County Bancorp, Inc. (Form: 10-Q, Received: 08/08/2017 06:10:57)

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐ (Do not check if a smaller reporting company)

Smaller reporting company

Emerging Growth Company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission File Number: 001-36808

COUNTY BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

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

860 North Rapids Road Manitowoc, WI	54221
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (920) 686-9998

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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 ☒

As of August 8, 2017, the registrant had 6,641,159 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents

		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	39
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42
Exhibit Index		43

PART I— FINANCIAL INFORMATION

Item 1. Financial Statements.

COUNTY BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2017 and December 31, 2016

(Unaudited)

	June 30, 2017			December 31, 2016
	(dollars in thousands)
ASSETS
Cash and cash equivalents	$	35,939		$	42,679
Securities available-for-sale, at fair value		115,148			123,437
FHLB Stock, at cost		4,534			5,688
Loans held for sale		8,036			1,162
Loans, net of allowance for loan losses of $13,503 as of June 30, 2017; $12,645 as of December 31, 2016		1,062,165			1,017,841
Premises and equipment, net		9,342			9,819
Loan servicing rights		8,893			9,264
Other real estate owned, net		6,917			3,161
Cash surrender value of bank owned life insurance		17,159			11,448
Deferred tax asset, net		5,870			5,486
Goodwill		5,038			5,038
Core deposit intangible, net of accumulated amortization of $636 as of June 30, 2017; $360 as of December 31, 2016		1,165			1,441
Accrued interest receivable and other assets		6,428			6,206
Total assets	$	1,286,634		$	1,242,670

LIABILITIES
Deposits:
Noninterest-bearing	$	102,569		$	118,657
Interest-bearing		891,094			858,861
Total deposits		993,663			977,518
Other borrowings		1,443			2,152
Advances from FHLB		133,300			107,895
Subordinated debentures		15,487			15,451
Accrued interest payable and other liabilities		6,487			8,366
Total liabilities		1,150,380			1,111,382

SHAREHOLDERS' EQUITY
Preferred stock-variable rate, non-cumulative, nonparticipating, $1,000 stated value; 15,000 shares authorized; 8,000 shares issued at June 30, 2017 and December 31, 2016		8,000			8,000
Common stock - $0.01 par value; 50,000,000 authorized; 7,074,020 shares issued and 6,641,159 shares outstanding at June 30, 2017; 7,018,248 shares issued and 6,586,335 shares outstanding at December 31, 2016		27			26
Surplus		51,436			50,553
Retained earnings		81,636			77,907
Treasury stock, at cost; 432,861 shares at June 30, 2017; 431,913 shares at December 31, 2016		(4,828	)		(4,828	)
Accumulated other comprehensive loss		(17	)		(370	)
Total shareholders' equity		136,254			131,288
Total liabilities and shareholders' equity	$	1,286,634		$	1,242,670

See accompanying notes to unaudited consolidated financial statements.

COUNTY BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2017		2016		2017		2016
	(dollars in thousands except per share data)
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	12,328	$	10,205	$	23,882	$	18,935
Taxable securities		460		355		885		595
Tax-exempt securities		83		90		180		199
Federal funds sold and other		81		50		141		89
Total interest and dividend income		12,952		10,700		25,088		19,818

INTEREST EXPENSE
Deposits		2,806		1,995		5,243		3,807
FHLB advances and other borrowed funds		464		332		845		635
Subordinated debentures		125		69		245		135
Total interest expense		3,395		2,396		6,333		4,577
Net interest income		9,557		8,304		18,755		15,241
Provision for loan losses		1,524		470		2,285		1,282
Net interest income after provision for loan losses		8,033		7,834		16,470		13,959
NON-INTEREST INCOME
Services charges		399		411		724		688
Gain on sale of loans, net		24		61		49		161
Loan servicing fees		1,270		2,132		2,475		3,579
Other		163		154		324		267
Total non-interest income		1,856		2,758		3,572		4,695
NON-INTEREST EXPENSE
Employee compensation and benefits		3,833		3,092		7,890		6,093
Occupancy		180		114		357		207
Information processing		397		1,477		759		1,757
Write-down of other real estate owned		78		—		78		84
Other		2,153		2,770		3,452		3,903
Total non-interest expense		6,641		7,453		12,536		12,044
Income before income taxes		3,248		3,139		7,506		6,610
Income tax expense		1,190		1,194		2,816		2,489
NET INCOME	$	2,058	$	1,945	$	4,690	$	4,121

NET INCOME PER SHARE:
Basic	$	0.30	$	0.31	$	0.68	$	0.67
Diluted	$	0.29	$	0.30	$	0.68	$	0.65
Dividends paid per share	$	0.06	$	0.05	$	0.12	$	0.10

See accompanying notes to unaudited consolidated financial statements.

COUNTY BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
	(dollars in thousands)
Net income	$	2,058		$	1,945		$	4,690		$	4,121
Other comprehensive income:
Unrealized gains on securities available-for-sale		246			843			579			1,512
Income tax expense		(96	)		(329	)		(226	)		(590	)
Total other comprehensive income		150			514			353			922
Comprehensive income	$	2,208		$	2,459		$	5,043		$	5,043

See accompanying notes to unaudited consolidated financial statements.

COUNTY BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

	Preferred Stock		Common Stock		Surplus		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders' Equity
	(dollars in thousands)
Balance at December 31, 2015	$	8,000	$	19	$	34,717	$	68,825		$	(4,758	)	$	221		$	107,024
Net income		—		—		—		4,121			—			—			4,121
Other comprehensive income		—		—		—		—			—			922			922
Stock compensation expense, net of tax		—		—		236		—			—			—			236
Purchase of treasury stock (3,500 shares)		—		—		—		—			(70	)		—			(70	)
Cash dividends declared on common stock		—		—		—		(614	)		—			—			(614	)
Cash dividends declared on preferred stock		—		—		—		(161	)		—			—			(161	)
Cash dividends declared on SBLF preferred stock		—		—		—		(21	)		—			—			(21	)
Shares issued in the acquistion of Fox River Valley Bancorp, Inc. (712,830 shares)		—		7		14,249		—			—			—			14,256
Proceeds from exercise of common stock options (6,943 shares)		—		—		96		—			—			—			96
Balance at June 30, 2016	$	8,000	$	26	$	49,298	$	72,150		$	(4,828	)	$	1,143		$	125,789

Balance at December 31, 2016	$	8,000	$	26	$	50,553	$	77,907		$	(4,828	)	$	(370	)	$	131,288
Net income		—		—		—		4,690			—			—			4,690
Other comprehensive income		—		—		—		—			—			353			353
Stock compensation expense, net of tax		—		—		239		—			—			—			239
Cash dividends declared on common stock		—		—		—		(795	)		—			—			(795	)
Cash dividends declared on preferred stock		—		—		—		(166	)		—			—			(166	)
Proceeds from exercise of common stock options (48,584 shares)		—		1		644		—			—			—			645
Balance at June 30, 2017	$	8,000	$	27	$	51,436	$	81,636		$	(4,828	)	$	(17	)	$	136,254

See accompanying notes to unaudited consolidated financial statements.

COUNTY BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2017 and 2016

(Unaudited)

	June 30, 2017			June 30, 2016
	(dollars in thousands)
Cash flows from operating activities
Net income	$	4,690		$	4,121
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation and amortization of premises and equipment		485			395
Amortization of core deposit intangible		276			54
Amortization of subordinated debentures		36			—
Provision for loan losses		2,285			1,282
Realized gain on sales of other real estate owned		(402	)		(89	)
Write-down of other real estate owned		78			84
Realized gain (loss) on sales of premises and equipment		290			(8	)
Increase in cash surrender value of bank owned life insurance		(211	)		(146	)
Deferred income tax expense (benefit)		(613	)		958
Stock compensation expense, net		239			236
Net amortization of securities		473			340
Net change in:
Accrued interest receivable and other assets		(222	)		1,475
Loans held for sale		(6,874	)		4,369
Loan servicing rights		371			(966	)
Accrued interest payable and other liabilities		(1,879	)		(1,833	)
Net cash provided by (used in) operating activities		(978	)		10,272
Cash flows from investing activities
Proceeds from maturities, principal repayments, and call of securities available for sale		18,034			9,959
Purchases of securities available for sale		(9,636	)		(5,310	)
Redemption (purchases) of FHLB stock		1,154			(2,147	)
Purchases of bank owned life insurance		(5,500	)		—
Loan originations and principal collections, net		(51,121	)		(71,600	)
Proceeds from sales of premises and equipment		1,615			13
Purchases of premises and equipment		(1,911	)		(1,383	)
Proceeds from sales of other real estate owned		1,079			2,198
Net cash provided by business combination		—			12,320
Net cash used in investing activities		(46,286	)		(55,950	)
Cash flows from financing activities
Net decrease in demand and savings deposits		(59,849	)		(55,444	)
Net increase in certificates of deposits		75,993			72,802
Net change in other borrowings		(709	)		(1,443	)
Proceeds from FHLB advances		157,660			240,200
Repayment of FHLB advances		(132,255	)		(188,350	)
Payments to acquire treasury stock		—			(70	)
Proceeds from issuance of common stock		645			96
Redemption of SBLF preferred stock		—			(15,000	)
Dividends paid on SBLF preferred stock		—			(21	)
Dividends paid on preferred stock		(166	)		(161	)
Dividends paid on common stock		(795	)		(614	)
Net cash provided by financing activities		40,524			51,995
Net change in cash and cash equivalents		(6,740	)		6,317
Cash and cash equivalents, beginning of period		42,679			14,907
Cash and cash equivalents, end of period	$	35,939		$	21,224

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	6,143		$	4,442
Income taxes	$	4,775			3,720
Noncash investing activities:
Transfer from loans to other real estate owned	$	4,512		$	159
Loans charged off	$	1,492		$	905

See accompanying notes to unaudited consolidated financial statements.

County Bancorp, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

NOTE 1 – BASIS OF PRESENTATION

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 six months ended June 30, 2017 for the interim period. The results of operations for the three and six months ended June 30, 2017 may not necessarily be indicative of the results to be expected for the year ending December 31, 2017, 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, 2016.

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.

New Accounting Pronouncements

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation to simplify several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The amendments in this update became effective beginning January 1, 2017 and did not have a significant impact the Company’s financial statements.

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 developed a steering committee to implement this ASU, and is currently in the process of evaluating which methodology we will apply to its loan portfolio. At this time, the effect this ASU will have on its consolidated financial statements is unknown.

In March 2017, the FASB issued updated guidance codified within ASU-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 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted including adoption in an interim period. The Company is currently evaluating the effects this ASU will have on its consolidated financial statements.

