358 |
|
|
|
1,076 |
|
OREO expenses |
|
|
59 |
|
|
|
57 |
|
|
|
121 |
|
|
|
51 |
|
|
|
106 |
|
|
|
288 |
|
|
|
444 |
|
Writedown of OREO |
|
|
376 |
|
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
|
688 |
|
|
|
626 |
|
|
|
873 |
|
Net loss (gain) on sale of OREO |
|
|
(231 |
) |
|
|
160 |
|
|
|
9 |
|
|
|
(136 |
) |
|
|
(54 |
) |
|
|
(198 |
) |
|
|
(189 |
) |
Depreciation and amortization |
|
|
319 |
|
|
|
319 |
|
|
|
328 |
|
|
|
337 |
|
|
|
408 |
|
|
|
1,303 |
|
|
|
1,348 |
|
Other |
|
|
2,278 |
|
|
|
567 |
|
|
|
901 |
|
|
|
895 |
|
|
|
689 |
|
|
|
4,641 |
|
|
|
3,201 |
|
Total non-interest
expense |
|
|
10,265 |
|
|
|
7,668 |
|
|
|
7,446 |
|
|
|
7,305 |
|
|
|
7,538 |
|
|
|
32,684 |
|
|
|
28,283 |
|
Income before
income taxes |
|
|
3,046 |
|
|
|
7,772 |
|
|
|
4,997 |
|
|
|
5,253 |
|
|
|
3,953 |
|
|
|
21,068 |
|
|
|
19,310 |
|
Income tax expense |
|
|
(258 |
) |
|
|
2,090 |
|
|
|
1,293 |
|
|
|
1,491 |
|
|
|
1,123 |
|
|
|
4,616 |
|
|
|
5,059 |
|
NET
INCOME |
|
$ |
3,304 |
|
|
$ |
5,682 |
|
|
$ |
3,704 |
|
|
$ |
3,762 |
|
|
$ |
2,830 |
|
|
$ |
16,452 |
|
|
$ |
14,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.47 |
|
|
$ |
0.82 |
|
|
$ |
0.53 |
|
|
$ |
0.54 |
|
|
$ |
0.41 |
|
|
$ |
2.37 |
|
|
$ |
2.06 |
|
Diluted |
|
$ |
0.47 |
|
|
$ |
0.82 |
|
|
$ |
0.53 |
|
|
$ |
0.54 |
|
|
$ |
0.40 |
|
|
$ |
2.36 |
|
|
$ |
2.04 |
|
Dividends declared |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.07 |
|
|
$ |
0.20 |
|
|
$ |
0.28 |
|
|
|
For the Three Months Ended |
|
|
For the Year Ended |
|
|
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
December 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands, except share data) |
|
Other
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets(1) |
|
|
0.96 |
% |
|
|
1.57 |
% |
|
|
1.00 |
% |
|
|
1.00 |
% |
|
|
0.75 |
% |
|
|
1.13 |
% |
|
|
0.96 |
% |
Return on average
shareholders' equity(1) |
|
|
7.74 |
% |
|
|
13.73 |
% |
|
|
9.24 |
% |
|
|
9.78 |
% |
|
|
7.58 |
% |
|
|
10.10 |
% |
|
|
9.50 |
% |
Return on average
common shareholders' equity (1)(2) |
|
|
7.83 |
% |
|
|
14.14 |
% |
|
|
9.41 |
% |
|
|
9.99 |
% |
|
|
7.70 |
% |
|
|
10.31 |
% |
|
|
9.74 |
% |
Efficiency ratio
(1)(2) |
|
|
76.32 |
% |
|
|
52.55 |
% |
|
|
55.38 |
% |
|
|
55.91 |
% |
|
|
52.85 |
% |
|
|
59.92 |
% |
|
|
54.42 |
% |
Tangible common equity
to tangible assets (2) |
|
|
11.54 |
% |
|
|
11.03 |
% |
|
|
10.10 |
% |
|
|
9.73 |
% |
|
|
9.16 |
% |
|
|
11.54 |
% |
|
|
9.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations |
|
$ |
3,304 |
|
|
$ |
5,682 |
|
|
$ |
3,704 |
|
|
$ |
3,762 |
|
|
$ |
2,830 |
|
|
$ |
16,452 |
|
|
$ |
14,251 |
|
Less: Preferred
stock dividends |
|
|
117 |
|
|
|
120 |
|
|
|
118 |
|
|
|
117 |
|
|
|
111 |
|
|
|
472 |
|
|
|
413 |
|
Income available to
common shareholders |
|
$ |
3,187 |
|
|
$ |
5,562 |
|
|
$ |
3,586 |
|
|
$ |
3,645 |
|
|
$ |
2,719 |
|
|
$ |
15,980 |
|
|
$ |
13,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares issued |
|
|
7,173,290 |
|
|
|
7,168,785 |
|
|
|
7,159,072 |
|
|
|
7,153,174 |
|
|
|
7,143,204 |
|
|
|
7,163,650 |
|
|
|
7,132,985 |
|
Less: Weighted
