Strategic initiatives to improve credit quality and grow client deposits gaining momentum

Highlights

• Net income of $3.3 million for the fourth quarter of 2019; $16.5 million for the year 2019
  
• Diluted earnings per share of $0.47 for the fourth quarter of 2019; $2.36 for the year 2019
• Client deposits (demand deposits, NOW, savings, money market accounts, and certificates of deposit) increased $17.4 million, or 2.1%, since September 30, 2019, and increased $81.2 million, or 10.8%, since December 31, 2018
• Loans sold with servicing retained increased $90.5 million, or 13.7%, since December 31, 2018, resulting in $10.0 million of non-interest income
• Substandard loans decreased $11.0 million, or 10.4%, since September 30, 2019

MANITOWOC, Wisc., Jan. 23, 2020 (GLOBE NEWSWIRE) -- 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 results for the fourth quarter and year ended December 31, 2019.  Net income was $3.3 million, or $0.47 diluted earnings per share, for the fourth quarter of 2019, compared to net income of $5.7 million, or $0.82 diluted earnings per share, for the third quarter of 2019 and $2.8 million, or $0.40 diluted earnings per share, for the fourth quarter of 2018.    

Tim Schneider, President of County Bancorp, Inc., noted, “In 2019, we focused on improving credit quality, reducing wholesale funding, and growing our client deposits. I am pleased to say that our strategic initiatives drove improvements across all three focus areas, resulting in record full-year net profit for County Bancorp. Our business is progressing at a solid pace, but we understand there is more work to be done. Our dairy portfolio continued to strengthen as milk prices improved throughout 2019, and the futures market is the strongest we have seen in years. As trade deals with Mexico, Canada and China near the finish line, we feel more optimistic about the future of agricultural export stability. We made great progress in 2019, which is a testament to the diligent and tireless work of our team, and we look to continue our momentum as we head into 2020.”

Loans and Total Assets

Total assets at December 31, 2019 were $1.4 billion, a decrease of $36.5 million, or 2.6%, and a decrease of $142.5 million, or 9.4%, from total assets as of September 30, 2019 and December 31, 2018, respectively.  Total loans were $1.0 billion at December 31, 2019, which represents a $45.0 million, or 4.2%, decrease from total loans at September 30, 2019, and a decrease of $171.5 million, or 14.2%, from total loans at December 31, 2018.

The decrease in total loans and assets were the result of our continued focus on loan participation sales and the resulting reduction in wholesale funding (brokered deposits, national certificates of deposit, and Federal Home Loan Bank (FHLB) advances) on our balance sheet.  Loan participations that the Company continued to service were $751.7 million at December 31, 2019, which was an increase of $14.9 million, or 2.0%, and $90.5 million, or 13.7%, over participated loans that the Company serviced at September 30, 2019 and December 31, 2018, respectively.  By increasing the amount of loans participated, the Company has been reducing credit risk from its balance sheet and increasing non-interest revenue streams.

Deposits

Total deposits at December 31, 2019 were $1.1 billion, a decrease of $41.3 million, or 3.6%, and a decrease of $121.9 million, or 10.0%, from total deposits as of September 30, 2019 and December 31, 2018, respectively.  Despite the decline in total deposits, client deposits (demand deposits, NOW accounts, savings accounts, money market accounts, and certificates of deposit) increased $17.4 million, or 2.1%, since September 30, 2019, and increased $81.2 million, or 10.8%, since December 31, 2018. 

During 2019, the Company focused on reducing its reliance on wholesale funding.  Due to the increases in loan participations and client deposit growth discussed above, the Company was able to decrease its dependence on brokered deposits and national certificates of deposit to $265.8 million at December 31, 2019.  This represents a decrease of $58.7 million, or 18.1%, from September 30, 2019, and a decrease of $203.1 million, or 43.3%, from December 31, 2018. 

Also during 2019, the Company paid off a portion of its FHLB advances.  At December 31, 2019, advances from the FHLB totaled $44.4 million, which was a decrease of $45.0 million, or 50.3%, since December 31, 2018.

