ICBK - County Bancorp Inc. Announces First Quarter Earnings

April, 22 2021 04:01 PM County Bancorp Inc.

Consistent improvement in credit trends and solid loan sales led to strong first quarter in 2021

Highlights

Net income of $3.9 million for the first quarter of 2021 or $0.62 per diluted share
Cost of funds decreased by 19 basis points sequentially to 1.23%, a decline of 79 basis points year-over-year
Loans sold with servicing retained increased $29.3 million since December 31, 2020 and $94.3 million since March 31, 2020
$32.6 million of second round of PPP loans were closed during the quarter of 2021 which generated $1.5 million in deferred fee income
Watch and worse rated credit improved by $25.5 million during the first quarter of 2021

MANITOWOC, Wis., April 22, 2021 (GLOBE NEWSWIRE) -- 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 first quarter of 2021. Net income was $3.9 million, or $0.62 per diluted share, for the first quarter of 2021, compared to net loss of $5.2 million, or $0.78 diluted loss per share, for the first quarter of 2020. The net loss for the first quarter of 2020 included a $5.0 million goodwill impairment charge, or $0.77 loss per diluted share.

Tim Schneider, President of County Bancorp, Inc., noted, “I’m highly encouraged by our strong start to the year, and based on positive movements in credit migration and overall improvements in watch and worse rated credits, we continue to expect this to be a strong fiscal year for County Bancorp. We expect to see continued improvement in our overall credit metrics as the dairy market continues to rebound and we conduct our annual credit review of our dairy loan portfolio in the second quarter of 2021. Additionally, shortly after quarter-end, we received a settlement on a nonperforming hotel loan, resulting in a loan loss recovery for that credit in the second quarter of 2021.

Schneider continued, “We also demonstrated our faith in Country Bancorp's long-term value by extending our share repurchase program and purchasing more than 100,000 shares during the first quarter. I am confident that we have the right strategy to maintain our momentum and deliver consistent long-term growth. We look forward to partnering and growing with our commercial, agricultural, and consumer customers in 2021 and beyond.”

Loans and Securities

Total loans increased sequentially by $15.4 million, or 1.5%, to $1.0 billion during the first quarter of 2021. The increase in total loans was primarily due to $32.6 million of second round Paycheck Protection Program (“PPP”) loans originated during the quarter, which was partially offset by the forgiveness of $24.1 million of first round PPP loans by the Small Business Administration (“SBA”). The following table sets forth the total PPP loans at the dates indicated:



March 31, 2021


December 31, 2020



# of Loans


Balance


Deferred Fee Income


# of Loans


Balance


Deferred Fee Income






















(dollars in thousands)

PPP 1oans - Round 1


127


$
13,674


$
301



456


$
37,790


$
1,191

PPP loans - Round 2


461



32,595



1,479



—



—



—

Total PPP loans


588


$
46,269


$
1,780



456


$
37,790


$
1,191

% of Total loans






4.57
%










3.79
%

As of March 31, 2021, there were five customer relationships with loans in payment deferral associated with COVID-19 customer support programs totaling $6.1 million, or 0.6% of total loans, which is a decrease of $16.8 million, or 63.5%, since December 31, 2020.
Loan participations the Company continued to service were $841.9 million as of March 31, 2021, an increase of $29.3 million, or 3.6%, compared to December 31, 2020, and an increase of $94.3 million, or 12.6%, compared to March 31, 2020.
During the first quarter of 2021, investments increased by $32.4 million, or 9.2%, and increased $139.1 million, or 56.5%, since March 31, 2020. There were no security sales during the first quarter of 2021.

Deposits

Total deposits as of March 31, 2021 were $1.1 billion, an increase of $57.7 million, or 5.5%, from December 31, 2020, and an increase of $78.6 million, or 7.7% since March 31, 2020.
Client deposits (demand deposits, NOW accounts, savings accounts, money market accounts, and certificates of deposit) decreased slightly by $2.8 million, or 0.3%, from December 31, 2020 to $913.2 million, which was expected due to seasonal attrition. Year-over-year, client deposits increased $121.5 million, or 15.3%, since March 31, 2020.
The Company increased its brokered deposits and national certificate of deposits by $60.5 million, or 48.5%, during the first quarter of 2021 in order to facilitate investment purchases. Despite the additional brokered deposits in the first quarter, wholesale funding decreased $49.9 million, or 18.8%, since March 31, 2020.

