icbk-10q_20190331.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of May 9, 2019, the registrant had 6,714,254 shares of common stock, $0.01 par value per share, outstanding.

	March 31, 2019			December 31, 2018
	(unaudited)
	(dollars in thousands except per share data)
ASSETS
Cash and cash equivalents	$	62,426		$	61,087
Securities available-for-sale, at fair value		192,210			195,945
FHLB Stock, at cost		2,998			2,978
Loans held for sale		2,750			2,949
Loans, net of allowance for loan losses of $17,493 as of March 31, 2019; $16,505 as of December 31, 2018		1,165,470			1,190,790
Premises and equipment, net		15,965			16,075
Loan servicing rights		9,275			9,047
Other real estate owned, net		5,019			6,568
Cash surrender value of bank owned life insurance		17,953			17,842
Deferred tax asset, net		2,905			4,346
Goodwill		5,038			5,038
Core deposit intangible, net of accumulated amortization of $1,371 as of March 31, 2019; $1,288 as of December 31, 2018		430			513
Accrued interest receivable and other assets		8,949			7,849
Total assets	$	1,491,388		$	1,521,027

LIABILITIES
Deposits:
Noninterest-bearing	$	101,434		$	121,436
Interest-bearing		1,074,843			1,101,911
Total deposits		1,176,277			1,223,347
Other borrowings		1,412			827
Advances from FHLB		100,400			89,400
Subordinated debentures		44,742			44,703
Accrued interest payable and other liabilities		10,540			10,466
Total liabilities		1,333,371			1,368,743

SHAREHOLDERS' EQUITY
Preferred stock- $1,000 stated value; 15,000 shares authorized; 8,000 shares issued		8,000			8,000
Common stock - $0.01 par value; 50,000,000 authorized; 7,153,174 shares issued and 6,709,254 shares outstanding at March 31, 2019; 7,153,174 shares issued and 6,709,480 shares outstanding as of December 31, 2018		28			28
Surplus		53,280			53,162
Retained earnings		101,785			98,475
Treasury stock, at cost; 443,920 shares at March 31, 2019; 443,694 shares at December 31, 2018		(5,030	)		(5,030	)
Accumulated other comprehensive loss		(46	)		(2,351	)
Total shareholders' equity		158,017			152,284
Total liabilities and shareholders' equity	$	1,491,388		$	1,521,027

	For the Three Months Ended March 31,
	2019			2018
	(dollars in thousands except per share data)
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	15,501		$	13,691
Taxable securities		1,186			632
Tax-exempt securities		175			157
Federal funds sold and other		264			213
Total interest and dividend income		17,126			14,693

INTEREST EXPENSE
Deposits		5,424			3,796
FHLB advances and other borrowed funds		464			484
Subordinated debentures		678			143
Total interest expense		6,566			4,423
Net interest income		10,560			10,270
Provision for loan losses		752			97
Net interest income after provision for loan losses		9,808			10,173
NON-INTEREST INCOME
Services charges		353			365
Gain (loss) on sale of loans, net		(1	)		32
Loan servicing fees		1,747			1,462
Other		651			181
Total non-interest income		2,750			2,040
NON-INTEREST EXPENSE
Employee compensation and benefits		4,482			4,218
Occupancy		389			204
Information processing		563			465
Other		1,871			1,898
Total non-interest expense		7,305			6,785
Income before income taxes		5,253			5,428
Income tax expense		1,491			1,374
NET INCOME	$	3,762		$	4,054

NET INCOME PER SHARE:
Basic	$	0.54		$	0.59
Diluted	$	0.54		$	0.58
Dividends paid per share	$	0.05		$	0.07

	Preferred Stock		Common Stock			Surplus		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders' Equity
	(dollars in thousands except share data)
Balance at December 31, 2017	$	8,000	$	28		$	52,230	$	86,385		$	(5,030	)	$	(627	)	$	140,986
Net income		—		—			—		4,054			—			—			4,054
Other comprehensive loss		—		—			—		—			—			(1,885	)		(1,885	)
Stock compensation expense		—		—			117		—			—			—			117
Cash dividends declared on common stock		—		—			—		(468	)		—			—			(468	)
Cash dividends declared on preferred stock		—		—			—		(97	)		—			—			(97	)
Reclassification of par value to surplus		—		(21	)		21		—			—			—			—
Reclassification of stranded tax effects of rate change		—		—			—		126			—			(126	)		—
Proceeds from exercise of common stock options (2,952 shares)		—		—			107		—			—			—			107
Balance at March 31, 2018	$	8,000	$	7		$	52,475	$	90,000		$	(5,030	)	$	(2,638	)	$	142,814

Balance at December 31, 2018	$	8,000	$	28		$	53,162	$	98,475		$	(5,030	)	$	(2,351	)	$	152,284
Net income		—		—			—		3,762			—			—			3,762
Other comprehensive income		—		—			—		—			—			2,305			2,305
Stock compensation expense		—		—			118		—			—			—			118
Cash dividends declared on common stock		—		—			—		(335	)		—			—			(335	)
Cash dividends declared on preferred stock		—		—			—		(117	)		—			—			(117	)
Balance at March 31, 2019	$	8,000	$	28		$	53,280	$	101,785		$	(5,030	)	$	(46	)	$	158,017


	March 31, 2019			March 31, 2018
	(dollars in thousands)
Cash flows from operating activities
Net income	$	3,762		$	4,054
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization of premises and equipment		342			271
Amortization of core deposit intangible		83			113
Amortization of subordinated debentures discount		39			17
Provision for loan losses		752			97
Realized gain on sales of other real estate owned		(136	)		—
Realized gain on sales of premises and equipment		—			(1	)
Increase in cash surrender value of bank owned life insurance		(111	)		(112	)
Deferred income tax expense (benefit)		398			(187	)
Stock compensation expense, net		118			117
Net amortization of securities		153			234
Net change in:
Accrued interest receivable and other assets		(1,250	)		(64	)
Loans held for sale		199			168
Loan servicing rights		(228	)		(9	)
Accrued interest payable and other liabilities		(228	)		77
Net cash provided by operating activities		3,893			4,775
Cash flows from investing activities
Proceeds from maturities, principal repayments, and call of securities available-for-sale		-			6,948
Purchases of securities available-for-sale		7,234			(25,055	)
Redemption (purchase) of FHLB stock		(20	)		230
Loan originations and principal collections, net		23,421			(18,723	)
Purchases of premises and equipment		(84	)		(5,067	)
Proceeds from sales of other real estate owned		2,832			—
Net cash provided by (used in) investing activities		33,383			(41,667	)
Cash flows from financing activities
Net decrease in demand and savings deposits		(14,388	)		(28,144	)
Net increase (decrease) in certificates of deposits		(32,682	)		90,457
Net change in other borrowings		585			(58	)
Proceeds from FHLB advances		94,000			63,000
Repayment of FHLB advances		(83,000	)		(64,000	)
Proceeds from issuance of common stock		—			107
Dividends paid on preferred stock		(117	)		(97	)
Dividends paid on common stock		(335	)		(468	)
Net cash provided by (used for) financing activities		(35,937	)		60,797
Net change in cash and cash equivalents		1,339			23,905
Cash and cash equivalents, beginning of period		61,087			66,771
Cash and cash equivalents, end of period	$	62,426		$	90,676

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	5,135		$	4,187
Income taxes	$	—		$	—
Noncash investing activities:
Transfer from loans to other real estate owned	$	1,147		$	4,417
Loans charged off	$	390		$	42

The unaudited consolidated financial statements of County Bancorp, Inc. (“we,” “us,” ”our,” or the “Company”) and its subsidiaries, including Investors Community Bank (the “Bank”), have been prepared, in the opinion of management, to reflect all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows as of and for the three months ended March 31, 2019. The results of operations for the three months ended March 31, 2019 may not necessarily be indicative of the results to be expected for the year ending December 31, 2019, or for any other period.

Management of the Company is required to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of income and expenses during the reported periods. Actual results could differ significantly from those estimates.

These unaudited interim financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Certain information in footnote disclosure normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses, to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years with early adoption permitted for the fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. Entities should apply this amendment a modified-retrospective approach, through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company has engaged a third-party software consultant and is currently testing the model’s methodology in parallel to current loss model calculations. At this time, the effect this ASU will have on its consolidated financial statements is still being quantified as the Company ensures data, assumptions, and methods all comply with the requirements of ASU 2016-13.

In March 2017, the FASB issued updated guidance codified within ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs, which is intended to enhance the accounting for the amortization of premiums for purchased callable debt securities. The amendment became effective January 1, 2019; however, the Company has no callable debt securities; therefore, this amendment has no effect on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), to permit entities to better portray the economic results of their hedging strategies in their financial statements. In addition, the amendments make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The amendment is effective for fiscal years beginning after December 15, 2018, with early adoption permitted, including adoption in an interim period. The Company has chosen to early adopt this amendment in connection with the interest rate swap that commenced on June 15, 2018 with no material impact on its results of operation, financial position, or liquidity.

In February 2016, the FASB issued ASU No. 2016-02, Leases: Amendments to the FASB Accounting Standards Codification which requires companies to recognize all leases as assets and liabilities on the consolidated balance sheet. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of

cash flows is largely unchanged from previous GAAP. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) – Targeted Improvements, which provided an additional and optional transition method with which to adopt the new leases standard. The updated ASU allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The amendment became effective January 1, 2019, and was adopted by the Company retrospectively to the beginning of the adoption period. Since all of the Company’s leases are operating leases, there was no impact to the Statement of Operations, however, a right-of-use asset of $0.2 million and a corresponding liability were recorded on the Company’s balance sheet as of the effective date of the amendment.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 842) – Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which focuses on improving the effectiveness of disclosures in the notes to the financial statements. The amendment is effective for the fiscal years beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company is currently evaluating the effect this standard will have on the Company’s financial statements.

Earnings per common share is computed using the two-class method. Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the applicable period. Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share plus the dilutive effect of share-based compensation using the treasury stock method.