average treasury shares |
|
|
443,920 |
|
|
|
443,920 |
|
|
|
443,920 |
|
|
|
443,729 |
|
|
|
443,694 |
|
|
|
443,873 |
|
|
|
442,206 |
|
Plus: Weighted average
non- vested restricted stock units |
|
|
32,125 |
|
|
|
32,125 |
|
|
|
30,483 |
|
|
|
16,260 |
|
|
|
13,041 |
|
|
|
27,804 |
|
|
|
13,272 |
|
Weighted average number
of common shares outstanding |
|
|
6,761,495 |
|
|
|
6,756,990 |
|
|
|
6,745,635 |
|
|
|
6,725,705 |
|
|
|
6,712,551 |
|
|
|
6,747,581 |
|
|
|
6,704,051 |
|
Effect of dilutive
options |
|
|
44,630 |
|
|
|
19,160 |
|
|
|
20,731 |
|
|
|
21,323 |
|
|
|
45,116 |
|
|
|
21,344 |
|
|
|
68,876 |
|
Weighted average
number of common shares outstanding used to
calculate diluted earnings per common share |
|
|
6,806,125 |
|
|
|
6,776,150 |
|
|
|
6,766,366 |
|
|
|
6,747,028 |
|
|
|
6,757,667 |
|
|
|
6,768,925 |
|
|
|
6,772,927 |
|
- Annualized
- This is a non-GAAP financial measure. A reconciliation to
GAAP is included below.
|
|
For the Three Months Ended |
|
|
For the Year Ended |
|
Non-GAAP
Financial Measures: |
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
December 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands) |
|
Return on average
common shareholders'
equity reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
shareholders' equity |
|
|
7.74 |
% |
|
|
13.73 |
% |
|
|
9.24 |
% |
|
|
9.78 |
% |
|
|
7.58 |
% |
|
|
10.10 |
% |
|
|
9.50 |
% |
Effect of excluding
average preferred shareholders' equity |
|
|
0.09 |
% |
|
|
0.41 |
% |
|
|
0.17 |
% |
|
|
0.21 |
% |
|
|
0.12 |
% |
|
|
0.21 |
% |
|
|
0.24 |
% |
Return on average common shareholders' equity |
|
|
7.83 |
% |
|
|
14.14 |
% |
|
|
9.41 |
% |
|
|
9.99 |
% |
|
|
7.70 |
% |
|
|
10.31 |
% |
|
|
9.74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio GAAP
to non-GAAP reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense |
|
$ |
10,265 |
|
|
$ |
7,668 |
|
|
$ |
7,446 |
|
|
$ |
7,305 |
|
|
$ |
7,538 |
|
|
$ |
32,684 |
|
|
$ |
28,283 |
|
Less: net gain (loss)
on sales and write-downs of OREO |
|
|
(145 |
) |
|
|
(160 |
) |
|
|
(259 |
) |
|
|
136 |
|
|
|
(634 |
) |
|
|
(428 |
) |
|
|
(642 |
) |
Adjusted non-interest expense (non-GAAP) |
|
$ |
10,120 |
|
|
$ |
7,508 |
|
|
$ |
7,187 |
|
|
$ |
7,441 |
|
|
$ |
6,904 |
|
|
$ |
32,256 |
|
|
$ |
27,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
$ |
9,538 |
|
|
$ |
10,252 |
|
|
$ |
10,432 |
|
|
$ |
10,560 |
|
|
$ |
10,743 |
|
|
$ |
40,782 |
|
|
$ |
41,955 |
|
Non-interest
income |
|
|
3,722 |
|
|
|
4,034 |
|
|
|
2,887 |
|
|
|
2,750 |
|
|
|
2,320 |
|
|
|
13,393 |
|
|
|
8,833 |
|
Less: net gain on sales
of securities |
|
|
- |
|
|
|
- |
|
|
|
(341 |
) |
|
|
- |
|
|
|
- |
|
|
|
(341 |
) |
|
|
- |
|
Operating revenue |
|
$ |
13,260 |
|
|
$ |
14,286 |
|
|
$ |
12,978 |
|
|
$ |
13,310 |
|
|
$ |
13,063 |
|
|
$ |
53,834 |
|
|
$ |
50,788 |
|
Efficiency ratio |
|
|
76.32 |
% |
|
|
52.55 |
% |
|
|
55.38 |
% |
|
|
55.91 |
% |
|
|
52.85 |
% |
|
|
59.92 |
% |
|
|
54.42 |
% |
Non-GAAP
Financial Measures: |
|
December 31,2019 |
|
|
September 30,2019 |
|
|
June 30,2019 |
|
|
March 31,2019 |
|
|
December 31,2018 |
|
|
|