In May 2017, the FASB issued updated guidance codified within ASU-2017-09, Compensation – Stock Compensation to provide clarity and reduce the diversity in practice and cost and complexity of applying the guidance when there is a change of terms condition of share-based awards. The amendment is effective for fiscal years beginning after December 15, 2017, with early adoption permitted including adoption in an interim period. The adoption of this ASU is not expected to have a significant impact on the Company’s consolidated financial because modification to share-based awards are rarely made .

NOTE 2 – EARNINGS PER SHARE

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.

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
	(dollars in thousands)
Net income from continuing operations	$	2,058	$	1,945	$	4,690	$	4,121
Less: preferred stock dividends		85		80		166		182
Income available to common shareholders for basic earnings per common share	$	1,973	$	1,865	$	4,524	$	3,939

Average number of common shares issued		7,328,282		6,878,374		7,323,885		6,768,899
Less: weighted average treasury shares		432,861		422,762		432,484		421,608
Less: weighted average nonvested equity incentive plan shares		266,186		384,585		278,810		372,235
Weighted average number of common shares outstanding		6,629,235		6,071,027		6,612,591		5,975,056
Effect of dilutive options		84,958		114,331		88,987		110,660
Weighted average number of common shares outstanding used to calculate diluted earnings per common share		6,714,193		6,185,358		6,701,578		6,085,716

NOTE 3 – SECURITIES AVAILABLE-FOR-SALE

The amortized cost and fair value of securities available-for-sale as of June 30, 2017 and December 31, 2016 were as follows:

	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(dollars in thousands)
June 30, 2017
Municipal securities	$	38,553	$	171	$	(81	)	$	38,643
Mortgage-backed securities		73,130		359		(451	)		73,038
Asset-backed securities		3,493		4		(30	)		3,467
	$	115,176	$	534	$	(562	)	$	115,148
December 31, 2016
U.S. government and agency securities	$	1,000	$	—	$	—		$	1,000
Municipal securities		45,638		57		(239	)		45,456
Mortgage-backed securities		73,648		292		(632	)		73,308
Asset-backed securities		3,761		3		(91	)		3,673
	$	124,047	$	352	$	(962	)	$	123,437

The amortized cost and fair value of securities at June 30, 2017 and December 31, 2016 , 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.

	Amortized		Fair
	Cost		Value
	(dollars in thousands)
June 30, 2017
Due in one year or less	$	13,660	$	13,632
Due from one to five years		19,470		19,512
Due from five to ten years		8,916		8,966
Due after ten years		—		—
Mortgage-backed securities		73,130		73,038
	$	115,176	$	115,148
December 31, 2016
Due in one year or less	$	17,396	$	17,311
Due from one to five years		25,960		25,912
Due from five to ten years		7,043		6,906
Due after ten years		—		—
Mortgage-backed securities		73,648		73,308
	$	124,047	$	123,437

There were no security sales for the six months ended June 30, 2017 and 2016.

At June 30, 2017 and December 31, 2016, no securities were pledged to secure the FHLB advances besides FHLB stock of $4.5 million and $5.7 million, respectively. At June 30, 2017 and December 31, 2016, the carrying amount of securities pledged to secure the Federal Reserve Bank Line of Credit was $10.6 million and $11.2 million, 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 June 30, 2017 and December 31, 2016:

	Less Than 12 Months					12 Months or Greater					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
	(dollars in thousands)
June 30, 2017
Municipal securities	$	17,338	$	(71	)	$	1,010	$	(10	)	$	18,348	$	(81	)
Mortgage-backed securities		30,034		(316	)		6,439		(135	)		36,473		(451	)
Asset-backed securities		—		—			2,669		(30	)		2,669		(30	)
	$	47,372	$	(387	)	$	10,118	$	(175	)	$	57,490	$	(562	)
December 31, 2016
U.S. government and agency securities	$	—	$	—		$	—	$	—		$	—	$	—
Municipal securities		24,924		(236	)		604		(3	)		25,528		(239	)
Mortgage-backed securities		48,719		(632	)		—		—			48,719		(632	)
Asset-backed securities		2,745		(91	)		—		—			2,745		(91	)
	$	76,388	$	(959	)	$	604	$	(3	)	$	76,992	$	(962	)

The unrealized loss on the investments at June 30, 2017 and December 31, 2016 was due to 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 does not consider these investments to be other-than-temporarily impaired at June 30, 2017 and December 31, 2016.

NOTE 4 – LOANS

The components of loans were as follows:

	June 30,			December 31,
	2017			2016
	(dollars in thousands)
Agricultural loans	$	643,978		$	624,632
Commercial real estate loans		283,035			270,475
Commercial loans		97,571			89,944
Residential real estate loans		50,939			45,276
Installment and consumer other		145			159
Total gross loans		1,075,668			1,030,486
Allowance for loan losses		(13,503	)		(12,645	)
Loans, net	$	1,062,165		$	1,017,841

Changes in the allowance for loan losses by portfolio segment for the six months ended June 30, 2017 and 2016 were as follows:

June 30, 2017	Agricultural			Commercial Real Estate			Commercial			Residential Real Estate			Installment and Consumer Other			Total
	(dollars in thousands)
Balance, beginning of year	$	8,173		$	2,762		$	1,239		$	470		$	1		$	12,645
Provision for loan losses		1,029			473			1,028			(246	)		1			2,285
Loans charged off		—			(575	)		(917	)		—			—			(1,492	)
Recoveries		1			36			28			—			—			65
Balance, end of period	$	9,203		$	2,696		$	1,378		$	224		$	2		$	13,503

June 30, 2016	Agricultural			Commercial Real Estate			Commercial			Residential Real Estate			Installment and Consumer Other			Total
	(dollars in thousands)
Balance, beginning of year	$	6,355		$	2,237		$	1,268		$	533		$	12		$	10,405
Provision for loan losses		1,277			12			141			(143	)		(5	)		1,282
Loans charged off		(896	)		—			—			(5	)		(4	)		(905	)
Recoveries		2			1			6			—			—			9
Balance, end of period	$	6,738		$	2,250		$	1,415		$	385		$	3		$	10,791

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 June 30, 2017 and December 31, 2016:

	June 30, 2017
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
	(dollars in thousands)
Allowance for loan losses:
Agricultural loans	$	657	$	8,546	$	9,203
Commercial real estate loans		18		2,678		2,696
Commercial loans		47		1,331		1,378
Residential real estate loans		—		224		224
Installment and consumer other		—		2		2
Total ending allowance for loan losses		722		12,781		13,503
Loans:
Agricultural loans		8,576		635,402		643,978
Commercial real estate loans		3,832		279,203		283,035
Commercial loans		1,131		96,440		97,571
Residential real estate loans		—		50,939		50,939
Installment and consumer other		—		145		145
Total loans		13,539		1,062,129		1,075,668
Net loans	$	12,817	$	1,049,348	$	1,062,165

	December 31, 2016
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
	(dollars in thousands)
Allowance for loan losses:
Agricultural loans	$	546	$	7,627	$	8,173
Commercial real estate loans		377		2,385		2,762
Commercial loans		413		826		1,239
Residential real estate loans		—		470		470
Installment and consumer other		—		1		1
Total ending allowance for loan losses		1,336		11,309		12,645
Loans:
Agricultural loans		13,044		611,588		624,632
Commercial real estate loans		4,952		265,523		270,475
Commercial loans		3,376		86,568		89,944
Residential real estate loans		68		45,208		45,276
Installment and consumer other		—		159		159
Total loans		21,440		1,009,046		1,030,486
Net loans	$	20,104	$	997,737	$	1,017,841

The following table presents the aging of the recorded investment in past due loans at June 30, 2017 and December 31, 2016:

	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Loans Not Past Due
	(dollars in thousands)
June 30, 2017
Agricultural loans	$	43	$	—	$	5,690	$	5,733	$	638,245
Commercial real estate loans		3,010		—		518		3,528		279,507
Commercial loans		—		—		1,131		1,131		96,440
Residential real estate loans		116		—		—		116		50,823
Installment and consumer other		—		—		—		—		145
Total	$	3,169	$	—	$	7,339	$	10,508	$	1,065,160

December 31, 2016
Agricultural loans	$	12	$	—	$	9,680	$	9,692	$	614,940
Commercial real estate loans		—		287		2,710		2,997		267,478
Commercial loans		371		—		2,695		3,066		86,878
Residential real estate loans		—		—		—		—		45,276
Installment and consumer other		—		—		—		—		159
Total	$	383	$	287	$	15,085	$	15,755	$	1,014,731

The following table lists information on nonaccrual, restructured, and certain past due loans at June 30, 2017 and December 31, 2016:

	June 30,		December 31,
	2017			2016
	(dollars in thousands)
Nonaccrual loans, 90 days or more past due	$	7,339	$	15,085
Nonaccrual loans 30-89 days past due		3,053		371
Nonaccrual loans, less than 30 days past due		2,020		4,651
Restructured loans not on nonaccrual status		4,523		4,300
90 days or more past due and still accruing		—		—
Total		16,935		24,407

The following table presents the recorded investment in nonaccrual loans and loans past due 90 days or more at June 30, 2017 and December 31, 2016:

	June 30,		December 31,
	2017			2016
	(dollars in thousands)
Agricultural loans	$	7,736	$	12,323
Commercial real estate loans		3,545		4,340
Commercial loans		1,131		3,376
Residential real estate loans		—		68
Total	$	12,412	$	20,107

The average recorded investment in total impaired loans for the six months ended June 30, 2017 and for the year ended December 31, 2016 amounted to approximately $17.5 million and $25.9 million, respectively. Impaired loans include nonaccrual loans, restructured loans, and loans that are 90 days or more past due and still accruing. Interest income recognized on total impaired loans for the six months ended June 30, 2017 and for the year ended December 31, 2016 amounted to approximately $0.2 million and $0.4 million, respectively. 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 $0.5 million and $1.5 million for the six months ended June 30, 2017 and for the year ended December 31, 2016, respectively.