The amortized cost and fair value of securities available-for-sale as of March 31, 2019 and December 31, 2018 were as follows:

	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(dollars in thousands)
March 31, 2019
U.S. government and agency securities	$	3,964	$	—	$	(35	)	$	3,929
U.S. treasury securities		2,497		2		—			2,499
Municipal securities		31,615		333		(75	)		31,873
Mortgage-backed securities		153,534		1,353		(978	)		153,909
	$	191,610	$	1,688	$	(1,088	)	$	192,210
December 31, 2018
U.S. government and agency securities	$	4,368	$	—	$	(37	)	$	4,331
U.S. treasury securities		2,497		—		(6	)		2,491
Municipal securities		34,985		33		(498	)		34,520
Mortgage-backed securities		157,147		203		(2,747	)		154,603
	$	198,997	$	236	$	(3,288	)	$	195,945

The amortized cost and fair value of securities at March 31, 2019 and December 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

There were no security sales for the three months ended March 31, 2019 and 2018.

At March 31, 2019 and December 31, 2018, no securities were pledged to secure the Federal Home Loan Bank (“FHLB”) advances besides FHLB stock of $3.0 million. There were no securities pledged to secure the Federal Reserve Bank line of credit at March 31, 2019 and December 31, 2018; however, there were $33.5 million and $53.4 million of securitied pledged to secure municipial customer deposts at March 31, 2019 and December 31, 2019, respectively.

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temorarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2019 and December 31, 2018:

	Less Than 12 Months					12 Months or Greater					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(dollars in thousands)
March 31, 2019
U.S. government and agency securities	$	—	$	—		$	3,929	$	(35	)		3,929		(35	)
U.S. treasury securities		—		—			—		—			—		—
Municipal securities		—		—			11,723		(75	)		11,723		(75	)
Mortgage-backed securities		285		(1	)		79,778		(977	)		80,063		(978	)
	$	285	$	(1	)	$	95,430	$	(1,087	)	$	95,715	$	(1,088	)
December 31, 2018
U.S. government and agency securities	$	—	$	—		$	4,331	$	(37	)		4,331		(37	)
U.S. treasury securities		2,491		(6	)		—		—			2,491		(6	)
Municipal securities		4,291		(15	)		25,377		(483	)		29,668		(498	)
Mortgage-backed securities		41,925		(208	)		83,319		(2,539	)		125,244		(2,747	)
	$	48,707	$	(229	)	$	113,027	$	(3,059	)	$	161,734	$	(3,288	)

The unrealized losses on the investments at March 31, 2019 and December 31, 2018 were due to market conditions as well as normal fluctuations and pricing inefficiencies. The contractual terms of the investments do not permit the issuers to settle the securities at a price less than the amortized cost basis of the investment. Because the Company does not intend to sell the investments and it is not more-likely-than-not that the Company will be required to sell the investments before recovery of the amortized cost basis, which may be maturity, the Company did not consider these investments to be other-than-temporarily impaired at March 31, 2019 and December 31, 2018.

Changes in the allowance for loan losses by portfolio segment for the three months ended March 31, 2019 and 2018 were as follows:

	Agricultural			Commercial Real Estate			Commercial			Residential Real Estate			Installment and Consumer Other			Total
	(dollars in thousands)
March 31, 2019
Balance, beginning of year	$	12,258		$	2,779		$	1,414		$	53		$	1		$	16,505
Provision for loan losses		(135	)		1,138			(214	)		(37	)		—			752
Loans charged off		—			(390	)		—			—			—			(390	)
Recoveries		—			625			1			—			—			626
Balance, end of period	$	12,123		$	4,152		$	1,201		$	16		$	1		$	17,493

March 31, 2018
Balance, beginning of year	$	9,712		$	1,978		$	1,508		$	47		$	2		$	13,247
Provision for loan losses		1,537			(1,118	)		(319	)		(2	)		(1	)		97
Loans charged off		—			(42	)		—			—			—			(42	)
Recoveries		1			1,240			68			—			1			1,310
Balance, end of period	$	11,250		$	2,058		$	1,257		$	45		$	2		$	14,612

The following tables present the balances in the allowance for loan losses and the recorded balance in loans by portfolio segment and based on impairment method as of March 31, 2019 and December 31, 2018:

	March 31, 2019
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
	(dollars in thousands)
Allowance for loan losses:
Agricultural loans	$	2,691	$	9,432	$	12,123
Commercial real estate loans		2,472		1,680		4,152
Commercial loans		648		553		1,201
Residential real estate loans		—		16		16
Installment and consumer other		—		1		1
Total ending allowance for loan losses		5,811		11,682		17,493
Loans:
Agricultural loans		54,251		667,856		722,107
Commercial real estate loans		6,031		283,793		289,824
Commercial loans		1,135		112,531		113,666
Residential real estate loans		—		57,146		57,146
Installment and consumer other		—		220		220
Total loans		61,417		1,121,546		1,182,963
Net loans	$	55,606	$	1,109,864	$	1,165,470

	December 31, 2018
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
	(dollars in thousands)
Allowance for loan losses:
Agricultural loans	$	2,325	$	9,933	$	12,258
Commercial real estate loans		583		2,196		2,779
Commercial loans		745		669		1,414
Residential real estate loans		—		53		53
Installment and consumer other		—		1		1
Total ending allowance for loan losses		3,653		12,852		16,505
Loans:
Agricultural loans		52,947		671,561		724,508
Commercial real estate loans		2,037		297,175		299,212
Commercial loans		1,773		114,687		116,460
Residential real estate loans		—		66,843		66,843
Installment and consumer other		—		272		272
Total loans		56,757		1,150,538		1,207,295
Net loans	$	53,104	$	1,137,686	$	1,190,790

The following table presents the aging of the recorded investment in past due loans at March 31, 2019 and December 31, 2018:

	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Loans Not Past Due		Total Loans
	(dollars in thousands)
March 31, 2019
Agricultural loans	$	3,269	$	167	$	7,048	$	10,484	$	711,623	$	722,107
Commercial real estate loans		1,012		3,998		—		5,010		284,814		289,824
Commercial loans		110		—		—		110		113,556		113,666
Residential real estate loans		—		—		—		—		57,146		57,146
Installment and consumer other		—		—		—		—		220		220
Total	$	4,391	$	4,165	$	7,048	$	15,604	$	1,167,359	$	1,182,963

December 31, 2018
Agricultural loans	$	460	$	969	$	7,968	$	9,397	$	715,111	$	724,508
Commercial real estate loans		—		—		2,037		2,037		297,175		299,212
Commercial loans		—		—		600		600		115,860		116,460
Residential real estate loans		—		—		—		—		66,843		66,843
Installment and consumer other		—		—		—		—		272		272
Total	$	460	$	969	$	10,605	$	12,034	$	1,195,261	$	1,207,295

The following table lists information on nonaccrual, troubled debt restructured, and certain past due loans at March 31, 2019 and December 31, 2018:

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days on accrual by class of loan:

The following table presents the average recorded investment and interest income recognized on impaired loans by portfolio segment for three months ended March 31, 2019 and 2018:

	As of and for the Three Months Ended March 31, 2019
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized
	(dollars in thousands)
Agricultural loans	$	56,844	$	54,251	$	2,691	$	53,599	$	1,173
Commercial real estate loans		6,031		6,031		2,472		4,034		24
Commercial loans		1,142		1,135		648		1,454		2
Total	$	64,017	$	61,417	$	5,811	$	59,087	$	1,199

	As of and for the Three Months Ended March 31, 2018
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized
	(dollars in thousands)
Agricultural loans	$	35,980	$	35,545	$	2,419	$	32,145	$	646
Commercial real estate loans		582		575		—		1,520		—
Commercial loans		1,163		1,153		273		1,473		1
Residential real estate loans		114		114		—		57		1
Total	$	37,839	$	37,387	$	2,692	$	35,195	$	648

Impaired loans include nonaccrual loans, troubled debt restructured loans, and loans that are 90 days or more past due and still accruing. For nonaccrual loans included in impaired loans, the interest income that would have been recognized had those loans been performing in accordance with their original terms would have been approximately $0.6 million and $0.4 million for the three months ended March 31, 2019 and 2018, respectively.

The Company has allocated approximately $2.6 million and $2.0 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings (“TDR”) at March 31, 2019 and December 31, 2018, respectively. The Company had no additional lending commitments at March 31, 2019 or December 31, 2018 to customers with outstanding loans that are classified as TDRs.

A TDR on nonaccrual status is classified as a nonaccrual loan until evaluation supports reasonable assurance of repayment and there has been a satisfactory period of performance according to the modified terms of the loan. Once this assurance is reached, the TDR is classified as a restructured loan. The following table presents the TDRs by loan class at March 31, 2019 and December 31, 2018:

The following table provides the number of loans modified in a troubled debt restructuring investment by class for the three months ended March 31, 2019 and 2018:

The following table provides the troubled debt restructurings for the three months ended March 31, 2019 and 2018 grouped by type of concession:

	For the Three Months Ended
	March 31, 2019				March 31, 2018
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
	(dollars in thousands)
Agricultural loans
Payment concessions		1	$	262		6	$	2,751
Extension of interest-only payments		7		1,442		1		91
Commercial real estate loans
Payment concessions		1		1,021		—		—
Commercial loans
Combination of extension of term and interest rate concessions		2		1,046		—		—
Total		11	$	3,771		7	$	2,842

The Company categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes agricultural, commercial, and commercial real estate loans individually by classifying the credits as to credit risk. The process of analyzing loans for changes in risk rating is ongoing through routine monitoring of the portfolio and annual internal credit reviews for credits with total exposure in excess of $300,000. The Company uses the following definitions for credit risk ratings:

Sound. Credits classified as sound show very good probability of ongoing ability to meet and/or exceed obligations.

Acceptable. Credits classified as acceptable show a good probability of ongoing ability to meet and/or exceed obligations.

Satisfactory. Credits classified as satisfactory show fair probability of ongoing ability to meet and/or exceed obligations.

Low Satisfactory. Credits classified as low satisfactory show fair probability of ongoing ability to meet and/or exceed obligations. Low satisfactory credits may be newer or have a less established track record of financial performance, inconsistent earnings, or may be going through an expansion.

