Attached files
| file | filename |
|---|---|
| EX-10.1 - EX-10.1 - County Bancorp, Inc. | icbk-ex101_9.htm |
| EX-4.1 - EX-4.1 - County Bancorp, Inc. | icbk-ex41_10.htm |
| 8-K - 8-K - County Bancorp, Inc. | icbk-8k_20200723.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
COUNTY BANCORP, INC. ANNOUNCES SECOND QUARTER 2020 FINANCIAL RESULTS
Execution on strategic priorities and stabilizing milk prices drove strong client deposit growth
and improved sequential results
Highlights
|
|
• |
Net income of $2.7 million, or $0.40 per diluted share, for the second quarter 2020 |
|
|
• |
Net interest income increased $88,000 during the second quarter of 2020 due to reduction in cost of funds |
|
|
• |
Provision for loan losses decreased $1.1 million to $1.1 million in the second quarter of 2020 |
|
|
• |
Loans increased $75.1 million during the second quarter of 2020 primarily due to $106.0 million in Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loan applications approved |
|
|
• |
Average loans sold and serviced increased $8.8 million, and loan fees as a percentage of average loans sold and serviced increased 0.04% to 1.02% during the second quarter 2020 |
|
|
• |
Client deposits (demand deposits, NOW, savings, money market accounts, and certificates of deposit) increased $101.9 million, or 12.9%, during the second quarter of 2020 |
|
|
• |
Independent director Andrew Steimle selected as Chairman of the Board |
|
|
• |
Capital ratios remain strong with a Total Risk-Based Capital ratio of 20.2% and Tier 1 Leverage of 12.5% |
Manitowoc, Wisconsin, July 23, 2020 — 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 second quarter of 2020. Net income was $2.7 million, or $0.40 per diluted share, for the second quarter of 2020, compared to net income of $3.7 million, or $0.53 per diluted share, for the second quarter of 2019. For the six months ended June 30, 2020, there was a net loss of $2.5 million, or a $0.40 loss per diluted share, compared to net income of $7.5 million, or $0.53 per share, for the six months ended June 30, 2019. The 2020 net loss included a $5.0 million goodwill impairment charge, or $0.76 diluted loss per share. The Company concluded goodwill was impaired after an estimate of the fair value of the Company considering the uncertainty related to COVID-19 and its potential impact on future earnings, as well as comparable bank valuations. Excluding that charge, net income for the six months ended June 30, 2020 would have been $2.5 million, or $0.36 per diluted share.
Tim Schneider, President of County Bancorp, Inc., noted, “I am very pleased with how well our team has worked through the current COVID-19 environment to fulfill our mission as we partner with our local communities and businesses. With the vast majority of our employees working remotely, we were able to approve $106 million in SBA PPP loans to support our loyal and new customers and more than 14,000 jobs through this crisis. By executing against our strategic initiatives, we grew our client deposits this quarter expect to invest our excess liquidity during the second half of 2020 as we see increasing signs of stability and health in our operating environment.”
Schneider continued, “Overall, credit quality has held up well. However, we believe it will take some time to see the total impact of COVID-19 on overall credit quality and our provisions for loan losses. While we still have some customers asking for payment deferral related to COVID-19, which now totals $200 million, we witnessed a considerable rebound and stabilization of milk prices during the month of June, which we believe will benefit our agricultural borrowers. More specifically, class III milk prices (cwt) rebounded from the April and May lows of $12 to $13, to $16 to $21 in both June and in the futures for the remainder of 2020.”
Schneider concluded, “Lastly, we successfully raised $17.4 million in subordinated notes at the end of the second quarter 2020. This opportunistic capital raise reinforces County Bancorp’s value proposition and allows us to take advantage of additional market opportunities for our customers and communities. As part of our balanced capital allocation approach, we continue to monitor additional pathways to enhance shareholder value. We are pleased with the attractive pricing we received in the fixed income markets and the ability to strengthen our capital structure as we continue to execute against our short- and long-term strategic priorities. This capital raise allows us to keep our capital ratios strong and will enable us to continue our current dividend payout and common stock buyback plan. Of note, during the second quarter, we purchased 122,000 shares of common stock. We are also very proud to rejoin the Russell 2000 and Russell 3000 Indexes during the second quarter of 2020. This membership is an important milestone for us as we continue to execute our mission and serve our customers and communities. We believe our inclusion will positively impact the liquidity in our stock and create an opportunity to increase our exposure and share our compelling story with a broader investment audience.”
Loans and Securities
Total loans increased $75.1 million, or 7.4%, during the second quarter of 2020 and decreased $60.3 million, or 5.3%, year-over-year to $1.1 billion. The increase in total loans in the second quarter of 2020 was due primarily to SBA PPP loans totaling $106.0 million as of June 30, 2020. The decrease in total loans year-over-year was the result of a continued focus on long-term liquidity. Loan participations the Company continued to service were $762.1 million at June 30, 2020, an increase of $14.5 million, or 1.9%, compared to the first quarter of 2020, and an increase of $66.4 million, or 9.5%, year-over-year.
During the second quarter of 2020, investments decreased $19.2 million, or 7.8%, compared to March 31, 2020 due in part to the sale of $27.8 million of securities that resulted in a gain of $0.6 million.
Deposits
Total deposits at June 30, 2020 were $1.1 billion, an increase of $53.1 million, or 5.2%, from March 31, 2020 and decreased $132.1 million, or 11.0%, year-over-year. Client deposits (demand deposits, NOW accounts, savings accounts, money market accounts, and certificates of deposit) increased $101.9 million, or 12.9%, from March 31, 2020 and increased $94.4 million, or 11.8%, year-over-year. The increase in client deposits from the prior quarter-end was partially driven by customers who participated in the SBA PPP program. Deposits related to those customers totaled approximately $58 million as of June 30, 2020.
During the second quarter of 2020, the Company took advantage of the Federal Reserve Bank’s Paycheck Protection Program Liquidity Facility (“PPPLF”) and funded $99.7 million of SBA PPP loans through borrowings under the PPPLF at an interest rate of 0.35%. The Company’s overall focus remains on funding loan growth with client deposits; however, these borrowings helped bolster the Company’s overall liquidity. Due to the increases in loan participations and client deposit growth discussed above, the Company decreased its dependence on brokered deposits and national certificates of deposit to $179.5 million at June 30, 2020. This represents a decrease of $226.5 million, or 55.8%, from June 30, 2019.
