Form 8-K County Bancorp, Inc. For: Jul 22
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E-mailExhibit 99.1
FOR IMMEDIATE RELEASE
COUNTY BANCORP, INC. ANNOUNCES SECOND QUARTER OF 2021 EARNINGS
Continued improvement in credit trends, decreased cost of funds and solid loan sales led to a strong second quarter in 2021
Highlights
|
|
• |
Net income of $6.7 million for the second quarter of 2021, or $1.07 per diluted share |
|
|
• |
A recovery of provision for loan losses of $4.3 million was recognized in the second quarter of 2021 |
|
|
• |
Cost of funds decreased by 17 basis points sequentially to 1.06%, a decline of 61 basis points year-over-year |
|
|
• |
Loans sold with servicing retained increased $11.3 million since March 31, 2021 and $91.1 million since June 30, 2020 |
|
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• |
Watch and worse rated loans decreased by $74.6 million during the second quarter of 2021, an improvement of 67.4 % |
Manitowoc, Wisconsin, July 22, 2021 — 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 2021. Net income was $6.7 million, or $1.07 per diluted share, for the second quarter of 2021, compared to net income of $2.7 million, or $0.40 per diluted share, for the second quarter of 2020. For the six months ended June 30, 2021, net income was $10.7 million, or $1.69 per diluted share, compared to a net loss of $2.5 million, or a $0.40 loss per diluted share, for the six months ended June 30, 2020. The 2020 net loss included a $5.0 million goodwill impairment charge, or $0.77 loss per diluted share.
"The momentum we generated at the beginning of the year continued through the second quarter, reinforcing the unique strengths of our people and franchise," said Tim Schneider, President of County Bancorp, Inc. "In June, we announced the merger with Nicolet Bankshares, a like-minded partner with a similar culture, approach to service, and an unwavering commitment to our people, customers, and community. This transaction will bring together two high-performing and well-respected institutions with unique sector experience and deep community relationships. The combined entity will provide customers greater access to branches, expert bankers, and innovative solutions, while enhancing capabilities and is a natural transition for the team at County Bancorp. As we work towards the merger's close, our focus remains steadfast on delivering value to customers, supporting communities, and caring for colleagues. I am excited about the opportunities ahead and look forward to continuing working with the team here with our new partners at Nicolet. We remain committed to the markets and industries we serve, and above all, keeping banking local.”
Loans and Securities
|
|
• |
Total loans decreased sequentially by $9.8 million, or 1.0%, to $1.0 billion during the second quarter of 2021. The decrease in total loans was primarily due to $ 15.6 million in Paycheck Protection Program (“PPP”) loans that were forgiven by the Small Business Administration (“SBA”) during the quarter, which was partially offset by $2.7 million in additional PPP originations during the quarter. The following table sets forth the total PPP loans at the dates indicated: |
|
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|
June 30, 2021 |
|
|
March 31, 2021 |
|
||||||||||||||||||
|
|
|
# of Loans |
|
|
Balance |
|
|
Deferred Fee Income |
|
|
# of Loans |
|
|
Balance |
|
|
Deferred Fee Income |
|
||||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||||||
|
PPP 1oans - Round 1 |
|
|
69 |
|
|
$ |
3,285 |
|
|
$ |
82 |
|
|
|
127 |
|
|
$ |
13,674 |
|
|
$ |
301 |
|
|
PPP loans - Round 2 |
|
|
391 |
|
|
|
30,115 |
|
|
|
1,576 |
|
|
|
461 |
|
|
|
32,595 |
|
|
|
1,479 |
|
|
Total PPP loans |
|
|
460 |
|
|
$ |
33,400 |
|
|
$ |
1,658 |
|
|
|
588 |
|
|
$ |
46,269 |
|
|
$ |
1,780 |
|
|
% of Total loans |
|
|
|
|
|
|
3.33 |
% |
|
|
|
|
|
|
|
|
|
|
4.57 |
% |
|
|
|
|
|
|
• |
Loans sold that the Company continued to service were $853.2 million as of June 30, 2021, an increase of $11.3 million, or 1.3%, compared to March 31, 2021, and an increase of $91.1 million, or 12.0%, compared to June 30, 2020. |
|
|
• |
The Company sold $35.3 million of securities during the second quarter of 2021 in an effort to reduce duration risk, resulting in a loss of $1.5 million. The security sales were partially offset by $3.0 million of security purchases during the second quarter of 2021. |
|
|
• |
As of June 30, 2021, there were four customer relationships with loans in payment deferral associated with COVID-19 customer support programs totaling $2.9 million, a reduction of $3.2 million since March 31, 2021. |
Deposits
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|
• |
Total deposits as of June 30, 2021 were $1.1 billion, an increase of $37.2 million, or 3.4%, from March 31, 2021, and an increase of $62.7 million, or 5.8%, since June 30, 2020. |
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|
• |
Client deposits (demand deposits, NOW accounts, savings accounts, money market accounts, and certificates of deposit) increased by $44.8 million, or 4.9%, from March 31, 2021, to $958.0 million. Year-over-year, client deposits increased $64.4 million, or 7.2%, since June 30, 2020. |
|
|
• |
The Company decreased its brokered deposits and national certificate of deposits by $7.6 million, or 4.1%, during the second quarter of 2021. Year-over-year, wholesale funding decreased by $1.8 million, or 1.0%, since June 30, 2020. |
Shareholders’ Equity
|
|
• |
During the second quarter of 2021, the Company repurchased 91,453 shares of its common stock, totaling $2.2 million, at a weighted average price of $24.35 per share. |
|
|
• |
Book value per share increased to $27.68 per share on June 30, 2021, from $25.99 on March 31, 2020, and $25.18 on June 30, 2020. |
Net Interest Income and Margin
|
|
• |
Net interest margin for the quarter ended June 30, 2021 was 3.22%, an increase of 27 basis points compared to the sequential quarter and an increase of 68 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. |
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|
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For the Three Months Ended |
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|||||
|
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|
June 30, 2021 |
|
|
March 31, 2021 |
|
||
|
Net interest margin excluding PPP loans |
|
|
3.12 |
% |
|
|
2.74 |
% |
|
Accretion related to PPP loans: |
|
|
|
|
|
|
|
|
|
Impact of interest rate on PPP loans |
|
|
(0.03 |
)% |
|
|
(0.06 |
)% |
|
Impact of PPP fee income recognized |
|
|
0.14 |
% |
|
|
0.29 |
% |
|
Impact of interest expense on PPP Liquidity Facility program |
|
|
(0.01 |
)% |
|
|
(0.02 |
)% |
|
Total accretion related to PPP loans |
|
|
0.10 |
% |
|
|
0.21 |
% |
|
Total net interest margin |
|
|
3.22 |
% |
|
|
2.95 |
% |
|
|
• |
Net interest margin was positively impacted by approximately 19 basis points during the second quarter of 2021 due to the recovery of $0.7 million in interest income related to a nonaccrual loan participation. |
|
|
|
• |
Total rates paid on interest-bearing deposits decreased by 19 basis points to 0.72% for the three months ended June 30, 2021, compared to the three months ended March 31, 2021, and decreased 87 basis points compared to the three months ended June 30, 2020. The decrease was primarily due to the Company’s success in 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.