Watch. Credits classified as watch show some questionable probability of ongoing ability to meet and/or exceed obligations.

Special Mention. Credits classified as special mention show potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loans or of the institution’s credit position at some future date.

Substandard – Performing. Credits classified as substandard – performing generally have well-defined weaknesses. Collateral coverage is adequate and the loans are not considered impaired. Payments are being made and the loans are on accrual status.

Substandard - Impaired. Credits classified as substandard generally have well-defined weaknesses that jeopardize the repayment of the debt. They have a distinct possibility that a loss will be sustained if the deficiencies are not corrected. Loans are considered impaired. Loans are either exhibiting signs of delinquency, are on non-accrual or are identified as a TDR.

Doubtful. Credits classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable.

The Company categorizes residential real estate, installment and consumer other loans as satisfactory at the time of origination based on information obtained as to the ability of the borrower(s) to service their debt, such as current financial information, employment status and history, historical payment experience, credit scores and type and amount of collateral among other factors. The Company updates relevant information on these types of loans at the time of refinance, troubled debt restructuring or other indications of financial difficulty, downgrading as needed using the same category descriptions as for agricultural, commercial, and commercial real estate loans. In addition, the Company further considers current payment status as an indicator of which risk category to assign the borrower.

The greater the level of deteriorated risk as indicated by a loan’s assigned risk category, the greater the likelihood a loss will occur in the future. If the loan is substandard - impaired, then the loan loss reserves for the loan are recorded at the loss level of impairment. If the loan is not impaired, then its loan loss reserves are determined by the application of a loss rate that increases with risk in accordance with the allowance for loan loss analysis.

Based on the most recent analysis performed by management, the risk category of loans by class of loans was as follows as of March 31, 2019 and December 31, 2018:

	As of March 31, 2019
	Sound/ Acceptable/ Satisfactory/ Low Satisfactory		Watch		Special Mention		Substandard Performing		Substandard Impaired		Total Loans
	(dollars in thousands)
Agricultural loans	$	479,399	$	156,910	$	540	$	31,007	$	54,251	$	722,107
Commercial real estate loans		258,101		10,303		2,593		12,796		6,031		289,824
Commercial loans		101,882		7,181		1,368		2,100		1,135		113,666
Residential real estate loans		56,726		248		—		172		—		57,146
Installment and consumer other		220		—		—		—		—		220
Total	$	896,328	$	174,642	$	4,501	$	46,075	$	61,417	$	1,182,963

	As of December 31, 2018
	Sound/ Acceptable/ Satisfactory/ Low Satisfactory		Watch		Special Mention		Substandard Performing		Substandard Impaired		Total Loans
	(dollars in thousands)
Agricultural loans	$	495,418	$	133,582	$	564	$	41,997	$	52,947	$	724,508
Commercial real estate loans		253,853		18,968		4,642		19,712		2,037		299,212
Commercial loans		95,842		15,237		1,360		2,248		1,773		116,460
Residential real estate loans		62,787		3,883		—		173		—		66,843
Installment and consumer other		272		—		—		—		—		272
Total	$	908,172	$	171,670	$	6,566	$	64,130	$	56,757	$	1,207,295

Loans serviced for others are not included in the accompanying consolidated balance sheets. The risks inherent in servicing assets relate primarily to changes in prepayments that result from shifts in interest rates. The unpaid principal balances of mortgage and other loans serviced for others were approximately $675.3 million and $661.3 million at March 31, 2019 and December 31, 2018, respectively. The fair value of these rights were approximately $13.3 million and $13.2 million at March 31, 2019 and December 31, 2018. The fair value of servicing rights was determined using an assumed discount rate of 20 percent and prepayment speeds primarily ranging from 4 percent to 9 percent, depending upon the stratification of the specific right, and nominal credit losses.

The following summarizes servicing rights capitalized and amortized, along with the aggregate activity in related valuation allowances:

The excess of the purchase price in an acquisition over the fair value of net assets acquired consists primarily of goodwill and the core deposit intangible. Goodwill is not amortized but is instead subject to impairment tests on at least an annual basis. Core deposit intangible, which arose from value ascribed to the deposit base of a bank acquired, has an estimated finite life and is amortized on an accelerated basis to expense over a 66-month period.

Management will periodically review the carrying value of its long-lived and intangible assets to determine if any impairment has occurred, in which case an impairment charge would be recorded as an expense in the period of impairment, or whether changes in circumstances have occurred that would require a revision to the remaining useful life which would impact expense prospectively. In making such determination, management evaluates whether there are any adverse qualitative factors indicating that an impairment may exist, as well as the performance, on an undiscounted basis, of the underlying operations or assets which give rise to the intangible.

Goodwill: Goodwill resulted from the acquisition of Fox River Valley Bancorp, Inc. (“Fox River Valley”) on May 13, 2016. The carrying amount of goodwill was $5.0 million at March 31, 2019 and December 31, 2018.

Core deposit intangible: Core deposit intangible, primarily related to acquired customer relationships, is amortized over its estimated finite life. The core deposit intangible related to the Fox River Valley acquisition had a gross carrying amount of $1.8 million.

The Bank had advances outstanding from the FHLB in the amount of $100.4 million and $89.4 million on March 31, 2019 and December 31, 2018, respectively. These advances, rates, and maturities were as follows:

					March 31,		December 31,
	Maturity	Rate			2019		2018
					(dollars in thousands)
Fixed rate, fixed term	01/02/2019		2.54	%	$	—	$	3,000
Fixed rate, fixed term	01/04/2019		2.55	%		—		12,000
Fixed rate, fixed term	02/27/2019		1.47	%		—		5,000
Fixed rate, fixed term	03/08/2019		1.54	%		—		10,000
Fixed rate, fixed term	04/10/2019		2.58	%		9,000		—
Fixed rate, fixed term	04/18/2019		2.59	%		12,000		—
Fixed rate, fixed term	04/25/2019		2.56	%		10,000		—
Fixed rate, fixed term	06/06/2019		2.61	%		10,000		—
Fixed rate, fixed term	07/15/2019		1.11	%		8,000		8,000
Fixed rate, fixed term	08/12/2019		2.24	%		5,000		5,000
Fixed rate, fixed term	08/14/2019		1.77	%		2,000		2,000
Fixed rate, fixed term	02/20/2020		1.71	%		5,000		5,000
Fixed rate, fixed term	07/16/2020		1.85	%		800		800
Fixed rate, fixed term	08/25/2020		1.84	%		3,000		3,000
Fixed rate, fixed term	08/27/2020		1.88	%		5,000		5,000
Fixed rate, fixed term	12/30/2020		2.09	%		4,000		4,000
Fixed rate, fixed term	12/31/2020		1.94	%		600		600
Fixed rate, fixed term	04/12/2021		1.92	%		8,000		8,000
Fixed rate, fixed term	06/15/2021		1.39	%		5,000		5,000
Fixed rate, fixed term	08/16/2021		2.29	%		3,000		3,000
Fixed rate, fixed term	12/30/2021		2.29	%		2,000		2,000
Fixed rate, putable, no call 2 years	01/12/2023		2.03	%		8,000		8,000
					$	100,400	$	89,400

The terms of security agreements with the FHLB require the Bank to pledge collateral for its borrowings. The collateral consists of qualifying first mortgage loans and stock of the FHLB. At March 31, 2019 and December 31, 2018, the Bank had pledged qualifying mortgage loans of $434.4 million and $453.8 million, respectively.

The Bank had no irrevocable letters of credit with the FHLB as of March 31, 2019 and December 31, 2018.

Future maturities of FHLB borrowings as of March 31, 2019 and December 31, 2018 were as follows:

As of March 31, 2019 and December 31, 2018, the Bank also had a line of credit available with the Federal Reserve Bank of Chicago. Borrowings under this line of credit are limited by the amount of collateral pledged by the Bank, which totaled $137.4 million and $143.4 million in loans at March 31, 2019 and December 31, 2018, respectively. There were no outstanding advances included in other borrowings at March 31, 2019 and December 31, 2018.

As of March 31, 2019 and December 31, 2018, the Company had a credit agreement with U.S. Bank National Association for a $15.0 million revolving line of credit with an interest rate of the one-month LIBOR rate plus 2.25%. The line also bears a non-usage fee of 0.275% per annum. The line did not have an outstanding balance as of March 31, 2019 and December 31, 2018.

Other borrowings are borrowings as a result of sold loans that do not qualify for sale accounting. These agreements are recorded as financing transactions as the Bank maintains effective control over the transferred loans. The dollar amount of the loans underlying

the sale agreements continues to be carried in the Bank’s loan portfolio, and the transfer is reported as a secured borrowing with pledge of collateral. At March 31, 2019 and December 31, 2018, the amounts of these borrowings were $1.4 million and $0.8 million, respectively.

The following table sets forth information concerning balances and interest rates on other borrowings as of and for the periods indicated:

Under the Company’s 2016 Long Term Incentive Plan (the “Plan”), the Company may grant options to purchase shares of common stock and issue restricted stock to its directors, officers, and employees. Both qualified and non-qualified stock options and restricted stock may be granted and issued, respectively, under the Plan. As of March 31, 2019, 180,230 options or shares of restricted stock remain available under the Plan.

The exercise price of each option equals the market price of the Company’s stock on the date of grant and an option’s maximum term is ten years. Vesting periods range from one to five years from the date of grant. The restricted stock vesting periods range from one to five years from the date of issuance.

The status of the Plan as of March 31, 2019 and changes in the Plan during the three months ended March 31, 2019 were as follows:

Activity in restricted stock awards and restricted stock units for the three months ended March 31, 2019 was as follows:

For the three months ended March 31, 2019 and 2018, share-based compensation expense, including options and restricted stock awards, applicable to the Plan was $118 thousand and $117 thousand, respectively.

As of March 31, 2019, unrecognized share-based compensation expense related to nonvested options and restricted stock awards amounted to $0.8 million and is expected to be recognized over a weighted average period of 1.88 years.

The Company (on a consolidated basis) and the Bank are each subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total, Tier 1 and Tier 1 Common Equity capital to risk-weighted assets, and of Tier 1 capital to average assets, as such terms are defined in the regulations. Management believed, as of March 31, 2019 and December 31, 2018, that the Company and the Bank met all capital adequacy requirements to which they were subject.