Net Interest Income and Margin

Net interest income was $9.5 million for the three months ended December 31, 2019, which was a $0.7 million, or 7.0%, decrease from the three months ended September 30, 2019, and a $1.2 million, or 11.6%, decrease from the three months ended December 31, 2018.  For the year ended December 31, 2019, net interest income decreased $1.2 million, or 2.8%, to $40.8 million from the same period in 2018.  The decrease in net interest income in the fourth quarter 2019 was the result of a lower average loan balance due to loan payoffs and the increase in loan participations sold.  This was partially offset by a $58.7 million decrease in brokered deposits and national certificates of deposit and the resulting decrease in interest expense.  The current quarter was also adversely impacted by a $10.2 million increase in nonaccrual loans, as well as a 25 basis point decrease in the Prime rate.

Net interest margin was 2.89% for the three months ended December 31, 2019, which was a decrease from 2.95% for the three months ended September 30, 2019.  The decrease in net interest margin was primarily due to the noted increase in nonaccrual loans.  Net interest margin was also impacted during the fourth quarter of 2019 by a 25 basis point decrease in the Prime rate, immediately impacting the yield of the loan portfolio.  This was partially offset by a decrease in rates offered on savings, NOW and money market accounts.

The table below presents the effects of changing rates and volumes on our net interest income for the periods indicated.

		Three Months Ended December 31, 2019 v. Three Months Ended September 30, 2019												Three Months Ended December 31, 2019 v. Three Months Ended December 31, 2018
		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		$	1			$	(11	)		$	(10	)		$	(228	)		$	(17	)		$	(245	)
Loans			(847	)			(493	)			(1,340	)			(1,889	)			44				(1,845	)
Federal funds sold and   interest-bearing deposits    with banks			(30	)			(140	)			(170	)			126				92				218
Total interest income			(876	)			(644	)			(1,520	)			(1,991	)			119				(1,872	)
Interest Expense:
Savings, NOW, money   market and interest   checking		$	(15	)		$	(385	)		$	(400	)		$	158			$	(325	)		$	(167	)
Time deposits			(515	)			123				(392	)			(1,354	)			1,029				(325	)
Other borrowings			-				-				-				-				-				-
FHLB advances			(22	)			1				(21	)			(226	)			24				(202	)
Junior subordinated debentures			1				6				7				2				25				27
Total interest expense		$	(551	)		$	(255	)		$	(806	)		$	(1,420	)		$	753			$	(667	)
Net interest income		$	(325	)		$	(389	)		$	(714	)		$	(571	)		$	(634	)		$	(1,205	)

The following tables set forth average balance sheets, average yields and rates, and income and expenses for the period indicated.

		For the Three Months Ended
		December 31, 2019												September 30, 2019												December 31, 2018
		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		$	159,202			$	1,106				2.78	%		$	159,091			$	1,117				2.81	%		$	191,955			$	1,351				2.82	%
Loans (2)			1,061,432				13,691				5.16	%			1,126,243				15,030				5.34	%			1,207,883				15,536				5.14	%
Interest bearing deposits due from   other banks			98,848				441				1.79	%			104,253				612				2.35	%			67,153				223				1.33	%
Total interest-earning assets		$	1,319,482			$	15,238				4.62	%		$	1,389,587			$	16,759				4.82	%		$	1,466,991			$	17,110				4.67	%
Allowance for loan losses			(14,868	)											(16,209	)											(16,034	)
Other assets			77,934												78,664												61,316
Total assets		$	1,382,548											$	1,452,042											$	1,512,273
Liabilities
Savings, NOW, money market,   interest checking		$	322,629			$	876				1.09	%		$	326,592			$	1,276				1.56	%		$	287,420			$	1,043				1.45	%
Time deposits			658,864				3,905				2.37	%			745,032				4,298				2.31	%			820,515				4,230				2.06	%
Total interest-bearing deposits		$	981,493			$	4,781				1.95	%		$	1,071,624			$	5,574				2.08	%		$	1,107,935			$	5,273				1.90	%
Other borrowings			799				9				4.60	%			804				9				4.60	%			837				10				4.62	%
FHLB advances			44,400				216				1.94	%			48,857				237				1.94	%			90,509				417				1.84	%
Junior subordinated debentures			44,839				694				6.19	%			44,800				687				6.14	%			44,681				667				5.97	%
Total interest-bearing liabilities		$	1,071,531			$	5,700				2.13	%		$	1,166,085			$	6,507				2.23	%		$	1,243,962			$	6,367				2.05	%
Non-interest bearing deposits			123,541												105,578												108,140
Other liabilities			16,749												14,801												10,913
Total liabilities		$	1,211,821											$	1,286,464											$	1,363,015
Shareholders' equity			170,727												165,578												149,258
Total liabilities and equity		$	1,382,548											$	1,452,042											$	1,512,273
Net interest income						$	9,538											$	10,252											$	10,743
Interest rate spread (3)											2.49	%											2.59	%											2.62	%
Net interest margin (4)											2.89	%											2.95	%											2.91	%
Ratio of interest-earning assets to   interest-bearing liabilities			1.23												1.19												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.