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|
Three Months Ended June 30, 2021 v. Three Months Ended March 31, 2021 |
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|
Three Months Ended June 30, 2021 v. Three Months Ended June 30 2020 |
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Increase (Decrease) Due to Change in Average |
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|
Increase (Decrease) Due to Change in Average |
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||||||||||||||||||
|
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|
Volume |
|
|
Rate |
|
|
Net |
|
|
Volume |
|
|
Rate |
|
|
Net |
|
||||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||||||
|
Interest Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
|
$ |
95 |
|
|
$ |
251 |
|
|
$ |
346 |
|
|
$ |
971 |
|
|
$ |
117 |
|
|
$ |
1,088 |
|
|
Loans (excluding PPP) |
|
|
65 |
|
|
|
737 |
|
|
|
802 |
|
|
|
(657 |
) |
|
|
(94 |
) |
|
|
(751 |
) |
|
PPP loans - round 1 |
|
|
(551 |
) |
|
|
(129 |
) |
|
|
(680 |
) |
|
|
— |
|
|
|
185 |
|
|
|
185 |
|
|
PPP loans - round 2 |
|
|
131 |
|
|
|
223 |
|
|
|
354 |
|
|
|
— |
|
|
|
436 |
|
|
|
436 |
|
|
Total loans |
|
|
(355 |
) |
|
|
831 |
|
|
|
476 |
|
|
|
(657 |
) |
|
|
527 |
|
|
|
(130 |
) |
|
Federal funds sold and interest-bearing deposits with banks |
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
(45 |
) |
|
|
(62 |
) |
|
|
(107 |
) |
|
Total interest income |
|
|
(259 |
) |
|
|
1,081 |
|
|
|
822 |
|
|
|
269 |
|
|
|
582 |
|
|
|
851 |
|
|
Interest Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market and interest checking |
|
$ |
22 |
|
|
$ |
(39 |
) |
|
$ |
(17 |
) |
|
$ |
389 |
|
|
$ |
(551 |
) |
|
$ |
(162 |
) |
|
Time deposits |
|
|
37 |
|
|
|
(374 |
) |
|
|
(337 |
) |
|
|
(507 |
) |
|
|
(1,336 |
) |
|
|
(1,843 |
) |
|
Other borrowings |
|
|
(7 |
) |
|
|
2 |
|
|
|
(5 |
) |
|
|
(3 |
) |
|
|
31 |
|
|
|
28 |
|
|
FHLB advances |
|
|
(40 |
) |
|
|
1 |
|
|
|
(39 |
) |
|
|
(8 |
) |
|
|
(86 |
) |
|
|
(94 |
) |
|
Junior subordinated debentures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
363 |
|
|
|
7 |
|
|
|
370 |
|
|
Total interest expense |
|
$ |
12 |
|
|
$ |
(410 |
) |
|
$ |
(398 |
) |
|
$ |
234 |
|
|
$ |
(1,935 |
) |
|
$ |
(1,701 |
) |
|
Net interest income |
|
$ |
(271 |
) |
|
$ |
1,491 |
|
|
$ |
1,220 |
|
|
$ |
35 |
|
|
$ |
2,517 |
|
|
$ |
2,552 |
|
The following table sets forth average balances, average yields and rates, and income and expenses for the periods indicated.
|
|
|
For the Three Months Ended |
|
|||||||||||||||||||||||||||||||||
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
June 30, 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 |
|
$ |
386,637 |
|
|
$ |
2,533 |
|
|
|
2.63 |
% |
|
$ |
372,235 |
|
|
$ |
2,187 |
|
|
|
2.38 |
% |
|
$ |
237,082 |
|
|
$ |
1,445 |
|
|
|
2.44 |
% |
|
Loans excluding PPP loans (2) |
|
|
974,525 |
|
|
|
11,281 |
|
|
|
4.64 |
% |
|
|
969,429 |
|
|
|
10,479 |
|
|
|
4.38 |
% |
|
|
995,010 |
|
|
|
12,033 |
|
|
|
4.86 |
% |
|
PPP loans - Round 1 (2) |
|
|
9,344 |
|
|
|
282 |
|
|
|
12.11 |
% |
|
|
27,252 |
|
|
|
961 |
|
|
|
14.30 |
% |
|
|
103,317 |
|
|
|
97 |
|
|
|
0.38 |
% |
|
PPP loans - Round 2 (2) |
|
|
33,080 |
|
|
|
437 |
|
|
|
5.30 |
% |
|
|
16,857 |
|
|
|
83 |
|
|
|
2.01 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total loans (2) |
|
|
1,016,949 |
|
|
|
12,000 |
|
|
|
4.73 |
% |
|
|
1,013,538 |
|
|
|
11,523 |
|
|
|
4.61 |
% |
|
|
1,098,327 |
|
|
|
12,130 |
|
|
|
4.42 |
% |
|
Interest bearing deposits due from other banks |
|
|
22,085 |
|
|
|
4 |
|
|
|
0.07 |
% |
|
|
19,949 |
|
|
|
5 |
|
|
|
0.10 |
% |
|
|
64,142 |
|
|
|
111 |
|
|
|
0.69 |
% |
|
Total interest-earning assets |
|
$ |
1,425,671 |
|
|
$ |
14,537 |
|
|
|
4.09 |
% |
|
$ |
1,405,722 |
|
|
$ |
13,715 |
|
|
|
3.96 |
% |
|
$ |
1,399,551 |
|
|
$ |
13,686 |
|
|
|
3.91 |
% |
|
Allowance for loan losses |
|
|
(15,305 |
) |
|
|
|
|
|
|
|
|
|
|
(14,932 |
) |
|
|
|
|
|
|
|
|
|
|
(17,844 |
) |
|
|
|
|
|
|
|
|
|
Other assets |
|
|
91,039 |
|
|
|
|
|
|
|
|
|
|
|
90,109 |
|
|
|
|
|
|
|
|
|
|
|
85,716 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,501,405 |
|
|
|
|
|
|
|
|
|
|
$ |
1,480,899 |
|
|
|
|
|
|
|
|
|
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings, NOW, money market, interest checking |
|
$ |
507,089 |
|
|
$ |
363 |
|
|
|
0.29 |
% |
|
$ |
477,159 |
|
|
$ |
380 |
|
|
|
0.32 |
% |
|
$ |
379,991 |
|
|
$ |
525 |
|
|
|
0.55 |
% |
|
Time deposits |
|
|
452,443 |
|
|
|
1,353 |
|
|
|
1.20 |
% |
|
|
442,626 |
|
|
|
1,690 |
|
|
|
1.55 |
% |
|
|
553,616 |
|
|
|
3,196 |
|
|
|
2.31 |
% |
|
Total interest-bearing deposits |
|
$ |
959,532 |
|
|
$ |
1,716 |
|
|
|
0.72 |
% |
|
$ |
919,785 |
|
|
$ |
2,070 |
|
|
|
0.91 |
% |
|
$ |
933,607 |
|
|
$ |
3,721 |
|
|
|
1.59 |
% |
|
Other borrowings |
|
|
43,803 |
|
|
|
43 |
|
|
|
0.39 |
% |
|
|
51,220 |
|
|
|
48 |
|
|
|
0.38 |
% |
|
|
66,910 |
|
|
|
15 |
|
|
|
0.09 |
% |
|
FHLB advances |
|
|
101,352 |
|
|
|
234 |
|
|
|
0.93 |
% |
|
|
116,311 |
|
|
|
273 |
|
|
|
0.95 |
% |
|
|
103,916 |
|
|
|
328 |
|
|
|
1.27 |
% |
|
Junior subordinated debentures |