As a result of the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act, the federal banking agencies are required to develop a “Community Bank Leverage Ratio” (the ratio of a bank’s tangible equity capital to average total consolidated assets) for financial institutions with assets of less than $10 billion. A “qualifying community bank” that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered “well capitalized” under Prompt Corrective Action statutes. The federal banking agencies may consider a financial institution’s risk profile when evaluating whether it qualifies as a community bank for purposes of the capital ratio requirement. The federal banking agencies must set the minimum capital for the new Community Bank Leverage Ratio at not less than 8% and not more than 10%. The Bank has not elected to be subject to this new definition.

As of March 31, 2019, the Bank’s capital ratios met those required to be considered as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 Common Equity risk-based, and Tier 1 leverage ratios as set forth in the following tables.

The Bank’s actual capital amounts and ratios are presented in the following table:

	Actual					Minimum For Capital Adequacy Purposes ^(a):					Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
March 31, 2019
Total Capital (to risk weighted assets)	$	208,042		15.87	%	$	137,632		10.50	%	$	131,078		10.00	%
Tier 1 Capital (to risk weighted assets)		191,643		14.62	%		111,417		8.50	%		104,863		8.00	%
Tier 1 Capital (to average assets)		191,643		12.83	%		59,761		4.00	%		74,701		5.00	%
Tier 1 Common Equity Ratio (to risk weighted assets)		191,643		14.62	%		91,755		7.00	%		85,201		6.50	%

December 31, 2018
Total Capital (to risk weighted assets):
Consolidated	$	210,768		15.81	%	$	131,664		9.875	%	Not applicable
Bank		204,327		15.35	%		131,488		9.875	%	$	133,153		10.00	%
Tier 1 Capital (to risk weighted assets):
Consolidated		164,675		12.35	%		104,998		7.875	%	Not applicable
Bank		187,679		14.09	%		104,858		7.875	%		106,522		8.00	%
Tier 1 Capital (to average assets):
Consolidated		164,675		11.09	%		59,374		4.00	%	Not applicable
Bank		187,679		12.44	%		60,330		4.00	%		75,413		5.00	%
Tier 1 Common Equity Ratio (to risk weighted assets):
Consolidated		141,085		10.58	%		84,999		6.375	%	Not applicable
Bank		187,679		14.09	%		84,885		6.375	%		86,549		6.50	%

The rules of the Basel III regulatory capital framework implemented a capital conservation buffer that is added to the minimum requirements for capital adequacy purposes. The capital conservation buffer was subject to a three year phase-in period that began on January 1, 2016 and was fully phased in on January 1, 2019 at 2.5%. The ratios for the Company and the Bank are sufficient to meet the conservation buffer.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are independent, knowledgeable, and both able and willing to transact.

ASC 820-10 requires the use of valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, ASC 820-10 establishes a fair value hierarchy for valuation inputs that gives

the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1—Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2—Valuation is based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3—Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following methods and assumptions were used by the Company in estimating the fair value disclosures for financial instruments recorded at fair value on a recurring basis:

Where quoted prices are available in an active market, the Company classifies the securities within Level 1 of the valuation hierarchy. Securities are defined as both long and short positions. Level 1 securities include highly liquid government bonds and exchange-traded equities.

If quoted market prices are not available, the Company estimates fair values using pricing models and discounted cash flows that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes and credit spreads.

Examples of such instruments, which would generally be classified within Level 2 of the valuation hierarchy, include U.S. government and agency securities, corporate bonds and other securities. Mortgage-backed securities are included in Level 2 if observable inputs are available. In certain cases where there is limited activity or less transparency around inputs to the valuation, the Company classifies those securities in Level 3.

The Company's derivative instruments consist of interest rate swaps, which are accounted for as cash flow hedges. The Company's derivative positions are classified within Level 2 of the fair value hierarchy and are valued using models generally accepted in the financial services industry and that use actively quoted or observable market input values from external market data providers and/or non-binding broker-dealer quotations. The fair value of the derivatives is determined using discounted cash flow models. These models’ key assumptions include the contractual terms of the respective contract along with significant observable inputs, including interest rates, yield curves, nonperformance risk and volatility.

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(dollars in thousands)
March 31, 2019
Securities available for sale:
U.S. government and agency securities	$	—	$	3,929	$	—	$	3,929
U.S. treasury Securities		—		2,499		—		2,499
Municipal securities		—		31,873		—		31,873
Mortgage-backed securities		—		153,909		—	$	153,909
Total assets at fair value	$	—	$	192,210	$	—	$	192,210
Derivative instruments, interest rate swaps		—		660		—	$	660
Total liabilities at fair value	$	—	$	660	$	—	$	660
December 31, 2018
Securities available for sale:
U.S. government and agency securities	$	—	$	4,331	$	—	$	4,331
U.S. treasury Securities		—		2,491		—		2,491
Municipal securities		—		34,520		—		34,520
Mortgage-backed securities		—		154,603		—	$	154,603
Total assets at fair value	$	—	$	195,945	$	—	$	195,945
Derivative instruments, interest rate swaps		—		179		—	$	179
Total liabilities at fair value	$	—	$	179	$	—	$	179

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, they are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents the financial instruments carried on the consolidated balance sheet by caption and by level in the fair value hierarchy for which a nonrecurring change in fair value has been recorded:

The significant inputs used in the fair value measurements for Level 3 assets measured at fair value on a nonrecurring basis are as follows:

The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments were as follows:

	March 31,				December 31,
	2019				2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Input Level
	(dollars in thousands)
Financial assets:
Cash and cash equivalents	$	62,426	$	62,426	$	61,087	$	61,087	1
Securities available for sale		192,210		192,210		195,945		195,945	2
FHLB Stock		2,998		2,998		2,978		2,978	2
Loans, net of allowance for loan losses		1,165,470		1,164,369		1,190,790		1,187,330	3
Loans held for sale		2,750		2,750		2,949		2,949	3
Accrued interest receivable		4,020		4,020		3,878		3,878	2
Loan servicing rights		9,275		13,320		9,047		13,198	3
Financial liabilities:
Deposits:
Time		772,967		772,053		805,240		801,267	2
Other deposits		403,310		403,310		418,107		418,107	1
Other borrowings		1,412		1,412		827		827	3
Advances from FHLB		100,400		100,016		89,400		88,725	2
Subordinated debentures		44,742		44,742		44,703		44,703	3
Accrued interest payable		5,215		5,215		4,013		4,013	2
Derivative instruments, interest rate swaps		660		660		179		179	2

Income (expenses) applicable to other real estate owned included in non-interest expense included the following:

On June 15, 2018, the Company executed an interest rate swap to manage interest rate risk on two sets of its trust preferred securities. This derivative contract involves the receipt of floating rate interest from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional value. This instrument is designated as a cash flow hedge as the receipt of floating rate interest from the counterparty is used to manage interest rate risk associated with three month LIBOR advances. The change in the fair value of this hedging instrument is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged transaction affects earnings.

The Company had two outstanding interest rate swaps designated as a cash flow hedge each with an aggregate notional value of $6.0 million at March 31, 2019 and December 31, 2018. Both interest rate swaps mature on June 15, 2028. A pre-tax unrealized loss of $0.5 thousand was recognized in accumulated other comprehensive income for the three months ended March 31, 2019, and there was no ineffective portion of this hedge. There were no interest rate swaps designated as a cash flow hedge outstanding at March 31, 2018.

The Company is exposed to credit risk in the event of nonperformance by the interest rate swaps counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate swaps. The Company monitors counterparty risk in accordance with the provisions of FASB ASC 815. In addition, the interest rate swap agreements contains language outlining collateral-pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain threshold limits. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties should either party suffer a credit rating deterioration. The Company was required to pledge $0.5 million of cash as collateral to the counterparty as of March 31, 2019.

Management evaluated subsequent events through the date the financial statements were issued. There were no significant events or transactions occurring after March 31, 2019, but prior to May 9, 2019, that provided additional evidence about conditions that existed at March 31, 2019.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Form 10-Q. This report contains statements that constitute forward-looking statements within the meaning of the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “estimate,” “project,” “predict,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “may,” “might,” “should,” “indicate,” “will,” “would,” “could,” “contemplate,” “continue,” “intend,” “target” and words of similar meaning. These forward-looking statements are not historical facts and include statements of our goals, intentions, expectations, business plans, and operating strategies.

Forward-looking statements are subject to significant risks and uncertainties, and our actual results may differ materially from the results discussed in such forward-looking statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Forward-looking statements are made only as of the date of this report, and the Company undertakes no obligation to update any forward-looking statements contained in this report to reflect new information or events or conditions after the date hereof.

County Bancorp, Inc. is a Wisconsin corporation founded in May 1996 and is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. Our primary activities consist of operating through our wholly owned subsidiary bank, Investors Community Bank, headquartered in Manitowoc, Wisconsin, and providing a wide range of banking and related business services through the Bank and our other subsidiaries.

In addition to the Bank, we have three wholly-owned subsidiaries, County Bancorp Statutory Trust II, County Bancorp Statutory Trust III, and Fox River Valley Capital Trust I, which are Delaware statutory trusts. The Bank is the sole member of Investors Insurance Services, LLC and ABS 1, LLC, which are both Wisconsin limited liability companies.

Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans, and the interest we pay on interest-bearing liabilities, such as deposits. We generate most of our revenue from interest on loans and investments and loan- and deposit-related fees. Our loan portfolio consists of a mix of agricultural, commercial real estate, commercial, and residential real estate loans. Our primary source of funding is deposits. Our largest expenses are interest on these deposits and salaries and related employee benefits. We measure our performance through various metrics, including our pre-tax net income, net interest margin, net overhead ratio, return on average assets, earnings per share, and ratio of non-performing assets to total assets. We also utilize non-GAAP metrics, such as efficiency ratio, return on average common shareholders’ equity, tangible book value per share, ratio of tangible common equity to tangible assets, and adverse classified asset ratio to evaluate the Company’s performance. We are required to maintain appropriate regulatory leverage and risk-based capital ratios.

