More annual reports from County Bancorp, Inc.:
2021 ReportEvolving for a strong future 2015 ANNUAL REPORT Letter to Shareholders William Censky Chairman of the Board County Bancorp, Inc. Timothy Schneider President, County Bancorp, Inc. CEO, Investors Community Bank Our efficiency ratio continued to be strong and in the industry peer group top quartile at 49.95% for 2015. Return on average assets was a record for your company at 1.35% and also was in the industry peer group top quartile for the year 2015, exceeding last year’s return on average assets of 1.10%. In the current competitive and sustained low interest rate com- mercial banking environment, we were able to maintain a solid net interest margin at 3.36% in 2015. Our non-interest income also remained strong, growing to $7.7 million for 2015 versus $7.1 million for 2014. This was primarily due to our continued strong secondary market sales of Farm Service Agency government guaranteed loans, participated loans and an increase in our crop insurance revenues for the year. Our non-performing asset level rose in the fourth quarter of 2015. The increase at year end was primarily due to the recognition of one large credit as non-accrual at the end of the fourth quarter. We expect this situation to resolve itself through the owner’s sale of the business in 2016. Finally, earnings per diluted share for 2015 were $1.82 as compared to 2014 at $1.69. In addition, we an- nounced an increase of 25% in our first quarter dividend for 2016. Company Recognition As we previously shared with you, we opened our newly relocated branch in Stevens Point in early February 2016. This beautiful facility will allow us to continue our growth in the Stevens Point and central Wisconsin market. We also opened a new Loan Production Office in Sheboygan in January 2016. People Bank with People, not Banks We continue to be a business driven by our people and the rela- tionships we have with our customers. We have added significant new talent to our team in 2015 and will add resources accordingly in 2016 as we see opportunity to grow. As mentioned earlier, we are excited about the people joining our team in the Appleton and Green Bay markets as part of our acquisition of The Business Bank. Thank you for your support as shareholders this past year, and hopefully you are as pleased with our results for 2015 as we are. We are proud to share our successes with you as we move into an evolving time as a bank and an industry. Dear Shareholders: 2015 was quite an exciting and active year for County Bancorp, Inc. Besides the outstanding financial performance of your com- pany, which I will expound on later, we are Evolving for a Strong Future. What do I mean by this? Strategically, our board decided a few years ago that providing long-term shareholder liquidity was important. To address this issue we made the decision to take the company public, and on January 16, 2015 we started trading on the NASDAQ Global Market (ICBK), raising approximately $16.9 million (net proceeds) in additional capital through an Initial Public Offering. Why would a company that is already well capitalized require additional capital? This additional capital, along with the public currency we created by taking the company public, allowed us to pursue another high priority set by your board – that of pursuing qualified acquisition candidates. Two of our primary objectives of an acquisition are to provide a diversification of our loan portfo- lio by acquiring a strong commercially-focused bank, along with finding an acquisition that’s located in a strong community for fu- ture growth. We accomplished this with the May 13, 2016 closing of the acquisition of Fox River Valley Bancorp, Inc. and its wholly owned subsidiary, The Business Bank, with locations in Appleton and Green Bay. We are very excited about our new venture with The Business Bank and the outstanding new team members who will be joining Investors Community Bank (ICB), along with their solid commercial banking customers becoming customers of ICB. As you can see, we have had a lot going on this past year. Diligent and extreme hard work have gone into accomplishing both of these goals by many team members at ICB. Again, we felt both of these steps were necessary in the ever-evolving banking business to continue to provide long term shareholder value creation. 