Net Interest Income and Margin
|
|
• |
Net interest margin decreased both quarter-to-quarter and year-over-year due primarily to the SBA PPP loans that were funded during the second quarter of 2020 at annual yield of 1.0% and the repricing of loans in the declining rate environment. |
|
|
|
• |
Interest income on investment securities increased both quarter-to-quarter and year-over-year due to shifting balances from interest-bearing deposits with banks to investment securities. |
|
|
|
• |
Loan interest income decreased in the both linked and year-over-year periods as a result of the lower yields on the previously mentioned PPP loans and the shift from loans held on balance sheet to loans sold and serviced. |
|
|
|
• |
Interest expense on savings, NOW, money market, and interest checking accounts decreased despite the increase in average balance both in the linked quarter and year-over year due to the market-driven drop in interest rates which contributed to an overall lower cost of funds. |
|
The table below presents the effects of changing rates and volumes on net interest income for the periods indicated.
|
|
|
Three Months Ended June 30, 2020 v. Three Months Ended March 31, 2020 |
|
|
Three Months Ended June 30, 2020 v. Three Months Ended June 30, 2019 |
|
||||||||||||||||||
|
|
|
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 |
|
$ |
238 |
|
|
$ |
(82 |
) |
|
$ |
156 |
|
|
$ |
323 |
|
|
$ |
(138 |
) |
|
$ |
185 |
|
|
Loans |
|
|
1,044 |
|
|
|
(1,495 |
) |
|
|
(451 |
) |
|
|
(987 |
) |
|
|
(2,366 |
) |
|
|
(3,353 |
) |
|
Federal funds sold and interest-bearing deposits with banks |
|
|
13 |
|
|
|
(127 |
) |
|
|
(114 |
) |
|
|
(54 |
) |
|
|
(299 |
) |
|
|
(353 |
) |
|
Total interest income |
|
|
1,295 |
|
|
|
(1,704 |
) |
|
|
(409 |
) |
|
|
(718 |
) |
|
|
(2,803 |
) |
|
|
(3,521 |
) |
|
Interest Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market and interest checking |
|
$ |
126 |
|
|
$ |
(375 |
) |
|
$ |
(249 |
) |
|
$ |
344 |
|
|
$ |
(1,135 |
) |
|
$ |
(791 |
) |
|
Time deposits |
|
|
(347 |
) |
|
|
(30 |
) |
|
|
(377 |
) |
|
|
(1,254 |
) |
|
|
88 |
|
|
|
(1,166 |
) |
|
Other borrowings |
|
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
FHLB advances |
|
|
132 |
|
|
|
(37 |
) |
|
|
95 |
|
|
|
393 |
|
|
|
(466 |
) |
|
|
(73 |
) |
|
Junior subordinated debentures |
|
|
3 |
|
|
|
28 |
|
|
|
31 |
|
|
|
5 |
|
|
|
48 |
|
|
|
53 |
|
|
Total interest expense |
|
$ |
(83 |
) |
|
$ |
(414 |
) |
|
$ |
(497 |
) |
|
$ |
(511 |
) |
|
$ |
(1,465 |
) |
|
$ |
(1,976 |
) |
|
Net interest income |
|
$ |
1,378 |
|
|
$ |
(1,290 |
) |
|
$ |
88 |
|
|
$ |
(207 |
) |
|
$ |
(1,338 |
) |
|
$ |
(1,545 |
) |
The following table sets forth average balances, average yields and rates, and income and expenses for the period indicated.
|
|
|
For the Three Months Ended |
|
|||||||||||||||||||||||||||||||||
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
June 30, 2019 |
|
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|
|
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Average Balance (1) |
|
|
Income/ Expense |
|
|
Yields/ Rates |
|
|
Average Balance (1) |
|
|
Income/ Expense |
|
|
Yields/ Rates |
|
|
Average Balance (1) |
|
|
Income/ Expense |
|
|
Yields/ Rates |
|
|||||||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||||||||||||||||||
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Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
|
$ |
237,082 |
|
|
$ |
1,444 |
|
|
|
2.44 |
% |
|
$ |
196,353 |
|
|
$ |
1,289 |
|
|
|
2.63 |
% |
|
$ |
176,237 |
|
|
$ |
1,259 |
|
|
|
2.86 |
% |
|
Loans (2) |
|
|
1,098,327 |
|
|
|
12,131 |
|
|
|
4.42 |
% |
|
|
1,028,637 |
|
|
|
12,582 |
|
|
|
4.89 |
% |
|
|
1,177,071 |
|
|
|
15,484 |
|
|
|
5.26 |
% |
|
Interest bearing deposits due from other banks |
|
|
64,142 |
|
|
|
111 |
|
|
|
0.69 |
% |
|
|
60,825 |
|
|
|
225 |
|
|
|
1.48 |
% |
|
|
73,769 |
|
|
|
465 |
|
|
|
2.52 |
% |
|
Total interest-earning assets |
|
$ |
1,399,551 |
|
|
$ |
13,686 |
|
|
|
3.91 |
% |
|
$ |
1,285,815 |
|
|
$ |
14,096 |
|
|
|
4.39 |
% |
|
$ |
1,427,077 |
|
|
$ |
17,208 |
|
|
|
4.82 |
% |
|
Allowance for loan losses |
|
|
(17,844 |
) |
|
|
|
|
|
|
|
|
|
|
(15,330 |
) |
|
|
|
|
|
|
|
|
|
|
(17,782 |
) |
|
|
|
|
|
|
|
|
|
Other assets |
|
|
85,716 |
|
|
|
|
|
|
|
|
|
|
|
84,461 |
|
|
|
|
|
|
|
|
|
|
|
76,806 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
|
$ |
1,354,946 |
|
|
|
|
|
|
|
|
|
|
$ |
1,486,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market, interest checking |
|
$ |
379,991 |
|
|
$ |
525 |
|
|
|
0.55 |
% |
|
$ |
334,740 |
|
|
$ |
774 |
|
|
|
0.92 |
% |
|
$ |
315,940 |
|
|
$ |
1,316 |
|
|
|
1.67 |
% |
|
Time deposits |
|
|
553,616 |
|
|
|
3,196 |
|
|
|
2.31 |
% |
|
|
613,753 |
|
|
|
3,574 |
|
|
|
2.33 |
% |
|
|
770,554 |
|
|
|
4,363 |
|
|
|
2.26 |
% |
|
Total interest-bearing deposits |
|
$ |
933,607 |
|
|
$ |
3,721 |
|
|
|
1.59 |
% |
|
$ |