	As of and for						As of and for
	Three Months Ended						Year Ended
	March 31, 2019			March 31, 2018			December 31, 2018
	(unaudited)
	(Dollars in thousands, except per share data)
Selected Income Statement Data:
Interest income	$	17,126		$	14,693		$	64,217
Interest expense		6,566			4,423			22,262
Net interest income		10,560			10,270			41,955
Provision for loan losses		752			97			3,195
Net interest income after provision for loan losses		9,808			10,173			38,760
Non-interest income		2,750			2,040			8,833
Non-interest expense		7,305			6,785			28,283
Income tax expense		1,491			1,374			5,059
Net income	$	3,762		$	4,054		$	14,251

Per Common Share Data:
Basic earnings per common share	$	0.54		$	0.59		$	2.06
Diluted earnings per common share	$	0.54		$	0.58		$	2.04
Cash dividends per common share	$	0.05		$	0.07		$	0.28
Book value per share, end of period	$	22.36		$	20.17		$	21.50
Tangible book value per share, end of period ⁽¹⁾	$	21.54		$	19.29		$	20.65
Weighted average common shares - basic		6,725,705			6,678,161			6,712,551
Weighted average common shares - diluted		6,747,028			6,768,965			6,757,667
Common shares outstanding, end of period		6,709,254			6,684,923			6,709,480

Selected Balance Sheet Data:
Total assets	$	1,491,388		$	1,460,257		$	1,521,027
Securities available-for-sale		192,210			141,360			195,945
Total loans		1,182,963			1,164,525			1,207,295
Allowance for loan losses		(17,493	)		(14,612	)		(16,505	)
Total deposits		1,176,277			1,172,390			1,223,347
Other borrowings and FHLB advances		101,812			121,741			90,227
Subordinated debentures		44,742			15,540			44,703
Total shareholders' equity		158,017			142,814			152,284

Performance Ratios:
Return on average assets (annualized)		1.00	%		1.15	%		0.96	%
Return on average shareholders' equity (annualized)		9.78	%		11.62	%		7.58	%
Return on average common shareholders' equity ⁽¹⁾		9.99	%		12.04	%		9.74	%
Equity to assets ratio		10.60	%		9.78	%		10.00	%
Net interest margin		2.94	%		3.01	%		2.91	%
Interest rate spread		2.64	%		2.78	%		2.62	%
Non-interest income to average assets (annualized)		0.73	%		0.58	%		0.58	%
Non-interest expense to average assets (annualized)		1.95	%		1.92	%		1.87	%
Net overhead ratio (annualized) ⁽²⁾		1.22	%		1.34	%		1.29	%
Efficiency ratio ⁽¹⁾		55.91	%		55.12	%		54.42	%
Dividend payout ratio		9.26	%		12.07	%		13.73	%

Asset Quality Ratios:
Adverse classified asset ratio ⁽¹⁾		48.59	%		53.44	%		57.12	%
Non-performing loans to total loans ⁽³⁾		2.19	%		1.52	%		1.90	%
Allowance for loan losses to:
Total loans		1.48	%		1.25	%		1.37	%
Non-performing loans		67.59	%		82.34	%		71.81	%
Net recoveries to average loans		(0.02	)%		(0.11	)%		(0.01	)%
Non-performing assets to total assets ⁽³⁾		2.07	%		1.83	%		1.94	%

“Efficiency ratio” is defined as non-interest expense, excluding gains and losses on sales and write-downs of other real estate owned, divided by operating revenue, which is equal to net interest income plus non-interest income excluding gains and losses on sales of securities. 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.

Return on average common shareholders’ equity is a non-GAAP based financial measure calculated using non-GAAP based amounts. The most directly comparable GAAP based measure is return on average shareholders’ equity. We calculate return on average common shareholders’ equity by excluding the average preferred shareholders’ equity and the related dividends. Management uses the return on average common shareholders’ equity in order to review our core operating results and our performance.

Tangible book value per share and ratio of tangible common equity to tangible assets are non-GAAP financial measures based on GAAP amounts. 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.

	March 31, 2019			March 31, 2018			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	$	150,017		$	134,814		$	144,284
Less: Goodwill		5,038			5,038			5,038
Less: Core deposit intangible, net of amortization		430			806			513
Tangible common equity	$	144,549		$	128,970		$	138,733
Common shares outstanding		6,709,254			6,684,923			6,673,381
Tangible book value per share	$	21.54		$	19.29		$	20.79

Total assets	$	1,491,238		$	1,460,257		$	1,521,027
Less: Goodwill		5,038			5,038			5,038
Less: Core deposit intangible, net of amortization		430			806			513
Tangible assets	$	1,485,770		$	1,454,413		$	1,515,476
Tangible common equity to tangible assets		9.73	%		8.87	%		9.15	%

Adverse classified asset ratio is a non-GAAP financial measure based on GAAP amounts. In our judgment, the adjustments made to non-performing assets allows management to better assess asset quality and monitor the amount of capital coverage necessary for non-performing assets.

	March 31, 2019			March 31, 2018			December 31, 2018
	(dollars in thousands, except per share data)
Adverse classified asset ratio:
Substandard loans	$	107,492		$	82,648		$	120,887
Less: Impaired performing restructured loans		(6,382	)		(1,164	)		(5,078	)
Net substandard loans		101,110			81,484			115,809
Other real estate owned		5,019			8,982			6,568
Substandard unused commitments		976			2,309			1,625
Less: Substandard government guarantees		(5,864	)		(3,605	)		(7,111	)
Total adverse classified assets (non-GAAP)	$	101,241		$	89,170		$	116,891

Total equity (Bank)	$	191,287		$	149,105		$	185,458
Accumulated other comprehensive loss (gain) on available-for-sale securities		(436	)		2,603			2,221
Allowance for loan losses		17,493			14,612			16,505
Allowance for unused commitments		—			553			475
Adjusted total equity (non-GAAP)	$	208,344		$	166,873		$	204,659
Adverse classified asset ratio		48.59	%		53.44	%		57.12	%

Our operating revenue is comprised of interest income and non-interest income. Net interest income increased by 2.8% to $10.6 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018, primarily attributable to loan growth of 1.5% and a 0.47% improvement in average loan yield between the same periods which was partially offset by a 0.51% increase in average rates paid interest-bearing deposits.

Interest income increased to $17.1 million for the first quarter of 2019 compared to $14.7 million for the first quarter of 2018 primarily as the result of increased volume of loans and an increase in loan yield from 4.67% for the first quarter of 2018 to 5.14% for the first quarter of 2019. The increase in interest income was partially offset by an increase in interest expense from $4.4 million for

the first quarter of 2018 to $6.6 million for the first quarter of 2019, which was primarily the result of increases in rates paid on deposits, and the issuance of $30.0 million in junior subordinated notes in the second quarter of 2018.

Non-interest income for the three months ended March 31, 2019 increased 34.8% to $2.8 million from $2.0 million for the three months ended March 31, 2018, primarily due to the reduction of the allowance for unused commitments of $0.5 million that caused an increase to other non-interest income. The Company evaluated the need for this allowance during the first quarter of 2019 and concluded there was no longer sufficient evidence of credit loss inherent in these commitments to substantiate the necessity of this reserve at March 31, 2019 and concluded that this allowance could be eliminated. The Company will continue to evaluate credit risk on these off-balance sheet commitments going forward and make appropriate adjustments to an allowance as necessary. Also during the first quarter of 2019, the Company reduced a valuation allowance on its loan servicing rights portfolio which resulted in an increase of $0.2 million of loan servicing rights. The reduction of the valuation allowance is expected to continue throughout the remainder of 2019.

Non-interest expense increased 7.7% to $7.3 million for the three months ended March 31, 2019 compared to $6.8 million for the same period in 2018. This increase was primarily the result of increased employee compensation and benefits in connection with a 24.1% increase in the premium cost of employee health insurance benefits.

Net interest income is the largest component of our income and is dependent on the volumes of and yields on interest-earning assets as compared to the volumes of and rates paid on interest-bearing liabilities. The following table reflects the components of net interest income for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31, 2019								March 31, 2018
	Average Balance⁽¹⁾			Income/ Expense		Yields/ Rates			Average Balance⁽¹⁾			Income/ Expense		Yields/ Rates
	(dollars in thousands)
Assets
Investment securities	$	192,963		$	1,361		2.82	%	$	136,722		$	789		2.31	%
Loans ⁽²⁾		1,207,240			15,501		5.14	%		1,172,786			13,691		4.67	%
Interest bearing deposits due from other banks		36,227			264		2.92	%		55,784			213		1.53	%
Total interest-earning assets	$	1,436,430		$	17,126		4.77	%	$	1,365,292		$	14,693		4.30	%

Allowance for loan losses		(17,005	)							(13,722	)
Other assets		78,654								62,000
Total assets	$	1,498,079							$	1,413,570

Liabilities
Savings, NOW, money market, interest checking	$	295,418		$	1,184		1.60	%	$	282,313		$	640		0.91	%
Time deposits		797,476			4,240		2.13	%		742,465			3,156		1.70	%
Total interest-bearing deposits	$	1,092,894		$	5,424		1.99	%	$	1,024,778		$	3,796		1.48	%
Other borrowings		844			11		5.27	%		1,286			16		4.97	%
FHLB advances		92,900			453		1.95	%		121,067			468		1.55	%
Junior subordinated debentures		44,606			678		6.08	%		15,529			143		3.68	%
Total interest-bearing liabilities	$	1,231,244		$	6,566		2.13	%	$	1,162,660		$	4,423		1.52	%

Non-interest bearing deposits		101,532								103,669
Other liabilities		11,362								7,743
Total liabilities	$	1,344,138							$	1,274,072

Shareholders' equity		153,941								139,498
Total liabilities and equity	$	1,498,079							$	1,413,570

Net interest income				$	10,560							$	10,270
Interest rate spread ⁽³⁾							2.64	%							2.78	%
Net interest margin ⁽⁴⁾							2.94	%							3.01	%
Ratio of interest-earning assets to interest-bearing liabilities		1.17								1.17

The following table presents the effects of changing rates and volumes on our net interest income between the periods indicated. The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The net column represents the sum of the volume and rate columns. For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.

