County Bancorp, Inc. Announces 7.6% Loan Growth and Third Quarter 2015 Net Income of $3.3 Million

Q3 Highlights

  • Net income of $3.3 million
  • Net loan growth of $49.7 million
  • Return on average assets of 1.63%
  • $867 thousand negative provision for loan losses 

MANITOWOC, Wis., Oct. 21, 2015 (GLOBE NEWSWIRE) — County Bancorp, Inc. (NASDAQ:ICBK) today reported third quarter 2015 net income of $3.3 million.  This represents an increase of $1.0 million compared to the net income of the third quarter of 2014.  Net income for the nine months ended September 30, 2015 was $8.1 million compared to $6.1 million for the same period in 2014.  This represents a return on average assets of 1.36% for the nine months ended September 30, 2015 compared to 1.10% for the nine months ended September 30, 2014. 

“We are very pleased with our third quarter results, which were highlighted by solid loan growth quarter-over-quarter and year-over-year, primarily in the agricultural space,” said Timothy J. Schneider, President of County Bancorp, Inc. and CEO of its wholly-owned bank subsidiary, Investors Community Bank.  “Asset quality continues to improve and, despite growth in our loan portfolio, we were able to have a recovery of loan losses for the quarter.  Additionally, in this highly competitive market, we have been able to improve our net interest margin.  As a part of our strategic focus, we continue to seek talent in the business banking sector and evaluate acquisition opportunities.”

Total assets of $844.8 million at September 30, 2015 increased $63.7 million, or 8.2%, over total assets as of June 30, 2015 of $781.1 million.  Total loans increased $49.6 million, or 7.6%, to $704.0 million at September 30, 2015 from $654.4 million at June 30, 2015.

Non-performing assets decreased 31.4% to $14.2 million at September 30, 2015 from $20.7 million at September 30, 2014, and decreased 22.5% from June 30, 2015 of $18.3 million.  This improvement year-over-year was primarily due to other real estate owned, which declined from $8.1 million at September 30, 2014 to $3.0 million at September 30, 2015.  The improvement over the previous quarter was the result of a 26.0% decrease in nonaccrual loans from $15.1 million at June 30, 2015, to $11.2 million at September 30, 2015.

Net income for the quarters ended September 30, 2015 and 2014 was $3.3 million and $2.3 million, respectively.  The increase in net income of $1.0 million between the third quarters of 2014 and 2015 is primarily the result of $0.9 million recovery of loan losses recognized as a credit to income during the third quarter of 2015.  As the result of that recovery and increased net interest income, diluted earnings per share increased to $0.55 for the three months ended September 30, 2015 from $0.47 for the three months ended September 30, 2014.  Return on average assets was 1.63% for the three months ended September 30, 2015 compared to 1.22% for the three months ended September 30, 2014.  Net interest margin increased to 3.49% for the three months ended September 30, 2015 compared to 3.27% for the three months ended September 30, 2014.

Net income for the nine months ended September 30, 2015 was $8.1 million compared to $6.1 million for the nine months ended September 30, 2014.  This represents year-over-year growth of 31.8% which was primarily driven by a $2.2 million increase in net interest income and a $1.3 million recovery of loan losses, which was partially offset by an increase in income tax expense.

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 and Stevens Point and our loan production offices in Darlington, Eau Claire, and Fond du Lac.

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,” “comfortable with,” “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,
2015
  June 30,
2015
  March 31,
2015
  September 30,
2014
Selected Balance Sheet Data:                
(In thousands, except per share data)                
                 
  Total assets   $   844,791     $   781,117     $   781,408     $   743,018  
  Total loans       704,029         654,389         635,067         591,623  
  Allowance for loan losses       9,833         9,897         10,269         10,374  
  Deposits       636,221         608,571         608,441         599,931  
  Shareholders’ equity       104,436         101,024         99,544         77,722  
  Common equity       96,436         93,024         91,544         69,722  
                 
Stock Price Information:                
  High   $   20.00     $   20.33     $   21.70      N/A    
  Low   $   16.46     $   17.90     $   16.76      N/A    
  Market price (2015)/Book value (2014) per common share   $   19.14     $   19.00     $   19.68     $   15.57  
  Common shares outstanding       5,734         5,734         5,734         4,464  
                 
                 
Non-Performing Assets:                
(In thousands)                
                 