948,493 |
|
|
$ |
4,348 |
|
|
|
1.83 |
% |
|
$ |
1,086,494 |
|
|
$ |
5,679 |
|
|
|
2.09 |
% |
|
Other borrowings |
|
|
66,910 |
|
|
|
15 |
|
|
|
0.09 |
% |
|
|
1,259 |
|
|
|
11 |
|
|
|
3.49 |
% |
|
|
1,204 |
|
|
|
13 |
|
|
|
4.47 |
% |
|
FHLB advances |
|
|
103,916 |
|
|
|
328 |
|
|
|
1.26 |
% |
|
|
56,708 |
|
|
|
233 |
|
|
|
1.65 |
% |
|
|
78,653 |
|
|
|
401 |
|
|
|
2.04 |
% |
|
Junior subordinated debentures |
|
|
45,090 |
|
|
|
737 |
|
|
|
6.53 |
% |
|
|
44,871 |
|
|
|
706 |
|
|
|
6.29 |
% |
|
|
44,762 |
|
|
|
683 |
|
|
|
6.11 |
% |
|
Total interest-bearing liabilities |
|
$ |
1,149,523 |
|
|
$ |
4,800 |
|
|
|
1.67 |
% |
|
$ |
1,051,331 |
|
|
$ |
5,298 |
|
|
|
2.02 |
% |
|
$ |
1,211,113 |
|
|
$ |
6,776 |
|
|
|
2.24 |
% |
|
Non-interest bearing deposits |
|
|
134,271 |
|
|
|
|
|
|
|
|
|
|
|
113,351 |
|
|
|
|
|
|
|
|
|
|
|
102,432 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
16,749 |
|
|
|
|
|
|
|
|
|
|
|
16,877 |
|
|
|
|
|
|
|
|
|
|
|
12,154 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
$ |
1,300,543 |
|
|
|
|
|
|
|
|
|
|
$ |
1,181,559 |
|
|
|
|
|
|
|
|
|
|
$ |
1,325,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
166,880 |
|
|
|
|
|
|
|
|
|
|
|
173,387 |
|
|
|
|
|
|
|
|
|
|
|
160,402 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
|
$ |
1,354,946 |
|
|
|
|
|
|
|
|
|
|
$ |
1,486,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
8,886 |
|
|
|
|
|
|
|
|
|
|
$ |
8,798 |
|
|
|
|
|
|
|
|
|
|
$ |
10,432 |
|
|
|
|
|
|
Interest rate spread (3) |
|
|
|
|
|
|
|
|
|
|
2.24 |
% |
|
|
|
|
|
|
|
|
|
|
2.37 |
% |
|
|
|
|
|
|
|
|
|
|
2.59 |
% |
|
Net interest margin (4) |
|
|
|
|
|
|
|
|
|
|
2.54 |
% |
|
|
|
|
|
|
|
|
|
|
2.74 |
% |
|
|
|
|
|
|
|
|
|
|
2.92 |
% |
|
Ratio of interest-earning assets to interest-bearing liabilities |
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
|
1.18 |
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
|
• |
Loan servicing income increased in the linked quarter due primarily to a 0.03% increase in loan servicing fees as a percent of average loans serviced during the second quarter. Year-over-year, loan servicing fees increased due primarily to a 0.10% increase in loan servicing fees as a percent of average loans serviced and an increase in loans serviced. |
|
|
• |
Loan servicing right origination decreased in the linked quarter and year-over-year; however, loan servicing rights as a percent of loans serviced increased to 2.14% at June 30, 2020 from 1.38% at June 30, 2019. |
|
|
• |
$27.8 million of securities were sold during the second quarter of 2020 which resulted in a $0.6 million gain. |
|
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
$ |
368 |
|
|
$ |
342 |
|
|
$ |
549 |
|
|
$ |
348 |
|
|
$ |
407 |
|
|
Gain on sale of loans, net |
|
|
4 |
|
|
|
38 |
|
|
|
34 |
|
|
|
87 |
|
|
|
26 |
|
|
Loan servicing fees |
|
|
1,923 |
|
|
|
1,831 |
|
|
|
1,778 |
|
|
|
1,677 |
|
|
|
1,563 |
|
|
Loan servicing right origination |
|
|
275 |
|
|
|
289 |
|
|
|
1,146 |
|
|
|
1,741 |
|
|
|
346 |
|
|
Income on OREO |
|
|
3 |
|
|
|
— |
|
|
|
54 |
|
|
|
10 |
|
|
|
40 |
|
|
Gain on sale of securities |
|
|
570 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
341 |
|
|
Other |
|
|
237 |
|
|
|
203 |
|
|
|
161 |
|
|
|
171 |
|
|
|
164 |
|
|
Total non-interest income |
|
$ |
3,380 |
|
|
$ |
2,703 |
|
|
$ |
3,722 |
|
|
$ |
4,034 |
|
|
$ |
2,887 |
|
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Loan servicing rights, end of period |
|
$ |
16,486 |
|
|
$ |
16,211 |
|
|
$ |
12,509 |
|
|
$ |
11,362 |
|
|
$ |
9,621 |
|
|
Loans serviced, end of period |
|
|
762,058 |
|
|
|
747,553 |
|
|
|
751,738 |
|
|
|
736,823 |
|
|
|
695,629 |
|
|
Loan servicing rights as a % of loans serviced |
|
|
2.16 |
% |
|
|
2.17 |
% |
|
|
1.66 |
% |
|
|
1.54 |
% |
|
|
1.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loan servicing fees |
|
$ |
1,923 |
|
|
$ |
1,831 |
|
|
$ |
1,778 |
|
|
$ |
1,677 |
|
|
$ |
1,563 |
|
|
Average loans serviced |
|
|
754,806 |
|
|
|
749,646 |
|
|
|
744,281 |
|
|
|
716,226 |
|
|
|
685,449 |
|
|
Annualized loan servicing fees as a % of average loans serviced |
|
|
1.02 |
% |
|
|
0.98 |
% |
|
|
0.96 |
% |
|
|
0.94 |
% |
|
|
0.91 |
% |
Non-Interest Expense
|
|
• |
The decrease in employee compensation and benefits expense in the linked quarter was the result of an increase in deferred loan costs (which is comprised primarily of salary expenses) associated with the PPP loans that were capitalized during the second quarter. The year-over-year increase in employee compensation and benefits expense was mainly the result of a 7.1% increase in headcount. |
|
|
|
• |
Goodwill was considered impaired and fully written-off in the first quarter 2020. |
|
|
|
• |
There was no write-down of OREO properties in the second quarter of 2020 compared to writedowns in the linked quarter and year-over-year. |
|
|
|
• |