2015 Company Performance 2014 was an outstanding year for County Bancorp, Inc., but 2015 was even better. We surpassed net income year-over-year by 33.7% – $8.2 million in 2014 versus $11.0 million in 2015. Our loan growth was also extremely strong, growing $100.1 million in net loans for the year – $648.1 million at year end 2014 versus $748.2 million at year end 2015. We also surpassed $1.2 billion in total loans serviced in 2015. This number represents all loans on our balance sheet as well as loans serviced, which includes Farm Service Agency government guaranteed loans sold in the second- ary market and loans participated to other financial institutions. ON THE COVER: 3 Sheeps Brewing Company, Sheboygan; Our new Stevens Point banking center; ICB agricultural banking team 1 Directors & Advisory Board Investors Community Bank Officers Senior Management Investors Community Bank Officers William C. Censky Chairman of the Board Timothy J. Schneider President Gary R. Abramowicz Chief Financial Officer and Treasurer Mark A. Miller Secretary and Securities Compliance Officer 2015 Board of Directors County Bancorp Inc. / Investors Community Bank William C. Censky Investors Community Bank Mark R. Binversie Investors Community Bank Timothy J. Schneider Investors Community Bank Wayne D. Mueller Investors Community Bank Carmen L. Chizek Chizek Transport, Inc. Lynn D. Davis, Ph.D. Nutrition Professionals, Inc. Rick G. Dercks Business Consultant and Investor Edson P. Foster Foster Needle Co., Inc. Robert E. Matzke Financial Services of Northeast Wisconsin Kathi P. Seifert* Katapult, LLC Andrew J. Steimle Steimle Birschbach LLC Kenneth R. Zacharias, CPA Schenck Business Solutions Gary J. Ziegelbauer Triangle Distributing, Inc. Stevens Point Advisory Board Augusto (Tito) Alinea Stevens Point Anesthesia Dan Bukowski Markit, N.A. and DigiCopy, Inc. Bill Mullins Mullins Cheese Ken Turzinski DMK, Inc. Bill Wolfe Wisconsin River Cranberry & Lester Cranberry *Investors Community Bank Board Only Gary R. Abramowicz, Executive Vice President – Chief Financial Officer/Treasurer Trever J. Athorp, Senior Agricultural & Business Banking Officer Nicole M. Bahn, Senior Special Assets Officer Tony J. Betley, Senior Agricultural Banking Officer Mark R. Binversie, President Virginia Bishop, Asst. Vice President - Banking Services Mary A. Boeckman, Loan Quality Control Specialist William C. Censky, Chairman of the Board David A. Coggins, Executive Vice President – Chief Banking Officer Christopher C. Cox, Senior Business Banking Officer Thomas D. Detienne, Market President – Southeast Region David J. Diedrich, Vice President – Business Banking Jeff C. Duffrin, Senior Business Banker Steven J. Fleming, Senior Agricultural Banking Officer Deb Geiger, Asst. Vice President – Electronic Banking Katelin R. Haglund, Agricultural Credit Manager Jeffrey J. Hebert, Bank Systems Manager Bill C. Hodgkiss, Senior Vice President - Business Banking Brian J. Hoskens, Vice President – Agricultural Banking Michael J. Hostak, Vice President – Information Technology Jeffrey L. Jagodinsky, Senior Business Banking Officer Matt K. Kasdorf, Deputy Chief Credit Officer Justin R. Knuth Credit Manager – Business Banking Cari A. Larsen, Vice President – Controller Matt R. Lemke, Vice President – Banking Services Kaarin M. Long, Cash Management Relationship Manager Mark D. Ludtke, Agricultural Banking Officer Mark C. Maurer, Vice President – Business Banking Craig P. Mayo, Executive Vice President – Chief Credit Officer Lori A. Megow, Asst. Vice President – Banking Services Mark