|
|
67,213 |
|
|
|
1,106 |
|
|
|
6.60 |
% |
|
|
67,123 |
|
|
|
1,106 |
|
|
|
6.68 |
% |
|
|
45,090 |
|
|
|
736 |
|
|
|
6.52 |
% |
|
Total interest-bearing liabilities |
|
$ |
1,171,900 |
|
|
$ |
3,099 |
|
|
|
1.06 |
% |
|
$ |
1,154,439 |
|
|
$ |
3,497 |
|
|
|
1.23 |
% |
|
$ |
1,149,523 |
|
|
$ |
4,800 |
|
|
|
1.67 |
% |
|
Non-interest-bearing deposits |
|
|
146,242 |
|
|
|
|
|
|
|
|
|
|
|
138,814 |
|
|
|
|
|
|
|
|
|
|
|
134,271 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
12,741 |
|
|
|
|
|
|
|
|
|
|
|
15,190 |
|
|
|
|
|
|
|
|
|
|
|
16,749 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
$ |
1,330,883 |
|
|
|
|
|
|
|
|
|
|
$ |
1,308,443 |
|
|
|
|
|
|
|
|
|
|
$ |
1,300,543 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
170,522 |
|
|
|
|
|
|
|
|
|
|
|
172,456 |
|
|
|
|
|
|
|
|
|
|
|
166,880 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,501,405 |
|
|
|
|
|
|
|
|
|
|
$ |
1,480,899 |
|
|
|
|
|
|
|
|
|
|
$ |
1,467,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
11,438 |
|
|
|
|
|
|
|
|
|
|
$ |
10,218 |
|
|
|
|
|
|
|
|
|
|
$ |
8,886 |
|
|
|
|
|
|
Interest rate spread (3) |
|
|
|
|
|
|
|
|
|
|
3.03 |
% |
|
|
|
|
|
|
|
|
|
|
2.73 |
% |
|
|
|
|
|
|
|
|
|
|
2.24 |
% |
|
Net interest margin (4) |
|
|
|
|
|
|
|
|
|
|
3.22 |
% |
|
|
|
|
|
|
|
|
|
|
2.95 |
% |
|
|
|
|
|
|
|
|
|
|
2.54 |
% |
|
Ratio of interest-earning assets to interest-bearing liabilities |
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
|
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
|
|
• |
A recovery of provision for loan losses of $4.3 million was recorded for the three months ended June 30, 2021, compared to a provision for loan losses of $0.2 million for the three months ended March 31, 2021. The recovery of provision during for the second quarter was primarily the result of a $30.0 million decrease in substandard rated loans and corresponding release of specific reserves, and the upgrade of $44.6 million of watch rated loans to a pass rating. |
|
|
• |
During the second quarter of 2021, the Company eliminated the qualitative factor for industries affected by COVID-19, and implemented an economic factor tied to Wisconsin unemployment. This change accounted for $0.3 million of the reduction in the allowance for loan losses. |
|
|
• |
Year-over-over, provision for loan losses decreased $5.4 million, or 474.6%, compared to the three months ended June 30, 2020. The reduction was primarily the result of the improvement in asset quality and the reduction in the inherent risk associated with COVID-19. |
Non-Interest Income
|
|
• |
Loan servicing fees increased quarter-over-quarter and year-over-year primarily due a four and six basis point increase, respectively in weighted average servicing fees. In addition, loans sold with servicing retained increased $11.3 million, or 1.3%, and $91.1 million, or 12.0%, from March 31, 2021 and June 30, 2020, respectively. |
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
$ |
165 |
|
|
$ |
119 |
|
|
$ |
108 |
|
|
$ |
108 |
|
|
$ |
139 |
|
|
Crop insurance commission |
|
|
291 |
|
|
|
301 |
|
|
|
517 |
|
|
|
271 |
|
|
|
229 |
|
|
Gain on sale of residential loans, net |
|
|
89 |
|
|
|
93 |
|
|
|
219 |
|
|
|
17 |
|
|
|
4 |
|
|
Loan servicing fees |
|
|
2,278 |
|
|
|
2,158 |
|
|
|
1,974 |
|
|
|
2,054 |
|
|
|
1,923 |
|
|
Gain on sale of service-retained loans, net |
|
|
1,784 |
|
|
|
1,587 |
|
|
|
1,828 |
|
|
|
1,268 |
|
|
|
1,041 |
|
|
Loan servicing right pay-down losses |
|
|
(1,162 |
) |
|
|
(1,119 |
) |
|
|
(635 |
) |
|
|
(551 |
) |
|
|
(766 |
) |
|
Total loan servicing right income |
|
|
622 |
|
|
|
468 |
|
|
|
1,193 |
|
|
|
717 |
|
|
|
275 |
|
|
Gain (loss) on sale of securities |
|
|
(1,453 |
) |
|
|
— |
|
|
|
— |
|
|
|
101 |
|
|
|
570 |
|
|
Referral fees |
|
|
— |
|
|
|
319 |
|
|
|
64 |
|
|
|
110 |
|
|
|
121 |
|
|
Other |
|
|
259 |
|
|
|
254 |
|
|
|
283 |
|
|
|
294 |
|
|
|
240 |
|
|
Total non-interest income |
|
$ |
2,251 |
|
|
$ |
3,712 |
|
|
$ |
4,358 |
|
|
$ |
3,672 |
|
|
$ |
3,501 |
|
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Loan servicing rights, end of period |
|
$ |
19,478 |
|
|
$ |
18,864 |
|
|
$ |
18,396 |
|
|
$ |
17,203 |
|
|
$ |
16,486 |
|
|
Loans serviced, end of period |
|
|
853,176 |
|
|
|
841,893 |
|
|
|
812,560 |
|
|
|
797,819 |
|
|
|
762,058 |
|
|
Loan servicing rights as a % of loans serviced |
|
|
2.28 |
% |
|
|
2.24 |
% |
|
|
2.26 |
% |
|
|
2.16 |
% |
|
|
2.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loan servicing fees |
|
$ |
2,278 |
|
|
$ |
2,158 |
|
|
$ |
1,974 |
|
|
$ |
2,054 |
|
|
$ |
1,923 |
|
|
Average loans serviced |
|
|
847,535 |
|
|
|
827,227 |
|
|
|
805,190 |
|
|
|
779,939 |
|
|
|
754,806 |
|
|
Annualized loan servicing fees as a % of average loans serviced |
|
|
1.08 |
% |
|
|
1.04 |
% |
|
|
0.98 |
% |
|
|
1.05 |
% |
|
|
1.02 |
% |
Non-Interest Expense
|
|
• |
Total non-interest expense for the three months ended June 30, 2021, was virtually unchanged from the first quarter of 2021 at $8.8 million, and increased $1.3 million, or 17.4%, from the three months ended June 30, 2020. |