The decrease in other non-interest expense in the linked quarter was primarily is the result of a loss of $0.3 million recognized on the sale-leaseback of the Manitowoc branch in the first quarter and reduced travel and education expenses as a result of the COVID-19 pandemic. |
|
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||||||
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
$ |
4,594 |
|
|
$ |
5,260 |
|
|
$ |
5,696 |
|
|
$ |
4,735 |
|
|
$ |
4,199 |
|
|
Occupancy |
|
|
305 |
|
|
|
354 |
|
|
|
417 |
|
|
|
313 |
|
|
|
283 |
|
|
Information processing |
|
|
663 |
|
|
|
670 |
|
|
|
645 |
|
|
|
683 |
|
|
|
591 |
|
|
Professional fees |
|
|
480 |
|
|
|
401 |
|
|
|
371 |
|
|
|
483 |
|
|
|
417 |
|
|
Business development |
|
|
333 |
|
|
|
366 |
|
|
|
335 |
|
|
|
351 |
|
|
|
347 |
|
|
OREO expenses |
|
|
44 |
|
|
|
116 |
|
|
|
59 |
|
|
|
57 |
|
|
|
121 |
|
|
Writedown of OREO |
|
|
— |
|
|
|
1,360 |
|
|
|
376 |
|
|
|
— |
|
|
|
250 |
|
|
Net loss (gain) on sale of OREO |
|
|
— |
|
|
|
4 |
|
|
|
(231 |
) |
|
|
160 |
|
|
|
9 |
|
|
Depreciation and amortization |
|
|
303 |
|
|
|
301 |
|
|
|
319 |
|
|
|
319 |
|
|
|
328 |
|
|
Goodwill impairment |
|
|
— |
|
|
|
5,038 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Other |
|
|
743 |
|
|
|
1,148 |
|
|
|
2,278 |
|
|
|
567 |
|
|
|
901 |
|
|
Total non-interest expense |
|
$ |
7,465 |
|
|
$ |
15,018 |
|
|
$ |
10,265 |
|
|
$ |
7,668 |
|
|
$ |
7,446 |
|
Asset Quality
|
|
• |
The increase in substandard loans and the adverse classified asset ratio in the linked quarter were primarily due to the downgrade of four agricultural customers and a single hotel customer. |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Loans by risk category(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sound/Acceptable/Satisfactory/ Low Satisfactory |
|
$ |
798,945 |
|
|
$ |
706,247 |
|
|
$ |
724,444 |
|
|
$ |
771,567 |
|
|
$ |
837,094 |
|
|
Watch |
|
|
198,044 |
|
|
|
219,459 |
|
|
|
216,098 |
|
|
|
202,615 |
|
|
|
175,995 |
|
|
Special Mention |
|
|
1,856 |
|
|
|
15,036 |
|
|
|
9,239 |
|
|
|
9,346 |
|
|
|
25,254 |
|
|
Substandard Performing |
|
|
47,741 |
|
|
|
34,179 |
|
|
|
49,774 |
|
|
|
71,133 |
|
|
|
83,992 |
|
|
Substandard Impaired |
|
|
40,938 |
|
|
|
37,515 |
|
|
|
36,218 |
|
|
|
26,106 |
|
|
|
25,497 |
|
|
Total loans |
|
$ |
1,087,524 |
|
|
$ |
1,012,436 |
|
|
$ |
1,035,773 |
|
|
$ |
1,080,767 |
|
|
$ |
1,147,832 |
|
|
Adverse classified asset ratio (2) |
|
|
41.73 |
% |
|
|
32.35 |
% |
|
|
39.85 |
% |
|
|
45.67 |
% |
|
|
53.21 |
% |
|
|
(1) |
Troubled debt restructurings are presented in their internal risk rating category rather than reclassified to substandard impaired. Prior quarters have been reclassified to reflect this change. |
|
|
(2) |
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 linked quarter by $2.8 million, or 7.9%, sequentially. Year-over-year, non-performing assets increased $9.3 million, or 32.3%, due to a $5.8 million increase in non-accrual agricultural loans and a $9.6 million increase in non-accrual commercial loans, which were partially offset by a $6.1 million decrease in OREO properties. |
|
|
• |
A provision for loan losses of $1.1 million was recorded for the three months ended June 30, 2020 compared to a provision of $0.9 million for the three months ended June 30, 2019. The increase in provision was the result of the increase in substandard impaired loans. |
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Non-Performing Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
|
$ |
35,456 |
|
|
$ |
32,051 |
|
|
$ |
30,968 |
|
|
$ |
20,776 |
|
|
$ |
20,096 |
|
|
Other real estate owned |
|
|
2,629 |
|
|
|
3,247 |
|
|
|
5,521 |
|
|
|
7,252 |
|
|
|
8,693 |
|
|
Total non-performing assets |
|
$ |
38,085 |
|
|
$ |
35,298 |
|
|
$ |
36,489 |
|
|
$ |
28,028 |
|
|
$ |
28,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing TDRs not on nonaccrual |
|
$ |
21,986 |
|
|
$ |
21,853 |
|
|
$ |
21,784 |
|
|
$ |
28,520 |
|
|
$ |
28,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a % of total loans |
|
|
3.50 |
% |
|
|
3.49 |
% |
|
|
3.52 |
% |
|
|
2.59 |
% |
|
|
2.51 |
% |
|
Non-performing assets as a % of total assets |
|
|
2.52 |
% |
|
|
2.61 |
% |
|
|
2.65 |
% |
|
|
1.98 |
% |
|
|
1.94 |
% |
|
Allowance for loan losses as a % of total loans |
|
|
1.71 |
% |
|
|
1.73 |
% |
|
|
1.47 |
% |
|
|
1.39 |
% |
|
|
1.42 |
% |
|
Net charge-offs (recoveries) quarter- to-date |
|
$ |
120 |
|
|
$ |
(62 |
) |
|
$ |
(253 |
) |
|
$ |
39 |
|
|
$ |
2,111 |
|
Corporate Updates
At the annual organizational meeting of the Company’s and the Bank’s boards of directors, Chair William Censky informed the boards that he did not wish to seek re-election as chair of the Company and the Bank. Censky, who is one of the Company's co-founders, has served as chair since the Company's inception in 1996 and will remain a director on the boards of directors of both the Company and the Bank.