For the year ended December 31, 2019, net interest margin improved slightly to 2.93% from 2.91% for the year ended December 31, 2018, despite a six basis point decrease in interest rate spread.  The increase in net interest margin in 2019 is due to a 3.2% decrease in the average balance of interest-earning assets.

		For the Year Ended
		December 31, 2019												December 31, 2018
		Average Balance (1)				Income/ Expense				Yields/ Rates				Average Balance (1)				Income/ Expense				Yields/ Rates
		(dollars in thousands)
Assets
Investment securities		$	172,500			$	4,843				2.81	%		$	169,302			$	4,425				2.61	%
Loans (2)			1,142,551				59,706				5.23	%			1,193,254				58,706				4.92	%
Interest bearing deposits due from other   banks			78,517				1,783				2.27	%			77,545				1,086				1.40	%
Total interest-earning assets		$	1,393,568			$	66,332				4.76	%		$	1,440,101			$	64,217				4.46	%
Allowance for loan losses			(16,460	)											(15,037	)
Other assets			77,444												59,291
Total assets		$	1,454,552											$	1,484,355
Liabilities
Savings, NOW, money market, interest   checking		$	316,278				4,582				1.45	%		$	282,746				3,398				1.20	%
Time deposits			741,483				16,875				2.28	%			801,892				15,251				1.90	%
Total interest-bearing deposits		$	1,057,761			$	21,457				2.03	%		$	1,084,638			$	18,649				1.72	%
Other borrowings			913				43				4.71	%			1,027				50				4.81	%
FHLB advances			66,022				1,307				1.98	%			105,218				1,759				1.67	%
Junior subordinated debentures			44,781				2,743				6.13	%			32,721				1,804				5.51	%
Total interest-bearing liabilities		$	1,169,477			$	25,550				2.18	%		$	1,223,604			$	22,262				1.82	%
Non-interest bearing deposits			108,356												100,819
Other liabilities			13,796												9,883
Total liabilities		$	1,291,629											$	1,334,306
Shareholders' equity			162,923												150,049
Total liabilities and equity		$	1,454,552											$	1,484,355
Net interest income						$	40,782											$	41,955
Interest rate spread (3)											2.58	%											2.64	%
Net interest margin (4)											2.93	%											2.91	%
Ratio of interest-earning assets to interest-   bearing liabilities			1.19												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.

Non-Interest Income and Expense

		For the Three Months Ended
		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018
		(dollars in thousands)
Non-Interest Income
Service charges		$	549			$	348			$	407			$	353			$	470
Gain (loss) on sale of loans, net			34				87				26				(1	)			54
Loan servicing fees			1,778				1,677				1,563				1,519				1,553
Loan servicing right origination			1,146				1,741				346				228				7
Income on OREO			54				10				40				26				83
Gain on sale of securities			-				-				341				-				-
Other			161				171				164				625				153
Total non-interest income		$	3,722			$	4,034			$	2,887			$	2,750			$	2,320

Non-interest income for the three months ended December 31, 2019 decreased by $0.3 million, or 7.7%, to $3.7 million compared to the three months ended September 30, 2019, which was primarily the result of a decrease of $0.6 million of loan servicing right origination due to the $41.2 million in loans that were sold or participated during the third quarter compared to only $14.9 million in loans that were sold or participated during the fourth quarter. 