|
|
• |
Employee compensation and benefits expense increased for the three months ended June 30, 2021, by $0.8 million to $6.4 million compared to the three months ended March 31, 2021. The change was primarily the result of an additional accrual of $0.9 million related to additional benefits. |
|
|
|
• |
During the three months ended June 30, 2021, the Company sold the excess land in Appleton, Wisconsin, that surrounded the location of its new branch that is currently under construction. As a result of the sale, the Company recorded a gain on fixed assets of $1.1 million. |
|
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
$ |
6,426 |
|
|
$ |
5,582 |
|
|
$ |
6,687 |
|
|
$ |
4,766 |
|
|
$ |
4,594 |
|
|
Occupancy |
|
|
293 |
|
|
|
279 |
|
|
|
297 |
|
|
|
321 |
|
|
|
305 |
|
|
Information processing |
|
|
664 |
|
|
|
661 |
|
|
|
656 |
|
|
|
641 |
|
|
|
663 |
|
|
Professional fees |
|
|
450 |
|
|
|
802 |
|
|
|
582 |
|
|
|
555 |
|
|
|
480 |
|
|
Business development |
|
|
289 |
|
|
|
307 |
|
|
|
136 |
|
|
|
305 |
|
|
|
333 |
|
|
OREO expenses |
|
|
52 |
|
|
|
23 |
|
|
|
20 |
|
|
|
47 |
|
|
|
44 |
|
|
Writedown of OREO |
|
|
— |
|
|
|
— |
|
|
|
148 |
|
|
|
— |
|
|
|
— |
|
|
Net loss (gain) on sale of OREO |
|
|
— |
|
|
|
17 |
|
|
|
(326 |
) |
|
|
9 |
|
|
|
— |
|
|
Net loss (gain) on sale of fixed assets |
|
|
(1,075 |
) |
|
|
(6 |
) |
|
|
9 |
|
|
|
(2 |
) |
|
|
(1 |
) |
|
Merger expenses |
|
|
385 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
484 |
|
|
|
257 |
|
|
|
289 |
|
|
|
295 |
|
|
|
303 |
|
|
Other |
|
|
797 |
|
|
|
842 |
|
|
|
996 |
|
|
|
730 |
|
|
|
744 |
|
|
Total non-interest expense |
|
$ |
8,765 |
|
|
$ |
8,764 |
|
|
$ |
9,494 |
|
|
$ |
7,667 |
|
|
$ |
7,465 |
|
Asset Quality
|
|
• |
Through the annual review process and the improved agricultural economy, during the second quarter of 2021, watch rated loans decreased by $44.6 million, or 26.9%, and $76.8 million, or 38.8%, compared to March 31, 2021 and June 30, 2020, respectively, primarily as the result of 34 dairy customers upgraded to a low satisfactory rating. This improvement in asset quality is expected to continue throughout 2021 as we complete the annual review process. |
|
|
• |
Substandard performing loans decreased by $11.2 million, or 28.8%, to $27.7 million at June 30, 2021, compared to March 31, 2021 due to the upgrade of 2 customer relationships. |
|
|
• |
Substandard impaired loans decreased by $18.7 million, or 38.2%, to $30.4 million at June 30, 2021, compared to March 31, 2021 due to the upgrade of five agriculture customer relationships. The following table presents loan balances by credit grade as of the dates indicated: |
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Loans by risk category: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sound/Acceptable/Satisfactory/ Low Satisfactory |
|
$ |
821,970 |
|
|
$ |
757,160 |
|
|
$ |
716,313 |
|
|
$ |
800,451 |
|
|
$ |
798,945 |
|
|
Watch |
|
|
121,242 |
|
|
|
165,823 |
|
|
|
190,101 |
|
|
|
185,254 |
|
|
|
198,044 |
|
|
Special Mention |
|
|
566 |
|
|
|
605 |
|
|
|
2,501 |
|
|
|
1,851 |
|
|
|
1,856 |
|
|
Substandard Performing |
|
|
27,742 |
|
|
|
38,961 |
|
|
|
40,420 |
|
|
|
41,577 |
|
|
|
47,741 |
|
|
Substandard Impaired |
|
|
30,370 |
|
|
|
49,115 |
|
|
|
46,950 |
|
|
|
46,793 |
|
|
|
40,938 |
|
|
Total loans |
|
$ |
1,001,890 |
|
|
$ |
1,011,664 |
|
|
$ |
996,285 |
|
|
$ |
1,075,926 |
|
|
$ |
1,087,524 |
|
|
Adverse classified asset ratio (1) |
|
|
24.72 |
% |
|
|
39.61 |
% |
|
|
39.43 |
% |
|
|
42.64 |
% |
|
|
41.73 |
% |
|
|
(1) |
This is a non-GAAP financial measure. A reconciliation to GAAP is included at the end of this earnings release. |
Non-Performing Assets
|
|
• |
Performing troubled debt restructurings (“TDRs”) not on nonaccrual decreased $5.9 million, or 43.4%, to $7.6 million on June 30, 2021 from March 31, 2021. The decrease was primarily due to five agriculture customers that had loans that were re-underwritten and were no longer a TDR due to improved performance and financial trends. |
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Non-Performing Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
|
$ |
30,071 |
|
|
$ |
43,973 |
|
|
$ |
41,624 |
|
|
$ |
41,351 |
|
|
$ |
35,456 |
|
|
Other real estate owned |
|
|
914 |
|
|
|
739 |
|
|
|
1,077 |
|
|
|
3,064 |
|
|
|
2,629 |
|
|
Total non-performing assets |
|
$ |
30,985 |
|
|
$ |
44,712 |
|
|
$ |
42,701 |
|
|
$ |
44,415 |
|
|
$ |
38,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing TDRs not on nonaccrual |
|
$ |
7,641 |
|
|
$ |
13,495 |
|
|
$ |
18,592 |
|
|
$ |
19,036 |
|
|
$ |
21,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets as a % of total loans |
|
|
3.09 |
% |
|
|
4.42 |
% |
|
|
4.29 |
% |
|
|
4.13 |
% |
|
|
3.50 |
% |
|
Non-performing assets as a % of total assets |
|
|
2.04 |
% |
|
|
3.00 |
% |
|
|
2.90 |
% |
|
|
2.98 |
% |
|
|
2.52 |
% |
|
Allowance for loan losses as a % of total loans |
|
|
1.14 |
% |
|
|
1.49 |
% |
|
|
1.49 |
% |
|
|
1.73 |
% |
|
|
1.71 |
% |
|
Net charge-offs (recoveries) quarter- to-date |
