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County Bancorp, Inc. Announces Fourth Quarter 2016 Net Income of $3.5 Million and Net Income of $10.7 Million for the Year 2016

Highlights

  • Net income of $3.5 million for the fourth quarter of 2016 and $10.7 million for the year 2016
  • Diluted earnings per share of $0.50 for the fourth quarter of 2016 and $1.61 for the year 2016
  • Net interest margin of 3.45% for the fourth quarter of 2016 and 3.35% for the year 2016
  • Organic loan growth of $161.0 million and total loan growth of $282.3 million during the year 2016

MANITOWOC, Wis., Jan. 19, 2017 (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 $3.5 million, or $0.50 diluted earnings per share, for the fourth quarter of 2016, compared to net income of $2.9 million, or $0.48 diluted earnings per share, for the fourth quarter of 2015. Net income for the year ended December 31, 2016 was $10.7 million compared to $11.0 million for the year ended December 31, 2015. This represents a return on average assets of 0.98% for the year ended December 31, 2016 compared to 1.35% for the year ended December 31, 2015.

“County Bancorp, Inc. finished 2016 on a solid note, with a strong fourth quarter from both income and loan growth standpoints,” said Tim Schneider, President of County Bancorp, Inc. and CEO of Investors Community Bank. “The year brought new opportunities as we completed our acquisition of Fox River Valley Bancorp, Inc., and based on the results of the past two quarters, we believe the merger has proven successful. Our company is driven by our people and the relationships they have with their clients. We continue to drive future success, adding people in key positions throughout the organization. Our historic tenets for success have always been sound underwriting, loan growth, and an efficient operating model, which result in strong bottom line returns. These tenets have not changed, and we will continue to strive for solid shareholder returns.”

Total assets at December 31, 2016 were $1.2 billion, an increase of $25.5 million over total assets as of September 30, 2016 and an increase of $357.8 million over total assets as of December 31, 2015. Total loans were $1.0 billion at December 31, 2016 which represents a $38.0 million increase over total loans at September 30, 2016 and a $282.3 million increase over total loans at December 31, 2015. Total deposits at December 31, 2016 were $977.5 million, an increase of $48.1 million over total deposits as of September 30, 2016 and an increase of $305.3 million over total deposits as of December 31, 2015.

Non-performing assets decreased to $22.9 million at December 31, 2016, from $27.5 million at December 31, 2015, which represents a 16.7% improvement.

Net income for the quarters ended December 31, 2016 and 2015 were $3.5 million and $2.9 million, respectively. The increase in net income of $0.6 million between the fourth quarters of 2016 and 2015 was primarily the result of increased loan volumes throughout 2016 and was partially offset by a $1.0 million increase in employee compensation and benefits and a $0.2 million increase in information processing expense resulting from the merger with Fox River Valley Bancorp, Inc. (“Fox River Valley”). Net interest margin increased to 3.45% for the three months ended December 31, 2016, compared to 3.34% for the three months ended December 31, 2015.

Net income for the year ended December 31, 2016 was $10.7 million compared to $11.0 million for the year ended December 31, 2015. This decrease was the result of increased non-interest expense during 2016, which included $2.6 million in merger-related expenses that were incurred during the year, which had a $1.6 million effect on net income, net of taxes. Net interest income increased 35.5% to $35.6 million for the year ended December 31, 2016 from $26.2 million for the year ended December 31, 2015.

Earnings for the year ended December 31, 2016 were affected by one-time merger-related expenses from the acquisition of Fox River Valley, 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, adjusted diluted earnings per share (non-GAAP) for the year ended December 31, 2016 were $1.86, compared to $1.82 for the year ended December 31, 2015.

Year Ended
December 31, 2016
Diluted Earnings per Share at December 31, 2016 Year Ended
December 31, 2015
Diluted Earnings per Share at December 31, 2015
Net income, excluding merger related expenses $12,313 $1.86 $10,974 $1.82
Merger related expenses, net of taxes 1,619 0.25 - -
Net income $10,694 $1.61 $10,974 $1.82

Provision for loan losses for the year ended December 31, 2016 was $3.0 million compared to a credit provision of $1.0 million for the year ended December 31, 2015. The increased provision resulted from increased loan growth in 2016 and a one-time recovery that took place in 2015.