Troubled Debt Restructurings

The Company has allocated approximately $0.6 million and $0.5 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings (“TDR”) at June 30, 2017 and December 31, 2016, respectively. The Company

had no additional lending commitments at June 30 , 2017 or December 31, 2016 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. There were no unfunded commitments on these loans at June 30, 2017 and December 31, 2016. The following table presents the TDRs by loan class at June 30, 2017 and December 31, 2016:

	Non-Accrual		Restructured and Accruing		Total
	(dollars in thousands)
June 30, 2017
Agricultural loans	$	3,841	$	4,158	$	7,999
Commercial real estate loans		636		320		956
Commercial loans		—		45		45
Total	$	4,477	$	4,523	$	9,000

December 31, 2016
Agricultural loans	$	7,947	$	3,925	$	11,872
Commercial real estate loans		1,400		325		1,725
Commercial loans		371		50		421
Total	$	9,718	$	4,300	$	14,018

The following table provides the number of loans modified in a troubled debt restructuring investment by class for the six months ended June 30, 2017 and 2016:

	For the Six Months Ended				For the Six Months Ended
	June 30, 2017				June 30, 2016
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
	(dollars in thousands)
Troubled debt restructurings:
Agricultural loans		3	$	546		3	$	5,515
Commercial real estate loans		—		—		2		559
Commercial loans		—		—		2		1,671
Total		3	$	546		7	$	7,745

The following table provides the troubled debt restructurings for the six months ended June 30, 2017 and 2016 grouped by type of concession:

	For the Six Months Ended				For the Six Months Ended
	June 30, 2017				June 30, 2016
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
	(dollars in thousands)
Agricultural loans
Payment concessions		2	$	221		—	$	—
Combination of extension of term and interest rate concessions		1		325		3		5,515
Commercial real estate loans
Extension of interest-only payments		—		—		2		559
Commercial loans
Extension of interest-only payments		—		—		2		1,671
Total		3	$	546		7	$	7,745

Credit Quality Indicators

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. Beginning in the third quarter of 2016, the substandard category was separated in to performing

and impaired subcategories to provide more detailed analysis of this category of loans. The Company analyzes agricultural, commercial, and commercial real estate loans individually by classifying the credits as to credit risk. The process of analyzing l oans 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 June 30, 2017 and December 31, 2016:

	As of June 30, 2017
	Sound/ Acceptable/ Satisfactory/ Low Satisfactory		Watch		Special Mention		Substandard Performing		Substandard Impaired		Total Loans
	(dollars in thousands)
Agricultural loans	$	469,488	$	131,371	$	9,351	$	25,192		8,576	$	643,978
Commercial real estate loans		228,088		33,907		7,235		9,973		3,832		283,035
Commercial loans		84,945		4,512		2,290		4,693		1,131		97,571
Residential real estate loans		47,034		3,905		—		—		—		50,939
Installment and consumer other		145		—		—		—		—		145
Total	$	829,700	$	173,695	$	18,876	$	39,858	$	13,539	$	1,075,668

	As of December 31, 2016
	Sound/ Acceptable/ Satisfactory/ Low Satisfactory		Watch		Special Mention		Substandard Performing		Substandard Impaired		Total Loans
	(dollars in thousands)
Agricultural loans	$	502,084	$	84,801	$	12,657	$	12,046	$	13,044	$	624,632
Commercial real estate loans		225,038		27,368		378		12,739		4,952		270,475
Commercial loans		74,221		6,624		1,632		4,091		3,376		89,944
Residential real estate loans		40,556		4,151		501		—		68		45,276
Installment and consumer other		159		—		—		—		—		159
Total	$	842,058	$	122,944	$	15,168	$	28,876	$	21,440	$	1,030,486

NOTE 5 – LOAN SERVICING RIGHTS

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 $589.0 million and $577.0 million at June 30, 2017 and December 31, 2016, respectively. The fair value of these rights were approximately $12.2 million at both June 30, 2017 and December 31, 2016. The fair value of servicing rights was determined using an assumed discount rate of 10 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:

	June 30,			December 31,
	2017			2016
	(dollars in thousands)
Loan servicing rights:
Balance, beginning of period	$	9,264		$	8,145
Additions		1,003			4,794
Disposals		(278	)		(1,552	)
Amortization		(1,096	)		(2,123	)
Balance, end of period	$	8,893		$	9,264

NOTE 6 – GOODWILL AND CORE DEPOSIT INTANGIBLE

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 impai rment 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 June 30, 2017 and December 31, 2016.

Core deposit intangible: Core deposit intangible, primarily related to acquired customer relationships, is amortized over their estimated finite lives. The core deposit intangible related to the Fox River Valley acquisition had a gross carrying amount of $1.8 million. Amortization on core deposit intangible was $636 thousand at June 30, 2017 and $360 thousand at December 31, 2016.

	June 30, 2017			December 31, 2016
	(dollars in thousands)
Core deposit intangible:
Gross carrying amount	$	1,801		$	1,801
Accumulated amortization		(636	)		(360	)
Net book value	$	1,165		$	1,441
Additions during the period	$	—		$	1,801

NOTE 7 – DEPOSITS

Deposits are summarized as follows at June 30, 2017 and December 31, 2016:

	June 30,		December 31,
	2017		2016
	(dollars in thousands)
Demand deposits	$	102,569	$	118,657
Savings		218,536		262,296
Certificates of deposit		672,558		596,565
Total deposits	$	993,663	$	977,518

At June 30, 2017 and December 31, 2016, brokered deposits amounted to $235.8 million and $193.6 million, respectively, and are included in savings and certificates of deposit categories.

NOTE 8—ADVANCES FROM FHLB AND OTHER BORROWINGS

The Bank had advances outstanding from the FHLB in the amount of $133.3 million and $107.9 million on June 30, 2017 and December 31, 2016, respectively. These advances, rates, and maturities were as follows:

					June 30,		December 31,
	Maturity	Rate			2017		2016
					(dollars in thousands)
Fixed rate, fixed term	01/03/2017		0.94	%	$	—	$	595
Fixed rate, fixed term	02/27/2017		0.76	%		—		5,000
Fixed rate, fixed term	03/15/2017		1.46	%		—		2,000
Fixed rate, fixed term	06/16/2017		0.80	%		—		10,000
Fixed rate, fixed term	08/11/2017		0.83	%		5,000		5,000
Fixed rate, fixed term	11/15/2017		0.95	%		3,800		3,800
Fixed rate, fixed term	12/29/2017		1.27	%		3,000		3,000
Fixed rate, fixed term	01/02/2018		1.23	%		1,000		1,000
Fixed rate, fixed term	01/12/2018		0.85	%		8,000		8,000
Fixed rate, fixed term	02/12/2018		0.91	%		5,000		5,000
Fixed rate, fixed term	04/23/2018		1.07	%		2,300		2,300
Fixed rate, fixed term	06/18/2018		0.93	%		10,000		10,000
Fixed rate, fixed term	07/09/2018		1.41	%		15,000		—
Fixed rate, fixed term	07/16/2018		1.21	%		762		762
Fixed rate, fixed term	07/16/2018		1.21	%		1,038		1,038
Fixed rate, fixed term	08/20/2018		1.15	%		1,000		1,000
Fixed rate, fixed term	08/20/2018		1.15	%		800		800
Fixed rate, fixed term	08/20/2018		1.27	%		2,200		2,200
Fixed rate, fixed term	11/09/2018		1.47	%		10,000		—
Fixed rate, fixed term	12/31/2018		1.65	%		3,000		3,000
Fixed rate, fixed term	02/27/2019		1.47	%		5,000		5,000
Fixed rate, fixed term	03/08/2019		1.54	%		10,000		—
Fixed rate, fixed term	07/15/2019		1.11	%		8,000		8,000
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		—
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
					$	133,300	$	107,895

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, certain securities available for sale, and stock of the FHLB.

The Bank had no irrevocable letters of credit with the FHLB as of June 30, 2017 and December 31, 2016.

Future maturities of borrowings were as follows:

	June 30,		December 31,
	2017		2016
	(dollars in thousands)
1 year or less	$	38,100	$	29,395
1 to 2 years		48,800		35,100
2 to 3 years		15,000		15,000
3 to 4 years		26,400		18,400
Over 4 years		5,000		10,000
	$	133,300	$	107,895

As of June 30, 2017 and December 31, 2016, the Bank also had a $50.0 million line-of-credit available with the Federal Reserve Bank of Chicago. Borrowings under this line of credit are limited by the amount of securities pledged by the Bank as collateral, which totaled $10.6 million and $11.3 million at June 30, 2017 and December 31, 2016, respectively. There were no outstanding advances included in other borrowings at June 30, 2017 and December 31, 2016, respectively.

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 June 30, 2017 and December 31, 2016, the amounts of these borrowings were $1.3 million and $2.0 million, respectively.

Also included in other borrowings is the capital lease for our full service banking location in Appleton, Wisconsin that was assumed in connection with our merger of Fox River Valley. Under the terms of the current triple-net lease the Company is obligated to pay monthly rent of $15 thousand, and the lease term expires in April, 2018. As of June 30, 2017, liability remaining under the capital lease was $118 thousand, and the amortization related to the lease was $71 thousand for the six months ended June 30, 2017. As of December 31, 2016, liability remaining under the capital lease was $189 thousand, and the amortization related to the lease was $85 thousand for the year ended December 31, 2016.

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

	June 30,			December 31,
	2017			2016
	(dollars in thousands)
Balance outstanding at end of period	$	1,443		$	2,152
Average amount outstanding during the period		1,734			3,047
Maximum amount outstanding at any month end		1,825			3,930
Weighted average interest rate during the period		5.88	%		5.30	%
Weighted average interest rate at end of period		5.97	%		5.32	%

NOTE 9 – EQUITY INCENTIVE PLAN

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 June 30, 2017, 23,254 options or shares of restricted stock have been granted 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 June 30 , 2017 and changes in the Plan during the six months ended June 30, 2017 were as follows:

	June 30, 2017
	Number of Options			Weighted-Average Exercise Price		Aggregate Intrinsic Value ⁽¹⁾
	(dollars in thousands except option and per share data)
Outstanding, beginning of year		291,059		$	15.18
Granted		17,673			26.74
Exercised		(48,584	)		12.68
Forfeited/expired		(4,868	)		21.69
Outstanding, end of period		255,280		$	16.34	$	1,955
Options exercisable at period-end		163,698		$	14.54	$	1,549
Weighted-average fair value of options granted during the period ⁽²⁾				$	9.77

(1)

The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on June 30, 2017. This amount changes based on changes in the market value of the Company’s stock.

(2)	The fair value (present value of the estimated future benefit to the option holder) of each option grant is estimated on the date of grant using the Black-Scholes option pricing model.

Activity in restricted stock awards (“RSA”) and restricted stock units (“RSU”) for the six months ended June 30, 2017 was as follows:

	June 30, 2017
	RSAs			Weighted Average Grant Price
Outstanding, beginning of year		38,593		$	17.27
Granted		5,988			27.31
Vested		(2,416	)		19.77
Forfeited/expired		(948	)		27.31
Outstanding, end of period		41,217		$	18.35

	June 30, 2017
	RSUs		Weighted Average Grant Price
Outstanding, beginning of year		—	$	—
Granted		8,691		25.53
Vested		—		—
Forfeited/expired		—		—
Outstanding, end of period		8,691	$	25.53

For the six months ended June 30, 2017 and 2016, share-based compensation expense, including options and restricted stock awards, applicable to the Plan was $239 thousand and $236 thousand, respectively.