(dollars in thousands, except per share data) |
|
Tangible book value
per share and tangible common equity to
tangible assets
reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity |
|
$ |
163,763 |
|
|
$ |
160,752 |
|
|
$ |
154,724 |
|
|
$ |
150,017 |
|
|
$ |
144,284 |
|
Less: Goodwill |
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
Less: Core deposit
intangible, net of amortization |
|
|
225 |
|
|
|
286 |
|
|
|
354 |
|
|
|
430 |
|
|
|
513 |
|
Tangible common equity (non-GAAP) |
|
$ |
158,500 |
|
|
$ |
155,428 |
|
|
$ |
149,332 |
|
|
$ |
144,549 |
|
|
$ |
138,733 |
|
Common shares
outstanding |
|
|
6,734,132 |
|
|
|
6,727,908 |
|
|
|
6,717,908 |
|
|
|
6,709,254 |
|
|
|
6,709,480 |
|
Tangible book value per
share |
|
$ |
23.54 |
|
|
$ |
23.10 |
|
|
$ |
22.23 |
|
|
$ |
21.54 |
|
|
$ |
20.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,378,514 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
$ |
1,491,388 |
|
|
$ |
1,521,027 |
|
Less: Goodwill |
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
Less: Core deposit
intangible, net of amortization |
|
|
225 |
|
|
|
286 |
|
|
|
354 |
|
|
|
603 |
|
|
|
701 |
|
Tangible assets
(non-GAAP) |
|
$ |
1,373,251 |
|
|
$ |
1,409,640 |
|
|
$ |
1,479,254 |
|
|
$ |
1,485,747 |
|
|
$ |
1,515,288 |
|
Tangible common equity to tangible assets |
|
|
11.54 |
% |
|
|
11.03 |
% |
|
|
10.10 |
% |
|
|
9.73 |
% |
|
|
9.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adverse classified
asset ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Substandard loans |
|
$ |
94,917 |
|
|
$ |
105,911 |
|
|
$ |
117,765 |
|
|
$ |
107,492 |
|
|
$ |
120,887 |
|
Less: Impaired
performing restructured loans |
|
|
(8,925 |
) |
|
|
(8,672 |
) |
|
|
(8,276 |
) |
|
|
(6,382 |
) |
|
|
(5,078 |
) |
Net substandard loans |
|
$ |
85,992 |
|
|
$ |
97,239 |
|
|
$ |
109,489 |
|
|
$ |
101,110 |
|
|
$ |
115,809 |
|
Other real estate
owned |
|
|
5,521 |
|
|
|
7,252 |
|
|
|
8,693 |
|
|
|
5,019 |
|
|
|
6,568 |
|
Substandard unused
commitments |
|
|
2,849 |
|
|
|
991 |
|
|
|
1,458 |
|
|
|
976 |
|
|
|
1,625 |
|
Less: Substandard
government guarantees |
|
|
(7,892 |
) |
|
|
(7,746 |
) |
|
|
(7,821 |
) |
|
|
(5,864 |
) |
|
|
(7,111 |
) |
Total adverse classified assets (non-GAAP) |
|
$ |
86,470 |
|
|
$ |
97,736 |
|
|
$ |
111,819 |
|
|
$ |
101,241 |
|
|
$ |
116,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
(Bank) |
|
$ |
204,240 |
|
|
$ |
201,967 |
|
|
$ |
196,036 |
|
|
$ |
191,287 |
|
|
$ |
185,458 |
|
Accumulated other
comprehensive loss (gain) on available for sale
securities |
|
|
(2,505 |
) |
|
|
(3,016 |
) |
|
|
(2,166 |
) |
|
|
(436 |
) |
|
|
2,221 |
|
Allowance for loan losses |
|
|
15,267 |
|
|
|
15,065 |
|
|
|
16,258 |
|
|
|
17,493 |
|
|
|
16,505 |
|
Allowance for unused commitments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
475 |
|
Adjusted total equity (non-GAAP) |
|
$ |
217,002 |
|
|
$ |
214,016 |
|
|
$ |
210,128 |
|
|
$ |
208,344 |
|
|
$ |
204,659 |
|
Adverse classified asset ratio |
|
|
39.85 |
% |
|
|
45.67 |
% |
|
|
53.21 |
% |
|
|
48.59 |
% |
|
|
57.12 |
% |
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