According to Timothy Schneider, CEO of Investors Community Bank and President of County Bancorp, Inc., "We are grateful for Bill's leadership and strategic contributions over the past 23 years. His focus on excellence as well as his unwavering support for the bank, its employees and our communities has been vital to our success."
On July 21, 2020, the respective boards appointed current independent director Andrew Steimle as the new chair of the boards of directors of both the Company and the Bank. Steimle has served on both boards of directors since April 2008. He is a business and real estate attorney practicing in Wisconsin and is a founding partner of Steimle Birschbach LLC. Additionally, the Company’s board of directors appointed director Kathi P. Seifert as Chair of the Nominating and Governance Committee and director Vicki L. Leinbach as Chair of the Compensation Committee.
Conference Call
The Company will host an earnings call tomorrow, July 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 July 24, 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, 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) |
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||||||
|
Period-End Balance Sheet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
127,432 |
|
|
$ |
21,545 |
|
|
$ |
129,011 |
|
|
$ |
120,845 |
|
|
$ |
116,251 |
|
|
Securities available for sale, at fair value |
|
|
226,971 |
|
|
|
246,148 |
|
|
|
158,733 |
|
|
|
154,962 |
|
|
|
158,561 |
|
|
Loans held for sale |
|
|
11,847 |
|
|
|
14,388 |
|
|
|
2,151 |
|
|
|
4,192 |
|
|
|
7,448 |
|
|
Agricultural loans |
|
|
624,340 |
|
|
|
642,066 |
|
|
|
659,725 |
|
|
|
673,742 |
|
|
|
713,602 |
|
|
Commercial loans |
|
|
328,368 |
|
|
|
325,310 |
|
|
|
331,723 |
|
|
|
360,132 |
|
|
|
383,542 |
|
|
Paycheck Protection Plan loans |
|
|
103,317 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Multi-family real estate loans |
|
|
30,439 |
|
|
|
42,198 |
|
|
|
41,070 |
|
|
|
43,487 |
|
|
|
46,683 |
|
|
Residential real estate loans |
|
|
975 |
|
|
|
2,753 |
|
|
|
2,888 |
|
|
|
3,183 |
|
|
|
3,753 |
|
|
Installment and consumer other |
|
|
85 |
|
|
|
109 |
|
|
|
367 |
|
|
|
223 |
|
|
|
252 |
|
|
Total loans |
|
|
1,087,524 |
|
|
|
1,012,436 |
|
|
|
1,035,773 |
|
|
|
1,080,767 |
|
|
|
1,147,832 |
|
|
Allowance for loan losses |
|
|
(18,569 |
) |
|
|
(17,547 |
) |
|
|
(15,267 |
) |
|
|
(15,065 |
) |
|
|
(16,258 |
) |
|
Net loans |
|
|
1,068,955 |
|
|
|
994,889 |
|
|
|
1,020,506 |
|
|
|
1,065,702 |
|
|
|
1,131,574 |
|
|
Other assets |
|
|
78,712 |
|
|
|
78,004 |
|
|
|
68,378 |
|
|
|
69,263 |
|
|
|
70,812 |
|
|
Total Assets |
|
$ |
1,513,917 |
|
|
$ |
1,354,974 |
|
|
$ |
1,378,779 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
149,963 |
|
|
$ |
117,434 |
|
|
$ |
138,489 |
|
|
$ |
117,224 |
|
|
$ |
111,022 |
|
|
NOW accounts and interest checking |
|
|
81,656 |
|
|
|
64,873 |
|
|
|
63,781 |
|
|
|
56,637 |
|
|
|
54,253 |
|
|
Savings |
|
|
8,369 |
|
|
|
6,566 |
|
|
|
15,708 |
|
|
|
6,981 |
|
|
|
6,621 |
|
|
Money market accounts |
|
|
307,083 |
|
|
|
237,889 |
|
|
|
242,539 |
|
|
|
248,608 |
|
|
|
239,337 |
|
|
Time deposits |
|
|
346,482 |
|
|
|
364,930 |
|
|
|
375,100 |
|
|
|
388,759 |
|
|
|
387,899 |
|
|
Brokered deposits |
|
|
121,503 |
|
|
|
161,882 |
|
|
|
166,340 |
|
|
|
206,474 |
|
|
|
256,475 |
|
|
National time deposits |
|
|
57,997 |
|
|
|
66,386 |
|
|
|
99,485 |
|
|
|
118,070 |
|
|
|
149,570 |
|
|
Total deposits |
|
|
1,073,053 |
|
|
|
1,019,960 |
|
|
|
1,101,442 |
|
|
|
1,142,753 |
|
|
|
1,205,177 |
|
|
Federal Reserve Discount Window advances |
|
|
99,693 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
FHLB advances |
|
|
93,400 |
|
|
|
109,400 |
|
|
|
44,400 |
|
|
|
44,400 |
|
|
|
59,400 |
|
|
Subordinated debentures |
|
|
61,910 |
|
|
|
44,896 |
|
|
|
44,858 |
|
|
|
44,820 |
|
|
|
44,781 |
|
|
Other liabilities |
|
|
17,336 |
|
|
|
15,672 |
|
|
|
16,050 |
|
|
|
14,239 |
|
|
|
12,564 |
|
|
Total Liabilities |
|
|
1,345,392 |
|
|
|
1,189,928 |
|
|
|
1,206,750 |
|
|
|
1,246,212 |
|
|
|
1,321,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
168,525 |
|
|
|
165,046 |
|
|
|
172,029 |
|
|
|
168,752 |
|
|
|
162,724 |
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