As of June 30, 2017, 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 1.98 years.

NOTE 10 – REGULATORY MATTERS

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 s pecific 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 judg ments 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 June 30, 2017 and December 31, 2016, that the Company and the Bank met all capital adequacy requirements to which they were subject.

As of June 30, 2017, 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 Company’s and 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)
June 30, 2017
Total Capital (to risk weighted assets):
Consolidated	$	159,881		13.32	%	$	111,003		9.25	%	No t applicable
Bank		155,037		12.93	%		110,945		9.25	%	$	119,940		10.00	%
Tier 1 Capital (to risk weighted assets):
Consolidated		145,771		12.15	%		87,002		7.25	%	Not applicable
Bank		140,927		11.75	%		86,957		7.25	%		95,952		8.00	%
Tier 1 Capital (to average assets):
Consolidated		145,771		11.62	%		50,167		4.00	%	Not applicable
Bank		140,927		11.25	%		50,129		4.00	%		62,661		5.00	%
Tier 1 Common Equity Ratio (to risk weighted assets):
Consolidated		122,301		10.19	%		69,002		5.75	%	Not applicable
Bank		140,927		11.75	%		68,966		5.75	%		77,961		6.50	%

December 31, 2016
Total Capital (to risk weighted assets):
Consolidated	$	154,335		13.59	%	$	97,949		8.625	%	Not applicable
Bank		149,278		13.23	%		97,295		8.625	%	$	112,805		10.00	%
Tier 1 Capital (to risk weighted assets):
Consolidated		141,206		12.43	%		75,236		6.625	%	Not applicable
Bank		136,148		12.07	%		74,734		6.625	%		90,244		8.00	%
Tier 1 Capital (to average assets):
Consolidated		141,206		11.48	%		49,183		4.00	%	Not applicable
Bank		136,148		11.08	%		49,144		4.00	%		61,430		5.00	%
Tier 1 Common Equity Ratio (to risk weighted assets):
Consolidated		117,755		10.37	%		58,201		5.125	%	Not applicable
Bank		136,148		12.07	%		57,813		5.125	%		73,323		6.50	%

(a)

The ratios for June 30, 2017 and December 31, 2016 include a capital conservation buffer of 1.25% and 0.625%, respectively.

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 is subject to a three year phase-in period that began on January 1, 2016 and will be fully phased in on January 1, 2019 at 2.5%. The required phase-in capital conservation buffer during

201 7 is 1 .25%. At the present time, the ratios for the Company and the Bank are sufficient to meet the full y phased-in c onservation buffer.

NOTE 11 – FAIR VALUE MEASUREMENTS

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 be 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:

Cash and Cash Equivalents and Interest-Bearing Deposits in Banks

The carrying amounts of cash and short-term instruments approximate fair values based on the short-term nature of the assets.

Fair values of other interest-bearing deposits in banks are estimated using discounted cash flow analyses based on current rates for similar types of deposits.

Securities Available for Sale

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 availa ble, 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.

Loans

For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for certain mortgage loans (e.g., one-to-four family residential), credit card loans, and other consumer loans are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. Fair values for other loans (e.g., commercial and agricultural loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for non-performing loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Loans Held for Sale

The carrying value of loans held for sale generally approximates fair value based on the short-term nature of the assets. If management identifies a loan held for sale that will ultimately sell at a value less than its carrying value, it is recorded at the estimated value.

Loan Servicing Rights

Fair value is based on market prices for comparable loan servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income.

Other Real Estate Owned

Loans on which the underlying collateral has been repossessed are adjusted to fair value upon transfer to other real estate owned. Subsequently, other real estate owned is carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. Due to the significance of the unobservable inputs, all other real estate owned is classified as Level 3.

Deposits

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, statement savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts of variable-rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Other Borrowings

The carrying amounts of federal funds purchased, other borrowings, and other short-term borrowings maturing within 90 days approximate their fair values.

Advances from the Federal Home Loan Bank

Current market rates for debt with similar terms and remaining maturities are used to estimate fair value of advances from the Federal Home Loan Bank (the “FHLB”). Fair values are estimated using discounted cash flow analyses based on current market rates for similar types of borrowing arrangements.

Subordinated Debentures

The fair values of these debt instruments utilize a discounted cash flow analysis based on an estimate of current interest rates being offered by instruments with similar terms and credit quality. Since the market for these instruments is limited, the internal evaluation represents a Level 3 measurement and approximates fair value.

Accrued Interest

The carrying amounts approximate fair value.

Commitments to Extend Credit and Standby Letters of Credit

As of June 30, 2017 and December 31, 2016, the carrying and fair values of the commitments to extend credit and standby letters of credit are not considered significant.

Assets measured at fair value on a recurring basis are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(dollars in thousands)
June 30, 2017
Securities available for sale:
Municipal securities	$	—	$	38,643	$	—	$	38,643
Mortgage-backed securities		—		73,038		—		73,038
Asset-backed securities		—		3,467		—		3,467
Total assets at fair value	$	—	$	115,148	$	—	$	115,148
December 31, 2016
Securities available for sale:
U.S. government and agency securities	$	—	$	1,000	$	—	$	1,000
Municipal securities		—		45,456		—		45,456
Mortgage-backed securities		—		73,308		—		73,308
Asset-backed securities		—		3,673		—		3,673
Total assets at fair value	$	—	$	123,437	$	—	$	123,437

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:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Impairment Losses
	(dollars in thousands)
June 30, 2017
Impaired loans	$	—	$	—	$	12,817	$	722
Other real estate owned		—		—		6,917		78
Total assets at fair value	$	—	$	—	$	19,734	$	800
December 31, 2016
Impaired loans	$	—	$	—	$	20,104	$	1,336
Other real estate owned		—		—		3,161		480
Total assets at fair value	$	—	$	—	$	23,265	$	1,816

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

June 30, 2017
	Valuation Techniques	Unobservable Inputs	Range (Average)
Impaired loans	Evaluation of collateral	Estimation of value	NM*
Other real estate owned	Appraisal	Appraisal adjustment	10%-41% (24%)

December 31, 2016
	Valuation Techniques	Unobservable Inputs	Range (Average)
Impaired loans	Evaluation of collateral	Estimation of value	NM*
Other real estate owned	Appraisal	Appraisal adjustment	7%-39% (21%)

Not Meaningful. Evaluations of the underlying assets are completed for each impaired loan with a specific reserve. The types of collateral vary widely and could include accounts receivable, inventory, a variety of equipment, and real estate. Collateral evaluations are reviewed and discounted as appropriate based on knowledge of the specific type of collateral. In the case of real estate, an independent appraisal may be obtained. Types of discounts considered include aging of receivables, condition of the collateral, potential market for the collateral, and estimated disposal costs. These discounts will vary from loan to loan, thus providing a range would not be meaningful.

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

	June 30,				December 31,
	2017				2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Input Level
	(dollars in thousands)
Financial assets:
Cash and cash equivalents	$	35,939	$	35,939	$	42,679	$	42,679	1
Securities available for sale		115,148		115,148		123,437		123,437	2
FHLB Stock		4,534		4,534		5,688		5,688	2
Loans, net of allowance for loan losses		1,062,165		1,067,742		1,017,841		1,022,391	3
Loans held for sale		8,036		8,036		1,162		1,162	3
Accrued interest receivable		3,654		3,654		3,151		3,151	2
Loan servicing rights		8,893		12,192		9,264		12,194	3
Financial liabilities:
Deposits:
Time		672,558		677,996		596,565		600,153	3
Other deposits		321,105		320,883		380,953		377,980	1
Other borrowings		1,443		1,443		2,152		2,152	3
Advances from FHLB		133,300		134,265		107,895		108,517	3
Subordinated debentures		15,487		15,487		15,451		15,451	3
Accrued interest payable		2,069		2,069		1,879		1,879	2

NOTE 1 2 – OTHER REAL ESTATE OWNED

Changes in other real estate owned were as follows:

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
		2017			2016			2017			2016
	(dollars in thousands)
Balance, beginning of period	$	6,995		$	2,947		$	3,161		$	2,872
Assets foreclosed		—			—			4,511			159
Assets acquired		—			1,951			—			1,951
Write-down of other real estate owned		(78	)		—			(78	)		(84	)
Net gain on sales of other real estate owned		27			89			402			89
Proceeds from sale of other real estate owned		(27	)		(2,198	)		(1,079	)		(2,198	)
Balance, end of period	$	6,917		$	2,789		$	6,917		$	2,789

Expenses (income) applicable to other real estate owned included in non-interest expense include the following:

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
		2017			2016			2017			2016
	(dollars in thousands)
Net gain on sales of other real estate owned	$	(27	)	$	(89	)	$	(402	)	$	(89	)
Write-down of other real estate owned		78			—			78			84
Operating expenses, net of rental income		25			48			69			79
	$	76		$	(41	)	$	(255	)	$	74

NOTE 13 – COMMITMENTS AND CONTINGENCIES

During the first quarter of 2017, the Company purchased and began renovating a building in Green Bay, Wisconsin in which to relocate its existing Green Bay branch. The project was completed and the renovated branch opened on July 31, 2017. The total project cost approximately $1.7 million, of which $1.5 had been incurred at June 30, 2017.

NOTE 14 – SUBSEQUENT EVENTS

Management evaluated subsequent events through the date the financial statements were issued. There were no significant events or transactions occurring after June 30, 2017, but prior to August 8, 2017, that provided additional evidence about conditions that existed at June 30, 2017.

On July 24, 2017, the Company received approval from the Federal Deposit Insurance Corporation to dissolve the ICB Investment Corp. subsidiary. Upon the dissolution, which is expected to be completed by December 31, 2017, the assets of the subsidiary will be transferred to the Bank.

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:

• adverse changes in economic conditions in our market area and to the agriculture market generally, dairy in particular;

• adverse changes in the financial services industry and national and local real estate markets (including real estate values);

• competition among depository and other financial institutions;

• risks related to a high concentration of dairy-related collateral located in our market area;

• credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for loan losses and provision for loan losses;

• changes in U.S. monetary policy, the level and volatility of interest rates, the capital markets and other market conditions that may affect, among other things, our liquidity, our net interest margin, our funding sources and the value of our assets and liabilities;

• our success in introducing new financial products;

• our ability to attract and maintain deposits;

• fluctuations in the demand for loans, which may be affected by numerous factors, including commercial conditions in our market areas and by declines in the value of real estate in our market areas;

• changes in consumer spending, borrowing and saving habits that may affect deposit levels;

• costs or difficulties related to the integration of the business of acquired entities and the risk that the anticipated benefits, cost savings and any other savings from such transactions may not be fully realized or may take longer than expected to realize;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• any negative perception of our reputation or financial strength;

• our ability to raise additional capital on acceptable terms when needed;

• changes in laws or government regulations or policies affecting financial institutions, including increased costs of compliance with such laws and regulations;

• changes in accounting policies and practices;

• our ability to retain key members of our senior management team;

• the failure or security breaches of computer systems on which we depend;

• the ability of key third-party service providers to perform their obligations to us;

• the impact of any claims or legal actions, including any effect on our reputation;

• each of the factors and risks identified in the “Risk Factors” section included under Item 1A. of Part I of our most recent Annual Report on Form 10-K.