	Three Months Ended March 31, 2019 v. 2018
	Increase (Decrease) Due to Change in Average
	Volume			Rate			Net
	(dollars in thousands)
Interest Income:
Investment securities	$	371		$	201		$	572
Loans		413			1,397			1,810
Federal funds sold and interest-bearing deposits with banks		(33	)		84			51
Total interest income		751			1,682			2,433
Interest Expense:
Savings, NOW, money market and interest checking		31			513			544
Time deposits		247			837			1,084
Other borrowings		(6	)		1			(5	)
FHLB advances		114			(129	)		(15	)
Junior subordinated debentures		397			138			535
Total interest expense		783			1,360			2,143
Net interest income	$	(32	)	$	322		$	290

Based on our analysis of the components of the allowance for loan losses, management recorded a provision for loan losses of $0.8 million for the three months ended March 31, 2019 compared to a provision of $0.1 million for the three months ended March 31, 2018. The increased provision is directly related to the $24.8 million increase in substandard performing and substandard impaired loans from the first quarter of 2018 compared to the first quarter of 2019. During the first quarter of 2019, we charged-off $0.4 million in loans, and recovered $0.6 million in loans that had been previously written-off.

The specific reserve related to impaired loans increased 115.8% from $2.7 million at March 31, 2018 to $5.8 million at March 31, 2019 due to a 64.3% increase in substandard impaired loans from $37.4 million at March 31, 2018 to $61.4 million at March 31, 2019. In addition, non-performing assets have increased $4.2 million since March 31, 2018 to $30.9 million at March 31, 2019. This increase in non-performing assets is primarily due to the continued depressed dairy market pricing, which has been further complicated by recent tariff discussions by the federal government and the response to such tariffs by other countries, which have affected our agricultural borrowers. Despite the recent increase in Class III milk prices, we anticipate some additional stress in our agricultural portfolio will continue throughout 2019 due to the length of the depressed prices that our agricultural borrowers endured; however, management believes this increased risk is adequately captured by the existing agriculture qualitative factors in our allowance for loan losses methodology. Additionally, management is encouraged by the proposed revision of the North American Free Trade Agreement among the U.S., Canada, and Mexico, called the United States Mexico Canada Agreement, which has been signed but not ratified by the United States, which includes a pledge to curb protection for Canada’s dairy industry.

There have been no substantive changes to our methodology for estimating the appropriate level of allowance for loan losses from what was previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018. Based upon this methodology, which includes actively monitoring the asset quality and inherent risks within the loan and lease portfolio, management concluded that an allowance for loan losses of $17.5 million, or 1.48% of total loans, was appropriate as of March 31, 2019. This is compared to an allowance for loan losses of $14.6 million, or 1.25% of total loans, at March 31, 2018, and $16.5 million, or 1.37% of total loans, at December 31, 2018.

Non-interest income for the three months ended March 31, 2019 increased by 34.8% to $2.8 million from $2.0 million for the three months ended March 31, 2018. During the first quarter of 2019, the Company eliminated the allowance for unused commitments of $0.5 million after concluding that there was no longer sufficient evidence of credit loss inherent in these commitments to substantiate the necessity of this reserve at March 31, 2019. The elimination of this reserve resulted in an increase of other non-interest income. The Company will continue to evaluate credit risk on these off-balance sheet commitments going forward and make appropriate adjustments to an allowance as necessary. In addition, the Company also reduced a valuation allowance on its loan servicing rights portfolio which resulted in an increase of $0.2 million of loan servicing rights which are included in loan servicing fees in our consolidated statement of operations. The reduction of the valuation allowance is expected to continue throughout the remaining quarters of 2019.

The following table reflects the components of non-interest income for the three months ended March 31, 2019 and 2018:

Non-interest expense increased 7.7% for the three months ended March 31, 2019 to $7.3 million compared to $6.8 million for the three months ended March 31, 2018. The increase is primarily the result of increased employee compensation and benefits related to a 24.1% increase in the premium cost of employee benefits. In addition, increased occupancy and information processing expenses are directly related to the new corporate headquarters which the Company moved into during the third quarter of 2018.

The following table reflects the components of our non-interest expense for the three months ended March 31, 2019 and 2018:

The Company accounts for income taxes in accordance with income tax accounting guidance, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.

The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences

between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term “more likely than not” means a likelihood of more than 50%; the terms “examined” and “upon examination” also include resolution of the related appeals or litigation processes, if any. A tax position that meets the “more likely than not” recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the “more likely than not” recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company files income tax returns in the U.S. federal jurisdiction and in the state of Wisconsin. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2015.

The Company recognizes interest and penalties on income taxes, if any, as a component of other non-interest expense.

Income tax expense for the three months ended March 31, 2019 and 2018, was $1.5 million and $1.4 million, respectively, which represents an effective tax rate of 28.4% and 25.3%, respectively. The increase in the effective tax rate year-over-year is primarily the result of the exercise of stock options during the first quarter of 2018 that resulted in additional permanent tax deductions. There were no stock option exercises during the first quarter of 2019.

Total assets decreased $29.6 million, or 1.9%, from December 31, 2018 to $1.5 billion at March 31, 2019. Total loans decreased by $24.3 million, or 2.0%, since December 31, 2018 as the result of normal pay-downs and $14.0 million in loan sales and participations.

Total liabilities decreased $35.4 million, or 2.6%, from $1.4 billion at December 31, 2018 to $1.3 billion at March 31, 2019. This decrease is primarily attributed to a decrease in brokered deposits and national certificates of deposits of $52.2 million in the first quarter of 2019, which was partially offset by $11.0 million of additional FHLB borrowings. Client deposits, defined as demand deposits, money market accounts, and certificates of deposit, increased $5.2 million, or 0.7%, since December 31, 2018.

Shareholders’ equity increased $5.7 million, or 3.8%, to $158.0 million at March 31, 2019 from $152.3 million at December 31, 2018. This increase was due primarily to net income for the three months ended March 31, 2019 of $3.8 million and a $2.7 million tax-effected increase to the fair market value of the investment portfolio, which was partially offset by the payment of $0.5 million of dividends on common and preferred stock during the three months ended March 31, 2019.

Total net loans decreased by $25.3 million, or 2.1%, to $1.2 billion at March 31, 2019 from December 31, 2018. This decrease was driven primarily by normal pay-downs and $14.0 million of loan sales and participations that took place during the first quarter. The proceeds from the loan sales and participations were used to pay-off some brokered and national time deposits and reduce our reliance on wholesale funding which is a long-term strategy of the Company.

The following table sets forth the composition of our loan portfolio at the dates indicated:

	March 31, 2019						December 31, 2018
	Amount			Percent			Amount			Percent
	(dollars in thousands)
Agriculture loans	$	722,107			61.0	%	$	724,508			60.0	%
Commercial real estate loans		289,824			24.5	%		299,212			24.8	%
Commercial loans		113,666			9.7	%		116,460			9.7	%
Residential real estate loans		57,146			4.8	%		66,843			5.5	%
Installment and consumer other		220			0.0	%		272			0.0	%
Total gross loans	$	1,182,963			100.0	%	$	1,207,295			100.0	%
Allowance for loan losses		(17,493	)					(16,505	)
Loans, net	$	1,165,470					$	1,190,790

The allowance for loan losses is established through a provision for loan losses charged to expense, which affects our earnings directly. Loans are charged against the allowance for loan losses when management believes that the collectability of all or some of the principal is unlikely. Subsequent recoveries are added to the allowance. The allowance is an amount that reflects management’s estimate of the level of probable incurred losses in the loan portfolio. Factors considered by management in determining the adequacy of the allowance include, but are not limited to, detailed reviews of individual loans, historical and current trends in loan charge-offs for the various portfolio segments evaluated, the level of the allowance in relation to total loans and to historical loss levels, levels and trends in non-performing and past due loans, volume and migratory direction of adversely graded loans, external factors including regulation, reputation, and competition, and management’s assessment of economic conditions. Our board of directors reviews the recommendations of management regarding the appropriate level for the allowance for loan losses based upon these factors.

The provision for loan losses is the charge to operating earnings necessary to maintain an adequate allowance for loan losses. We have developed policies and procedures for evaluating the overall quality of our loan portfolio and the timely identification of problem credits. Management continuously reviews these policies and procedures and makes further improvements as needed. The adequacy of our allowance for loan losses and the effectiveness of our internal policies and procedures are also reviewed periodically by our regulators, our auditors, and external loan review personnel. Our regulators may advise us to recognize additions to the allowance based upon their judgments about information available to them at the time of their examination. Such regulatory guidance is taken under consideration by management, and we may recognize additions to the allowance as a result.

We continually refine our methodology for determining the allowance for loan losses by comparing historical loss ratios utilized to actual experience and by classifying loans for analysis based on similar risk characteristics. Cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreements; however, cash receipts on impaired and nonaccrual loans for which the accrual of interest has been discontinued are applied to principal and interest income depending upon the overall risk of principal loss to us.

At March 31, 2019 and December 31, 2018, the allowance for loan losses was $17.5 million and $16.5 million, respectively, which resulted in a ratio of the allowance to total loans of 1.48% and 1.37%, respectively. The overall increase in the allowance for loan losses was largely the result of a $2.2 increase in specific reserve primarily related to a commercial real estate relationship that lost its anchor tenant which was offset by lower general reserve due to the lower substandard loan balances and a $0.6 million recovery that was collected during the first quarter of 2019.