Non-interest income for the three months ended December 31, 2019 increased $1.4 million, or 60.4%, compared to $2.3 million for the three months ended December 31, 2018.  The year-over-year increase was primarily due to the increase in loan participations sold and related loan servicing right origination income compared to the fourth quarter of 2018.

		For the Three Months Ended
		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018
		(dollars in thousands)
Loan servicing rights, beginning of period		$	11,362			$	9,621			$	9,275			$	9,047			$	9,040
Changes in loan servicing rights:
Additions related to new loans			1,811				2,276				843				621				596
Impairment due to prepayment			(296	)			(198	)			(190	)			(73	)			(37	)
Amortization of existing asset			(632	)			(584	)			(554	)			(550	)			(552	)
Reduction of valuation allowance			263				247				247				230				-
Total loan servicing right origination income			1,146				1,741				346				228				7
Loan servicing rights, end of period		$	12,508			$	11,362			$	9,621			$	9,275			$	9,047
Loans serviced, end of period			751,738				736,823				695,629				675,268				661,257
Loan servicing rights as a % of loans serviced			1.66	%			1.54	%			1.38	%			1.37	%			1.37	%
Total loan servicing fees		$	1,778			$	1,677			$	1,563			$	1,519			$	1,553
Average loans serviced			744,281				716,226				685,449				668,263				653,068
Annualized loan servicing fees as a   % of average loans serviced			0.96	%			0.94	%			0.91	%			0.91	%			0.95	%

Loan servicing right origination and loan serving fee income was positively impacted during the second half of the year in 2019 due to the higher volumes of loan participation sales as well as higher loan servicing fee spreads.

		For the Three Months Ended
		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018
		(dollars in thousands, except per share data)
Non-Interest Expense
Employee compensation and   benefits		$	5,696			$	4,735			$	4,199			$	4,482			$	4,059
Occupancy			417				313				283				389				245
Information processing			645				683				591				563				641
Professional fees			371				483				417				399				497
Business development			335				351				347				325				259
OREO expenses			59				57				121				51				106
Write-down of OREO			376				-				250				-				688
Net loss (gain) on sale of OREO			(231	)			160				9				(136	)			(54	)
Depreciation and amortization			319				319				328				337				408
Other			2,278				567				901				895				689
Total non-interest expense		$	10,265			$	7,668			$	7,446			$	7,305			$	7,538

Non-interest expense for the three months ended December 31, 2019 increased by $2.6 million, or 33.9%, to $10.3 million compared to the three months ended September 30, 2019.  Employee compensation and benefits increased $1.0 million, or 20.3%, in the linked quarter due to the additional accrual of $0.9 million for incentive compensation related to current year financial results.  The year-over-year increase was also the result of a 5.3% increase in head count and a 21.7% increase in insurance benefits in 2019.  Other non-interest expense increased from impairment recognized from an investment in a historical tax credit project of $1.1 million.  The impairment was offset by a $1.4 million benefit to income tax expense when the credit was earned.  The three months ended December 31, 2019 was also adversely affected by decline in market values of three OREO properties which resulted in write-downs totaling $0.4 million. 