|
$ |
(662 |
) |
|
$ |
(32 |
) |
|
$ |
3,386 |
|
|
$ |
(1 |
) |
|
$ |
120 |
|
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 (1) the possibility that any of the anticipated benefits of the proposed merger will not be realized or will not be realized within the expected time period; (2) the risk that integration of the Company’s operations with those of Nicolet will be materially delayed or will be more costly or difficult than expected; (3) the parties’ inability to meet expectations regarding the timing of the proposed merger; (4) changes to tax legislation and their potential effects on the accounting for the merger; (5) the inability to complete the proposed merger due to the failure of Nicolet’s or the Company’s shareholders to adopt the Merger Agreement; (6) the failure to satisfy other conditions to completion of the proposed merger, including receipt of required regulatory and other approvals; (7) the failure of the proposed merger to close for any other reason; (8) diversion of management’s attention from ongoing business operations and opportunities due to the proposed merger; (9) the challenges of integrating and retaining key employees; (10) the effect of the announcement of the proposed merger on Nicolet’s, the Company’s or the combined company’s respective customer and employee relationships and operating results; (11) the possibility that the proposed merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (12) dilution caused by Nicolet’s issuance of additional shares of Nicolet common stock in connection with the merger; (13) risks and uncertainties relating to Nicolet’s proposed acquisition of Mackinac Financial Corporation (“Mackinac”), including but not limited to the failure of the proposed acquisition to close for any reason and risks and uncertainties relating to the Mackinac’s business, the combined business of Mackinac and Nicolet, and the combined businesses of Nicolet, the Company and Mackinac; and (14) the effects of the COVID-19 pandemic and its 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.
Important Information and Where to Find It
Certain communications in this release relate to the proposed merger transaction involving Nicolet and the Company. In connection with the proposed merger, Nicolet and the Company will file a joint proxy statement/prospectus on Form S-4 and other relevant documents concerning the merger with the Securities and Exchange Commission (the “SEC”). BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT NICOLET, THE COMPANY AND THE PROPOSED MERGER. When available, the joint proxy statement/prospectus will be delivered to shareholders of Nicolet and the Company. Investors may obtain copies of the joint proxy statement/prospectus and other relevant documents (as they become available) free of charge at the SEC’s website (www.sec.gov). Copies of the documents filed with the SEC by Nicolet will be available free of charge on Nicolet’s website at www.nicoletbank.com. Copies of the documents filed with the SEC by the Company will be available free of charge on the Company’s website at Investors.ICBK.com/documents.
Nicolet, the Company and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Nicolet and the shareholders of the
Company in connection with the proposed merger. Information about the directors and executive officers of Nicolet and the Company will be included in the joint proxy statement/prospectus for the proposed transaction filed with the SEC. Information about the directors and executive officers of Nicolet is also included in the proxy statement for its 2021 annual meeting of shareholders, which was filed with the SEC on March 2, 2021. Information about the directors and executive officers of the Company is also included in the proxy statement for its 2021 annual meeting of shareholders, which was filed with the SEC on April 5, 2021. Additional information regarding the interests of such participants and other persons who may be deemed participants in the transaction will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.
No Offer or Solicitation
This release shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
###
Investor Relations Contact
Glen L. Stiteley
EVP - CFO, Investors Community Bank
Phone: (920) 686-5658
Email: [email protected]
|
County Bancorp, Inc. Consolidated Financial Summary (Unaudited) |
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||||||
|
Period-End Balance Sheet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
72,745 |
|
|
$ |
17,820 |
|
|
$ |
19,500 |
|
|
$ |
53,283 |
|
|
$ |
127,432 |
|
|
Securities available-for-sale, at fair value |
|
|
349,334 |
|
|
|
385,240 |
|
|
|
352,854 |
|
|
|
298,476 |
|
|
|
226,971 |
|
|
Loans held for sale |
|
|
15,805 |
|
|
|
5,789 |
|
|
|
35,976 |
|
|
|
2,593 |
|
|
|
11,847 |
|
|
Agricultural loans |
|
|
613,514 |
|
|
|
609,482 |
|
|
|
606,881 |
|
|
|
619,617 |
|
|
|
624,340 |
|
|
Commercial loans |
|
|
319,878 |
|
|
|
317,625 |
|
|
|
313,265 |
|
|
|
317,782 |
|
|
|
328,368 |
|
|
Paycheck Protection Plan loans |