Shareholders’ Equity

During the first quarter of 2021, the Company repurchased 109,862 shares of its common stock, totaling $2.5 million, at a weighted average price of $22.87 per share.
Book value per share decreased to $25.99 per share on March 31, 2021 from $26.42 on December 31, 2020, due primarily to a $6.4 million unrealized loss on our securities portfolio in the first quarter of 2021.

Net Interest Income and Margin

Net interest margin for the quarter ended March 31, 2021 was 2.95%, which declined 11 basis points compared to the sequential quarter and increased 21 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



March 31, 2021


December 31, 2020

Net interest margin excluding PPP loans


2.74
%


2.49
%
Accretion related to PPP loans:








Yield on PPP loans


(0.06
)%


(0.13
)%
Yield on PPP loan SBA fees


0.29
%


0.81
%
Interest expense on PPP Liquidity Facility programs


(0.02
)%


(0.11
)%
Total accretion related to PPP loans


0.21
%


0.57
%
Total net interest margin


2.95
%


3.06
%

Net interest margin was positively impacted by approximately 15 basis points during the first quarter of 2021, due to the recovery of $0.5 million in interest income related to a nonaccrual loan participation.
Loan interest income (including fees) decreased $1.2 million sequentially primarily due to fewer PPP loans forgiven by the SBA in the first quarter of 2021 compared to the fourth quarter of 2020, which resulted in fewer origination fees being recognized as interest income. During the first quarter of 2021, $24.1 million of PPP loans were forgiven compared to $60.6 million during the fourth quarter of 2020. Year-over-year, loan interest income decreased $1.1 million primarily due to lower yields on the previously mentioned PPP loans and decrease the in federal funds target rates.
Total rates paid on interest-bearing deposits decreased by 22 basis points to 0.91% for the three months ended March 31, 2021, compared to the three months ended December 31, 2020, and decreased 92 basis points compared to the three months ended March 31, 2020. The decrease was primarily due to the Company’s renewed focus on 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 March 31, 2021 v. Three Months Ended December 31, 2020


Three Months Ended March 31, 2021 v. Three Months Ended March 31, 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

$
246


$
(37
)

$
209


$
1,003


$
(105
)

$
898

Loans (excluding PPP)


5



271



276



(752
)


(1,351
)


(2,103
)
PPP loans - round 1


(1,610
)


37



(1,573
)


(678
)


1,639



961

PPP loans - round 2


1,213



(1,130
)


83



1,213



(1,130
)


83

Total loans


(392
)


(822
)


(1,214
)


(217
)


(842
)


(1,059
)
Federal funds sold and interest-bearing deposits with banks


(4
)


(1
)


(5
)


(92
)


(128
)


(220
)
Total interest income


(150
)


(860
)


(1,010
)


694



(1,075
)


(381
)
Interest Expense:
























Savings, NOW, money market and interest checking

$
(16
)

$
13


$
(3
)

$
750


$
(1,144
)

$
(394
)
Time deposits


(38
)


(371
)


(409
)


(854
)


(1,030
)


(1,884
)
Other borrowings


(24
)


(5
)


(29
)


38



(1
)


37

FHLB advances


(15
)


3



(12
)


68



(27
)


41

Junior subordinated debentures


—



(1
)


(1
)


355



45



400

Total interest expense

$
(93
)

$
(361
)

$
(454
)

$
357


$
(2,157
)

$
(1,800
)
Net interest income

$
(57
)

$
(499
)

$
(556
)

$
337


$
1,082


$
1,419

The following table sets forth average balances, average yields and rates, and income and expenses for the periods indicated.