1,513,917 |
|
|
$ |
1,354,974 |
|
|
$ |
1,378,779 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Price Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High - Quarter-to-date |
|
$ |
24.67 |
|
|
$ |
27.19 |
|
|
$ |
27.98 |
|
|
$ |
20.99 |
|
|
$ |
18.92 |
|
|
Low - Quarter-to-date |
|
$ |
17.13 |
|
|
$ |
13.55 |
|
|
$ |
18.76 |
|
|
$ |
16.80 |
|
|
$ |
16.24 |
|
|
Market price - Quarter-end |
|
$ |
20.93 |
|
|
$ |
18.50 |
|
|
$ |
25.63 |
|
|
$ |
19.62 |
|
|
$ |
17.09 |
|
|
Book value per share |
|
$ |
25.18 |
|
|
$ |
24.17 |
|
|
$ |
24.32 |
|
|
$ |
23.89 |
|
|
$ |
23.03 |
|
|
Tangible book value per share (1) |
|
$ |
25.16 |
|
|
$ |
24.15 |
|
|
$ |
23.58 |
|
|
$ |
23.10 |
|
|
$ |
22.23 |
|
|
Common shares outstanding |
|
|
6,375,150 |
|
|
|
6,496,790 |
|
|
|
6,734,132 |
|
|
|
6,727,908 |
|
|
|
6,717,908 |
|
|
|
(1) |
This is a non-GAAP financial measure. A reconciliation to GAAP is included below. |
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||||||
|
Selected Income Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
12,130 |
|
|
$ |
12,582 |
|
|
$ |
13,691 |
|
|
$ |
15,030 |
|
|
$ |
15,484 |
|
|
Taxable securities |
|
|
1,283 |
|
|
|
1,282 |
|
|
|
1,106 |
|
|
|
1,117 |
|
|
|
1,177 |
|
|
Tax-exempt securities |
|
|
162 |
|
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
82 |
|
|
Federal funds sold and other |
|
|
111 |
|
|
|
225 |
|
|
|
442 |
|
|
|
612 |
|
|
|
465 |
|
|
Total interest and dividend income |
|
|
13,686 |
|
|
|
14,095 |
|
|
|
15,239 |
|
|
|
16,759 |
|
|
|
17,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
3,721 |
|
|
|
4,347 |
|
|
|
4,781 |
|
|
|
5,574 |
|
|
|
5,678 |
|
|
FHLB advances and other borrowed funds |
|
|
343 |
|
|
|
244 |
|
|
|
225 |
|
|
|
246 |
|
|
|
415 |
|
|
Subordinated debentures |
|
|
736 |
|
|
|
706 |
|
|
|
695 |
|
|
|
687 |
|
|
|
683 |
|
|
Total interest expense |
|
|
4,800 |
|
|
|
5,297 |
|
|
|
5,701 |
|
|
|
6,507 |
|
|
|
6,776 |
|
|
Net interest income |
|
|
8,886 |
|
|
|
8,798 |
|
|
|
9,538 |
|
|
|
10,252 |
|
|
|
10,432 |
|
|
Provision for loan losses |
|
|
1,142 |
|
|
|
2,218 |
|
|
|
(51 |
) |
|
|
(1,154 |
) |
|
|
876 |
|
|
Net interest income after provision for loan losses |
|
|
7,744 |
|
|
|
6,580 |
|
|
|
9,589 |
|
|
|
11,406 |
|
|
|
9,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services charges |
|
|
368 |
|
|
|
342 |
|
|
|
549 |
|
|
|
348 |
|
|
|
407 |
|
|
Gain on sale of loans, net |
|
|
4 |
|
|
|
38 |
|
|
|
34 |
|
|
|
87 |
|
|
|
26 |
|
|
Loan servicing fees |
|
|
1,923 |
|
|
|
1,831 |
|
|
|
1,778 |
|
|
|
1,677 |
|
|
|
1,563 |
|
|
Loan servicing right origination |
|
|
275 |
|
|
|
289 |
|
|
|
1,146 |
|
|
|
1,741 |
|
|
|
346 |
|
|
Income on OREO |
|
|
3 |
|
|
|
— |
|
|
|
54 |
|
|
|
10 |
|
|
|
40 |
|
|
Gain on sale of securities |
|
|
570 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
341 |
|
|
Other |
|
|
237 |
|
|
|
203 |
|
|
|
161 |
|
|
|
171 |
|
|
|
164 |
|
|
Total non-interest income |
|
|
3,380 |
|
|
|
2,703 |
|
|
|
3,722 |
|
|
|
4,034 |
|
|
|
2,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
4,594 |
|
|
|
5,260 |
|
|
|
5,696 |
|
|
|
4,735 |
|
|
|
4,199 |
|
|
Occupancy |
|
|
305 |
|
|
|
354 |
|
|
|
417 |
|
|
|
313 |
|
|
|
283 |
|
|
Information processing |
|
|
663 |
|
|
|
670 |
|
|
|
645 |
|
|
|
683 |
|
|
|
591 |
|
|
Professional fees |
|
|
480 |
|
|
|
401 |
|
|
|
371 |
|
|
|
483 |
|
|
|
417 |
|
|
Business development |
|
|
333 |
|
|
|
366 |
|
|
|
335 |
|
|
|
351 |
|
|
|
347 |
|
|
OREO expenses |
|
|
44 |
|
|
|
116 |
|
|
|
59 |
|
|
|
57 |
|
|
|
121 |
|
|
Writedown of OREO |
|
|
— |
|
|
|
1,360 |
|
|
|
376 |
|
|
|
— |
|
|
|
250 |
|
|
Net loss (gain) on sale of OREO |
|
|
— |
|
|
|
4 |
|
|
|
(231 |
) |
|
|
160 |
|
|
|
9 |
|
|
Depreciation and amortization |
|
|
303 |
|
|
|
301 |
|
|
|
319 |
|
|
|
319 |
|
|
|
328 |
|
|
Goodwill impairment |
|
|
— |
|
|
|
5,038 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Other |
|
|
743 |
|
|
|
1,148 |
|
|
|
2,278 |
|
|
|
567 |
|
|
|
901 |
|
|
Total non-interest expense |
|
|
7,465 |
|
|
|
15,018 |
|
|
|
10,265 |
|
|
|
7,668 |
|
|
|
7,446 |
|
|
Income before income taxes |
|
|
3,659 |
|
|
|
(5,735 |
) |
|
|
3,046 |
|
|
|
7,772 |
|
|
|
4,997 |
|
|
Income tax expense |
|