Nonaccrual loans   $   11,172     $   15,098     $   12,834     $   12,550  
Other real estate owned       3,024         3,211         5,128         8,149  
  Total non-performing assets   $   14,196     $   18,309     $   17,962     $   20,699  
                 
Restructured loans not on nonaccrual   $   617     $   820     $   826     $   918  
                 
Non-performing assets as a % of total loans     2.02 %     2.80 %     2.83 %     3.50 %
Non-performing assets as a % of total assets     1.68 %     2.34 %     2.30 %     2.79 %
Allowance for loan losses as a % of nonperforming assets     69.27 %     54.06 %     57.17 %     50.12 %
Allowance for loan losses as a % of total loans     1.40 %     1.51 %     1.62 %     1.75 %
                 
Net charge-off (recoveries) year-to-date       (555 )       248         (268 )       121  
Recovery of loan loss year-to-date       (1,325 )       (458 )       (602 )       –   
                 
                 
    For the three months ended   For the nine months ended
    September 30,
2015
  September 30,
2014
  September 30,
2015
  September 30,
2014
Selected Income Statement Data:                
(In thousands, except per share data)                
                 
  Net interest income   $   6,871     $   5,805     $   19,261     $   17,099  
  Recovery of loan losses       (867 )       –         (1,325 )       –  
  Net interest income after provision for (recovery of) loan losses       7,738         5,805         20,586         17,099  
  Non-interest income       1,723         1,798         5,310         5,167  
  Non-interest expense       4,135         4,264         12,983         12,735  
  Income tax expense       1,996         1,068         4,839         3,403  
  Net income   $   3,330     $   2,271     $   8,074     $   6,128  
                 
  Return on average assets      1.63 %     1.22 %     1.36 %     1.10 %
  Return on average shareholders’ equity      11.32 %     9.88 %     9.44 %     9.08 %
  Return on average common shareholders’ equity (1)     13.58 %     12.51 %     11.28 %     11.50 %
  Efficiency ratio (1)     48.42 %     53.23 %     51.04 %     52.87 %
                 
Per Common Share Data:                
  Basic   $   0.56     $   0.48     $   1.37     $   1.29  
  Diluted   $   0.55     $   0.47     $   1.34     $   1.26  
  Dividends declared   $   0.04     $   –      $   0.12     $   –   
                 
(1)  This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.        
                 
Non interest income:                
  Service charges   $   238     $   388     $   744     $   559  
  Loan servicing fees       1,236         1,183         3,648         3,518  
  Loan servicing rights       (51 )       84         (25 )       116  
  Gain on sale of loans       44         69         166         251  
  Income on OREO       33         100         243         509  
  Other       223         (26 )       534         214  
  Total   $   1,723     $   1,798     $   5,310     $   5,167  
                 
Non-interest expense:                
  Employee compensation and benefits   $   2,643     $   2,570     $   8,232     $   7,628  
  Occupancy       100         75         260         229  
  Information processing       183         361         527         641  
  Professional fees       513         343         900         696  
  FDIC assessment       101         121         321         397  
  OREO expenses       121         192         261         686  
  Writedown of OREO       –          44         182         729  
  Net loss (gain) on OREO       (26 )       173         260         235  
  Business development       147         203         371         402  
  Other       353         182         1,669         1,092  
  Total   $   4,135     $   4,264     $   12,983     $   12,735  
                 
Non-GAAP Financial Measures                
                 
Return on average common shareholders’ equity reconciliation:                
  Return on average shareholders’ equity      11.32 %     9.88 %     9.44 %     9.08 %
  Effect of excluding average preferred shareholders’ equity      2.26 %     2.63 %     1.84 %     2.42 %
  Return on average common shareholders’ equity      13.58 %     12.51 %     11.28 %     11.50 %
                 
Efficiency ratio GAAP to non-GAAP reconciliation:                
  Non-interest expense   $   4,135     $   4,264     $   12,983     $   12,735  
  Less: net (loss)/gain on sales and write-downs of OREO       26         (217 )       (442 )       (964 )
  Adjusted non-interest expense (non-GAAP)   $   4,161     $   4,047     $   12,541     $   11,771  
                 
  Net interest income   $   6,871     $   5,805     $   19,261     $   17,099  
  Non-interest income       1,723         1,798         5,310         5,167  
  Operating revenue    $   8,594     $   7,603     $   24,571     $   22,266  
  Efficiency ratio      48.42 %     53.23 %     51.04 %     52.87 %
                                 

