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County Bancorp, Inc. Announces Third Quarter Net Income of $3.1 Million

3rd Quarter 2016 Highlights

  • Total loan growth of $32.2 million
  • Net interest margin of 3.57%
  • Net income of $3.1 million
  • Total deposit growth of $36.9 million

MANITOWOC, Wis., Oct. 20, 2016 (GLOBE NEWSWIRE) -- County Bancorp, Inc. (NASDAQ:ICBK), the holding company of Investors Community Bank, a commercial bank headquartered in Manitowoc, Wisconsin, reported net income of $3.1 million, or $0.46 diluted earnings per share, for the third quarter of 2016, compared to net income of $3.3 million, or $0.55 diluted earnings per share, for the third quarter of 2015. This represents a return on average assets of 1.04% for the three months ended September 30, 2016 compared to 1.63% for the three months ended September 30, 2015.

“We’ve completed our first full quarter since acquiring Fox River Valley Bancorp, Inc. and The Business Bank, and our strong performance has been a testament to a successful integration process. As we move forward, we will continue to build brand awareness in the new markets we serve and are very excited about our future growth opportunities,” said Tim Schneider, President of County Bancorp, Inc. and CEO of Investors Community Bank. “Highlights for the quarter include strong net income, stabilization of our non-interest expense as most of the one-time merger expenses occurred in the second quarter, and another period of solid loan growth. We have also made meaningful investments in people and infrastructure that are making positive impacts in our operations and results. We’ve added solid talent to expand our team in all markets we serve, which is aligned with our belief that ‘People Bank with People not with Banks’.”

Total assets at September 30, 2016 were $1.2 billion, an increase of $56.6 million over total assets as of June 30, 2016 and an increase of $372.4 million over total assets as of September 30, 2015. Total loans increased $32.2 million to $992.5 million at September 30, 2016 which represents a 3.3% increase over June 30, 2016. Total deposits at September 30, 2016 were $929.4 million, an increase of $36.9 million over total deposits as of June 30, 2016 and an increase of $293.2 million as of September 30, 2015.

Non-performing assets decreased to $24.8 million at September 30, 2016, from $26.7 million June 30, 2016, which represents a 7.2% improvement.

Net income for the quarters ended September 30, 2016 and 2015 were $3.1 million and $3.3 million, respectively. The decrease in net income of $0.2 million between the third quarters of 2016 and 2015 is primarily the result of a $0.9 million recovery of loan losses recognized as a credit to income during the third quarter of 2015 compared to a provision for loan losses of $1.1 million during the third quarter of 2016. The decrease in net income is also attributable to an increase in non-interest expense. Partially offsetting these effects was a $3.3 million increase in net interest income between the third quarter of 2016 and 2015 primarily the result of the merger. Net interest margin increased to 3.57% for the three months ended September 30, 2016, compared to 3.49% for the three months ended September 30, 2015.

Net income for the nine months ended September 30, 2016 was $7.2 million compared to $8.1 million for the nine months ended September 30, 2015. This decrease is the result of increased non-interest expense, which includes $2.6 million in merger-related expenses that were incurred during the first nine months of 2016, which had a $1.6 million effect on net income, net of taxes. Net interest income increased 32.0% to $25.4 million for the nine months ended September 30, 2016 from $19.3 million for the nine months ended September 30, 2015.

Earnings for the nine months ended September 30, 2016 were affected by one-time merger-related expenses from the acquisition of Fox River Valley Bancorp, Inc., and its wholly owned subsidiary, The Business Bank, which was completed on May 13, 2016. The non-GAAP information presented below should be read in conjunction with the Company’s balance sheet and statement of operations. After excluding the effects of $2.6 million ($1.6 million net of taxes) of expenses relating to the merger with Fox River Valley Bancorp, Inc., adjusted diluted earnings per share (non-GAAP) for the nine months ended September 30, 2016 were $1.38, compared to $1.34 for the nine months ended September 30, 2015.

3Q16 YTD Diluted EPS 3Q15 YTD Diluted EPS
Net income, excluding merger related expenses $8,826 $1.38 $8,074 $1.34
Merger related expenses, net of taxes 1,603 0.26 - -
Net income $7,223 $1.12 $8,074 $1.34

Provision for loan losses for the nine months ended September 30, 2016 was $2.4 million compared to a credit provision of $1.3 million for the nine months ended September 30, 2015. The increased provision resulted from a one-time recovery that took place in 2015 and from loan growth in 2016.

About County Bancorp, Inc.

