County Bancorp (ICBK) Announces 29.7% Drop in Non-Performing Assets

June 21, 2021 4:03 PM EDT

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County Bancorp, Inc. (Nasdaq: ICBK), the parent company for Investors Community Bank, announced today that as of May 31, 2021, the Company's non-performing assets decreased $13.3 million or 29.7% compared to March 31, 2021. In addition, the Company’s adverse classified assets (a non-GAAP measure; see below for a reconciliation to GAAP metrics) as of May 31, 2021, decreased $29.8 million or 34.9% compared to March 31, 2021.

“A sustained recovery in the dairy market is benefiting our clients' cash flows, and in turn, reducing the credit risk in our loan portfolio," said Tim Schneider, President of County Bancorp. He continued, "Loans rated watch and worse have decreased $70.9 million between March 31, 2021 and May 31, 2021, including a $18.4 million decrease in substandard impaired loans, and we expect these trends to continue. Assuming credit quality trends continue as expected, we expect to see a benefit to our second quarter earnings due to improvements in our allowance for loan and lease losses assumptions because of the decrease in watch and worse rated loans and the release of specific reserves related to the decrease in substandard impaired loans. We look forward to growing with our commercial, agricultural, and consumer customers.”

The following tables show certain of the Company’s unaudited, internal credit quality metrics as of March 31, 2021 and May 31, 2021:

May 31,2021 March 31,2021
(dollars in thousands)
Loans by risk category:
Sound/Acceptable/Satisfactory/Low Satisfactory $831,164 $757,160
Watch 123,410 165,823
Special Mention 575 605
Substandard Performing 28,865 38,961
Substandard Impaired 30,744 49,115
Total loans $1,014,758 $1,011,664

May 31,2021 March 31,2021
(dollars in thousands)
Non-Performing Assets:
Nonaccrual loans $30,873 $43,973
Other real estate owned 554 739
Total non-performing assets $31,427 $44,712
Performing TDRs not on nonaccrual $7,674 $13,495
Non-performing assets as a % of total loans 3.10% 4.42%
Non-performing assets as a % of total assets 2.08% 3.00%
Allowance for loan losses as a % of total loans 1.52% 1.49%
Net charge-offs (recoveries) quarter-to-date $(608) $(32)

May 31,2021 March 31,2021
(dollars in thousands)
Adverse classified asset ratio (1):
Substandard loans $59,609 $88,076
Other real estate owned 554 739
Substandard unused commitments 3,612 5,091
Less: Substandard government guarantees (8,159) (8,485)
Total adverse classified assets (non-GAAP) $55,616 $85,421
Total equity (Bank) $204,321 $202,200
Accumulated other comprehensive gain on available for sale securities (4,580) (1,652)
Allowance for loan losses 15,440 15,082
Adjusted total equity (non-GAAP) $215,181 $215,630
Adverse classified asset ratio 25.85% 39.61%

(1) Adverse classified asset ratio is a non-GAAP metric. 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

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