		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018
		(dollars in thousands)
Loans by risk category:
Sound/Acceptable/Satisfactory/   Low Satisfactory		$	724,444			$	771,568			$	836,988			$	896,328			$	908,172
Watch			207,173				193,942				167,824				174,642				171,670
Special Mention			9,239				9,346				25,255				4,501				6,566
Substandard Performing			30,478				44,183				56,336				46,075				65,501
Substandard Impaired			64,439				61,728				61,429				61,417				55,386
Total loans		$	1,035,773			$	1,080,767			$	1,147,832			$	1,182,963			$	1,207,295
Adverse classified asset ratio (1)			39.85	%			45.67	%			53.21	%			48.59	%			57.12	%

(1)   This is a non-GAAP financial measure.  A reconciliation to GAAP is included at the end of this earnings release

Substandard loans were $94.9 million at December 31, 2019, compared to $105.9 million at September 30, 2019 and $120.9 million at December 31, 2018.  Adverse classified asset ratio (a non-GAAP measure) decreased to 39.85% at December 31, 2019 from 45.67% and 57.12% at September 30, 2019 and December 31, 2018, respectively.  The decrease in substandard loans and the adverse classified ratio were in part the result of improving milk prices.  The average 12-month future price of class III milk on the Chicago Mercantile Exchange rose to $17.40 at December 31, 2019 compared to $17.12 at September 30, 2019 and $15.88 at December 31, 2018.

		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018
		(dollars in thousands)
Non-Performing Assets:
Nonaccrual loans		$	30,968			$	20,776			$	20,096			$	25,880			$	22,983
Other real estate owned			5,521				7,252				8,693				5,019				6,568
Total non-performing assets		$	36,489			$	28,028			$	28,789			$	30,899			$	29,551
Performing TDRs not on   nonaccrual		$	21,784			$	28,520			$	28,892			$	21,111			$	18,258
Non-performing assets as a % of total    loans			3.52	%			2.59	%			2.51	%			2.61	%			2.45	%
Non-performing assets as a % of total   assets			2.65	%			1.98	%			1.94	%			2.07	%			1.94	%
Allowance for loan losses as a % of   total loans			1.47	%			1.39	%			1.42	%			1.48	%			1.37	%
Net charge-offs (recoveries) quarter-   to-date		$	(253	)		$	39			$	2,111			$	(236	)		$	1,210

At December 31, 2019, non-performing assets were $36.5 million, an increase of $8.5 million, compared to September 30, 2019.  Non-performing assets as a percent of total assets increased to 2.65% at December 31, 2019, from 1.98% at September 30, 2019.  The increases were primarily due to an increase in non-accrual loans of $10.2 million in the fourth quarter related to one agriculture customer for $6.0 million and one commercial customer for $3.9 million, which was partially offset by two OREO properties that were sold during the fourth quarter of 2019, resulting in a decrease of $1.7 million in OREO.

A credit to provision for loan losses of $0.1 million was recorded for the three months ended December 31, 2019 compared to a credit of $1.2 million for the three months ended September 30, 2019.  The credit provision in the fourth quarter of 2019 was primarily a result of the reduction of the size of the loan portfolio, improved economic factors, and upgrades to credit ratings, which was partially offset by a $1.9 million impairment to a substandard commercial credit.  In addition, during the fourth quarter of 2019, the Company recovered a $0.4 million loan that was previously charged-off.   

The allowance for loan losses was $15.3 million at December 31, 2019 compared to $16.5 million at December 31, 2018.  The $1.2 million decrease in the allowance during 2019 was the result of a reduction in general reserves due to the decreases in total loans, improvement of economic factors, and the credit upgrades discussed previously.  Despite the decrease in allowance year-over-year, the allowance as a percent of total loans increased from 1.37% at December 31, 2018 to 1.47% at December 31, 2019.