For the Three Months Ended



March 31, 2021


December 31, 2020


March 31, 2020



Average Balance ⁽¹⁾


Income/ Expense


Yields/ Rates


Average Balance ⁽¹⁾


Income/ Expense


Yields/ Rates


Average Balance ⁽¹⁾


Income/ Expense


Yields/ Rates































(dollars in thousands)

Assets




































Investment securities

$
372,235


$
2,187



2.38
%

$
322,706


$
1,978



2.44
%

$
196,353


$
1,289



2.63
%
Loans excluding PPP loans ⁽²⁾


969,429



10,479



4.38
%


968,575



10,203



4.19
%


1,028,637



12,582



4.89
%
PPP loans - Round 1 ⁽²⁾


27,252



961



14.30
%


71,505



2,534



14.10
%


—



—



—

PPP loans - Round 2 ⁽²⁾


16,857



83



2.01
%


—



—



—



—



—



—

Total loans ⁽²⁾


1,013,538



11,523



4.61
%


1,040,080



12,737



4.87
%


1,028,637



12,582



4.89
%
Interest bearing deposits due from other banks


19,949



5



0.10
%


37,385



10



0.11
%


60,825



225



1.48
%
Total interest-earning assets

$
1,405,722


$
13,715



3.96
%

$
1,400,171


$
14,725



4.18
%

$
1,285,815


$
14,096



4.39
%
Allowance for loan losses


(14,932
)










(18,535
)










(15,330
)








Other assets


90,109











87,785











84,461









Total assets

$
1,480,899










$
1,469,421










$
1,354,946














































Liabilities




































Savings, NOW, money market, interest checking

$
477,159


$
380



0.32
%

$
421,969


$
383



0.36
%

$
334,740


$
774



0.92
%
Time deposits


442,626



1,690



1.55
%


450,193



2,099



1.85
%


613,753



3,574



2.33
%
Total interest-bearing deposits

$
919,785


$
2,070



0.91
%

$
872,162


$
2,482



1.13
%

$
948,493


$
4,348



1.83
%
Other borrowings


51,220



48



0.38
%


75,341



77



0.41
%


1,259



11



3.49
%
FHLB advances


116,311



273



0.95
%


96,191



285



1.18
%


56,708



233



1.65
%
Junior subordinated debentures


67,123



1,106



6.68
%


67,055



1,107



6.57
%


44,871



706



6.29
%
Total interest-bearing liabilities

$
1,154,439


$
3,497



1.23
%

$
1,110,749


$
3,951



1.42
%

$
1,051,331


$
5,297



2.02
%
Non-interest-bearing deposits


138,814











168,765











113,351









Other liabilities


15,190











18,758











16,877









Total liabilities

$
1,308,443










$
1,298,272










$
1,181,559














































Shareholders' equity


172,456











171,149











173,387









Total liabilities and equity

$
1,480,899










$
1,469,421










$
1,354,946














































Net interest income





$
10,218










$
10,774










$
8,799





Interest rate spread ⁽³⁾










2.73
%










2.76
%










2.37
%
Net interest margin ⁽⁴⁾










2.95
%










3.06
%










2.74
%
Ratio of interest-earning assets to interest-bearing liabilities


1.22











1.26











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

Provision for loan losses increased by $0.7 million, or 153.2%, to $0.2 million for the three months ended March 31, 2021, compared to the three months ended December 31, 2020. The provision for the first quarter is comprised of $0.1 million related to loan grown and a $0.4 million net increase in specific impairments related to one agriculture customer, which was partially offset by a $0.3 million improvement in economic qualitative factor related to the industries we have deemed high risk due in the COVID-19 pandemic.
Year-over-over, provision for loan losses decreased $2.0 million, or 89.1%, compared to the three months ended March 31, 2020. The reduction was primarily the result of the $2.0 million qualitative factor for industries that were deemed to be high-risk due to the COVID-19 pandemic for the three months ended March 31, 2020, due to the economic uncertainty at that time. As of March 31, 2021, only $0.5 million of this qualitative factor remained.