|
926 |
|
|
|
(547 |
) |
|
|
(258 |
) |
|
|
2,090 |
|
|
|
1,293 |
|
|
NET INCOME (LOSS) |
|
$ |
2,733 |
|
|
$ |
(5,188 |
) |
|
$ |
3,304 |
|
|
$ |
5,682 |
|
|
$ |
3,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
|
$ |
0.40 |
|
|
$ |
(0.79 |
) |
|
$ |
0.47 |
|
|
$ |
0.82 |
|
|
$ |
0.53 |
|
|
Diluted earnings (loss) per share |
|
$ |
0.40 |
|
|
$ |
(0.78 |
) |
|
$ |
0.47 |
|
|
$ |
0.82 |
|
|
$ |
0.53 |
|
|
Dividends declared per share |
|
$ |
0.07 |
|
|
$ |
0.07 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands, except share data) |
|
|||||||||||||||||
|
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(1) |
|
|
0.74 |
% |
|
|
(1.53 |
)% |
|
|
0.96 |
% |
|
|
1.57 |
% |
|
|
1.00 |
% |
|
Return on average shareholders' equity(1) |
|
|
6.55 |
% |
|
|
(11.97 |
)% |
|
|
7.74 |
% |
|
|
13.73 |
% |
|
|
9.24 |
% |
|
Return on average common shareholders' equity (1)(2) |
|
|
6.63 |
% |
|
|
(12.81 |
)% |
|
|
7.83 |
% |
|
|
14.14 |
% |
|
|
9.41 |
% |
|
Efficiency ratio (1)(2) |
|
|
63.83 |
% |
|
|
74.92 |
% |
|
|
76.32 |
% |
|
|
52.55 |
% |
|
|
55.38 |
% |
|
Tangible common equity to tangible assets (2) |
|
|
10.60 |
% |
|
|
11.58 |
% |
|
|
11.56 |
% |
|
|
11.03 |
% |
|
|
10.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
2,733 |
|
|
$ |
(5,188 |
) |
|
$ |
3,304 |
|
|
$ |
5,682 |
|
|
$ |
3,704 |
|
|
Less: Preferred stock dividends |
|
|
99 |
|
|
|
108 |
|
|
|
117 |
|
|
|
120 |
|
|
|
118 |
|
|
Income available to common shareholders |
|
$ |
2,634 |
|
|
$ |
(5,296 |
) |
|
$ |
3,187 |
|
|
$ |
5,562 |
|
|
$ |
3,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares issued |
|
|
7,198,901 |
|
|
|
7,182,945 |
|
|
|
7,173,290 |
|
|
|
7,168,785 |
|
|
|
7,159,072 |
|
|
Less: Weighted average treasury shares |
|
|
759,294 |
|
|
|
518,740 |
|
|
|
443,920 |
|
|
|
443,920 |
|
|
|
443,920 |
|
|
Plus: Weighted average non- vested restricted stock units |
|
|
65,291 |
|
|
|
39,785 |
|
|
|
32,125 |
|
|
|
32,125 |
|
|
|
30,483 |
|
|
Weighted average number of common shares outstanding |
|
|
6,504,898 |
|
|
|
6,703,990 |
|
|
|
6,761,495 |
|
|
|
6,756,990 |
|
|
|
6,745,635 |
|
|
Effect of dilutive options |
|
|
28,511 |
|
|
|
49,072 |
|
|
|
44,630 |
|
|
|
19,160 |
|
|
|
20,731 |
|
|
Weighted average number of common shares outstanding used to calculate diluted earnings per common share |
|
|
6,533,409 |
|
|
|
6,753,062 |
|
|
|
6,806,125 |
|
|
|
6,776,150 |
|
|
|
6,766,366 |
|
|
|
(1) |
Annualized |
|
|
(2) |
This is a non-GAAP financial measure. A reconciliation to GAAP is included below. |
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Return on average common shareholders' equity reconciliation(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average shareholders' equity |
|
|
6.55 |
% |
|
|
(11.97 |
)% |
|
|
7.74 |
% |
|
|
13.73 |
% |
|
|
9.24 |
% |
|
Effect of excluding average preferred shareholders' equity |
|
|
0.08 |
% |
|
|
(0.84 |
)% |
|
|
0.09 |
% |
|
|
0.41 |
% |
|
|
0.17 |
% |
|
Return on average common shareholders' equity |
|
|
6.63 |
% |
|
|
(12.81 |
)% |
|
|
7.83 |
% |
|
|
14.14 |
% |
|
|
9.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
$ |
7,465 |
|
|
$ |
15,018 |
|
|
$ |
10,265 |
|
|
$ |
7,668 |
|
|
$ |
7,446 |
|
|
Less: goodwill impairment |
|
|
— |
|
|
|
(5,038 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Less: net loss on sales and write-downs of OREO |
|
|
— |
|
|
|
(1,364 |
) |
|
|
(145 |
) |
|
|
(160 |
) |
|
|
(259 |
) |
|
Adjusted non-interest expense (non-GAAP) |
|
$ |
7,465 |
|
|
$ |
8,616 |
|
|
$ |
10,120 |
|
|
$ |
7,508 |
|
|
$ |
7,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
8,886 |
|
|
$ |
8,798 |
|
|
$ |
9,538 |
|
|
$ |
10,252 |
|
|
$ |
10,432 |
|
|
Non-interest income |
|
|
3,380 |
|
|
|
2,703 |
|
|
|
3,722 |
|
|
|
4,034 |
|
|
|
2,887 |
|
|
Less: net gain on sales of securities |
|
|
(570 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(341 |
) |
|
Operating revenue |
|
$ |
11,696 |
|
|
$ |
11,501 |
|
|
$ |
13,260 |
|
|
$ |
14,286 |
|
|
$ |
12,978 |
|
|
Efficiency ratio |
|
|
63.83 |
% |
|
|
74.92 |
% |
|
|
76.32 |
% |
|
|
52.55 |
% |
|
|
55.38 |
% |
|
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
|
|
June 30, 2020 |
|
|
June 30, 2019 |
|
|
June 30, 2020 |