These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s 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 County undertakes no obligation to update any forward-looking statements contained in this report to reflect new information or event s or conditions after the date hereof.

Overview

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.

On May 13, 2016, the Company acquired Fox River Valley and its wholly owned banking subsidiary, The Business Bank. The Company paid aggregate merger consideration of approximately $14.45 million in cash and 712,830 shares of the Company’s common stock.

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 shareholder of ICB Investment Corp., a Nevada corporation, and 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 utilize non-GAAP metrics such as efficiency ratio, return on average common shareholders’ equity, income before provision for loan losses and income tax expense. We are also required to maintain appropriate regulatory leverage and risk-based capital ratios.

Operational Overview

•

Net income for the three months ended June 30, 2017 was $2.1 million compared to $1.9 million for the three months ended June 30, 2016, and $4.7 million for the six months ended June 30, 2017 compared to $4.1 million for the six months ended June 30, 2016.

•

Net interest income increased by $3.5 million from $15.2 million for the six months ended June 30, 2016, to $18.8 million for the six months ended June 30, 2017.

•

Income before provision for loan losses and income tax expense was $4.8 million for the three months ended June 30, 2017, compared to $3.6 million for the three months ended June 30, 2016, and $9.8 million for the six months ended June 30, 2017, compared to $7.9 million for the six months ended June 30, 2016, an increase of 32.2% and 24.1%, respectively.

•

Total loans were $1.1 billion at June 30, 2017 compared to $1.0 billion at December 31, 2016, and $960.3 million at June 30, 2016, an increase of 4.4% and 12.0%, respectively.

•

Non-performing assets have decreased $3.9 million since December 31, 2016 to $18.9 million at June 30, 2017, a decrease of 17.2%, and have decreased $7.8 million, or 29.2%, since June 30, 2016.

Selected Financial Data

	Three Months Ended						Six Months Ended						Year Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			December 31, 2016
	(unaudited)						(unaudited)
	(Dollars in thousands, except per share data)
Selected Income Statement Data:
Interest income	$	12,952		$	10,700		$	25,088		$	19,818		$	45,581
Interest expense		3,395			2,396			6,333			4,577			10,014
Net interest income		9,557			8,304			18,755			15,241			35,567
Provision for loan losses		1,524			470			2,285			1,282			2,959
Net interest income after provision for loan losses		8,033			7,834			16,470			13,959			32,608
Non-interest income		1,856			2,758			3,572			4,695			8,715
Non-interest expense		6,641			7,453			12,536			12,044			24,146
Income tax expense		1,190			1,194			2,816			2,489			6,483
Net income	$	2,058		$	1,945		$	4,690		$	4,121		$	10,694

Per Common Share Data:
Basic earnings per common share	$	0.30		$	0.31		$	0.68		$	0.67		$	1.65
Diluted earnings per common share	$	0.29		$	0.30		$	0.68		$	0.65		$	1.61
Cash dividends per common share	$	0.06		$	0.05		$	0.12		$	0.10		$	0.20
Book value per share, end of period	$	19.31		$	18.15		$	19.31		$	18.15		$	18.72
Tangible book value per share, end of period ⁽¹⁾	$	18.38		$	17.07		$	18.38		$	17.07		$	17.74
Weighted average common shares - basic		6,629,235			6,071,027			6,612,591			5,975,716			6,260,040
Weighted average common shares - diluted		6,714,193			6,185,358			6,701,578			6,085,716			6,415,204
Common shares outstanding, end of period		6,641,159			6,501,031			6,641,159			6,501,031			6,586,335

Selected Balance Sheet Data (at period end):
Total assets							$	1,286,634		$	1,160,589		$	1,242,670
Securities available-for-sale								115,148			129,036			123,437
Total loans								1,075,668			960,310			1,030,486
Allowance for loan losses								(13,503	)		(10,791	)		(12,645	)
Total deposits								993,663			892,535			977,518
Other borrowings and FHLB advances								134,743			120,797			110,047
Subordinated debentures								15,487			15,407			15,451
Total shareholders' equity								136,254			125,789			131,288

Performance Ratios:
Return on average assets		0.65	%		0.75	%		0.75	%		0.85	%		0.98	%
Return on average common shareholders' equity ⁽¹⁾		6.15	%		6.72	%		7.13	%		7.76	%		9.51	%
Equity to assets ratio		10.59	%		10.84	%		10.59	%		10.84	%		10.56	%
Net interest margin		3.13	%		3.32	%		3.10	%		3.26	%		3.35	%
Interest rate spread		2.92	%		3.11	%		2.90	%		3.05	%		3.16	%
Non-interest income to average assets		0.59	%		1.06	%		0.57	%		0.97	%		0.80	%
Non-interest expense to average assets		2.11	%		2.86	%		2.01	%		2.48	%		2.21	%
Net overhead ratio ⁽²⁾		1.52	%		1.80	%		1.43	%		1.51	%		1.41	%
Efficiency ratio ⁽¹⁾		57.74	%		68.18	%		57.60	%		60.44	%		53.72	%
Dividend payout ratio		20.69	%		16.67	%		17.65	%		15.38	%		12.42	%

Asset Quality Ratios:
Non-performing loans to total loans		1.15	%		2.49	%		1.15	%		2.49	%		1.95	%
Allowance for loan losses to:
Total loans		1.26	%		1.12	%		1.26	%		1.12	%		1.23	%
Non-performing loans		108.79	%		45.07	%		108.79	%		45.07	%		62.89	%
Net charge-offs to average loans		0.14	%		0.10	%		0.14	%		0.11	%		0.08	%
Non-performing assets to total assets ⁽³⁾		1.47	%		2.30	%		1.47	%		2.30	%		1.84	%

	Three Months Ended						Six Months Ended						Year Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			December 31, 2016
	(unaudited)						(unaudited)
Capital Ratios:
Shareholders' common equity to assets		9.97	%		10.15	%		9.97	%		10.15	%		9.92	%
Tier 1 risk-based capital (Bank)		11.75	%		12.33	%		11.75	%		12.33	%		12.07	%
Total risk-based capital (Bank)		12.93	%		13.41	%		12.93	%		13.41	%		13.23	%
Tier 1 Common Equity ratio (Bank)		11.75	%		12.33	%		11.75	%		12.33	%		12.07	%
Leverage ratio (Bank)		11.25	%		11.34	%		11.25	%		11.34	%		11.08	%

(1)	Tangible book value per share, return on average common shareholders’ equity, and the efficiency ratio are not recognized under GAAP and are therefore considered to be non-GAAP financial measures. See below for reconciliations of these financial measures to their most comparable GAAP measures.

(2)	Net overhead ratio represents the difference between noninterest expense and noninterest income, divided by average assets.

(3)	Non-performing assets consist of nonaccrual loans and other real estate owned.

Non-GAAP Financial Measures

“Efficiency ratio” is defined as non-interest expenses, 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.

	Three Months Ended						Six Months Ended						Year Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			December 31, 2016
	(dollars in thousands)
Efficiency Ratio GAAP to Non-GAAP reconciliation:
Non-interest expense	$	6,641		$	7,453		$	12,536		$	12,044		$	24,146
Less: net gain (loss) on sales and write-downs of OREO		(51	)		89			324			5			(358	)
Adjusted non-interest expense (non-GAAP)	$	6,590		$	7,542		$	12,860		$	12,049		$	23,788

Net interest income	$	9,557		$	8,304		$	18,755		$	15,241		$	35,567
Non-interest income		1,856			2,758			3,572			4,695			8,715
Operating revenue	$	11,413		$	11,062		$	22,327		$	19,936		$	44,282
Efficiency ratio		57.74	%		68.18	%		57.60	%		60.44	%		53.72	%

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.

	Three Months Ended						Six Months Ended						Year Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016			December 31, 2016
Return on Average Common Shareholders' Equity GAAP to Non-GAAP reconciliation:
Return on average shareholders' equity		6.04	%		6.53	%		6.94	%		7.23	%		8.99	%
Effect of excluding average preferred shareholders' equity		0.11	%		0.19	%		0.19	%		0.53	%		0.52	%
Return on average common shareholders' equity		6.15	%		6.72	%		7.13	%		7.76	%		9.51	%

Tangible net book value per share is a non-GAAP financial measure based on GAAP amounts. In our judgment, the adjustments made to net book value allow investors to better assess our capital adequacy and net worth by removing the effect of intangible assets that are unrelated to our core business.

	Three Months Ended				Six Months Ended				Year Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016		December 31, 2016
	(dollars in thousands, except per share data)
Tangible book value per share reconciliation:
Common equity	$	128,254	$	117,789	$	128,254	$	117,789	$	123,288
Less: Goodwill		5,038		5,038		5,038		5,038		5,038
Less: Core deposit intangible, net of amortization		1,165		1,747		1,165		1,747		1,441
Tangible common equity	$	122,051	$	111,004	$	122,051	$	111,004	$	116,809
Common shares outstanding		6,641,159		6,501,031		6,641,159		6,501,031		6,586,335
Tangible book value per share	$	18.38	$	17.07	$	18.38	$	17.07	$	17.74

Results of Operations

Our operating revenue is comprised of interest income and non-interest income. Net interest income increased by 15.1% to $9.6 million for the three months ended June 30, 2017 compared to the three months ended June 30, 2016, primarily attributable to loan growth of 12.0% between the same periods. Interest income increased to $13.0 million for the second quarter of 2017 compared to $10.7 million for the second quarter of 2016. Interest income from loans increased $2.1 million between the two periods despite a decrease in yield from 4.66% for the second quarter of 2016 to 4.63% for the second quarter of 2017. The increase was partially offset by an increase in interest expense from $2.4 million for the second quarter of 2016 to $3.4 million for the second quarter of 2017, which was the result of both an increase in the volume of deposits and borrowings and an increase in the rates paid between the two periods. The rates paid on deposits increased from 1.13% for the second quarter of 2016 to 1.28% for the second quarter of 2017. Non-interest income for the three months ended June 30, 2017 decreased 32.7% to $1.9 million from $2.8 million for the three months ended June 30, 2016, primarily as a result of a decrease in loan servicing fees due to a fewer sales of secondary market loans resulting from procedural changes by the Farm Service Agency. Non-interest expense also decreased 10.9% to $6.6 million for the three months ended June 30, 2017 compared to $7.5 million for the same period in 2016. The decrease in non-interest expense is primarily due to the elimination of one-time merger related expenses that occurred during the second quarter of 2016 in connection with our acquisition of Fox River Valley Bancorp, Inc. (“Fox River Valley”) in May 2016, offset by $0.7 million increase in employee compensation and benefits and a $0.3 million loss on the sale of our Green Bay, Wisconsin branch.