County Bancorp, Inc., a Wisconsin corporation and registered bank holding company founded in May 1996, and our 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 we have developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending. We also serve business and retail customers throughout Wisconsin, with a focus on northeastern and central Wisconsin. Our customers are served from our full-service locations in Manitowoc, Appleton, Green Bay, and Stevens Point and our 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 our control. We caution you that the forward-looking information presented in this press release is 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. In addition, 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 information contained in this press release include those identified in County Bancorp, Inc.’s most recent annual report on Form 10-K and subsequent SEC filings. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

County Bancorp, Inc.
Consolidated Financial Summary (Unaudited)

September 30,
2016
June 30,
2016
March 31,
2016
September 30,
2015
(dollars in thousands, except per share data)
Selected Balance Sheet Data:
Total assets $1,217,149 $1,160,589 $909,557 $844,791
Total loans 992,478 960,310 775,848 704,029
Allowance for loan losses 11,626 10,791 11,218 9,833
Deposits 929,448 892,535 693,181 636,221
Shareholders' equity 128,794 125,789 109,378 104,436
Common equity 120,794 117,789 101,378 96,436
Stock Price Information:
High - Year-to-date $22.80 $22.80 $21.80 $20.00
Low - Year-to-date $18.25 $18.25 $18.25 $16.46
Market price per common share $20.01 $20.62 $20.08 $19.14
Common shares outstanding 6,532,776 6,501,031 5,786,701 5,733,919
Non-Performing Assets:
Nonaccrual loans $22,502 $23,942 $19,564 $11,172
Other real estate owned 2,299 2,789 2,947 3,024
Total non-performing assets $24,801 $26,731 $22,511 $14,196
Restructured loans not on nonaccrual $4,877 $3,583 $602 $617
Non-performing assets as a % of total loans 2.50% 2.78% 2.90% 2.02%
Non-performing assets as a % of total assets 2.04% 2.30% 2.47% 1.68%
Allowance for loan losses as a % of nonperforming assets 46.88% 40.37% 49.83% 69.27%
Allowance for loan losses as a % of total loans 1.17% 1.12% 1.45% 1.40%
Net charge-offs (recoveries) year-to-date $1,195 $896 $(1) $(555)
Provision for loan loss year-to-date $2,416 $1,282 $812 $(1,325)


For the Three Months Ended For the Nine Months Ended
September 30,
2016
September 30,
2015
September 30,
2016
September 30,
2015
(dollars in thousands, except per share data)
Selected Income Statement Data:
Net interest income $10,176 $6,871 $25,417 $19,261
Provision for loan losses 1,134 (867) 2,416 (1,325)
Net interest income after provision for loan losses 9,042 7,738 23,001 20,586
Non-interest income 2,014 1,723 6,709 5,310
Non-interest expense 6,105 4,135 18,149 12,983
Income tax expense 1,849 1,996 4,338 4,839
Net income $3,102 $3,330 $7,223 $8,074
Income before provision for loan losses, merger expense, and income tax expense (1) $6,181 $4,459 $16,543 $11,588
Return on average assets 1.04% 1.63% 0.92% 1.36%
Return on average shareholders' equity 9.63% 11.32% 8.09% 9.44%
Return on average common shareholders' equity (1) 10.00% 13.58% 9.67% 11.28%
Efficiency ratio (1) 48.29% 48.42% 55.83% 51.04%
Per Common Share Data:
Basic $0.46 $0.56 $1.13 $1.37
Diluted $0.46 $0.55 $1.12 $1.34
Dividends declared $0.05 $0.04 $0.15 $0.12
(1) This is a non-GAAP financial measure. A reconciliation to GAAP is included below.


For the Three Months Ended For the Nine Months Ended
September 30,
2016
September 30,
2015
September 30,
2016
September 30,
2015
(dollars in thousands)
Non-interest income:
Service charges $288 $238 $976 $744
Gain on sale of loans 79 44 240 166
Loan servicing fees 1,404 1,236 4,017 3,648
Loan servicing rights 54 (51) 1,020 (25)
Income on OREO 19 33 33 243
Other 170 223 423 534
Total $2,014 $1,723 $6,709 $5,310
Non-interest expense:
Employee compensation and benefits $3,461 $2,643 $9,554 $8,232
Occupancy 157 100 364 260
Information processing 288 183 2,045 527
Professional fees 304 513 1,337 900
Business development 167 147 452 371
FDIC assessment 163 101 424 321
OREO expenses 60 121 153 261
Writedown of OREO 250 - 334 182
Net loss (gain) on OREO (32) (26) (121) 260
Other 1,287 353 3,607 1,669
Total $6,105 $4,135 $18,149 $12,983
Non-GAAP Financial Measures
Return on average common shareholders' equity reconciliation:
Return on average shareholders' equity 9.63% 11.32% 8.09% 9.44%
Effect of excluding average preferred shareholders' equity 0.37% 2.26% 1.58% 1.84%
Return on average common shareholders' equity 10.00% 13.58% 9.67% 11.28%
Efficiency ratio GAAP to non-GAAP reconciliation:
Non-interest expense $6,105 $4,135 $18,149 $12,983
Less: net loss on sales and write-downs of OREO (218) 26 (213) (442)
Adjusted non-interest expense (non-GAAP) $5,887 $4,161 $17,936 $12,541
Net interest income $10,176 $6,871 $25,417 $19,261
Non-interest income 2,014 1,723 6,709 5,310
Operating revenue $12,190 $8,594 $32,126 $24,571
Efficiency ratio 48.29% 48.42% 55.83% 51.04%
Income before provision for loan losses, merger expense, and income tax expense reconciliation:
Income before income taxes $4,951 $5,326 $11,561 $12,913
Provision for loan losses 1,134 (867) 2,416 (1,325)
Merger expenses (one-time) 96 - 2,566 -
Income before provision for loan losses, merger expense, and income tax expense $6,181 $4,459 $16,543 $11,588