|
|
33,400 |
|
|
|
46,249 |
|
|
|
37,790 |
|
|
|
98,421 |
|
|
|
103,317 |
|
|
Multi-family real estate loans |
|
|
30,310 |
|
|
|
33,287 |
|
|
|
33,457 |
|
|
|
35,496 |
|
|
|
30,439 |
|
|
Residential real estate loans |
|
|
4,563 |
|
|
|
4,776 |
|
|
|
4,627 |
|
|
|
4,489 |
|
|
|
975 |
|
|
Installment and consumer other |
|
|
225 |
|
|
|
245 |
|
|
|
265 |
|
|
|
121 |
|
|
|
85 |
|
|
Total loans |
|
|
1,001,890 |
|
|
|
1,011,664 |
|
|
|
996,285 |
|
|
|
1,075,926 |
|
|
|
1,087,524 |
|
|
Allowance for loan losses |
|
|
(11,466 |
) |
|
|
(15,082 |
) |
|
|
(14,808 |
) |
|
|
(18,649 |
) |
|
|
(18,569 |
) |
|
Net loans |
|
|
990,424 |
|
|
|
996,582 |
|
|
|
981,477 |
|
|
|
1,057,277 |
|
|
|
1,068,955 |
|
|
Other assets |
|
|
88,764 |
|
|
|
85,897 |
|
|
|
82,551 |
|
|
|
80,426 |
|
|
|
78,712 |
|
|
Total Assets |
|
$ |
1,517,072 |
|
|
$ |
1,491,328 |
|
|
$ |
1,472,358 |
|
|
$ |
1,492,055 |
|
|
$ |
1,513,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
$ |
158,880 |
|
|
$ |
139,838 |
|
|
$ |
163,202 |
|
|
$ |
158,798 |
|
|
$ |
149,963 |
|
|
NOW accounts and interest checking |
|
|
136,180 |
|
|
|
95,591 |
|
|
|
96,624 |
|
|
|
78,026 |
|
|
|
81,656 |
|
|
Savings |
|
|
9,059 |
|
|
|
8,431 |
|
|
|
7,367 |
|
|
|
11,900 |
|
|
|
8,369 |
|
|
Money market accounts |
|
|
394,486 |
|
|
|
390,741 |
|
|
|
344,250 |
|
|
|
325,900 |
|
|
|
307,083 |
|
|
Time deposits |
|
|
259,386 |
|
|
|
278,591 |
|
|
|
304,580 |
|
|
|
322,992 |
|
|
|
346,482 |
|
|
Brokered deposits |
|
|
159,087 |
|
|
|
159,034 |
|
|
|
80,456 |
|
|
|
101,808 |
|
|
|
121,503 |
|
|
National time deposits |
|
|
18,648 |
|
|
|
26,302 |
|
|
|
44,347 |
|
|
|
50,747 |
|
|
|
57,997 |
|
|
Total deposits |
|
|
1,135,726 |
|
|
|
1,098,528 |
|
|
|
1,040,826 |
|
|
|
1,050,171 |
|
|
|
1,073,053 |
|
|
Federal Reserve Discount Window advances |
|
|
34,174 |
|
|
|
47,255 |
|
|
|
47,531 |
|
|
|
99,693 |
|
|
|
99,693 |
|
|
FHLB advances |
|
|
88,000 |
|
|
|
100,000 |
|
|
|
129,000 |
|
|
|
84,600 |
|
|
|
93,400 |
|
|
Subordinated debentures |
|
|
67,519 |
|
|
|
67,179 |
|
|
|
67,111 |
|
|
|
67,025 |
|
|
|
61,910 |
|
|
Other liabilities |
|
|
16,841 |
|
|
|
12,028 |
|
|
|
16,114 |
|
|
|
20,656 |
|
|
|
17,336 |
|
|
Total Liabilities |
|
|
1,342,260 |
|
|
|
1,324,990 |
|
|
|
1,300,582 |
|
|
|
1,322,145 |
|
|
|
1,345,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
174,812 |
|
|
|
166,338 |
|
|
|
171,776 |
|
|
|
169,910 |
|
|
|
168,525 |
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
1,517,072 |
|
|
$ |
1,491,328 |
|
|
$ |
1,472,358 |
|
|
$ |
1,492,055 |
|
|
$ |
1,513,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Price Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High - Quarter-to-date |
|
$ |
35.82 |
|
|
$ |
26.46 |
|
|
$ |
23.72 |
|
|
$ |
22.00 |
|
|
$ |
24.67 |
|
|
Low - Quarter-to-date |
|
$ |
22.85 |
|
|
$ |
19.66 |
|
|
$ |
18.20 |
|
|
$ |
17.04 |
|
|
$ |
17.13 |
|
|
Market price - Quarter-end |
|
$ |
33.96 |
|
|
$ |
23.97 |
|
|
$ |
22.08 |
|
|
$ |
18.80 |
|
|
$ |
20.93 |
|
|
Book value per share |
|
$ |
27.68 |
|
|
$ |
25.99 |
|
|
$ |
26.42 |
|
|
$ |
25.72 |
|
|
$ |
25.18 |
|
|
Tangible book value per share (1) |
|
$ |
27.68 |
|
|
$ |
25.98 |
|
|
$ |
25.71 |
|
|
$ |
25.16 |
|
|
$ |
24.15 |
|
|
Common shares outstanding |
|
|
6,026,748 |
|
|
|
6,094,450 |
|
|
|
6,197,965 |
|
|
|
6,294,675 |
|
|
|
6,375,150 |
|
|
|
(1) |
This is a non-GAAP financial measure. A reconciliation to GAAP is included below. |
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||||||
|
Selected Income Statement Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
12,000 |
|
|
$ |
11,523 |
|
|
$ |
12,737 |
|
|
$ |
11,594 |
|
|
$ |
12,009 |
|
|
Taxable securities |
|
|
2,205 |
|
|
|
1,887 |
|
|
|
1,777 |
|
|
|
1,293 |
|
|
|
1,283 |
|
|
Tax-exempt securities |
|
|
261 |
|
|
|
246 |
|
|
|
201 |
|
|
|
167 |
|
|
|
162 |
|
|
Federal funds sold and other |
|
|
71 |
|
|
|
58 |
|
|
|
10 |
|
|
|
52 |
|
|
|
111 |
|
|
Total interest and dividend income |
|
|
14,537 |
|
|
|
13,714 |
|
|
|
14,725 |
|
|
|
13,106 |
|
|
|
13,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,716 |
|
|
|
2,069 |
|
|
|
2,482 |
|
|
|
2,914 |
|
|
|
3,721 |
|
|
FHLB advances and other borrowed funds |
|
|
277 |
|
|
|
321 |
|
|
|
362 |
|
|
|
456 |
|
|
|
343 |
|
|
Subordinated debentures |
|
|
1,106 |
|
|
|
1,106 |
|
|
|
1,107 |
|
|
|
1,082 |
|
|
|
736 |
|
|
Total interest expense |
|
|
3,099 |
|
|
|
3,496 |
|
|
|
3,951 |
|
|
|
4,452 |
|
|
|
4,800 |
|
|
Net interest income |
|
|
11,438 |
|
|
|
10,218 |
|
|
|
10,774 |
|
|
|
8,654 |
|
|
|
8,765 |
|
|
Provision for loan losses |
|
|
(4,278 |
) |
|
|
242 |
|
|
|
(455 |
) |
|
|
79 |
|
|
|
1,142 |
|
|
Net interest income after provision for loan losses |
|
|
15,716 |
|
|
|
9,976 |
|
|
|
11,229 |
|
|
|
8,575 |
|
|
|
7,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services charges |
|
|
165 |
|
|
|
119 |
|
|
|
108 |
|
|
|
108 |
|
|
|
139 |
|
|
Crop insurance commission |
|
|
291 |
|
|
|
301 |
|
|
|
517 |
|
|
|
271 |
|
|
|
229 |
|
|
Gain on sale of residential loans, net |
|
|
89 |
|
|
|
93 |
|
|
|
219 |
|
|
|
17 |
|
|
|
4 |
|
|