For the six months ended June 30, 2017, net interest income was $18.8 million, an increase of $3.5 million, or 23.1% from the six months ended June 30, 2016. Non-interest income decreased to $3.6 million for the first two quarters of 2017 which represents a 23.9% decrease from the six month ended June 30, 2016, primarily from the previously discussed decrease in secondary market loan sales. Non-interest expense increased to $12.5 million for the six months ended June 30, 2017, which is a slight increase from $12.0 million for the six months ended June 30, 2016, which is directly related to the approximately 35% increase in employees since the acquisition of Fox River Valley, and the related operating costs of the two Fox River Valley branches that were acquired in May 2016.

Analysis of Net Interest Income

Net interest income is the largest component of our income and is dependent on the amounts of and yields on interest-earning assets as compared to the amounts of and rates paid on interest-bearing liabilities. The following table reflects the components of net interest income for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended
	June 30, 2017								June 30, 2016
	Average Balance ⁽¹⁾			Income/ Expense		Yields/ Rates			Average Balance ⁽¹⁾			Income/ Expense		Yields/ Rates
	(dollars in thousands)
Assets
Investment securities	$	113,453		$	544		1.92	%	$	103,809		$	445		1.71	%
Loans ⁽²⁾		1,064,808			12,328		4.63	%		876,331			10,205		4.66	%
Interest bearing deposits due from other banks		44,218			80		0.72	%		21,651			50		0.92	%
Total interest-earning assets	$	1,222,479		$	12,952		4.24	%	$	1,001,791		$	10,700		4.27	%

Allowance for loan losses		(14,162	)							(11,276	)
Other assets		52,639								53,636
Total assets	$	1,260,956							$	1,044,151

Liabilities
Savings, NOW, money market, interest checking	$	235,196		$	370		0.63	%	$	175,672		$	232		0.53	%
Time deposits		643,236			2,436		1.51	%		528,228			1,763		1.34	%
Total interest-bearing deposits	$	878,432		$	2,806		1.28	%	$	703,900		$	1,995		1.13	%
Other borrowings		1,605			23		5.73	%		3,024			45		5.95	%
FHLB advances		131,102			441		1.35	%		105,658			287		1.09	%
Junior subordinated debentures		15,470			125		3.23	%		13,973			69		1.98	%
Total interest-bearing liabilities	$	1,026,609		$	3,395		1.32	%	$	826,555		$	2,396		1.16	%

Non-interest bearing deposits		89,930								90,328
Other liabilities		8,162								8,121
Total liabilities	$	1,124,701							$	925,004

SBLF preferred stock ⁽³⁾		-								-
Shareholders' equity		136,255								119,147
Total liabilities and equity	$	1,260,956							$	1,044,151

Net interest income				$	9,557							$	8,304
Interest rate spread ⁽⁴⁾							2.92	%							3.11	%
Net interest margin ⁽⁵⁾							3.13	%							3.32	%
Ratio of interest-earning assets to interest-bearing liabilities		1.19								1.21

	Six Months Ended
	June 30, 2017								June 30, 2016
	Average Balance ⁽¹⁾			Income/ Expense		Yields/ Rates			Average Balance ⁽¹⁾			Income/ Expense		Yields/ Rates
	(dollars in thousands)
Assets
Investment securities	$	116,139		$	1,065		1.83	%	$	92,871		$	794		1.71	%
Loans ⁽²⁾		1,054,131			23,882		4.53	%		822,629			18,935		4.60	%
Interest bearing deposits due from other banks		40,607			141		0.69	%		20,382			89		0.87	%
Total interest-earning assets	$	1,210,877		$	25,088		4.14	%	$	935,882		$	19,818		4.24	%

Allowance for loan losses		(13,604	)							(11,056	)
Other assets		52,766								47,361
Total assets	$	1,250,039							$	972,187

Liabilities
Savings, NOW, money market, interest checking		246,638			725		0.59	%		175,141			441		0.50	%
Time deposits		627,046			4,518		1.44	%		484,228			3,366		1.39	%
Total interest-bearing deposits	$	873,684		$	5,243		1.20	%	$	659,369		$	3,807		1.15	%
Other borrowings		1,734			51		5.88	%		3,498			93		5.33	%
FHLB advances		123,860			794		1.28	%		94,400			542		1.15	%
Junior subordinated debentures		15,470			245		3.17	%		13,172			135		2.05	%
Total interest-bearing liabilities	$	1,014,748		$	6,333		1.24	%	$	770,439		$	4,577		1.19	%

Non-interest bearing deposits		91,626								75,340
Other liabilities		8,500								7,973
Total liabilities		1,114,874								853,752

SBLF preferred stock ⁽³⁾		-								4,368
Shareholders' equity		135,165								114,067
Total liabilities and equity	$	1,250,039							$	972,187

Net interest income				$	18,755							$	15,241
Interest rate spread ⁽⁴⁾							2.90	%							3.05	%
Net interest margin ⁽⁵⁾							3.10	%							3.26	%
Ratio of interest-earning assets to interest -bearing liabilities		1.19								1.21

(1)	Average balances are calculated on amortized cost.

(2)	Includes loan fee income, nonaccruing loan balances, and interest received on such loans.

(3)	The SBLF preferred stock refers to the 15,000 shares of our Series C noncumulative perpetual preferred stock issued to the U.S. Treasury through the U.S. Treasury’s Small Business Lending Fund Program, which were redeemed on February 23, 2016.

(4)	Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(5)	Net interest margin represents net interest income divided by average total interest-earning assets.

Rate/Volume Analysis

The following tables present 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 June 30, 2017 v. 2016
	Increase (Decrease) Due to Change in Average
	Volume			Rate			Net
	(dollars in thousands)
Interest Income:
Investment securities	$	44		$	55		$	99
Loans		2,182			(59	)		2,123
Federal funds sold and interest-bearing deposits with banks		38			(8	)		30
Total interest income		2,264			(12	)		2,252
Interest Expense:
Savings, NOW, money market and interest checking		88			50			138
Time deposits		416			257			673
Other borrowings		(20	)		(2	)		(22	)
FHLB advances		78			76			154
Junior subordinated debentures		8			48			56
Total interest expense		570			429			999
Net interest income	$	1,694		$	(441	)	$	1,253


	Six Months Ended June 30, 2017 v. 2016
	Increase (Decrease) Due to Change in Average
	Volume			Rate			Net
	(dollars in thousands)
Interest Income:
Investment securities	$	210		$	61		$	271
Loans		5,240			(293	)		4,947
Federal funds sold and interest-bearing deposits with banks		65			(13	)		52
Total interest income		5,515			(245	)		5,270
Interest Expense:
Savings, NOW, money market and interest checking		201			83			284
Time deposits		1,025			127			1,152
Other borrowings		(53	)		11			(42	)
FHLB advances		183			69			252
Junior subordinated debentures		27			83			110
Total interest expense		1,383			373			1,756
Net interest income	$	4,132		$	(618	)	$	3,514

Provision for Loan Losses

Based on our analysis of the components of the allowance for loan losses, management recorded a provision for loan losses of $1.5 million for the three months ended June 30, 2017 compared to a provision of $0.5 million for the three months ended June 30, 2016. The increase in the provision between these two periods is primarily the result of a $1.5 million charge-off from one commercial customer relationship.

For the six months ended June 30, 2017, the provision for loan losses was $2.3 million compared to $1.3 million for the six months ended June 30, 2016. Despite the increase in the provision, overall credit quality remains strong year-over-year. The specific reserve related to impaired loans decreased 59.9% from $1.8 million at June 30, 2016 to $0.7 million at June 30, 2017. In addition

non-performing assets have decreased $7.8 million since June 30, 2016 to $18.9 million at June 30 , 2017, and improvement of 29.2%. As a percentage of total loans, non-performing assets has improved to 1.76% at June 30, 2017 from 2.78% at June 30, 2016, which is the lowest level since December, 2013.

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, 2016. 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 $13.5 million , or 1.26% of total loans, was appropriate as of June 30, 2017. This is compared to an allowance for loan losses of $10.8 million, or 1.12% of total loans, at June 30, 2016, and $12.6 million, or 1.23% of total loans, at December 31, 2016.

Non-Interest Income

Non-interest income for the three months ended June 30, 2017 decreased by 32.7% from the three months ended June 30, 2016 from $2.8 million to $1.9 million. The decrease was the result of a decrease in loan servicing rights of $1.0 million which was due to a Farm Service Agency procedural change that has delayed our secondary market sale activity and a slowdown in farm expansions.

For the six months ended June 30, 2017, non-interest income decreased by 23.9% from $4.7 million to $3.6 million. As noted above, the decrease was the result of a decrease in loan servicing rights.

Loan servicing rights are included in loan servicing fees in our consolidated statement of operations. The following table reflects the components of non-interest income for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended					Six Months Ended
	June 30, 2017			June 30, 2016		June 30, 2017			June 30, 2016
	(dollars in thousands)
Service charges	$	399		$	411	$	724		$	688
Gain on sale of loans, net		24			61		49			161
Loan servicing fees		1,437			1,316		2,847			2,613
Loan servicing rights		(167	)		816		(372	)		966
Income on other real estate owned		20			9		38			14
Other		143			145		286			253
Total non-interest income	$	1,856		$	2,758	$	3,572		$	4,695

Non-Interest Expense

Non-interest expense decreased 10.9% to $6.6 million for the three months ended June 30, 2017 compared to $7.5 million for the three months ended June 30, 2016. The decrease is due merger related to information processing and other costs associated with the acquisition of Fox River Valley Bancorp, Inc. in 2016 of $1.5 million, which were partially offset by increased operating costs associated with the two additional branches acquired through the merger, including an increase of $141 thousand in amortization of core deposit intangible, and a 24.0% increase in employee compensation and benefits from the three months ended June 30, 2016 to the three months ended June 30, 2017. Additionally, during the three months ended June 30, 2017 a loss of $0.3 million was recorded on the sale of a branch building.