Non-Interest Income

Total non-interest income for the three months ended March 31, 2021 decreased $0.6 million, or 14.8%, to $3.7 million from the three months ended December 31, 2020, but increased $1.0 million, or 36.5% from the three months ended March 31, 2020.
Loan servicing fees increased quarter-over-quarter and year-over-year primarily due a six basis point increase in weighted average servicing fees and an increase in loans serviced. The average loans serviced on March 31, 2021 increased by $22.0 million and $77.6 million compared to December 31, 2020 and March 31, 2020, respectively.
Loan servicing right income for the three months ended March 31, 2021 decreased $0.7 million, or 60.8% to $0.5 million from $1.2 million for the three months ended December 31, 2020, primarily due to the pay-down of 20 loans totaling $12.3 million.
Crop insurance commission decreased in the sequential quarter by $0.2 million, or 41.8%, due to the annual profit-sharing payment that is received from insurance companies that was received in the fourth quarter of 2020.



For the Three Months Ended



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands)

Non-Interest Income




















Service charges

$
119


$
108


$
108


$
139


$
113

Crop insurance commission


301



517



271



229



229

Gain on sale of residential loans, net


93



219



17



4



38

Loan servicing fees


2,158



1,974



2,054



1,923



1,831

Gain on sale of service-retained loans, net


1,587



1,828



1,268



1,041



505

Loan servicing right pay-down losses


(1,119
)


(635
)


(551
)


(766
)


(216
)
Total loan servicing right income


468



1,193



717



275



289

Income on OREO


—



—



—



—



—

Gain on sale of securities


—



—



101



570



—

Referral fees


319



64



110



121



17

Other


254



283



294



240



203

Total non-interest income

$
3,712


$
4,358


$
3,672


$
3,501


$
2,720



For the Three Months Ended



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands)

Loan servicing rights, end of period

$
18,864


$
18,396


$
17,203


$
16,486


$
16,211

Loans serviced, end of period


841,893



812,560



797,819



762,058



747,553

Loan servicing rights as a % of loans serviced


2.24
%


2.26
%


2.16
%


2.16
%


2.17
%





















Total loan servicing fees

$
2,158


$
1,974


$
2,054


$
1,923


$
1,831

Average loans serviced


827,227



805,190



779,939



754,806



749,646

Annualized loan servicing fees as a % of average loans serviced


1.04
%


0.98
%


1.05
%


1.02
%


0.98
%

Non-Interest Expense

Total non-interest expense for the three months ended March 31, 2021 decreased $0.7 million, or 13.1%, to $8.8 million from the three months ended December 31, 2020, and decreased $6.3 million, or 41.6% from the three months ended March 31, 2020.
Employee compensation and benefits expense decreased for the three months ended March 31, 2021 by $1.1 million to $5.6 million compared to the three months ended December 31, 2020. The change was primarily the result of an additional accrual of $1.6 million that took place during the fourth quarter of 2020 for incentive compensation related to 2020 financial results, which was partially offset by 2021 merit increases and payroll taxes that reset at the beginning of each year.
Professional fees increased during the first quarter of 2021 by $0.2 million, or 37.8%, to $0.8 million compared to the fourth quarter of 2020 due primarily to a nonrecurring technology strategy project.



For the Three Months Ended



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands, except per share data)

Non-Interest Expense




















Employee compensation and benefits

$
5,582


$
6,687


$
4,766


$
4,594


$
5,260

Occupancy


279



297



321



305



354

Information processing


661



656



641



663



670

Professional fees


802



582



555



480



401

Business development


307



136



305



333



366

OREO expenses


23



20



47



44



116

Writedown of OREO


—



148



—



—



1,360

Net loss (gain) on sale of OREO


17



(326
)


9



—



4

Depreciation and amortization


257



289



295



303



301

Goodwill impairment


—



—



—



—



5,038

Other


836



1,005



728



743



1,148

Total non-interest expense

$
8,764


$
9,494


$
7,667


$
7,465


$
15,018

Asset Quality

During the first quarter of 2021, watch rated loans decreased by $24.3 million, or 12.8%, and $53.6 million, or 24.4%, compared to December 31, 2020 and March 31, 2020, respectively, primarily as the result of eight dairy customers upgraded to a low satisfactory rating. This improvement in asset quality is expected to continue in the second quarter of 2021 as we complete the annual review process.
Special mention loans decreased $1.9 million, or 75.5%, compared to December 31, 2020 due mainly to the migration of one agricultural customer to substandard performing.
Substandard performing loans decreased by $1.5 million, or 3.6%, to $39.0 million at March 31, 2021 compared to December 31, 2020 due to impairment of two customer relationships; one customer filed for bankruptcy, and one customer on a workout plan was more than 90 days past due at quarter end. These two migrations to substandard impaired were offset in part by the special mention migration discussed above.