Three Months Ended
September 30, 2016 September 30, 2015
Average Balance (1) Income/ Expense Yields/ Rates Average Balance (1) Income/ Expense Yields/ Rates
(dollars in thousands)
Assets
Investment securities $126,319 $510 1.61% $84,528 $359 1.70%
Loans (2) 993,156 12,245 4.93% 691,049 8,393 4.86%
Interest bearing deposits due from other banks 21,480 48 0.89% 12,741 11 0.35%
Total interest-earning assets $1,140,955 $12,803 4.49% $788,318 $8,763 4.45%
Allowance for loan losses (11,499) (10,462)
Other assets 63,588 40,043
Total assets $1,193,044 $817,899
Liabilities
Savings, NOW, money market, interest checking $245,001 333 0.54% $162,719 194 0.48%
Time deposits 565,899 1,767 1.25% 395,967 1,381 1.40%
Total interest-bearing deposits $810,900 $2,100 1.04% $558,686 $1,575 1.13%
Other borrowings 2,287 35 6.15% 8,830 63 2.83%
FHLB advances 133,815 373 1.11% 52,058 157 1.20%
Junior subordinated debentures 15,407 119 3.09% 12,372 99 3.21%
Total interest-bearing liabilities $962,409 $2,627 1.09% $631,946 $1,894 1.20%
Non-interest-bearing deposits 93,758 60,196
Other liabilities 8,041 8,099
Total liabilities $1,064,208 $700,241
SBLF preferred stock (3) - 15,000
Shareholders' equity 128,836 102,658
Total liabilities and equity $1,193,044 $817,899
Net interest income $10,176 $6,869
Interest rate spread (4) 3.40% 3.25%
Net interest margin (5) 3.57% 3.49%
Ratio of interest-earning assets to interest-bearing liabilities 1.19 1.25

(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) The SBLF preferred stock refers to our Noncumulative Perpetual Preferred Stock, Series C, issued to the U.S. Treasury through the U.S. Treasury’s Small Business Lending Fund program. This stock was redeemed on February 23, 2016.
(4) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.

Nine Months Ended
September 30, 2016 September 30, 2015
Average Balance (1) Income/ Expense Yields/ Rates Average Balance (1) Income/ Expense Yields/ Rates
(dollars in thousands)
Assets
Investment securities $104,021 $1,304 1.67% $82,187 $1,037 1.68%
Loans (2) 879,471 31,180 4.73% 661,797 23,687 4.77%
Interest bearing deposits due from other banks 18,664 137 0.98% 17,715 41 0.31%
Total interest-earning assets $1,002,156 $32,621 4.34% $761,699 $24,765 4.34%
Allowance for loan losses (11,203) (10,438)
Other assets 54,853 42,010
Total assets $1,045,806 $793,271
Liabilities
Savings, NOW, money market, interest checking $198,428 774 0.52% $154,046 543 0.47%
Time deposits 511,452 5,133 1.34% 395,005 3,998 1.35%
Total interest-bearing deposits $709,880 $5,907 1.11% $549,051 $4,541 1.10%
Other borrowings 3,094 128 5.52% 9,369 221 3.15%
FHLB advances 107,538 915 1.13% 39,276 403 1.37%
Junior subordinated debentures 13,917 254 2.43% 12,372 339 3.66%
Total interest-bearing liabilities $834,429 $7,204 1.15% $610,068 $5,504 1.20%
Non-interest-bearing deposits 81,480 61,236
Other liabilities 7,995 7,900
Total liabilities $923,904 $679,204
SBLF preferred stock (3) 2,912 15,000
Shareholders' equity 118,990 99,067
Total liabilities and equity $1,045,806 $793,271
Net interest income $25,417 $19,261
Interest rate spread (4) 3.19% 3.14%
Net interest margin (5) 3.38% 3.37%
Ratio of interest-earning assets to interest-bearing liabilities 1.20 1.25

(1) Average balances are calculated on amortized cost.
(2) Includes loan fee income, nonaccruing loan balances, and interest received on such loans.
(3) The SBLF preferred stock refers to our Noncumulative Perpetual Preferred Stock, Series C, issued to the U.S. Treasury through the U.S. Treasury’s Small Business Lending Fund program. This stock was redeemed on February 23, 2016.
(4) Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest bearing liabilities.
(5) Net interest margin represents net interest income divided by average total interest-earning assets.

Investor Relations Contact Timothy J. Schneider CEO, Investors Community Bank Phone: (920) 686-5604 Email: tschneider@investorscommunitybank.com

Source:County Bancorp, Inc.