A. Miller, Executive Vice President – Chief Risk Officer & Bank Counsel/Secretary of the Board Laurie K. Olson, Vice President - Business Banking Tom J. Pennings, Senior Business Banker Bill A. Pfingsten, Senior Vice President - Agricultural Banking Kathleen M. Richardson, Asst. Vice President – Banking Services Christopher J. Schneider, Vice President – Agricultural Banking Patricia M. Schneider, Vice President – Deposit Operations / Security Officer / BSA Administrator Timothy J. Schneider, Chief Executive Officer Scott Schroeter, Agricultural Portfolio Manager Roger P. Sinkula, Agricultural Banking Officer Sharon A. Slager, Asst. Vice President – Governmental Guarantee Loan Program James J. Smidel, Agricultural Banking Officer Susan M. Smith, Executive Vice President – Chief Human Resources Officer Lori A. Webster, Vice President – Compliance Officer Laura A. Wiegert, Vice President – Marketing Cyrene N. Wilke, Vice President – Loan Operations/CRA Officer Scott C. Yukel, Vice President - Business Banking 2 Selected Financial Highlights* COUNTY BANCORP, INC. AND SUBSIDIARIES December 31, 2015 and 2014 *Additional financial information is available upon request or can be viewed at www.ICBK.com (click on Investor Relations button in upper left corner) For the year ended December 31 2015 2014 Dollars in thousands except per share data $33,767 7,520 26,247 (1,019) 27,266 7,685 17,458 17,493 6,519 $10,974 $1.85 $1.82 $0.16 $17.16 1.35% 11.27% 3.36% 3.13% 0.95% 2.15% 1.20% 49.95% 8.79% 3.29% 1.39% 42.33% (0.12)% 3.10% 11.19% 13.94% 15.19% 13.94% 13.29% $30,897 7,537 23,360 589 22,771 7,148 17,025 12,894 4,684 $8,210 $1.73 $1.69 N/A $16.01 1.10% 11.37% 3.29% 3.07% 0.96% 2.28% 1.32% 50.99% N/A 1.78% 1.64% 91.76% 0.08% 2.42% 9.33% 15.51% 16.77% N/A 13.96% RESULTS OF OPERATIONS: Interest income Interest expense Net interest income Provision for loan losses Net interest income after provision for (recovery of) loan losses Non-interest income Non-interest expense Income before income taxes Income tax expense Net income PER SHARE DATA: Basic Diluted Cash dividends per common share Book value per share PERFORMANCE RATIOS: Return on average assets Return on average common shareholders’ equity Net interest margin Interest rate spread Non-interest income to average assets Non-interest expense to average assets Net overhead ratio Efficiency ratio Dividend payout ratio ASSET QUALITY RATIOS: Nonperforming loans to total loans Allowance for loan losses to: Total loans Nonperforming loans Net charge-offs (recoveries) to average loans Nonperforming assets to total assets CAPITAL RATIOS: Shareholders’ common equity to assets Tier 1 risk-based capital (Bank) Total risk-based capital (Bank) Tier 1 Common Equity Ratio (Bank) Leverage ratio (Bank) 3 Consolidated Balance Sheets COUNTY BANCORP, INC. AND SUBSIDIARIES December 31, 2015 and 2014 ASSETS Cash and cash equivalents Securities available for sale, at fair value FHLB Stock, at cost Loans held for sale Loans, net of allowance for loan losses of $10,405 as of December 31, 2015 and $10,603 as of December 31, 2014 Premises and equipment, net Loan servicing rights Other real estate owned, net Cash surrender value of bank owned life insurance Deferred tax asset, net Accrued interest receivable and other assets Total assets LIABILITIES Deposits: Non-interest bearing Interest bearing Total deposits Other borrowings Advances from FHLB Subordinated debentures Accrued interest payable and other liabilities Total liabilities 2015 2014 Dollars in thousands $ 14,907 83,281 3,507 9,201 737,784 7,165 8,145 2,872 11,155 2,048 4,824 $884,889 $ 70,914 601,312 672,226 3,945 66,445 12,372 7,877 762,865 $ 10,480 81,282 1,252 4,114 637,519 4,596 7,746 7,137 10,863 2,321 4,446 $771,756 $ 81,534 523,935 605,469 23,857 28,000 12,372 7,015 676,713 Small Business Lending Fund redeemable preferred stock-variable rate, noncumulative, nonparticipating, $1,000 stated value; 15,000 shares authorized and issued, $15,000 