IPO Report: County Bancorp (ICBK)

Francis Gaskins |

County Bancorp IPO, County Bancorp IPO report, County Bancorp IPO price, County Bancorp IPO date, small-cap stocks, stocks to buy now, IPOs this weekCounty Bancorp (ICBK) a Wisconsin corporation and registered bank holding company founded in May 1996, and ICBK’s wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin.

Two other companies are scheduled for the week of Jan. 12, 2015.  The full IPO calendar is available at IPOpremium.

Manager, Joint-managers: Baird and Sterne Agee

Co-managers: None

End of lockup (180 days): Wednesday, July 15, 2015

End of 25-day quiet period: Tuesday, February 10, 2015

ICBK scheduled a $20 million IPO with a market capitalization of $93 million at a price range midpoint of $17 for Friday, Jan. 16, 2015 on Nasdaq. SEC filings

County Bancorp Overview

ICBK, a Wisconsin corporation and registered bank holding company founded in May 1996, and ICBK’s wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin.

ICBK serves business and retail customers throughout Wisconsin, with a focus on Northeastern and Central Wisconsin. ICBK’s customers are served from its full-service locations in Manitowoc and Stevens Point, and ICBK’s loan production offices in Darlington, Eau Claire and Fond du Lac.

County Bancorp Valuation

Glossary

Retained earnings (mm)

.

.

$57

     

Per share dilution

.

.

-$1.52

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Interest income

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Sept 9 mos

         

County Bancorp (ICBK)

$94

3.1

11.9

0.8

1.1

21%


County Bancorp IPO Conclusion

Neutral
Top line rev down -5%, net income +1%
P/E ratio of 11.9
Price to book of .8
Retained earnings 61% of market cap
Consistently profitable
Small $20 million IPO

County Bancorp Business

ICBK, a Wisconsin corporation and registered bank holding company founded in May 1996, and ICBK’s wholly-owned subsidiary Investors Community Bank, a Wisconsin-chartered bank, are headquartered in Manitowoc, Wisconsin.

ICBK serves business and retail customers throughout Wisconsin, with a focus on Northeastern and Central Wisconsin. ICBK’s customers are served from its full-service locations in Manitowoc and Stevens Point, and ICBK’s loan production offices in Darlington, Eau Claire and Fond du Lac.

The state of Wisconsin is often referred to as “America’s Dairyland,” and one of the niches ICBK has developed is providing financial services to agricultural businesses statewide, with a primary focus on dairy-related lending.

County Bancorp History

The Company was founded in 1996 by ICBK’s leadership group consisting of William C. Censky, Timothy J. Schneider, Wayne D. Mueller and Mark R. Binversie, to meet the financial services needs of agricultural and business banking clients throughout Wisconsin.

According to the American Bankers Association, at June 30, 2014, ICBK was the 39th largest farm lender bank in the United States, measured by total dollar volume of farm loans, and since inception have been one of the faster growing banks in the state through organic growth.

At September 30, 2014, ICBK had assets of $742.8 million, total loans of $591.6 million and deposits of $599.9 million. ICBK’s guiding principles have always been soundness, profitability then growth, and ICBK believes its performance to date has validated ICBK’s business model and approach to banking.

County Bancorp Profitable

The Company has been profitable on an annual basis since ICBK’s first full year of operation, and ICBK has had a consistent focus on maintaining high levels of profitability during various market conditions and cycles.

ICBK’s net income was $5.9 million for the nine months ended September 30, 2014, which presents an annualized return on average assets of 1.06%. For 2013, ICBK’s net income was $7.0 million and ICBK’s return on average assets was 0.94%.

ICBK initially raised capital at a price of $1.60 per share, as adjusted to reflect a 10-for-1 stock split effected April 4, 2014.

By consistently maintaining high levels of profitability and building shareholder value through retained earnings, ICBK’s book value per share at December 31, 2013 was $14.28, representing a compound annual growth rate, or CAGR, of 14.4% for all full years since ICBK’s inception. At September 30, 2014, ICBK’s book value per share was $15.57.

County Bancorp Operating model

ICBK’s operating model has focused on serving the needs of its customers without a dependence on a traditional branch network, allowing ICBK to maintain lower operating costs than many of ICBK’s peers.

As a result, ICBK has been able to consistently operate ICBK’s business at attractive efficiency levels. For 2013 and the nine months ended September 30, 2014, ICBK’s efficiency ratio on a consolidated basis was 47.43% and 52.87%, respectively, while ICBK’s ratio of non-interest expense to average assets was 2.24% and 2.28%, respectively.

According to Federal Deposit Insurance Corporation, or FDIC, statistics through September 30, 2014, for commercial banks with assets between $500 million and $1.0 billion, the average for efficiency ratios for 2013 and the nine months ended September 30, 2014, was 69.0% and 67.4%, respectively, while industry average for non-interest expense to average assets was 3.17% and 3.08%, respectively.

County Bancorp Competition

ICBK encounters strong competition both in making loans and in attracting deposits.

The deregulation of the banking industry and the widespread enactment of state laws that permit multi-bank holding companies as well as an increasing level of interstate banking have created a highly competitive environment for commercial banking.

In one or more aspects of its business, ICBK competes with other commercial banks, savings and loan associations, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking companies and other financial intermediaries.

Most of these competitors, some of which are affiliated with bank holding companies, have substantially greater resources and lending limits, and may offer certain services that ICBK does not currently provide.

County Bancorp 5% shareholders pre-IPO

William C. Censky         9.66%

Mark R. Binversie          8.95%    

Gary Ziegelbauer            9.33%

County Bancorp Dividends

Following this offering, ICBK intends to pay quarterly cash dividends on ICBK’s common stock at an initial amount of approximately $0.04 per share starting in March 2015, subject to the approval of its board of directors.

The annual yield at the price range mid-point of $17 is .94%

County Bancorp IPO Use of proceeds

ICBK expects to receive $16 million from its IPO and use it for the following:

to provide capital to support growth and expansion. ICBK may also use the proceeds of the offering to: (i) serve as a source of additional capital for the Bank, as it may require from time to time; (ii) redeem SBLF Preferred Stock and Series B Preferred Stock; (iii) enable the Company and the Bank to take advantage of strategic opportunities as they may present themselves in the marketplace; and (iv) provide additional working capital for the Company to service its ongoing overhead and interest expense, and other ongoing operations of the Company.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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