The following table presents loan balances by credit grade for the periods indicated:



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands)

Loans by risk category:




















Sound/Acceptable/Satisfactory/ Low Satisfactory

$
757,160


$
716,313


$
800,451


$
798,945


$
706,247

Watch


165,823



190,101



185,254



198,044



219,459

Special Mention


605



2,501



1,851



1,856



15,036

Substandard Performing


38,961



40,420



41,577



47,741



34,179

Substandard Impaired


49,115



46,950



46,793



40,938



37,515

Total loans

$
1,011,664


$
996,285


$
1,075,926


$
1,087,524


$
1,012,436

Adverse classified asset ratio ⁽¹⁾


39.61
%


39.43
%


42.64
%


41.73
%


32.35
%

(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 increased in the first quarter by $2.0 million, or 4.7%, compared to the fourth quarter of 2020 due to two agricultural customers being placed on non-accrual status. It is anticipated that during the second quarter of 2021, approximately $7.0 million of agricultural loans will be restored to accrual status as a result of the completion of the annual credit review of the dairy portfolio.
Non-accrual loans increased $2.3 million, or 5.6%, as of March 31, 2021 compared to December 31, 2020, due to the previously discussed customer bankruptcy.
Performing TDRs not on non-accrual decreased $5.1 million, or 27.4%, to $13.5 million on March 31, 2021 from December 31, 2020. The decrease is primarily due to one agriculture customer that was re-underwritten and was no longer a TDR due to improved performance and financial trends.



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands)

Non-Performing Assets:




















Nonaccrual loans

$
43,973


$
41,624


$
41,351


$
35,456


$
32,051

Other real estate owned


739



1,077



3,064



2,629



3,247

Total non-performing assets

$
44,712


$
42,701


$
44,415


$
38,085


$
35,298






















Performing TDRs not on nonaccrual

$
13,495


$
18,592


$
19,036


$
21,986


$
21,853






















Non-performing assets as a % of total loans


4.42
%


4.29
%


4.13
%


3.50
%


3.49
%
Non-performing assets as a % of total assets


3.00
%


2.90
%


2.98
%


2.52
%


2.61
%
Allowance for loan losses as a % of total loans


1.49
%


1.49
%


1.73
%


1.71
%


1.73
%
Net charge-offs (recoveries) quarter- to-date

$
(32
)

$
3,386


$
(1
)

$
120


$
(62
)

Conference Call

The Company will host an earnings call tomorrow, April 23, 2021, at 8:30 a.m., CDT, conducted by Timothy J. Schneider, President; Glen L. Stiteley, Chief Financial Officer; David C. Coggins, Chief Banking Officer; John R. Fillingim, Chief Credit Officer; and Matthew R. Lemke, Chief Retail and Deposit Officer. 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 April 23, 2022, 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 Stat e m ents

This press release includes "forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking statements presented in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Factors that may cause actual results to differ materially from those made or suggested by the forward-looking statements contained in this press release include those identified in the Company’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission, including the effects of the COVID-19 pandemic and its potential effects on the economic environment, our customers and our operations, as well as, any changes to federal, state, or local government laws, regulations, or orders in connection with the pandemic. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Investor Relations Contact
Glen L. Stiteley
EVP - CFO, Investors Community Bank
Phone: (920) 686-5658
Email: gstiteley@icbk.com

County Bancorp, Inc. Consolidated Financial Summary (Unaudited)

March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands, except per share data)

Period-End Balance Sheet:




