Loan servicing fees |
|
|
2,278 |
|
|
|
2,158 |
|
|
|
1,974 |
|
|
|
2,054 |
|
|
|
1,923 |
|
|
Gain on sale of service-retained loans, net |
|
|
1,784 |
|
|
|
1,587 |
|
|
|
1,828 |
|
|
|
1,268 |
|
|
|
1,041 |
|
|
Loan servicing right pay-down losses |
|
|
(1,162 |
) |
|
|
(1,119 |
) |
|
|
(635 |
) |
|
|
(551 |
) |
|
|
(766 |
) |
|
Total loan servicing right income |
|
|
622 |
|
|
|
468 |
|
|
|
1,193 |
|
|
|
717 |
|
|
|
275 |
|
|
Gain (loss) on sale of securities |
|
|
(1,453 |
) |
|
|
— |
|
|
|
— |
|
|
|
101 |
|
|
|
570 |
|
|
Referral fees (1) |
|
|
— |
|
|
|
319 |
|
|
|
64 |
|
|
|
110 |
|
|
|
121 |
|
|
Other |
|
|
259 |
|
|
|
254 |
|
|
|
283 |
|
|
|
294 |
|
|
|
240 |
|
|
Total non-interest income |
|
|
2,251 |
|
|
|
3,712 |
|
|
|
4,358 |
|
|
|
3,672 |
|
|
|
3,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
6,426 |
|
|
|
5,582 |
|
|
|
6,687 |
|
|
|
4,766 |
|
|
|
4,594 |
|
|
Occupancy |
|
|
293 |
|
|
|
279 |
|
|
|
297 |
|
|
|
321 |
|
|
|
305 |
|
|
Information processing |
|
|
664 |
|
|
|
661 |
|
|
|
656 |
|
|
|
641 |
|
|
|
663 |
|
|
Professional fees |
|
|
450 |
|
|
|
802 |
|
|
|
582 |
|
|
|
555 |
|
|
|
480 |
|
|
Business development |
|
|
289 |
|
|
|
307 |
|
|
|
136 |
|
|
|
305 |
|
|
|
333 |
|
|
OREO expenses |
|
|
52 |
|
|
|
23 |
|
|
|
20 |
|
|
|
47 |
|
|
|
44 |
|
|
Writedown of OREO |
|
|
— |
|
|
|
— |
|
|
|
148 |
|
|
|
— |
|
|
|
— |
|
|
Net loss (gain) on sale of OREO |
|
|
— |
|
|
|
17 |
|
|
|
(326 |
) |
|
|
9 |
|
|
|
— |
|
|
Net loss (gain) on sale of fixed assets |
|
|
(1,075 |
) |
|
|
(6 |
) |
|
|
9 |
|
|
|
(2 |
) |
|
|
(1 |
) |
|
Merger expenses |
|
|
385 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
484 |
|
|
|
257 |
|
|
|
289 |
|
|
|
295 |
|
|
|
303 |
|
|
Other |
|
|
797 |
|
|
|
842 |
|
|
|
996 |
|
|
|
730 |
|
|
|
744 |
|
|
Total non-interest expense |
|
|
8,765 |
|
|
|
8,764 |
|
|
|
9,494 |
|
|
|
7,667 |
|
|
|
7,465 |
|
|
Income before income taxes |
|
|
9,202 |
|
|
|
4,924 |
|
|
|
6,093 |
|
|
|
4,580 |
|
|
|
3,659 |
|
|
Income tax expense |
|
|
2,459 |
|
|
|
996 |
|
|
|
1,575 |
|
|
|
1,164 |
|
|
|
926 |
|
|
NET INCOME |
|
$ |
6,743 |
|
|
$ |
3,928 |
|
|
$ |
4,518 |
|
|
$ |
3,416 |
|
|
$ |
2,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.08 |
|
|
$ |
0.62 |
|
|
$ |
0.70 |
|
|
$ |
0.52 |
|
|
$ |
0.40 |
|
|
Diluted earnings per share |
|
$ |
1.07 |
|
|
$ |
0.62 |
|
|
$ |
0.70 |
|
|
$ |
0.52 |
|
|
$ |
0.40 |
|
|
Dividends declared per share |
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.07 |
|
|
$ |
0.07 |
|
|
|
(1) |
Referral fees in prior quarters reclassed to non-interest income to match current classification |
|
|
|
|
|
For the Three Months Ended |
|
|||||||||||||||||
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands, except share data) |
|
|||||||||||||||||
|
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets (1) |
|
|
1.80 |
% |
|
|
1.06 |
% |
|
|
1.23 |
% |
|
|
0.91 |
% |
|
|
0.74 |
% |
|
Return on average shareholders' equity (1) |
|
|
15.82 |
% |
|
|
9.11 |
% |
|
|
10.56 |
% |
|
|
8.05 |
% |
|
|
6.55 |
% |
|
Return on average common shareholders' equity (1)(2) |
|
|
16.40 |
% |
|
|
9.29 |
% |
|
|
10.88 |
% |
|
|
8.25 |
% |
|
|
6.63 |
% |
|
Efficiency ratio (1)(2) |
|
|
64.98 |
% |
|
|
62.84 |
% |
|
|
63.86 |
% |
|
|
62.66 |
% |
|
|
63.83 |
% |
|
Equity to assets ratio |
|
|
11.52 |
% |
|
|
11.15 |
% |
|
|
11.67 |
% |
|
|
11.39 |
% |
|
|
11.13 |
% |
|
Tangible common equity to tangible assets (2) |
|
|
10.99 |
% |
|
|
10.62 |
% |
|
|
11.12 |
% |
|
|
10.85 |
% |
|
|
10.60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
6,743 |
|
|
$ |
3,928 |
|
|
$ |
4,518 |
|
|
$ |
3,416 |
|
|
$ |
2,733 |
|
|
Less: Preferred stock dividends |
|
|
79 |
|
|
|
81 |
|
|
|
80 |
|
|
|
80 |
|
|
|
99 |
|
|
Income available to common shareholders |
|
$ |
6,664 |
|
|
$ |
3,847 |
|
|
$ |
4,438 |
|
|
$ |
3,336 |
|
|
$ |
2,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares issued |
|
|
7,242,997 |
|
|
|
7,218,358 |
|
|
|
7,206,238 |
|
|
|
7,202,000 |
|
|
|
7,198,901 |
|
|
Less: Weighted average treasury shares |
|
|
1,179,271 |
|
|
|
1,080,089 |
|
|
|
957,573 |
|
|
|
882,153 |
|
|
|
759,294 |
|
|
Plus: Weighted average non-vested restricted stock units |
|
|
97,915 |
|
|
|
63,991 |
|
|
|
67,529 |
|
|
|
66,492 |
|
|
|
65,291 |
|
|
Weighted average number of common shares outstanding |
|
|
6,161,641 |
|
|
|
6,202,260 |
|
|
|
6,316,194 |
|
|
|
6,386,339 |
|
|
|
6,504,898 |
|
|
Effect of dilutive options |
|
|
46,438 |
|
|
|
34,465 |
|
|
|
28,025 |
|
|
|
20,915 |
|
|
|
28,511 |
|
|
Weighted average number of common shares outstanding used to calculate diluted earnings per common share |
|
|
6,208,079 |
|
|
|
6,236,725 |
|
|
|
6,344,219 |
|
|
|
6,407,254 |
|
|
|
6,533,409 |
|
|
|
(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 |
|
|||||||||||||||||
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands) |
|
|||||||||||||||||
|
Return on average common shareholders' equity reconciliation (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average shareholders' equity |
|
|
15.82 |
% |
|
|
9.11 |
% |
|
|
10.56 |
% |
|
|
8.05 |