|
|
June 30, 2019 |
|
||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||
|
Adjusted diluted earnings per share(3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
2,733 |
|
|
$ |
3,704 |
|
|
$ |
(2,454 |
) |
|
$ |
7,466 |
|
|
Less: preferred stock dividends |
|
|
(99 |
) |
|
|
(118 |
) |
|
|
(207 |
) |
|
|
(235 |
) |
|
Plus: Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
5,038 |
|
|
|
— |
|
|
Adjusted income available to common shareholders for basic earnings per common share |
|
$ |
2,634 |
|
|
$ |
3,586 |
|
|
$ |
2,377 |
|
|
$ |
7,231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
6,504,898 |
|
|
|
6,745,635 |
|
|
|
6,604,187 |
|
|
|
6,735,725 |
|
|
Effect of dilutive options |
|
|
28,511 |
|
|
|
20,731 |
|
|
|
39,548 |
|
|
|
21,170 |
|
|
Weighted average number of common shares outstanding used to calculate diluted earnings per common share |
|
|
6,533,409 |
|
|
|
6,766,366 |
|
|
|
6,643,735 |
|
|
|
6,756,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share |
|
$ |
0.40 |
|
|
$ |
0.53 |
|
|
$ |
0.36 |
|
|
$ |
1.07 |
|
|
|
(1) |
Management uses the return on average common shareholders’ equity in order 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):
|
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
September 30, 2019 |
|
|
June 30, 2019 |
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||||||
|
Tangible book value per share and tangible common equity to tangible assets reconciliation(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity |
|
$ |
160,526 |
|
|
$ |
157,046 |
|
|
$ |
164,029 |
|
|
$ |
160,752 |
|
|
$ |
154,724 |
|
|
Less: Goodwill |
|
|
— |
|
|
|
— |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
Less: Core deposit intangible, net of amortization |
|
|
125 |
|
|
|
171 |
|
|
|
225 |
|
|
|
286 |
|
|
|
354 |
|
|
Tangible common equity (non-GAAP) |
|
$ |
160,401 |
|
|
$ |
156,875 |
|
|
$ |
158,766 |
|
|
$ |
155,428 |
|
|
$ |
149,332 |
|
|
Common shares outstanding |
|
|
6,375,150 |
|
|
|
6,496,790 |
|
|
|
6,734,132 |
|
|
|
6,727,908 |
|
|
|
6,717,908 |
|
|
Tangible book value per share |
|
$ |
25.16 |
|
|
$ |
24.15 |
|
|
$ |
23.58 |
|
|
$ |
23.10 |
|
|
$ |
22.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,513,917 |
|
|
$ |
1,354,974 |
|
|
$ |
1,378,779 |
|
|
$ |
1,414,964 |
|
|
$ |
1,484,646 |
|
|
Less: Goodwill |
|
|
— |
|
|
|
— |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
|
5,038 |
|
|
Less: Core deposit intangible, net of amortization |
|
|
125 |
|
|
|
171 |
|
|
|
225 |
|
|
|
603 |
|
|
|
701 |
|
|
Tangible assets (non-GAAP) |
|
$ |
1,513,792 |
|
|
$ |
1,354,803 |
|
|
$ |
1,373,516 |
|
|
$ |
1,409,323 |
|
|
$ |
1,478,907 |
|
|
Tangible common equity to tangible assets |
|
|
10.60 |
% |
|
|
11.58 |
% |
|
|
11.56 |
% |
|
|
11.03 |
% |
|
|
10.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adverse classified asset ratio(2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Substandard loans |
|
$ |
88,680 |
|
|
$ |
71,694 |
|
|
$ |
85,992 |
|
|
$ |
97,239 |
|
|
$ |
109,489 |
|
|
Other real estate owned |
|
|
2,629 |
|
|
|
3,247 |
|
|
|
5,521 |
|
|
|
7,252 |
|
|
|
8,693 |
|
|
Substandard unused commitments |
|
|
3,230 |
|
|
|
2,840 |
|
|
|
2,849 |
|
|
|
991 |
|
|
|
1,458 |
|
|
Less: Substandard government guarantees |
|
|
(6,336 |
) |
|
|
(7,699 |
) |
|
|
(7,892 |
) |
|
|
(7,746 |
) |
|
|
(7,821 |
) |
|
Total adverse classified assets (non-GAAP) |
|
$ |
88,203 |
|
|
$ |
70,082 |
|
|
$ |
86,470 |
|
|
$ |
97,736 |
|
|
$ |
111,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity (Bank) |
|
$ |
201,507 |
|
|
$ |
204,089 |
|
|
$ |
204,240 |
|
|
$ |
201,967 |
|
|
$ |
196,036 |
|
|
Accumulated other comprehensive loss (gain) on available for sale securities |
|
|
(8,734 |
) |
|
|
(5,012 |
) |
|
|
(2,505 |
) |
|
|
(3,016 |
) |
|
|
(2,166 |
) |
|
Allowance for loan losses |
|
|
18,569 |
|
|
|
17,547 |
|
|
|
15,267 |
|
|
|
15,065 |
|
|
|
16,258 |
|
|
Adjusted total equity (non-GAAP) |
|
$ |
211,342 |
|
|
$ |
216,624 |
|
|
$ |
217,002 |
|
|
$ |
214,016 |
|
|
$ |
210,128 |
|
|
Adverse classified asset ratio |
|
|
41.73 |
% |
|
|
32.35 |
% |
|
|
39.85 |
% |
|
|
45.67 |
% |
|
|
53.21 |
% |
|
|
(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. |