Assets




















Cash and cash equivalents

$
17,820


$
19,500


$
53,283


$
127,432


$
21,545

Securities available-for-sale, at fair value


385,240



352,854



298,476



226,971



246,148

Loans held for sale


5,789



35,976



2,593



11,847



14,388

Agricultural loans


609,482



606,881



619,617



624,340



642,066

Commercial loans


317,625



313,265



317,782



328,368



325,310

Paycheck Protection Plan loans


46,249



37,790



98,421



103,317



—

Multi-family real estate loans


33,287



33,457



35,496



30,439



42,198

Residential real estate loans


4,776



4,627



4,489



975



2,753

Installment and consumer other


245



265



121



85



109

Total loans


1,011,664



996,285



1,075,926



1,087,524



1,012,436

Allowance for loan losses


(15,082
)


(14,808
)


(18,649
)


(18,569
)


(17,547
)
Net loans


996,582



981,477



1,057,277



1,068,955



994,889

Other assets


85,897



82,551



80,426



78,712



78,004

Total Assets

$
1,491,328


$
1,472,358


$
1,492,055


$
1,513,917


$
1,354,974






















Liabilities and Shareholders' Equity




















Demand deposits

$
139,838


$
163,202


$
158,798


$
149,963


$
117,434

NOW accounts and interest checking


95,591



96,624



78,026



81,656



64,873

Savings


8,431



7,367



11,900



8,369



6,566

Money market accounts


390,741



344,250



325,900



307,083



237,889

Time deposits


278,591



304,580



322,992



346,482



364,930

Brokered deposits


159,034



80,456



101,808



121,503



161,882

National time deposits


26,302



44,347



50,747



57,997



66,386

Total deposits


1,098,528



1,040,826



1,050,171



1,073,053



1,019,960

Federal Reserve Discount Window advances


47,255



47,531



99,693



99,693



—

FHLB advances


100,000



129,000



84,600



93,400



109,400

Subordinated debentures


67,179



67,111



67,025



61,910



44,896

Other liabilities


12,028



16,114



20,656



17,336



15,672

Total Liabilities


1,324,990



1,300,582



1,322,145



1,345,392



1,189,928






















Shareholders' equity


166,338



171,776



169,910



168,525



165,046

Total Liabilities and Shareholders' Equity

$
1,491,328


$
1,472,358


$
1,492,055


$
1,513,917


$
1,354,974






















Stock Price Information:




















High - Quarter-to-date

$
26.46


$
23.72


$
22.00


$
24.67


$
27.19

Low - Quarter-to-date

$
19.66


$
18.20


$
17.04


$
17.13


$
13.55

Market price - Quarter-end

$
23.97


$
22.08


$
18.80


$
20.93


$
18.50

Book value per share

$
25.99


$
26.42


$
25.72


$
25.18


$
24.17

Tangible book value per share ⁽¹⁾

$
25.98


$
26.42


$
25.71


$
25.16


$
24.15

Common shares outstanding


6,094,450



6,197,965



6,294,675



6,375,150



6,496,790

(1) This is a non-GAAP financial measure. A reconciliation to GAAP is included below.



For the Three Months Ended



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands, except per share data)

Selected Income Statement Data:




















Interest and Dividend Income




















Loans, including fees

$
11,523


$
12,737


$
11,594


$
12,009


$
12,565

Taxable securities


1,887



1,777



1,293



1,283



1,282

Tax-exempt securities


246



201



167



162



6

Federal funds sold and other


58



10



52



111



225

Total interest and dividend income


13,714



14,725



13,106



13,565



14,078






















Interest Expense




















Deposits


2,069



2,482



2,914



3,721



4,347

FHLB advances and other borrowed funds


321



362



456



343



244

Subordinated debentures


1,106



1,107



1,082



736



706

Total interest expense


3,496



3,951



4,452



4,800



5,297

Net interest income


10,218



10,774



8,654



8,765



8,781

Provision for loan losses


242



(455
)