% |
|
|
6.55 |
% |
|
Effect of excluding average preferred shareholders' equity |
|
|
0.58 |
% |
|
|
0.18 |
% |
|
|
0.32 |
% |
|
|
0.20 |
% |
|
|
0.08 |
% |
|
Return on average common shareholders' equity |
|
|
16.40 |
% |
|
|
9.29 |
% |
|
|
10.88 |
% |
|
|
8.25 |
% |
|
|
6.63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
$ |
8,765 |
|
|
$ |
8,764 |
|
|
$ |
9,494 |
|
|
$ |
7,667 |
|
|
$ |
7,465 |
|
|
Net gain (loss) on sales and write-downs of OREO |
|
|
— |
|
|
|
(17 |
) |
|
|
178 |
|
|
|
(9 |
) |
|
|
— |
|
|
Net gain (loss) on sale of fixed assets |
|
|
1,075 |
|
|
|
6 |
|
|
|
(9 |
) |
|
|
2 |
|
|
|
1 |
|
|
Adjusted non-interest expense (non-GAAP) |
|
$ |
9,840 |
|
|
$ |
8,753 |
|
|
$ |
9,663 |
|
|
$ |
7,660 |
|
|
$ |
7,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
11,438 |
|
|
$ |
10,218 |
|
|
$ |
10,774 |
|
|
$ |
8,654 |
|
|
$ |
8,765 |
|
|
Non-interest income |
|
|
2,251 |
|
|
|
3,712 |
|
|
|
4,358 |
|
|
|
3,672 |
|
|
|
3,501 |
|
|
Net loss (gain) on sales of securities |
|
|
1,453 |
|
|
|
— |
|
|
|
— |
|
|
|
(101 |
) |
|
|
(570 |
) |
|
Operating revenue |
|
$ |
15,142 |
|
|
$ |
13,930 |
|
|
$ |
15,132 |
|
|
$ |
12,225 |
|
|
$ |
11,696 |
|
|
Efficiency ratio |
|
|
64.98 |
% |
|
|
62.84 |
% |
|
|
63.86 |
% |
|
|
62.66 |
% |
|
|
63.83 |
% |
|
|
|
For the Three Months Ended |
|
|||||
|
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
||
|
|
|
(dollars in thousands, except per share data) |
|
|||||
|
Adjusted diluted earnings per share(3): |
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
6,743 |
|
|
$ |
2,733 |
|
|
Less: preferred stock dividends |
|
|
(79 |
) |
|
|
(99 |
) |
|
Plus: goodwill impairment |
|
|
— |
|
|
|
— |
|
|
Adjusted income available to common shareholders for basic earnings per common share |
|
$ |
6,664 |
|
|
$ |
2,634 |
|
|
Weighted average number of common shares outstanding |
|
|
6,161,641 |
|
|
|
6,504,898 |
|
|
Effect of dilutive options |
|
|
46,438 |
|
|
|
28,511 |
|
|
Weighted average number of common shares outstanding used to calculate diluted earnings per common share |
|
|
6,208,079 |
|
|
|
6,533,409 |
|
|
Adjusted diluted earnings per share |
|
$ |
1.07 |
|
|
$ |
0.40 |
|
|
|
(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):
|
|
|
June 30, 2021 |
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|||||
|
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||||||
|
Tangible book value per share and tangible common equity to tangible assets reconciliation (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity |
|
$ |
166,812 |
|
|
$ |
158,338 |
|
|
$ |
163,776 |
|
|
$ |
161,910 |
|
|
$ |
160,525 |
|
|
Less: Core deposit intangible, net of amortization |
|
|
12 |
|
|
|
29 |
|
|
|
54 |
|
|
|
86 |
|
|
|
125 |
|
|
Tangible common equity (non-GAAP) |
|
$ |
166,800 |
|
|
$ |
158,309 |
|
|
$ |
163,722 |
|
|
$ |
161,824 |
|
|
$ |
160,400 |
|
|
Common shares outstanding |
|
|
6,026,748 |
|
|
|
6,094,450 |
|
|
|
6,197,965 |
|
|
|
6,294,675 |
|
|
|
6,375,150 |
|
|
Tangible book value per share |
|
$ |
27.68 |
|
|
$ |
25.98 |
|
|
$ |
26.42 |
|
|
$ |
25.71 |
|
|
$ |
25.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,517,072 |
|
|
$ |
1,491,328 |
|
|
$ |
1,472,358 |
|
|
$ |
1,492,055 |
|
|
$ |
1,513,917 |
|
|
Less: Core deposit intangible, net of amortization |
|
|
12 |
|
|
|
29 |
|
|
|
54 |
|
|
|
86 |
|
|
|
125 |
|
|
Tangible assets (non-GAAP) |
|
$ |
1,517,060 |
|
|
$ |
1,491,299 |
|
|
$ |
1,472,304 |
|
|
$ |
1,491,969 |
|
|
$ |
1,513,792 |
|
|
Tangible common equity to tangible assets |
|
|
10.99 |
% |
|
|
10.62 |
% |
|
|
11.12 |
% |
|
|
10.85 |
% |
|
|
10.60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adverse classified asset ratio (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Substandard loans |
|
$ |
58,112 |
|
|
$ |
88,076 |
|
|
$ |
87,370 |
|
|
$ |
88,370 |
|
|
$ |
88,680 |
|
|
Other real estate owned |
|
|
914 |
|
|
|
739 |
|
|
|
1,077 |
|
|
|
3,064 |
|
|
|
2,629 |
|
|
Substandard unused commitments |
|
|
2,130 |
|
|
|
5,091 |
|
|
|
4,049 |
|
|
|
5,124 |
|
|
|
3,230 |
|
|
Less: Substandard government guarantees |
|
|
(8,007 |
) |
|
|
(8,485 |
) |
|
|
(8,960 |
) |
|
|
(7,002 |
) |
|
|
(6,336 |
) |
|
Total adverse classified assets (non-GAAP) |
|
$ |
53,149 |
|
|
$ |
85,421 |
|
|
$ |
83,536 |
|
|
$ |
89,556 |
|
|
$ |
88,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity (Bank) |
|
$ |
209,416 |
|
|
$ |
202,200 |
|
|
$ |
205,743 |
|
|
$ |
200,011 |
|
|
$ |
201,507 |
|
|
Accumulated other comprehensive gain on available for sale securities |
|
|
(5,854 |
) |
|
|
(1,652 |
) |
|
|
(8,686 |
) |
|
|
(8,640 |
) |
|
|
(8,734 |
) |
|
Allowance for loan losses |
|
|
11,466 |
|
|
|
15,082 |
|
|
|
14,808 |
|
|
|
18,649 |
|
|
|
18,569 |
|
|
Adjusted total equity (non-GAAP) |
|
$ |
215,028 |
|
|
$ |
215,630 |
|
|
$ |
211,865 |
|
|
$ |
210,020 |
|
|
$ |
211,342 |
|
|
Adverse classified asset ratio |
|
|
24.72 |
% |
|
|
39.61 |
% |
|
|
39.43 |
% |
|
|
42.64 |
% |
|
|
41.73 |
% |
|
|
(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. |
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