Charge-offs and recoveries by loan category for three months ended March 31, 2019 and 2018 were as follows:

	Three Months Ended
	March 31, 2019			March 31, 2018
	(dollars in thousands)
Balance, beginning of period	$	16,505		$	13,247
Loans charged off:
Agriculture loans		—			—
Commercial real estate loans		390			42
Commercial loans		—			—
Residential real estate loans		—			—
Installment and consumer other		—			—
Total loans charged off	$	390		$	42
Recoveries:
Agriculture loans		—			1
Commercial real estate loans		625			1,240
Commercial loans		1			68
Residential real estate loans		—			—
Installment and consumer other		—			1
Total recoveries		626			1,310
Net loans recovered	$	(236	)	$	(1,268	)
Provision for loan losses		752			97
Allowance for loan losses, end of period	$	17,493		$	14,612

Selected loan quality ratios:
Net recoveries to average loans		(0.02	)%		(0.11	)%
Allowance for loan losses to total loans (end of period)		1.48	%		1.25	%
Allowance for loan losses to non-performing loans and performing troubled debt restructurings (end of period)		33.63	%		39.26	%

As part of our growth and risk management strategy, we have actively developed a loan participation and loan sales network. Our ability to sell loan participations and whole loans benefits us by freeing up capital and funding to lend to new customers as well as to increase non-interest income through the recognition of loan sale and servicing revenue. Because we continue to service these loans, we are able to maintain a relationship with the customer. Additionally, we receive a servicing fee that offsets some of the cost of administering the loan, while maintaining the customer relationship.

Servicing assets are recognized as separate assets when rights are acquired through the sale of financial assets. Servicing rights resulting from the sale or securitization of loans originated by the Company are initially measured at fair value at the date of transfer. The Company subsequently measures each class of servicing asset using the amortization method. Under the amortization method, servicing rights are amortized in proportion to and over the period of estimated net servicing income. The amortized assets are assessed for impairment or increased obligation based on fair value at each reporting date.

Fair value is based on market prices for comparable servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. These variables may have an adverse impact on the value of the servicing right and may result in a reduction to non-interest income.

Servicing assets measured using the amortization method are evaluated and measured for impairment. Impairment is determined by stratifying rights into tranches based on predominant characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the carrying amount of the servicing assets for that tranche. The valuation allowance is adjusted to reflect changes in the measurement of impairment after the initial measure of the impairment.

Changes in the valuation allowances are reported with loan servicing fees on the Company’s consolidated statements of operations. Fair value in excess of the carrying amount of servicing assets for that stratum is not recognized.

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. The amortization of loan servicing rights is netted against loan servicing fee income.

Our securities portfolio is predominately composed of municipal securities, investment grade mortgage-backed securities, U.S. government and agency securities and U.S. treasury securities. We classify substantially all of our securities as available for sale. We do not engage in active securities trading in carrying out our investment strategies.

Securities decreased to $192.2 million at March 31, 2019 from $195.9 million at December 31, 2018. During the three months ended March 31, 2019, we recognized unrealized holding gains of $3.6 million before income taxes through other comprehensive income due to decreases in interest rates.

There were no security sales during the three months ended March 31, 2019 or 2018.

The following table sets forth the amortized cost and fair values of our securities portfolio at March 31, 2019 and December 31, 2018:

Deposits are the major source of our funds for lending and other investment purposes. Deposits are attracted principally from within our primary market area through the offering of a broad variety of deposit instruments including checking accounts, noninterest-bearing demand accounts, money market accounts, savings accounts, time deposit accounts (including “jumbo” certificates in denominations of $100,000 or more), and retirement savings plans.

Deposits decreased $47.1 million, or 3.8%, from December 31, 2018 to $1.2 billion at March 31, 2019 which was primarily the result of a $52.2 million decrease in brokered deposits and national time deposits since December 31, 2018, partially offset by a $5.2 million increase in client deposit (demand deposits, money market accounts, and certificates of deposit) generation.

Reducing our reliance on wholesale funding is a key strategic focus for 2019. Brokered deposits and national certificates of deposit at March 31, 2019 were $416.7 million, which was a decrease of $52.2 million, or 11.1%, from December 31, 2018, and a

decrease of $85.5 million, or 17.0%, from March 31, 2018. Because of the reduction in brokered deposits and national certificates of deposit in the first quarter of 2019, we increased FHLB borrowings by $11.0 million.

As of March 31, 2019 and December 31, 2018, the distribution by type of deposit account was as follows:

	March 31, 2019					December 31, 2018
	Amount		% of Deposits			Amount		% of Deposits
	(dollars in thousands)
Demand, noninterest-bearing	$	101,434		8.7	%	$	121,436		9.9	%
NOW accounts and interest checking		49,902		4.2	%		51,779		4.2	%
Savings		6,210		0.5	%		5,770		0.5	%
Money market accounts		225,975		19.2	%		218,929		18.0	%
Certificates of deposit		376,034		32.0	%		356,484		29.1	%
Brokered deposits		269,917		22.9	%		308,504		25.2	%
National time deposits		146,805		12.5	%		160,445		13.1	%
Total deposits	$	1,176,277		100.0	%	$	1,223,347		100.0	%

As of March 31, 2019, the Company had two outstanding interest rate swaps designated as a cash flow hedge each with an aggregate notional value of $6.0 million. Both interest rate swaps mature on June 15, 2028. A pre-tax unrealized loss of $0.5 million was recognized in accumulated other comprehensive income during the three months ended March 31, 2019, with a corresponding increase reported in accrued interest payable and other liabilities on the consolidated balance sheets. There was no ineffective portion of this hedge. There were no interest rate swaps designated as a cash flow hedge outstanding at March 31, 2018.

Liquidity is the ability to meet current and future financial obligations of a short-term and long-term nature including, but not limited to, funding loans and depositor withdrawals. Our primary sources of funds consist of deposit inflows, loan repayments, maturities and sales of securities and borrowings from the FHLB. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows, calls of investment securities and borrowed funds and prepayments on loans are greatly influenced by general interest rates, economic conditions and competition.

At March 31, 2019, advances from the FHLB were $100.4 million compared to $89.4 million at December 31, 2018. There were no borrowings outstanding at the Federal Reserve Bank of Chicago. The Company also has a credit agreement with U.S. Bank National Association for a $15.0 million revolving line of credit with an interest rate equal to the one-month LIBOR rate plus 2.25%. The line of credit also bears a non-usage fee of 0.275% per annum. The line of credit did not have an outstanding balance as of March 31, 2019.

On May 30, 2018, the Company entered into a subordinated note purchase agreement to sell and issue $30.0 million of notes to certain institutional investors. The notes carry a fixed interest rate of 5.875% until May 31, 2023, and have a stated maturity of June 1, 2028. As of June 1, 2023, the notes are redeemable in whole or in part, and bear an interest rate of 3-month LIBOR plus 288.4 basis points. The notes are unsecured, subordinated obligations of the Company and rate junior in right of payment to the Company’s current and future senior indebtedness.

On September 17, 2018, the Company closed its offer to exchange (the “Exchange Offer”) up to $30,000,000 aggregate principal amount of its outstanding 5.875% fixed-to-floating rate subordinated notes due 2028, which were issued in a private placement to certain institutional investors, for a like principal amount of its new 5.875% fixed-to-floating rate subordinated notes due 2028 registered under the Securities Act. One hundred percent of the privately placed 5.875% fixed-to-floating rate subordinated notes due 2028 were tendered for exchange in the Exchange Offer.

Management adjusts our investments in liquid assets based upon an assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning deposits and securities, (4) the objectives of our interest-rate risk and investment policies and (5) the risk tolerance of management and our board of directors.

Our cash flows are composed of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $3.9 million and $4.8 million for the three months ended March 31, 2019 and 2018, respectively. Net cash provided by (used in) investing activities, which consists primarily of purchases of and proceeds from the sale, maturities, calls, and principal repayments of securities available for sale, as well as loan originations, net of repayments, was $33.4 million and ($41.7) million for the three months ended March 31, 2019 and 2018, respectively. Net cash provided by (used in) financing activities, consisting primarily of the activity in deposit accounts and FHLB advances, was ($35.9) million and $60.8 million for the three months ended March 31, 2019 and 2018, respectively.

At March 31, 2019, the Bank exceeded all of its regulatory capital requirements, with Tier 1 leverage capital of $191.6 million, or 12.83% of adjusted average total assets, which is above the minimum level to be well-capitalized of $74.7 million, or 5.0% of adjusted average total assets, and total risk-based capital of $208.0 million, or 15.87% of risk-weighted assets, which is above the minimum level to be well-capitalized of $131.1 million, or 10.0% of risk-weighted assets.

At the holding company level, our primary sources of liquidity are dividends from the Bank, investment income and net proceeds from investment sales, borrowings and capital offerings. The main uses of liquidity are the payment of interest to holders of our junior subordinated debentures and subordinated notes and the payment of interest or dividends to common and preferred shareholders. The Bank is subject to certain regulatory limitations regarding its ability to pay dividends to the Company; however, we do not believe that the Company will be adversely affected by these dividend limitations. At March 31, 2019, there were $103.5 million of retained earnings available for the payment of dividends by the Bank to the Company, but would be limited to the Bank maintaining minimum regulatory capital ratios. Management believed liquidity to be sufficient as of March 31, 2019.

As of March 31, 2019, there were no other significant changes to our contractual obligations and off-balance sheet arrangements disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018. We continue to believe that we have adequate capital and liquidity available from various sources to fund projected obligations and commitments.

General. Market risk refers to potential losses arising from changes in interest rates, commodity prices, such as milk prices, and/or other relevant market rates or prices. We are exposed to market risk as a result of our banking activities. Our market risk is comprised primarily of interest rate risk. As a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit our exposure to changes in market interest rates. We manage the interest rate sensitivity of our interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment.

A major source of interest rate risk is a difference in the repricing of assets and liabilities. First, there are differences in the timing of rate changes reflecting the maturity and/or repricing of assets and liabilities. For example, the rate earned on a commercial real estate loan may be fixed for 10 years, while the rate paid on a certificate of deposit may be fixed only for a few months. Due to these timing differences, net interest income is sensitive to changes in the level and shape of the yield curve. Second, there are differences in the drivers of rate changes of various assets and liabilities known as basis risk. For example, commercial loans may reprice based on one-month LIBOR or prime, while the rate paid on retail money market demand accounts may be only loosely correlated with LIBOR and depend on competitive demand for funds. Due to these basis differences, net interest income is sensitive to changes in spreads between certain indices or repricing rates.