For the six months ended June 30, 2017, non-interest expense increased by 4.1% to $12.5 million from $12.0 million for the six months ended June 30, 2016. As noted above, the increase is primarily the result of increased operating costs associated with two additional branches acquired through the merger, including an increase of $282 thousand in amortization of core deposit intangible and a 29.5% increase in employee compensation and benefits from the six months ended June 30, 2016. In addition, during the first quarter of 2017, a $0.2 million severance package was paid to a former senior vice president.

The following table reflects the components of our non-interest expense for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
	(dollars in thousands)
Employee compensation and benefits	$	3,833		$	3,092		$	7,890		$	6,093
Occupancy		180			114			357			207
Information processing		397			1,477			759			1,757
Professional fees		423			725			837			1,034
Business development		286			145			456			285
FDIC assessment		96			124			188			261
Other real estate owned expenses		44			57			107			93
Write-down of other real estate owned		78			—			78			84
Net loss (gain) on other real estate owned		(27	)		(89	)		(402	)		(89	)
Depreciation and amortization		323			187			666			282
Other		1,008			1,621			1,600			2,037
Total non-interest expense	$	6,641		$	7,453		$	12,536		$	12,044

Income taxes

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 2013.

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

Income tax expense for the six months ended June 30, 2017 and 2016 was $2.8 million and $2.5 million, which represents an effective tax rate of 37.5% and 37.7%, respectively.

Financial Condition

Total assets increased $44.0 million, or 3.5%, from $1.2 billion at December 31, 2016 to $1.3 billion at June 30, 2017. Total loan growth amounted to $45.2 million, a 4.4% increase, in the first half of 2017. Other significant changes from December 31, 2016 to June 30, 2017 include a decrease in securities available-for-sale of $8.3 million and an increase in bank owned life insurance of $5.7 million.

Total liabilities increased $ 39. 0 million, or 3 . 5 %, from $ 1.1 b illion at December 31, 201 6 to $1. 2 million at June 30 , 201 7 . This increase is primarily attrib uted to increased deposits and borrowings associated with our increased loan demand .

Shareholders’ equity increased $5.0 million, or 3.8%, to $136.3 million at June 30, 2017 from $131.3 million at December 31, 2016. This increase was due primarily to net income for the six months ended June 30, 2017 of $4.7 million, and the exercise of 48,584 shares of stock options during the first half of 2017, which were partially offset by the payment of $0.8 million of dividends on common stock during the first half of 2017.

Net Loans

Total net loans increased by $44.4 million, or 4.4%, from $1.0 billion at December 31, 2016 to $1.1 billion at June 30, 2017. This increase was driven primarily by commercial real estate loans growing $12.6 million or 4.6% and agricultural loans growing $19.3 million or 3.1% during the first six months of 2017.

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

	June 30, 2017						December 31, 2016
	Amount			Percent			Amount			Percent
	(dollars in thousands)
Agriculture loans	$	643,978			59.9	%	$	624,632			60.6	%
Commercial real estate loans		283,035			26.3	%		270,475			26.3	%
Commercial loans		97,571			9.1	%		89,944			8.7	%
Residential real estate loans		50,939			4.7	%		45,276			4.4	%
Installment and consumer other		145			0.0	%		159			0.0	%
Total gross loans	$	1,075,668			100.0	%	$	1,030,486			100.0	%
Allowance for loan losses		(13,503	)					(12,645	)
Loans, net	$	1,062,165					$	1,017,841

Allowance for Loan Losses

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 June 30, 2017 and December 31, 2016, the allowance for loan losses was $13.5 million and $12.6 million, respectively, which resulted in a ratio of the allowance to total loans of 1.26% and 1.23%, respectively. The overall increase in the allowance for loan losses, was the result of organic loan growth and decline in qualitative economic factor we use to assess our portfolio.

Charge-offs and recoveries by loan category for the t hree and six months ended June 30, 2017 and 2016 were as follows:

	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
	(dollars in thousands)
Balance, beginning of period	$	13,428		$	11,218		$	12,645		$	10,405
Loans charged off:
Agriculture loans		—			896			—			896
Commercial real estate loans		575			5			575			5
Commercial loans		900			—			917			—
Residential real estate loans		—			—			—			—
Installment and consumer other		—			4			—			4
Total loans charged off	$	1,475		$	905		$	1,492		$	905
Recoveries:
Agriculture loans		1			1			1			2
Commercial real estate loans		23			1			36			1
Commercial loans		2			6			28			6
Residential real estate loans		—			—			—			—
Installment and consumer other		—			—			—			—
Total recoveries		26			8			65			9
Net loans charged-off	$	1,449		$	897		$	1,427		$	896
Provision for loan losses		1,524			470			2,285			1,282
Allowance for loan losses, end of period	$	13,503		$	10,791		$	13,503		$	10,791

Selected loan quality ratios:
Net charge-offs to average loans		0.14	%		0.10	%		0.14	%		0.11	%
Allowance for loan losses to total loans (end of period)		1.26	%		1.12	%		1.26	%		1.12	%
Allowance for loan losses to non- performing assets and performing troubled debt restructurings (end of period)		57.57	%		35.60	%		57.57	%		35.60	%

Loan Servicing Rights

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.

Information about the loan servicing portfolio is shown below:

	June 30, 2017			December 31, 2016
	(dollars in thousands)
Total loans	$	1,075,668		$	1,030,486
Less: Nonqualified loan sales included below		(1,325	)		(1,963	)
Loans serviced:
Agricultural		567,167			562,843
Commercial		18,855			11,038
Commercial real estate		2,943			3,083
Total loans serviced		588,965			576,964
Total loans and loans serviced	$	1,663,308		$	1,605,487

Securities

Our securities portfolio is predominately composed of municipal securities, investment grade mortgage-backed securities, U.S. Government and agency securities, and asset-backed 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 $115.1 million at June 30, 2017 from $123.4 million at December 31, 2016. During the six months ended June 30, 2017, we recognized unrealized holding gains of $0.6 million before income taxes through other comprehensive income.

The following table sets forth the amortized cost and fair values of our securities portfolio at June 30, 2017 and December 31, 2016:

	June 30, 2017				December 31, 2016
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(dollars in thousands)
Available for sale:
Municipal securities	$	38,553	$	38,643	$	45,638	$	45,456
Mortgage-backed securities		73,130		73,038		73,648		73,308
Asset-backed securities		3,493		3,467		3,761		3,673
U.S. Government and agency securities		—		—		1,000		1,000
Total available for sale	$	115,176	$	115,148	$	124,047	$	123,437

Deposits

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. We also obtain brokered deposits on an as-needed basis.

Deposit growth was 1.7% to $993.7 million at June 30, 2017 from $977.5 million at December 31, 2016. Organic deposit growth has been slow in recent years due to strong competition in a market with compressed interest rates. We anticipate continued

competition as rates are projected to rise. As of June 30, 2017 and December 31, 2016 , the distribution by type of deposit account was as follows:

	June 30, 2017					December 31, 2016
	Amount		% of Deposits			Amount		% of Deposits
	(dollars in thousands)
Time deposits	$	437,710		44.1	%	$	404,667		41.4	%
Brokered deposits		235,785		23.7	%		193,613		19.8	%
Money market accounts		164,061		16.5	%		206,435		21.1	%
Demand, noninterest-bearing		102,569		10.3	%		118,657		12.1	%
NOW accounts and interest checking		47,811		4.8	%		48,727		5.0	%
Savings		5,727		0.6	%		5,419		0.6	%
Total deposits	$	993,663		100.0	%	$	977,518		100.0	%

Liquidity Management and Capital Resources

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 June 30, 2017, advances from the FHLB were $133.3 million compared to $107.9 million at December 31, 2016. This increase helped fund our loan growth as load demands outpaced deposit growth. Our remaining borrowing capacity from the FHLB was $332.9 million at June 30, 2017.

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 used in operating activities was $1.0 million for the six months ended June 30, 2017, compared to net cash provided by operating activities of $10.3 million for the six months ended June 30, 2016. Net cash 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 $46.3 million and $56.0 million for the six months ended June 30, 2017 and 2016, respectively. Net cash provided by financing activities, consisting primarily of the activity in deposit accounts, and FHLB advances was $40.5 million and $52.0 million for the six months ended June 30, 2017 and 2016, respectively.

At June 30, 2017, the Bank exceeded all of its regulatory capital requirements, with Tier 1 leverage capital of $140.9 million, or 11.25% of adjusted average total assets, which is above the minimum level to be well-capitalized of $62.7 million, or 5.0% of adjusted average total assets, and total risk-based capital of $155.0 million, or 12.93% of risk-weighted assets, which is above the minimum level to be well-capitalized of $119.9 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 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 June 30, 2017, there were $82.2 million of retained earnings available for the payment of dividends by the Bank to the holding company. Management believes liquidity to be sufficient as of June 30, 2017.

Off-Balance Sheet Arrangements

As of June 30, 2017, there were no 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, 2016. We continue to believe that we have adequate capital and liquidity available from various sources to fund projected obligations and commitments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

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 June 30, 2017. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2017, 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.

Changes in Internal Control over Financial Reporting

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 June 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

P ART II—OTHER INFORMATION

Item 1. Legal Proceedings.

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.

Item 1A. Risk Factors.

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, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The Company did not issue any unregistered equity securities or repurchase any shares of its common stock during the quarter ended June 30, 2017.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On August 7, 2017, the Company and the Bank entered into revised employment agreements with Timothy J. Schneider, President of the Company and Chief Executive Officer of the Bank, Mark R. Binversie, President of the Bank, and David A. Coggins, Executive Vice President and Chief Banking Officer of the Bank, (the “Named Executive Officers”). The revised employment agreements supersede the Named Executive Officers’ previous agreements.

The employment agreements have an initial term through December 31, 2020 for Messrs. Schneider and Binversie and December 31, 2017 for Mr. Coggins. Following the initial term the agreements will automatically renew for successive one year terms unless notice of non-renewal is provided at least 90 days prior to the end of the then existing term. The employment agreements provide for an annual base salary of $371,830, $245,000, and $245,000, for Messrs. Schneider, Binversie and Coggins, respectively, annual incentive award opportunities and an opportunity for the Named Executive Officers to participate in other employee and fringe benefits on the same basis as is generally available for other similarly situated senior executives of the Company.

Per the terms of the employment agreements, each of the Named Executive Officers will be entitled to severance payments in the event of a termination by the Company and the Bank without cause or by the Named Executive Officer for good reason. The Named Executive Officers will be entitled to enhanced and accelerated severance payments if such termination occurs within the 6 months preceding, or 24 months following a change in control. The employment agreements provide for non-compete and non-solicitation restrictive covenants in the event of a termination of employment for any reason.

