 Execution on strategic priorities and stabilizing milk prices drove strong client deposit growth and improved sequential results Highlights Net income of 2.7 million, or 0.40 per diluted share, for the second quarter 2020 Net interest income increased 88,000 during the second quarter of 2020 due to reduction in cost of funds Provision for loan losses decreased 1.1 million to 1.1 million in the second quarter of 2020 Loans increased 75.1 million during the second quarter of 2020 primarily due to 106.0 million in Small Business Administration SBA Paycheck Protection Program PPP loan applications approved Average loans sold and serviced increased 8.8 million, and loan fees as a percentage of average loans sold and serviced increased 0.04 to 1.02 during the second quarter 2020 Client deposits demand deposits, NOW, savings, money market accounts, and certificates of deposit increased 101.9 million, or 12.9, during the second quarter of 2020 Independent director Andrew Steimle selected as Chairman of the Board Capital ratios remain strong with a Total Risk-Based Capital ratio of 20.2 and Tier 1 Leverage of 12.5MANITOWOC, Wis., July 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 financial results for the second quarter of 2020. Net income was 2.7 million, or 0.40 per diluted share, for the second quarter of 2020, compared to net income of 3.7 million, or 0.53 per diluted share, for the second quarter of 2019. For the six months ended June 30, 2020, there was a net loss of 2.5 million, or a 0.40 loss per diluted share, compared to net income of 7.5 million, or 0.53 per share, for the six months ended June 30, 2019. The 2020 net loss included a 5.0 million goodwill impairment charge, or 0.76 diluted loss per share. The Company concluded goodwill was impaired after an estimate of the fair value of the Company considering the uncertainty related to COVID-19 and its potential impact on future earnings, as well as comparable bank valuations. Excluding that charge, net income for the six months ended June 30, 2020 would have been 2.5 million, or 0.36 per diluted share. Tim Schneider, President of County Bancorp, Inc., noted, I am very pleased with how well our team has worked through the current COVID-19 environment to fulfill our mission as we partner with our local communities and businesses. With the vast majority of our employees working remotely, we were able to approve 106 million in SBA PPP loans to support our loyal and new customers and more than 14,000 jobs through this crisis. By executing against our strategic initiatives, we grew our client deposits this quarter expect to invest our excess liquidity during the second half of 2020 as we see increasing signs of stability and health in our operating environment. Schneider continued, Overall, credit quality has held up well. However, we believe it will take some time to see the total impact of COVID-19 on overall credit quality and our provisions for loan losses. While we still have some customers asking for payment deferral related to COVID-19, which now totals 200 million, we witnessed a considerable rebound and stabilization of milk prices during the month of June, which we believe will benefit our agricultural borrowers. More specifically, class III milk prices cwt rebounded from the April and May lows of 12 to 13, to 16 to 21 in both June and in the futures for the remainder of 2020.Schneider concluded, Lastly, we successfully raised 17.4 million in subordinated notes at the end of the second quarter 2020. This opportunistic capital raise reinforces County Bancorps value proposition and allows us to take advantage of additional market opportunities for our customers and communities. As part of our balanced capital allocation approach, we continue to monitor additional pathways to enhance shareholder value. We are pleased with the attractive pricing we received in the fixed income markets and the ability to strengthen our capital structure as we continue to execute against our short- and long-term strategic priorities. This capital raise allows us to keep our capital ratios strong and will enable us to continue our current dividend payout and common stock buyback plan. Of note, during the second quarter, we purchased 122,000 shares of common stock. We are also very proud to rejoin the Russell 2000 and Russell 3000 Indexes during the second quarter of 2020. This membership is an important milestone for us as we continue to execute our mission and serve our customers and communities. We believe our inclusion will positively impact the liquidity in our stock and create an opportunity to increase our exposure and share our compelling story with a broader investment audience.Loans and SecuritiesTotal loans increased 75.1 million, or 7.4, during the second quarter of 2020 and decreased 60.3 million, or 5.3, year-over-year to 1.1 billion. The increase in total loans in the second quarter of 2020 was due primarily to SBA PPP loans totaling 106.0 million as of June 30, 2020. The decrease in total loans year-over-year was the result of a continued focus on long-term liquidity. Loan participations the Company continued to service were 762.1 million at June 30, 2020, an increase of 14.5 million, or 1.9, compared to the first quarter of 2020, and an increase of 66.4 million, or 9.5, year-over-year.During the second quarter of 2020, investments decreased 19.2 million, or 7.8, compared to March 31, 2020 due in part to the sale of 27.8 million of securities that resulted in a gain of 0.6 million.DepositsTotal deposits at June 30, 2020 were 1.1 billion, an increase of 53.1 million, or 5.2, from March 31, 2020 and decreased 132.1 million, or 11.0, year-over-year. Client deposits demand deposits, NOW accounts, savings accounts, money market accounts, and certificates of deposit increased 101.9 million, or 12.9, from March 31, 2020 and increased 94.4 million, or 11.8, year-over-year. The increase in client deposits from the prior quarter-end was partially driven by customers who participated in the SBA PPP program. Deposits related to those customers totaled approximately 58 million as of June 30, 2020. During the second quarter of 2020, the Company took advantage of the Federal Reserve Banks Paycheck Protection Program Liquidity Facility PPPLF and funded 99.7 million of SBA PPP loans through borrowings under the PPPLF at an interest rate of 0.35. The Companys overall focus remains on funding loan growth with client deposits; however, these borrowings helped bolster the Companys overall liquidity. Due to the increases in loan participations and client deposit growth discussed above, the Company decreased its dependence on brokered deposits and national certificates of deposit to 179.5 million at June 30, 2020. This represents a decrease of 226.5 million, or 55.8, from June 30, 2019. Net Interest Income and Margin Net interest margin decreased both quarter-to-quarter and year-over-year due primarily to the SBA PPP loans that were funded during the second quarter of 2020 at annual yield of 1.0 and the repricing of loans in the declining rate environment. Interest income on investment securities increased both quarter-to-quarter and year-over-year due to shifting balances from interest-bearing deposits with banks to investment securities. Loan interest income decreased in the both linked and year-over-year periods as a result of the lower yields on the previously mentioned PPP loans and the shift from loans held on balance sheet to loans sold and serviced. Interest expense on savings, NOW, money market, and interest checking accounts decreased despite the increase in average balance both in the linked quarter and year-over year due to the market-driven drop in interest rates which contributed to an overall lower cost of funds. Interest expense on time deposits decreased in the linked quarter due to the Companys continued focus on shifting away from brokered time deposit balances for funding. Year-over-year, time deposits also decreased due to the Companys shift away from wholesale funding.The table below presents the effects of changing rates and volumes on net interest income for the periods indicated. Three Months Ended June 30, 2020 v. Three Months Ended March 31, 2020 Three Months Ended June 30, 2020 v. Three Months Ended June 30, 2019 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 238 82 156 323 138 185 Loans 1,044 1,495 451 987 2,366 3,353 Federal funds sold and interest-bearing deposits with banks 13 127 114 54 299 353 Total interest income 1,295 1,704 409 718 2,803 3,521 Interest Expense: Savings, NOW, money market and interest checking 126 375 249 344 1,135 791 Time deposits 347 30 377 1,254 88 1,166 Other borrowings 3 3 1 1 FHLB advances 132 37 95 393 466 73 Junior subordinated debentures 3 28 31 5 48 53 Total interest expense 83 414 497 511 1,465 1,976 Net interest income 1,378 1,290 88 207 1,338 1,545 The following table sets forth average balances, average yields and rates, and income and expenses for the period indicated. 