79



1,142



2,218

Net interest income after provision for loan losses


9,976



11,229



8,575



7,623



6,563






















Non-Interest Income




















Services charges


119



108



108



139



113

Crop insurance commission


301



517



271



229



229

Gain on sale of residential loans, net


93



219



17



4



38

Loan servicing fees


2,158



1,974



2,054



1,923



1,831

Gain on sale of service-retained loans, net


1,587



1,828



1,268



1,041



505

Loan servicing right pay-down losses


(1,119
)


(635
)


(551
)


(766
)


(216
)
Total loan servicing right income


468



1,193



717



275



289

Gain on sale of securities


—



—



101



570



—

Referral fees ⁽¹⁾


319



64



110



121



17

Other


254



283



294



240



203

Total non-interest income


3,712



4,358



3,672



3,501



2,720






















Non-Interest Expense




















Employee compensation and benefits


5,582



6,687



4,766



4,594



5,260

Occupancy


279



297



321



305



354

Information processing


661



656



641



663



670

Professional fees


802



582



555



480



401

Business development


307



136



305



333



366

OREO expenses


23



20



47



44



116

Writedown of OREO


—



148



—



—



1,360

Net loss (gain) on sale of OREO


17



(326
)


9



—



4

Depreciation and amortization


257



289



295



303



301

Goodwill impairment


—



—



—



—



5,038

Other


836



1,005



728



743



1,148

Total non-interest expense


8,764



9,494



7,667



7,465



15,018

Income (loss) before income taxes


4,924



6,093



4,580



3,659



(5,735
)
Income tax expense (benefit)


996



1,575



1,164



926



(547
)
NET INCOME (LOSS)

$
3,928


$
4,518


$
3,416


$
2,733


$
(5,188
)





















Basic earnings (loss) per share

$
0.62


$
0.70


$
0.52


$
0.40


$
(0.79
)
Diluted earnings (loss) per share

$
0.62


$
0.70


$
0.52


$
0.40


$
(0.78
)
Dividends declared per share

$
0.10


$
0.10


$
0.07


$
0.07


$
0.07

(1) Referral fees in prior quarters reclassed to non-interest income to match current classification



For the Three Months Ended



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands, except share data)

Other Data:




















Return on average assets ⁽¹⁾


1.06
%


1.23
%


0.91
%


0.74
%


(1.53
)%
Return on average shareholders' equity ⁽¹⁾


9.11
%


10.56
%


8.05
%


6.55
%


(11.97
)%
Return on average common shareholders' equity ⁽¹⁾⁽²⁾


9.29
%


10.88
%


8.25
%


6.63
%


(12.81
)%
Efficiency ratio ⁽¹⁾⁽²⁾


62.79
%


63.92
%


62.64
%


11.13
%


74.92
%
Equity to assets ratio


11.15
%


11.67
%


11.39
%


11.13
%


12.18
%
Tangible common equity to tangible assets ⁽²⁾


10.62
%


11.12
%


10.85
%


10.60
%


11.58
%





















Common Share Data:




















Net income from continuing operations

$
3,928


$
4,518


$
3,416


$
2,733


$
(5,188
)
Less: Preferred stock dividends


81



80



80



99



108

Income available to common shareholders

$
3,847


$
4,438


$
3,336


$
2,634


$
(5,296
)





















Weighted average number of common shares issued


7,218,358



7,206,238



7,202,000



7,198,901



7,182,945

Less: Weighted average treasury shares


1,080,089



957,573



882,153



759,294



518,740

Plus: Weighted average non-vested restricted stock units


63,991



67,529



66,492



65,291



39,785

Weighted average number of common shares outstanding


6,202,260



6,316,194



6,386,339



6,504,898



6,703,990

Effect of dilutive options


34,465



28,025



20,915



28,511



49,072

Weighted average number of common shares outstanding used to calculate diluted earnings per common share


6,236,725



6,344,219



6,407,254



6,533,409



6,753,062

(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



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands)

Return on average common shareholders' equity reconciliation ⁽¹⁾ :




















Return on average shareholders' equity


9.11
%


10.56
%


8.05
%


6.55
%


(11.97
)%
Effect of excluding average preferred shareholders' equity


0.18
%


0.32
%


0.20
%


0.08
%


(0.84
)%
Return on average common shareholders' equity


9.29
%


10.88
%


8.25
%


6.63
%


(12.81
)%





















Efficiency ratio ⁽²⁾ :




