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. 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 filings with the Securities and Exchange Commission. 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)

December 31,
2016
December 31,
2015
December 31,
2014
(dollars in thousands, except per share data)
Selected Balance Sheet Data:
Total assets $1,242,670 $884,889 $771,756
Total loans 1,030,486 748,189 648,122
Allowance for loan losses 12,645 10,405 10,603
Securities available for sale, at fair value 123,437 83,281 81,282
Goodwill 5,038 - -
Core deposit intangible, net of amortization 1,441 - -
Deposits 977,518 672,226 605,469
Shareholders' equity 131,288 107,024 80,043
Common equity 123,288 99,024 72,043
Stock Price Information:
High - Year-to-date $26.97 $24.20 N/A
Low - Year-to-date $18.25 $15.20 N/A
Market price per common share $26.97 $19.50 N/A
Average diluted shares of common stock year-to-date 6,415,204 5,778,584 4,580,917
Common shares outstanding 6,586,335 5,771,001 4,498,790
Non-Performing Assets:
Nonaccrual loans $20,107 $24,579 $11,555
Other real estate owned 2,763 2,872 7,137
Total non-performing assets $22,870 $27,451 $18,692
Restructured loans not on nonaccrual $4,300 $610 $846
Non-performing assets as a % of total loans 2.22% 3.67% 2.88%
Non-performing assets as a % of total assets 1.84% 3.10% 2.42%
Allowance for loan losses as a % of non-performing assets 55.29% 37.90% 56.72%
Allowance for loan losses as a % of total loans 1.23% 1.39% 1.64%
Net charge-offs (recoveries) year-to-date $718 $(821) $481
Provision for loan loss year-to-date $2,959 $(1,019) $589


For the Three Months Ended For the Year Ended
December 31,
2016
December 31,
2015
December 31,
2016
December 31,
2015
(dollars in thousands, except per share data)
Selected Income Statement Data:
Net interest income $10,150 $6,986 $35,567 $26,247
Provision for loan losses 543 306 2,959 (1,019)
Net interest income after provision for loan losses 9,607 6,680 32,608 27,266
Non-interest income 2,006 2,375 8,715 7,685
Non-interest expense 5,996 4,475 24,146 17,458
Income tax expense 2,145 1,680 6,483 6,519
Net income $3,472 $2,900 $10,694 $10,974
Income before provision for loan losses, merger expense, and income tax expense (1) $6,195 $4,886 $22,737 $16,474
Return on average assets 1.12% 1.34% 0.98% 1.35%
Return on average shareholders' equity 10.54% 9.58% 8.99% 9.45%
Return on average common shareholders' equity (1) 10.96% 11.35% 9.51% 11.27%
Efficiency ratio (1) 48.14% 47.08% 53.72% 49.95%
Per Common Share Data:
Basic $0.51 $0.48 $1.65 $1.85
Diluted $0.50 $0.48 $1.61 $1.82
Dividends declared $0.05 $0.04 $0.20 $0.16
(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,
2016
December 31,
2015
December 31,
2016
December 31,
2015
(dollars in thousands)
Non-interest income:
Service charges $364 $295 $1,341 $1,039
Gain on sale of loans 2 263 242 429
Loan servicing fees 1,434 1,276 5,451 4,924
Loan servicing rights 100 424 1,120 399
Income on OREO 17 5 50 248
Other 89 112 511 646
Total $2,006 $2,375 $8,715 $7,685
Non-interest expense:
Employee compensation and benefits $3,547 $2,537 $13,101 $10,769
Occupancy 148 78 512 338
Information processing 401 178 2,446 705
Professional fees 494 450 1,831 1,350
Business development 262 171 794 542
FDIC assessment 26 138 450 459
OREO expenses 38 23 191 284
Writedown of OREO 146 74 480 256
Net loss (gain) on OREO (2) (6) (122) 254
Other 936 832 4,463 2,501
Total $5,996 $4,475 $24,146 $17,458
Non-GAAP Financial Measures
Return on average common shareholders' equity reconciliation:
Return on average shareholders' equity 10.54% 9.58% 8.99% 9.45%
Effect of excluding average preferred shareholders' equity 0.42% 1.77% 0.52% 1.82%
Return on average common shareholders' equity 10.96% 11.35% 9.51% 11.27%
Efficiency ratio GAAP to non-GAAP reconciliation:
Non-interest expense $5,996 $4,475 $24,146 $17,458
Less: net loss on sales and write-downs of OREO (144) (68) (358) (510)
Adjusted non-interest expense (non-GAAP) $5,852 $4,407 $23,788 $16,948
Net interest income $10,150 $6,986 $35,567 $26,247
Non-interest income 2,006 2,375 8,715 7,685
Operating revenue $12,156 $9,361 $44,282 $33,932
Efficiency ratio 48.14% 47.08% 53.72% 49.95%
Income before provision for loan losses, merger expense, and income tax expense reconciliation:
Income before income taxes $5,617 $4,580 $17,177 $17,493
Provision for loan losses 543 306 2,959 (1,019)
Merger expenses (one-time) 35 - 2,601 -
Income before provision for loan losses, merger expense, and income tax expense $6,195 $4,886 $22,737 $16,474