Conference Call

The Company will host an earnings call tomorrow, January 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 January 25, 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.  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)		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018
		(dollars in thousands, except per share data)
Period-End Balance Sheet:
Assets
Cash and cash equivalents		$	129,011			$	120,845			$	116,251			$	62,426			$	61,087
Securities available for sale, at fair   value			160,361				154,962				158,561				192,210				195,945
Loans held for sale			2,151				4,192				7,448				2,750				2,949
Agricultural loans			659,725				673,742				713,602				722,107				724,508
Commercial loans			331,723				360,132				383,542				403,490				415,672
Multi-family real estate loans			41,070				43,487				46,683				52,974				62,321
Residential real estate loans			2,888				3,183				3,753				4,172				4,522
Installment and consumer other			367				223				252				220				272
Total loans			1,035,773				1,080,767				1,147,832				1,182,963				1,207,295
Allowance for loan losses			(15,267	)			(15,065	)			(16,258	)			(17,493	)			(16,505	)
Net loans			1,020,506				1,065,702				1,131,574				1,165,470				1,190,790
Other assets			66,485				69,263				70,812				68,532				70,256
Total Assets		$	1,378,514			$	1,414,964			$	1,484,646			$	1,491,388			$	1,521,027
Liabilities and Shareholders' Equity
Demand deposits		$	138,489			$	117,224			$	111,022			$	101,434			$	121,436
NOW accounts and interest checking			63,781				56,637				54,253				49,902				51,779
Savings			15,708				6,981				6,621				6,210				5,770
Money market accounts			242,539				248,608				239,337				225,975				218,929
Time deposits			375,100				388,759				387,899				376,034				356,484
Brokered deposits			166,340				206,474				256,475				269,917				308,504
National time deposits			99,485				118,070				149,570				146,805				160,445
Total deposits			1,101,442				1,142,753				1,205,177				1,176,277				1,223,347
FHLB advances			44,400				44,400				59,400				100,400				89,400
Subordinated debentures			44,858				44,820				44,781				44,742				44,703
Other liabilities			16,051				14,239				12,564				11,952				11,293
Total Liabilities			1,206,751				1,246,212				1,321,922				1,333,371				1,368,743
Shareholders' equity			171,763				168,752				162,724				158,017				152,284
Total Liabilities and Shareholders'   Equity		$	1,378,514			$	1,414,964			$	1,484,646			$	1,491,388			$	1,521,027
Stock Price Information:
High - Quarter-to-date		$	27.98			$	20.99			$	18.92			$	19.69			$	26.00
Low - Quarter-to-date		$	18.76			$	16.80			$	16.24			$	16.74			$	17.37
Market price - Quarter-end		$	25.63			$	19.62			$	17.09			$	17.60			$	17.37
Book value per share		$	24.32			$	23.89			$	23.03			$	22.36			$	21.50
Tangible book value per share (1)		$	23.54			$	23.10			$	22.23			$	21.54			$	20.68
Common shares outstanding			6,734,132				6,727,908				6,717,908				6,709,254				6,709,480

             (1)               This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.

		For the Three Months Ended																				For the Year Ended
		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018				December 31, 2019				December 31, 2018
		(dollars in thousands, except per share data)
Selected Income Statement   Data:
Interest and Dividend   Income
Loans, including fees			13,691			$	15,030			$	15,484			$	15,501			$	15,536			$	59,706			$	58,706
Taxable securities			1,106				1,117				1,177				1,186				1,168				4,586				3,727
Tax-exempt securities			-				-				82				175				183				257				698
Federal funds sold and other			442				612				465				264				223				1,783				1,086
Total interest and   dividend income			15,239				16,759				17,208				17,126				17,110				66,332				64,217
Interest Expense
Deposits			4,781				5,574				5,678				5,424				5,273				21,457				18,649
FHLB advances and other   borrowed funds			225				246				415				464				427				1,350				1,809
Subordinated debentures			695				687				683				678				667				2,743				1,804
Total interest expense			5,701				6,507				6,776				6,566				6,367				25,550				22,262
Net interest income			9,538				10,252				10,432				10,560				10,743				40,782				41,955
Provision for loan losses			(51	)			(1,154	)			876				752				1,572				423				3,195
Net interest income after   provision for loan losses			9,589				11,406				9,556				9,808				9,171				40,359				38,760
Non-Interest Income
Services charges			549				348				407				353				470				1,657				1,674
Gain (loss) on sale of   loans, net			34				87				26				(1	)			54				146				172
Loan servicing fees			1,778				1,677				1,563				1,519				1,553				6,537				6,012
Loan servicing right   origination			1,146				1,741				346				228				7				3,461				98
Income on OREO			54				10				40				26				83				130				256
Gain on sale of securities			-				-				341				-				-				341				-
Other			161				171				164				625				153				1,121				621
Total non-interest   income			3,722				4,034				2,887				2,750				2,320				13,393				8,833
Non-Interest Expense
Employee compensation and   benefits			5,696				4,735				4,199				4,482				4,059				19,112				16,785
Occupancy			417				313				283				389				245				1,402				1,059
Information processing			645				683				591				563				641				2,482				2,164
Professional fees			371				483				417				399				497				1,670				1,522
Business development			335				351				347				325				259				1,358				1,076
OREO expenses			59				57				121				51				106				288				444
Writedown of OREO			376				-				250				-				688				626				873
Net loss (gain) on sale of   OREO			(231	)			160				9				(136	)			(54	)			(198	)			(189	)
Depreciation and   amortization			319				319				328				337				408				1,303				1,348
Other			2,278				567				901				895				689				4,641				3,201
Total non-interest   expense			10,265				7,668				7,446				7,305				7,538				32,684				28,283
Income before income taxes			3,046				7,772				4,997				5,253				3,953				21,068				19,310
Income tax expense			(258	)			2,090				1,293				1,491				1,123				4,616				5,059
NET INCOME		$	3,304			$	5,682			$	3,704			$	3,762			$	2,830			$	16,452			$	14,251
Basic		$	0.47			$	0.82			$	0.53			$	0.54			$	0.41			$	2.37			$	2.06
Diluted		$	0.47			$	0.82			$	0.53			$	0.54			$	0.40			$	2.36			$	2.04
Dividends declared		$	0.05			$	0.05			$	0.05			$	0.05			$	0.07			$	0.20			$	0.28