redemption amount $ 15,000 $ 15,000 SHAREHOLDERS’ EQUITY Preferred stock-variable rate, non-cumulative, nonparticipating, $1,000 stated value; 15,000 shares authorized; 8,000 shares issued Common stock - $0.01 par value; 50,000,000 authorized; 6,192,609 shares issued and 5,771,001 shares outstanding as of December 31, 2015 and 4,908,560 shares issued and 4,498,790 shares outstanding as of December 31, 2014 Surplus Retained earnings Treasury stock, at cost, 421,608 and 409,770 shares, respectively Accumulated other comprehensive income Total shareholders’ equity Total liabilities and shareholders’ equity 8,000 8,000 19 34,717 68,825 (4,758) 221 107,024 $884,889 5 16,970 59,254 (4,572) 386 80,043 $771,756 4 Consolidated Statements of Operations COUNTY BANCORP, INC. AND SUBSIDIARIES For the years ended December 31, 2015 and 2014 2015 2014 Dollars in thousands except per share data INTEREST AND DIVIDEND INCOME Loans, including fees Taxable securities Tax-exempt securities Federal funds sold and other Total interest and dividend income INTEREST EXPENSE Deposits FHLB advances and other borrowed funds Subordinated debentures Total interest expense Net interest income Provision for loan losses Net interest income after provision for loan losses NON-INTEREST INCOME Services charges Gain on sale of loans, net Loan servicing fees Other Total non-interest income NON-INTEREST EXPENSE Employee compensation and benefits Occupancy Write-down of other real estate owned Other Total non-interest expense Income before income taxes Income tax expense NET INCOME NET INCOME PER SHARE: Basic Diluted Dividends paid per share $32,301 964 437 65 33,767 6,238 882 400 7,520 26,247 (1,019) 27,266 1,039 429 5,323 894 7,685 10,769 338 256 6,095 17,458 17,493 6,519 $10,974 $1.85 $1.82 $0.16 $29,416 897 474 110 30,897 6,154 903 480 7,537 23,360 589 22,771 788 321 4,938 1,101 7,148 10,209 299 1,190 5,327 17,025 12,894 4,684 $8,210 $1.73 $1.69 N/A 5 Locations & Loan Relationships Branches Manitowoc 860 N. Rapids Rd. Manitowoc, WI (Corporate headquarters) Appleton 5643 Waterford Ln. Appleton, WI Green Bay 3193 Voyager Dr. Green Bay, WI Stevens Point 5517 Vern Holmes Dr. Stevens Point, WI Counties where ICB has loan relationships as of 12/31/15 ICB Loan Production Offices Member FDIC Member FDIC 6 A partnership that adds up! The Business Bank is now Investors Community Bank The Business Bank has merged with Investors Community Bank, and it’s a partnership that adds up perfectly. Together we are focused on the financial needs of area businesses ... with a shared passion for personal service, customized solutions and local decision making. InvestorsCommunityBank.com Annual Meeting Tuesday, June 21, 2016 at 6 PM at the Silver Lake College Franciscan Center Atrium, 2406 S. Alverno Rd., Manitowoc Corporate Headquarters 860 North Rapids Rd., PO Box 700, Manitowoc WI 54221-0700, (920) 686-9998, 1-888-686-9998 Transfer Agent Stock Listing Computershare Trust Company, N.A.; 211 Quality Circle, Suite 210; College Station, TX 77845 County Bancorp, Inc. common stock is traded on the NASDAQ Global Market under the symbol “ICBK” Shareholder website www.ICBK.com (click on Investor Relations button in upper left corner) Investor Relations Shareholders, analysts, the news media and others desiring general information about the company or its subsidiaries may contact Timothy J. Schneider, CEO, at the corporate headquarters. This report includes “forward-looking statements.” Forward-looking statements are subject to known and unknown risks and uncertain- ties, many of which may be beyond our control. We caution you that the forward-looking information presented in this document is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking informa- tion contained here. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of publication of this annual report, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise. PAGE 7
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