Three Months Ended
December 31, 2016 December 31, 2015
Average
Balance (1)
Income/
Expense
Yields/
Rates
Average
Balance (1)
Income/
Expense
Yields/
Rates
(dollars in thousands)
Assets
Investment securities $122,111 $497 1.63% $84,667 $364 1.72%
Loans (2) 1,010,825 12,372 4.90% 735,120 8,614 4.69%
Interest bearing deposits due from other banks 42,633 91 0.85% 16,198 24 0.59%
Total interest-earning assets $1,175,569 $12,960 4.41% $835,985 $9,002 4.31%
Allowance for loan losses (11,825) (9,927)
Other assets 73,763 39,642
Total assets $1,237,507 $865,700
Liabilities
Savings, NOW, money market, interest checking $246,628 292 0.47% $172,155 203 0.47%
Time deposits 597,488 1,996 1.34% 421,340 1,493 1.42%
Total interest-bearing deposits $844,116 $2,288 1.08% $593,495 $1,696 1.14%
Other borrowings 2,187 33 6.03% 4,287 55 5.09%
FHLB advances 123,928 369 1.19% 59,331 204 1.37%
Junior subordinated debentures 15,451 120 3.11% 12,372 61 1.97%
Total interest-bearing liabilities $985,682 $2,810 1.14% $669,485 $2,015 1.20%
Non-interest-bearing deposits 110,062 65,970
Other liabilities 9,997 9,217
Total liabilities $1,105,741 $744,672
SBLF preferred stock (3) - 15,000
Shareholders' equity 131,766 106,028
Total liabilities and equity $1,237,507 $865,700
Net interest income $10,150 $6,987
Interest rate spread (4) 3.27% 3.11%
Net interest margin (5) 3.45% 3.34%
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.

Year Ended
December 31, 2016 December 31, 2015
Average
Balance (1)
Income/
Expense
Yields/
Rates
Average
Balance (1)
Income/
Expense
Yields/
Rates
(dollars in thousands)
Assets
Investment securities $108,549 $1,801 1.66% $82,812 $1,401 1.69%
Loans (2) 913,887 43,552 4.77% 680,279 32,301 4.75%
Interest bearing deposits due from other banks 38,153 228 0.60% 17,333 65 0.38%
Total interest-earning assets $1,060,589 $45,581 4.30% $780,424 $33,767 4.33%
Allowance for loan losses (11,687) (10,309)
Other assets 42,649 41,416
Total assets $1,091,551 $811,531
Liabilities
Savings, NOW, money market, interest checking $214,749 1,066 0.50% $158,610 746 0.47%
Time deposits 532,338 7,129 1.34% 401,643 5,492 1.37%
Total interest-bearing deposits $747,087 $8,195 1.10% $560,253 $6,238 1.11%
Other borrowings 3,047 161 5.30% 8,088 276 3.41%
FHLB advances 112,722 1,284 1.14% 44,331 606 1.37%
Junior subordinated debentures 14,628 374 2.56% 12,372 400 3.23%
Total interest-bearing liabilities $877,484 $10,014 1.14% $625,044 $7,520 1.20%
Non-interest-bearing deposits 84,621 62,430
Other liabilities 8,276 7,947
Total liabilities $970,381 $695,421
SBLF preferred stock (3) 2,184 15,000
Shareholders' equity 118,986 101,110
Total liabilities and equity $1,091,551 $811,531
Net interest income $35,567 $26,247
Interest rate spread (4) 3.16% 3.13%
Net interest margin (5) 3.35% 3.36%
Ratio of interest-earning assets to interest-bearing liabilities 1.21 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.