		For the Three Months Ended																				For the Year Ended
		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018				December 31, 2019				December 31, 2018
		(dollars in thousands, except share data)
Other Data:
Return on average assets(1)			0.96	%			1.57	%			1.00	%			1.00	%			0.75	%			1.13	%			0.96	%
Return on average   shareholders' equity(1)			7.74	%			13.73	%			9.24	%			9.78	%			7.58	%			10.10	%			9.50	%
Return on average common   shareholders' equity (1)(2)			7.83	%			14.14	%			9.41	%			9.99	%			7.70	%			10.31	%			9.74	%
Efficiency ratio (1)(2)			76.32	%			52.55	%			55.38	%			55.91	%			52.85	%			59.92	%			54.42	%
Tangible common equity to   tangible assets (2)			11.54	%			11.03	%			10.10	%			9.73	%			9.16	%			11.54	%			9.16	%
Common Share Data:
Net income from continuing   operations		$	3,304			$	5,682			$	3,704			$	3,762			$	2,830			$	16,452			$	14,251
Less:  Preferred stock   dividends			117				120				118				117				111				472				413
Income available to common   shareholders		$	3,187			$	5,562			$	3,586			$	3,645			$	2,719			$	15,980			$	13,838
Weighted average number of   common shares issued			7,173,290				7,168,785				7,159,072				7,153,174				7,143,204				7,163,650				7,132,985
Less: Weighted average   treasury shares			443,920				443,920				443,920				443,729				443,694				443,873				442,206
Plus: Weighted average non-   vested restricted stock units			32,125				32,125				30,483				16,260				13,041				27,804				13,272
Weighted average number of   common shares outstanding			6,761,495				6,756,990				6,745,635				6,725,705				6,712,551				6,747,581				6,704,051
Effect of dilutive options			44,630				19,160				20,731				21,323				45,116				21,344				68,876
Weighted average number   of common shares   outstanding used to   calculate diluted earnings    per common share			6,806,125				6,776,150				6,766,366				6,747,028				6,757,667				6,768,925				6,772,927