Non-interest expense

$
8,764


$
9,494


$
7,667


$
7,465


$
15,018

Less: goodwill impairment


—



—



—



—



(5,038
)
Less: historical tax credit investment impairment


—



—



—



—



—

Less: net loss on sales and write-downs of OREO


(17
)


178



(9
)


—



(1,364
)
Adjusted non-interest expense (non-GAAP)

$
8,747


$
9,672


$
7,658


$
7,465


$
8,616






















Net interest income

$
10,218


$
10,774


$
8,654


$
8,765


$
8,781

Non-interest income


3,712



4,358



3,672



3,501



2,720

Less: net gain on sales of securities


—



—



(101
)


(570
)


—

Operating revenue

$
13,930


$
15,132


$
12,225


$
11,696


$
11,501

Efficiency ratio


62.79
%


63.92
%


62.64
%


63.83
%


74.92
%



For the Three Months Ended



March 31, 2021


March 31, 2020










(dollars in thousands, except per share data)

Adjusted diluted earnings per share ⁽³⁾ :








Net income from continuing operations

$
3,928


$
(5,188
)
Less: preferred stock dividends


(81
)


(108
)
Plus: goodwill impairment


—



5,038

Adjusted income available to common shareholders for basic earnings per common share

$
3,847


$
(258
)
Weighted average number of common shares outstanding


6,202,260



6,703,990

Effect of dilutive options


34,465



49,072

Weighted average number of common shares outstanding used to calculate diluted earnings per common share


6,236,725



6,753,062

Adjusted diluted earnings per share

$
0.62


$
(0.04
)

(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):



March 31, 2021


December 31, 2020


September 30, 2020


June 30, 2020


March 31, 2020



















(dollars in thousands, except per share data)

Tangible book value per share and tangible common equity to tangible assets reconciliation ⁽¹⁾ :




















Common equity

$
158,338


$
163,776


$
161,910


$
160,525


$
157,046

Less: Core deposit intangible, net of amortization


29



54



86



125



171

Tangible common equity (non-GAAP)

$
158,309


$
163,722


$
161,824


$
160,400


$
156,875

Common shares outstanding


6,094,450



6,197,965



6,294,675



6,375,150



6,496,790

Tangible book value per share

$
25.98


$
26.42


$
25.71


$
25.16


$
24.15






















Total assets

$
1,491,328


$
1,472,358


$
1,492,055


$
1,513,917


$
1,354,974

Less: Core deposit intangible, net of amortization


29



54



86



125



171

Tangible assets (non-GAAP)

$
1,491,299


$
1,472,304


$
1,491,969


$
1,513,792


$
1,354,803

Tangible common equity to tangible assets


10.62
%


11.12
%


10.85
%


10.60
%


11.58
%





















Adverse classified asset ratio ⁽²⁾ :




















Substandard loans

$
88,076


$
87,370


$
88,370


$
88,680


$
71,694

Other real estate owned


739



1,077



3,064



2,629



3,247

Substandard unused commitments


5,091



4,049



5,124



3,230



2,840

Less: Substandard government guarantees


(8,485
)


(8,960
)


(7,002
)


(6,336
)


(7,699
)
Total adverse classified assets (non-GAAP)

$
85,421


$
83,536


$
89,556


$
88,203


$
70,082






















Total equity (Bank)

$
202,200


$
205,743


$
200,011


$
201,507


$
204,089

Accumulated other comprehensive gain on available for sale securities


(1,652
)


(8,686
)


(8,640
)


(8,734
)


(5,012
)
Allowance for loan losses


15,082



14,808



18,649



18,569



17,547

Adjusted total equity (non-GAAP)

$
215,630


$
211,865


$
210,020


$
211,342


$
216,624

Adverse classified asset ratio


39.61
%


39.43
%


42.64
%


41.73
%


32.35
%

(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.

Company Name:	County Bancorp Inc.
Stock Symbol:	ICBK
Market:	NASDAQ
Website:	investorscommunitybank.com

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