 

    Three Months Ended    
    September 30, 2015   September 30, 2014    
    Average
Balance (1)
  Income/
Expense
  Yields/
Rates
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
   
Assets                            
Investment securities   $   84,528     $   359       1.70 %   $   76,259     $   334       1.75 %    
Loans (2)       691,049         8,393       4.86 %       590,272         7,225       4.90 %    
Interest bearing deposits due from other banks       12,741         11       0.35 %       43,837         23       0.21 %    
Total interest-earning assets   $   788,318     $   8,763       4.45 %   $   710,368     $   7,582       4.27 %    
                             
Allowance for loan losses       (10,462 )               (10,474 )            
Other assets       40,043                 45,542              
Total assets   $   817,899             $   745,436              
                             
Liabilities                            
Savings, NOW, money market, interest checking       162,719         194       0.48 %       138,713         166       0.48 %    
Time deposits       395,967         1,381       1.40 %       404,854         1,383       1.37 %    
Total interest-bearing deposits   $   558,686     $   1,575       1.13 %   $   543,567     $   1,549       1.14 %    
Other borrowings       8,830         63       2.83 %       10,629         32       1.19 %    
FHLB advances       52,058         157       1.20 %       19,609         77       1.56 %    
Junior subordinated debentures       12,372         99       3.21 %       12,372         120       3.88 %    
Total interest-bearing liabilities   $   631,946     $   1,894       1.20 %   $   586,177     $   1,778       1.21 %    
                             
Non-interest bearing deposits       60,196                 60,156              
Other liabilities       8,099                 7,188              
Total liabilities   $   700,241             $   653,521              
                             
SBLF preferred stock (3)       15,000                 15,000              
Shareholders’ equity       102,658                 76,915              
Total liabilities and equity   $   817,899             $   745,436              
                             
Net interest income           6,869                 5,804          
Interest rate spread (4)             3.25 %             3.06 %    
Net interest margin (5)             3.49 %             3.27 %    
Ratio of interest-earning assets to interest -bearing liabilities       1.25                 1.21              
                             
    Nine Months Ended    
    September 30, 2015   September 30, 2014    
    Average
Balance (1)
  Income/
Expense
  Yields/
Rates
  Average
Balance (1)
  Income/
Expense
  Yields/
Rates
   
Assets                            
Investment securities   $   82,187     $   1,037       1.68 %   $   74,402     $   1,026       1.84 %    
Loans (2)       661,797         23,687       4.77 %       582,616         21,704       4.97 %    
Interest bearing deposits due from other banks       17,715         41       0.31 %       50,305         90       0.24 %    
Total interest-earning assets   $   761,699     $   24,765       4.34 %   $   707,323     $   22,820       4.30 %    
                             
Allowance for loan losses       (10,438 )               (10,531 )            
Other assets       42,010                 48,751              
Total assets   $   793,271             $   745,543              
                             
Liabilities                            
Savings, NOW, money market, interest checking       154,046         543       0.47 %       130,884         468       0.48 %    
Time deposits       395,005         3,998       1.35 %       417,125         4,198       1.34 %    
Total interest-bearing deposits   $   549,051     $   4,541       1.10 %   $   548,009     $   4,666       1.14 %    
Other borrowings       9,369         221       3.15 %       12,377         463       4.99 %    
FHLB advances       39,276         403       1.37 %       19,271         232       1.61 %    
Junior subordinated debentures       12,372         339       3.66 %       12,372         360       3.88 %    
Total interest-bearing liabilities   $   610,068     $   5,504       1.20 %   $   592,029     $   5,721       1.29 %    
                             
Non-interest bearing deposits       61,236                 56,733              
Other liabilities       7,900                 6,828              
Total liabilities   $   679,204             $   655,590              
                             
SBLF preferred stock (3)       15,000                 15,000              
Shareholders’ equity       99,067                 74,953              
Total liabilities and equity   $   793,271             $   745,543              
                             
Net interest income           19,261                 17,099          
Interest rate spread (4)             3.13 %             3.01 %    
Net interest margin (5)             3.37 %             3.22 %    
Ratio of interest-earning assets to interest -bearing liabilities       1.25                 1.19              
                             
(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 Series C noncumulative perpetual preferred stock issued to the U.S. Treasury through the U.S. Treasury’s Small Business Lending Fund program.    
(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.            

CONTACT: Investor Relations Contact

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

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