1. Annualized
2. This is a non-GAAP financial measure.  A reconciliation to GAAP is included below.

		For the Three Months Ended																				For the Year Ended
Non-GAAP Financial   Measures:		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018				December 31, 2019				December 31, 2018
		(dollars in thousands)
Return on average common   shareholders' equity   reconciliation:
Return on average   shareholders' equity			7.74	%			13.73	%			9.24	%			9.78	%			7.58	%			10.10	%			9.50	%
Effect of excluding average   preferred shareholders'   equity			0.09	%			0.41	%			0.17	%			0.21	%			0.12	%			0.21	%			0.24	%
Return on average common   shareholders' equity			7.83	%			14.14	%			9.41	%			9.99	%			7.70	%			10.31	%			9.74	%
Efficiency ratio GAAP to   non-GAAP reconciliation:
Non-interest expense		$	10,265			$	7,668			$	7,446			$	7,305			$	7,538			$	32,684			$	28,283
Less: net gain (loss) on sales   and write-downs of OREO			(145	)			(160	)			(259	)			136				(634	)			(428	)			(642	)
Adjusted non-interest   expense (non-GAAP)		$	10,120			$	7,508			$	7,187			$	7,441			$	6,904			$	32,256			$	27,641
Net interest income		$	9,538			$	10,252			$	10,432			$	10,560			$	10,743			$	40,782			$	41,955
Non-interest income			3,722				4,034				2,887				2,750				2,320				13,393				8,833
Less: net gain on sales of   securities			-				-				(341	)			-				-				(341	)			-
Operating revenue		$	13,260			$	14,286			$	12,978			$	13,310			$	13,063			$	53,834			$	50,788
Efficiency ratio			76.32	%			52.55	%			55.38	%			55.91	%			52.85	%			59.92	%			54.42	%

               

Non-GAAP Financial   Measures:		December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019				December 31, 2018
		(dollars in thousands, except per share data)
Tangible book value per share and   tangible common equity to tangible   assets reconciliation:
Common equity		$	163,763			$	160,752			$	154,724			$	150,017			$	144,284
Less: Goodwill			5,038				5,038				5,038				5,038				5,038
Less: Core deposit intangible, net of   amortization			225				286				354				430				513
Tangible common equity   (non-GAAP)		$	158,500			$	155,428			$	149,332			$	144,549			$	138,733
Common shares outstanding			6,734,132				6,727,908				6,717,908				6,709,254				6,709,480
Tangible book value per share		$	23.54			$	23.10			$	22.23			$	21.54			$	20.68
Total assets		$	1,378,514			$	1,414,964			$	1,484,646			$	1,491,388			$	1,521,027
Less: Goodwill			5,038				5,038				5,038				5,038				5,038
Less: Core deposit intangible, net of   amortization			225				286				354				603				701
Tangible assets (non-GAAP)		$	1,373,251			$	1,409,640			$	1,479,254			$	1,485,747			$	1,515,288
Tangible common equity to tangible   assets			11.54	%			11.03	%			10.10	%			9.73	%			9.16	%
Adverse classified asset ratio:
Substandard loans		$	94,917			$	105,911			$	117,765			$	107,492			$	120,887
Less: Impaired performing restructured   loans			(8,925	)			(8,672	)			(8,276	)			(6,382	)			(5,078	)
Net substandard loans		$	85,992			$	97,239			$	109,489			$	101,110			$	115,809
Other real estate owned			5,521				7,252				8,693				5,019				6,568
Substandard unused commitments			2,849				991				1,458				976				1,625
Less: Substandard government   guarantees			(7,892	)			(7,746	)			(7,821	)			(5,864	)			(7,111	)
Total adverse classified assets   (non-GAAP)		$	86,470			$	97,736			$	111,819			$	101,241			$	116,891
Total equity (Bank)		$	204,240			$	201,967			$	196,036			$	191,287			$	185,458
Accumulated other comprehensive loss   (gain) on available for sale securities			(2,505	)			(3,016	)			(2,166	)			(436	)			2,221
Allowance for loan losses			15,267				15,065				16,258				17,493				16,505
Allowance for unused commitments			-				-				-				-				475
Adjusted total equity (non-GAAP)		$	217,002			$	214,016			$	210,128			$	208,344			$	204,659
Adverse classified asset ratio			39.85	%			45.67	%			53.21	%			48.59	%			57.12	%