Another important source of interest rate risk relates to the potential exercise of explicit or embedded options for prepayment or withdrawal. For example, most residential real estate loans can be prepaid without penalty, and most consumer deposits can be withdrawn without penalty. The exercise of such options by customers can exacerbate the timing differences discussed above.

Deposit accounts typically react more quickly to changes in market interest rates than loans because of the shorter maturities of deposits. However, given the asset sensitive nature of our balance sheet, a decrease in interest rates may adversely affect our earnings while increases in interest rates may beneficially affect our earnings. To reduce the potential volatility of our earnings, we have sought to improve the match between asset and liability maturities and rates, while maintaining an acceptable interest rate spread. Our

strategy for managing interest rate risk emphasizes adjustable-rate loans for retention in our loan portfolio, promoting core deposit products and time deposits, adjusting the maturities of borrowings and adjusting the investment portfolio mix and duration.

We have an asset/liability committee, which includes members of management, to communicate, coordinate and control all aspects involving asset-liability management. The committee establishes and monitors the volume, maturities, pricing and mix of assets and funding sources with the objective of managing assets and funding sources to provide results that are consistent with liquidity, growth, risk limits and profitability goals.

Our goal is to manage asset and liability positions to moderate the effects of interest rate fluctuations on net interest income and net income and control exposure to interest rate risk within policy limits approved by our board of directors. These limits and guidelines reflect our tolerance for interest rate risk over both short-term and long-term horizons. We analyze our sensitivity to changes in interest rates through our net interest income simulation model. Exposures are reported on a monthly basis to the asset and liability committee and at meetings of our board of directors.

Net Interest Income Simulation Analysis. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings.

Income simulation is the primary tool for measuring the interest rate risk inherent in our balance sheet at a given point in time by showing the effect on net interest income, over specified time horizons, under a range of interest rate shock scenarios. These simulations take into account repricing, maturity and prepayment characteristics of individual products. We estimate what our net interest income would be for a one- and two-year horizon based on current interest rates. We then calculate what the net interest income would be for the same period under different interest rate assumptions.

These estimates require us to make certain assumptions, including loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturities and decay rates. These assumptions are inherently uncertain, and, as a result, we cannot precisely predict the impact of changes in interest rates on our net interest income. Although the net interest income table below provides an indication of our interest rate risk exposure at a particular point in time, such estimates are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.

The following table shows the estimated impact on net interest income for the one- and two-year periods beginning March 31, 2019 resulting from potential changes in interest rates. The net interest income simulation analyses assume a static balance sheet and do not include possible future actions that management might undertake to mitigate this risk.

As of March 31, 2019, net interest income simulation indicated that our exposure to changing interest rates was within our internal policy guidelines. As the table illustrates, our balance sheet is asset-sensitive over a one and two year time horizon and net interest income would increase as interest rates increase. It should be noted that the magnitude of any possible increase in interest rates is constrained by the low absolute starting levels of rates. While immediate, proportional and severe shifts in interest rates upward were used as part of this analysis, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact.

Depending on the relationship between long-term and short-term interest rates, market conditions and consumer preference, we may place greater emphasis on maximizing our net interest margin than on strictly matching the interest rate sensitivity of our assets and liabilities. We believe that our level of interest rate risk is acceptable using this approach.

Economic Value of Equity Analysis. We also analyze the sensitivity of our financial condition to changes in interest rates through our economic value of equity model. This analysis measures the difference between predicted changes in the present value of our assets and predicted changes in the present value of our liabilities assuming various changes in current interest rates. As with the net interest income simulation model, the estimates of changes in the economic value of our equity require certain assumptions to be

made. These assumptions include loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturities and decay rates. These assumptions are inherently uncertain, and, as a result, we cannot precisely predict the impact of changes in interest rates on the economic value of our equity. Although our economic value of equity analysis provides an indication of our interest rate risk exposure at a particular point in time, such estimates are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on the economic value of our equity and will differ from actual results.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2019. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2019, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act.

There are inherent limitations in the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of controls. Accordingly, even an effective system of disclosure controls and procedures can provide only reasonable assurance with respect to financial statement preparation. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We and our subsidiaries may be involved from time to time in ordinary routine litigation incidental to our respective businesses. Neither we nor any of our subsidiaries are currently engaged in, nor is any of our property the subject of, any legal proceedings, other than ordinary routine litigation incidental to the business, that are expected to have a material adverse effect on our results of operations or financial position.

There are no material changes to the risk factors set forth in “Risk Factors” in Item 1A to Part I of our Annual Report on Form 10-K for the year ended December 31, 2018.

The Company did not issue any unregistered equity securities or repurchase any shares of its common stock during the quarter ended March 31, 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Wisconsin	39-1850431
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2400 South 44^th Street Manitowoc, WI	54221
(Address of principal executive offices)	(Zip Code)

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Shareholders’ Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	41
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures		44

	For the Three Months Ended March 31,
	2019			2018
	(dollars in thousands)
Net income	$	3,762		$	4,054
Other comprehensive income:
Unrealized gain (loss) on securities available-for-sale		3,652			(2,543	)
Income tax benefit (expense)		(995	)		658
Total other comprehensive income (loss) on securities available-for-sale		2,657			(1,885	)
Unrealized loss on derivatives arising during the period		(481	)		—
Income tax benefit		129			—
Total other comprehensive loss on derivatives		(352	)		—
Total other comprehensive income (loss)		2,305			(1,885	)
Comprehensive income	$	6,067		$	2,169

	For the Three Months Ended
	March 31,
	2019		2018
	(dollars in thousands)
Net income from continuing operations	$	3,762	$	4,054
Less: preferred stock dividends		117		97
Income available to common shareholders for basic earnings per common share	$	3,645	$	3,957

Weighted average number of common shares issued		7,153,174		7,106,685
Less: weighted average treasury shares		443,729		439,833
Plus: weighted average of participating restricted stock units		16,260		11,309
Weighted average number of common shares and participating securities outstanding		6,725,705		6,678,161
Effect of dilutive options		21,323		90,804
Weighted average number of common shares outstanding used to calculate diluted earnings per common share		6,747,028		6,768,965
Weighted average of anti-dilutive options		134,824		—

	Amortized		Fair
	Cost		Value
	(dollars in thousands)
March 31, 2019
Due in one year or less	$	3,270	$	3,269
Due from one to five years		10,387		10,355
Due from five to ten years		8,659		8,694
Due after ten years		15,760		15,983
Mortgage-backed securities		153,534		153,909
	$	191,610	$	192,210
December 31, 2018
Due in one year or less	$	5,848	$	5,843
Due from one to five years		11,113		10,974
Due from five to ten years		8,458		8,382
Due after ten years		16,431		16,143
Mortgage-backed securities		157,147		154,603
	$	198,997	$	195,945

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging Growth Company	☒

	Non-Accrual		Restructured and Accruing		Total
	(dollars in thousands)
March 31, 2019
Agricultural loans	$	11,056	$	20,090	$	31,146
Commercial real estate loans		—		1,021		1,021
Commercial loans		1,135		—		1,135
Total	$	12,191	$	21,111	$	33,302

December 31, 2018
Agricultural loans	$	12,034	$	19,389	$	31,423
Commercial loans		92		—		92
Total	$	12,126	$	19,389	$	31,515

	March 31, 2019
	Number of Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value ⁽¹⁾
	(dollars in thousands except option and per share data)
Outstanding, beginning of year		208,988		$	18.15
Granted		14,237			18.06
Exercised		—			—
Forfeited/expired		(1,678	)		19.88
Outstanding, end of period		221,547		$	18.13	$	392
Options exercisable at period-end		170,038		$	17.02	$	382
Weighted-average fair value of options granted during the period ⁽²⁾				$	6.31

	March 31, 2019
	Restricted Stock Awards			Weighted Average Grant Price
Outstanding, beginning of year		28,701		$	21.02
Granted		—			—
Vested		(11,552	)		19.19
Forfeited/expired		(226	)		27.15
Outstanding, end of period		16,923		$	22.19

	March 31, 2019
	Restricted Stock Units			Weighted Average Grant Price
Outstanding, beginning of year		11,772		$	27.15
Granted		18,178			18.11
Issued		—			—
Forfeited/expired		(375	)		18.11
Outstanding, end of period		29,575		$	21.91

March 31, 2019
	Valuation Techniques	Unobservable Inputs	Range (Average)
Impaired loans	Evaluation of collateral	Estimation of value	NM*
Other real estate owned	Appraisal	Appraisal adjustment	3%-70% (31%)

December 31, 2018
	Valuation Techniques	Unobservable Inputs	Range (Average)
Impaired loans	Evaluation of collateral	Estimation of value	NM*
Other real estate owned	Appraisal	Appraisal adjustment	16%-39% (14%)

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(dollars in thousands)
Available for sale:
U.S. government and agency securities	$	3,964	$	3,929	$	4,368	$	4,331
U.S. treasury securities		2,497		2,499		2,497		2,491
Municipal securities		31,615		31,873		34,985		34,520
Mortgage-backed securities		153,534		153,909		157,147		154,603
Total available for sale	$	191,610	$	192,210	$	198,997	$	195,945

Rate Shift	Net Interest Income Year 1 Forecast		Year 1 Change from Base			Net Interest Income Year 2 Forecast		Year 2 Change from Base
	(dollars in thousands)					(dollars in thousands)
+400 bps	$	56,700		26.56	%	$	108,800		23.36	%
+200 bps		50,700		13.17	%		98,400		11.56	%
+100 bps		47,600		6.25	%		93,000		5.44	%
Base		44,800		0.00	%		88,200		0.00	%
-100 bps		41,800		(6.70	)%		82,600		(6.35	)%
-200 bps		38,200		(14.73	)%		75,000		(14.97	)%

Exhibit Number		Description

10.1		Employment Agreement among County Bancorp, Inc., Investors Community Bank and Mark A. Miller, dated as of August 7, 2017 (Filed herewith)

31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

	County Bancorp, Inc.

Date: May 9, 2019	By:	/s/ Timothy J. Schneider
		Timothy J. Schneider
		President (principal executive officer)

Date: May 9, 2019	By:	/s/ Glen L. Stiteley
		Glen L. Stiteley
		Chief Financial Officer (principal financial and accounting officer)