CONTACT: Timothy J. Schneider
CEO, Investors Community Bank
(920) 686-5604
tschneider@investorscommunitybank.com
Third Quarter Highlights
Net income of $3.6 million for the third quarter of 2017, an increase of 16.2% over the third quarter of 2016
Book value per share of $19.79 and tangible book value per share of $18.87 as of September 30, 2017, an increase of $1.07, or 5.7%, and $1.13, or 6.4%, respectively, since December 31, 2016
Loan growth of $50.9 million in the third quarter of 2017
Deposit growth of $72.4 million, or 7.3%, in the third quarter of 2017
MANITOWOC, Wis., Oct. 20, 2017 (GLOBE NEWSWIRE) — County Bancorp, Inc. (NASDAQ:ICBK), the holding company of Investors Community Bank, a commercial bank headquartered in Manitowoc, Wisconsin, reported net income of $3.6 million, or $0.52 diluted earnings per share, for the third quarter of 2017, compared to net income of $3.1 million, or $0.46 diluted earnings per share, for the third quarter of 2016, which represents a 16.2% increase to net income year-over-year. This represents a return on average assets of 1.11% for the three months ended September 30, 2017, compared to 1.04% for the three months ended September 30, 2016.
“Our third quarter results were positive, with solid loan growth from both the agricultural and commercial banking teams,” stated Timothy J. Schneider, President of County Bancorp, Inc. and CEO of Investors Community Bank. “Our net income for the quarter was also better than the first two quarters, primarily due to increased non-interest income that was driven by a pickup in secondary market loan sales, as well as a decrease in provision for loan loss expense.”
“Our loan pipeline for both commercial and ag continues to be solid. We remain confident in our ability to continue to develop loan growth in both sectors,” added Schneider. “With regard to credit quality, our non-performing assets as a percent of total assets improved slightly for the quarter. The dairy sector, although improved from last year due to an increase in milk prices, is still feeling some of the effects of lower prices from 2015 and 2016. As always, we are diligently working with our dairy customers through these challenges and closely monitoring credits in the industry. Additionally, we continue to add key talent to our staff in all of our markets to fill open positions. Attracting top level talent has been a significant focus of our organization, and we feel very good about our team.”
Loans and Total Assets
Total assets at September 30, 2017 were $1.4 billion, an increase of $117.3 million, or 9.4%, over total assets as of December 31, 2016, and an increase of $142.8 million, or 11.7%, over total assets as of September 30, 2016. Total loans were $1.1 billion at September 30, 2017, which represents a $96.1 million, or 9.3%, increase over total loans at December 31, 2016, and a $134.1 million, or 13.5% increase over total loans at September 30, 2016. We have seen increased loan demand in our market areas; agricultural loans have increased $52.6 million and commercial loans have increased $45.1 million in 2017.
Deposits
Total deposits at September 30, 2017 were $1.1 billion, an increase of $88.6 million, or 9.1%, over total deposits as of December 31, 2016, and an increase of $136.6 million, or 14.7%, over total deposits as of September 30, 2016. While core deposit generation remains challenging in this ultra-competitive environment, we have been able to supplement our deposit needs with wholesale deposits from our brokered relationships. Brokered deposits increased $87.6 million, or 45.2%, from $193.6 million at December, 31, 2016 to $281.2 million at September 30, 2017.
Net Interest Income and Margin
As the result of increased wholesale deposits and other borrowings to fund the loan volume, net interest income decreased $0.2 million to $10.0 million for the three months ended September 30, 2017, compared to the three months ended September 30, 2016. For the nine months ended September 30, 2017, net interest income increased $3.3 million to $28.7 million from $25.4 million for the nine months ended September 30, 2016.
Net interest margin decreased to 3.17% for the three months ended September 30, 2017, compared to 3.57% for the three months ended September 30, 2016. For the nine months ended September 30, 2017, net interest margin decreased to 3.12%, compared to 3.38% for the nine months ended September 30, 2016. The decrease in margin is the result of market-driven rate compression on new loans of 0.12% and increased funding costs of 0.14%.
The net interest margin for the three and nine months ended September 30, 2016 was positively impacted by 0.25% and 0.10%, respectively, for the accretion of a fair value discount resulting from the acquisition of The Business Bank, which closed on May 13, 2016. The accretion adjustment for 2017 is immaterial.
Non-Interest Income and Expense
Non-interest income for the third quarter of 2017 increased $0.1 million to $2.1 million compared to the third quarter of 2016 and decreased $1.0 million to $5.7 million for the nine months ended September 30, 2017. The year-to-date decrease is primarily due to a $1.3 million decrease in loan servicing rights during the first three quarters of 2017. The decrease in loan servicing rights resulted from lower volumes of secondary market sales and participations due to changes in Farm Service Agency regulations.
Non-interest expense for the third quarter of 2017 increased $0.2 million to $6.3 million from the third quarter of 2016 primarily as the result of a $0.4 million increase in employee compensation and benefits expense partially offset by a $0.2 million reduction in OREO writedowns from the third quarter of 2016.
Non-interest expense year-over-year has increased from $18.1 million for the nine months ended September 30, 2016 to $18.8 million for the nine months ended September 30, 2017. The increase is related to a $2.2 million increase in employee compensation and benefits related to a 9.7% increase in headcount since September 30, 2016. This increase was partially offset by a $0.8 million reduction in information processing expenses and a $0.5 million reduction in OREO writedowns and losses on OREO sales from the same period in 2016.
Asset Quality
Non-performing assets as a percent of total assets continued to improve and decreased to 1.43% at September 30, 2017 from 1.84% at December 31, 2016 and 2.04% at September 30, 2016.
Net charge-offs for the nine months ended September 30, 2017 were $1.3 million which is a decrease of $0.1 million from the nine months ended September 30, 2016. The net charge-offs for 2017 primarily consisted of one commercial real estate relationship that was fully reserved for in the allowance for loan losses; there is no further exposure to this customer.
Provision for loan losses for the three months ended September 30, 2017 was $33,000 compared to $1.1 million for the three months ended September 30, 2016. The decreased provision is primarily the result of improved historical charge-off factors and a more stable agricultural economy which offset the 2017 loan growth.
About County Bancorp, Inc.
County Bancorp, Inc., a Wisconsin corporation and registered bank holding company founded in May 1996, and our wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin. The state of Wisconsin is often referred to as “America’s Dairyland,” and one of the niches we have developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending. We also serve business and retail customers throughout Wisconsin, with a focus on northeastern and central Wisconsin. Our customers are served from our full-service locations in Manitowoc, Appleton, Green Bay, and Stevens Point and our 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 our control. We caution you that the forward-looking statements presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. 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 County Bancorp, Inc.’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