The foregoing description of the employment agreements for Messrs. Schneider, Binversie and Coggins is qualified in its entirety by the terms and conditions of such documents, which are filed as Exhibits 10.2, 10.3 and 10.4, respectively, to this Quarterly Report on Form 10-Q.

As disclosed in the Company’s Form 8-K filed on July 20, 2017, an employment agreement between the Bank and Glen L. Stiteley was signed on July 18, 2017. Effective August 15, 2017, Mr. Stiteley will become Treasurer and Chief Financial Officer of the Company and Executive Vice President, Chief Financial Officer, and Treasurer of the Bank.

The 2017 Annual Meeting of Shareholders (the “2017 Annual Meeting”) date has been changed by more than 30 days from the anniversary of the Company’ 2016 annual meeting of shareholders, which was held on June 20, 2017. The 2017 Annual Meeting will be held at Silver Lake College Franciscan Center Atrium, 2406 S. Alverno Rd., Manitowoc, WI 54220, on May 15, 2018 at 6:00 p.m., Central Daylight time.

Item 6. E xhibits.

Exhibit Number		Description


10.1		Employment Agreement dated July 18, 2017, by and among County Bancorp, Inc., Investors Community Bank and Glen L. Stiteley (incorporated by reference to Exhibit 10.1 to County Bancorp, Inc.’s current report on Form 8-K (File no. 001-36808) filed on July 20, 2017)

10.2		Employment Agreement dated August 7, 2017, by and among County Bancorp, Inc., Investors Community Bank and Timothy J. Schneider.

10.3		Employment Agreement dated August 7, 2017, by and among County Bancorp, Inc., Investors Community Bank and Mark R. Binversie.

10.4		Employment Agreement dated August 7, 2017, by and among County Bancorp, Inc., Investors Community Bank and David A. Coggins.

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

S IGNATURES

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.

	County Bancorp, Inc.

Date: August 8, 2017	By:	/s/ Timothy J. Schneider
		Timothy J. Schneider
		President (principal executive officer)

Date: August 8, 2017	By:	/s/ David D. Kohlmeyer
		David D. Kohlmeyer
		Interim Chief Financial Officer (principal financial and accounting officer)

Exhibit Index

Exhibit Number		Description

10.1		Employment Agreement dated July 18, 2017, by and among County Bancorp, Inc., Investors Community Bank and Glen L. Stiteley (incorporated by reference to Exhibit 10.1 to County Bancorp, Inc.’s current report on Form 8-K (File no. 001-36808) filed on July 20, 2017)

10.2		Employment Agreement dated August 7, 2017, by and among County Bancorp, Inc., Investors Community Bank and Timothy J. Schneider.

10.3		Employment Agreement dated August 7, 2017, by and among County Bancorp, Inc., Investors Community Bank and Mark R. Binversie.

10.4		Employment Agreement dated August 7, 2017, by and among County Bancorp, Inc., Investors Community Bank and David A. Coggins.

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 Calculation Linkbase Document

101.DEF		XBRL Taxonomy Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 10.2

County Bancorp, Inc.
Investors Community bank

Employment Agreement

This Employment Agreement (this “ Agreement ”) is made and entered into as of August 7 , 2017 (the “ Effective Date ”), by and between County Bancorp, Inc. (the “ Company ”), Investors Community Bank (the “ Bank ” and together with the Company, the “ Employer ”) and Timothy J. Schneider (the “ Executive ,” and together with the Employer, the “ Parties ”).

A. The Company is the sole shareholder of the Bank.

B. The Executive is currently employed by the Company and the Bank pursuant to the terms of that certain employment agreement dated November 5, 2014 , as subsequently amended (the “ Prior Employment Agreement ”), by and between the Bank and the Executive.

C. The Employer desires to continue to employ the Executive pursuant to the terms of this Agreement and the Executive desires to continue such employment pursuant to the terms of this Agreement.

D. The Parties have made commitments to each other on a variety of important issues concerning the Executive’s employment, including the performance that will be expected of the Executive, the compensation the Executive will be paid, how long and under what circumstances the Executive will remain employed and the financial details relating to any decision that either the Employer or the Executive may make to terminate this Agreement.

E. The Parties desire to enter into this Agreement as of the Effective Date and, to the extent provided herein, to have this Agreement supersede all of the terms of all prior employment agreements between the Parties, whether or not in writing, including the Prior Employment Agreement, and any such prior employment agreement shall become null and void as of the Effective Date, and the parties thereunder shall have no rights or interests therein.

Now, therefore , in consideration of the foregoing and the mutual promises and covenants of the Parties set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby expressly covenant and agree as follows:

1. Employment Term . The term of this Agreement (the “ Term ”) and the Executive’s employment under this Agreement shall commence as of the Effective Date and end on December 31, 2020, unless sooner terminated as provided herein. The Term shall be extended automatically for one (1) additional year beginning on January 1, 2020, and on each January 1 thereafter unless either Party notifies the other Party, by written notice delivered no later than ninety (90) days prior to such January 1, that the Term shall not be extended for an additional year. Notwithstanding any provision of this Agreement to the contrary, if a Change of Control occurs during the Term, this Agreement shall remain in effect for the two (2)-year period following the Change of Control and shall then terminate.

2. Duties . During the Term, the Executive shall devote the Executive’s full business time, energies and talents to serving as the President of the Company and Chief Executive Officer of the Bank, at the direction of the Company’s Board of Directors (the “ Board”) . The Executive shall have such duties and responsibilities as may be assigned to the Executive from time to time by the Board, which duties and responsibilities shall be commensurate with the Executive’s position, shall perform all duties assigned to the Executive faithfully and efficiently, subject to the direction of the Board, and shall have such authorities and powers as are inherent to the undertakings applicable to the Executive’s position and necessary to carry out the responsibilities and duties required of the Executive hereunder. Notwithstanding the foregoing provisions of this Section 2 , during the

Term, the Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious or similar nature (including professional associations) to the extent such activities do not, in the reasonable judgment of the Board, inhibit, prohibit, interfere with or conflict with the Executive’s duties under this Agreement or conflict in any material way with the business of the Employer or an Affiliate; provided, however, that the Executive shall not serve on the board of directors of any business (other than the Employer or an Affiliate) or hold any other position with any business without receiving the prior written consent of the Board. For purposes of this Agreement, “ Affiliate ” means each company, corporation, partnership, Financial Institution or other entity that, directly or indirectly, is controlled by, controls, or is under common control with, the Employer, where “control” means (i) the ownership of fifty-one percent (51%) or more of the voting securities or other voting or equity interests of any corporation, partnership, joint venture or other business entity, or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, partnership, joint venture or other business entity.

3. Compensation and Benefits .

(a) Base Salary . For services performed by the Executive for the Employer pursuant to this Agreement during the Term, the Employer shall pay the Executive a base salary at the rate of Three Hundred Seventy-One Thousand Eight Hundred Thirty Dollars ($371,830.00) per year, payable in substantially equal installments in accordance with the Employer’s regular payroll practices (“ Salary ”). Beginning on or about January 1, 2018, and on or about each January 1 thereafter, the Executive’s rate of Salary shall be reviewed by the Compensation Committee (the “ Committee ”) of the Board and, following such review, the Salary may be increased, but not decreased, with such adjusted amount then becoming the “Salary” for purposes of this Agreement.

(b) Annual Bonuses . The Executive shall be eligible to receive performance-based annual incentive bonuses (each, the “ Incentive Bonus ”) from the Employer for each fiscal year ending during the Term. Any Incentive Bonus shall be paid not later than two and one-half months following the close of the year in which it is earned, provided that any Incentive Bonus shall not be considered earned until the Board has made all determinations and taken all actions necessary to establish such Incentive Bonus.

(c) Long Term Incentive Program . The Executive shall be eligible to participate in the Employer’s long-term equity incentive program, as determined in the sole discretion of the Committee.

(d) Other Benefits . Executive shall be eligible to participate, subject to the terms thereof, in all other plans of the Company as may be in effect from time to time with respect to senior executives employed by the Company, as determined by the Committee (excluding participation in any non-qualified retirement or deferred compensation programs, unless specifically selected for participation by the Committee). During the Employment Period, Executive and Executive’s dependents, as the case may be, shall be eligible to participate, subject to the terms thereof, in all tax qualified retirement and similar benefit plans and all medical, dental, disability, group and executive life, accidental death and travel accident insurance, and other similar welfare benefit plans of the Company as may be in effect from time to time with respect to employees of the Company generally.

(e) Business Reimbursements . The Executive shall be eligible to be reimbursed by the Employer, on terms that are substantially similar to those that apply to other similarly situated and performing executives employed by the Employer, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging, and similar items that are consistent with the Employer’s expense reimbursement policy and that are actually incurred by the Executive in the promotion of the Employer’s business.

4. Termination . Either Party may terminate the Executive’s employment and this Agreement pursuant to the terms of this Section 4 . The Executive’s right to benefits and payments, if any, for periods after the Date of Termination shall be determined in accordance with Section 5 .

(a) Death or Disability . This Agreement shall terminate immediately in the event of the Executive’s Disability or death. In accordance with Section 13 , the Company shall promptly give the Executive written notice of any such determination of the Executive’s Disability and of any decision of the Board to terminate the Executive’s employment by reason thereof. In the event of Disability, until the Date of Termination, the Salary payable to the Executive shall be reduced dollar-for-dollar by the amount of disability benefits paid to the Executive in accordance with any disability policy or program of the Company or the Bank.

(b) Discharge for Cause . In accordance with the procedures hereinafter set forth, the Company may discharge the Executive from the Executive’s employment hereunder for Cause. This Agreement shall terminate immediately as of the Date of Termination in the event the Executive is discharged for Cause. Any discharge of the Executive for Cause shall be communicated by a written notice of termination to the Executive given in accordance with Section 13 .

(c) Resignation for Good Reason . Prior to the Executive’s termination for Good Reason, the Executive shall give the Employer written notice in accordance with Section 13 of the occurrence of the event or condition that the Executive believes constitutes a Good Reason within thirty (30) days of the initial existence of such event or condition. If the Employer determines that the events or conditions exist as alleged by the Executive, and does not cure such events or conditions within thirty (30) days of the Executive’s written notice, then this Agreement and the Executive’s employment hereunder shall terminate on the thirtieth (30 ^th ) day following the Executive’s written notice.

(d) Discharge without Cause; Resignation without Good Reason . Either Party may terminate this Agreement and the Executive’s employment hereunder for any reason by delivering written notice of termination in accordance with Section 13 to the other Party no fewer than thirty (30) days before the Date of Termination, which date shall be specified in the notice of termination. The Employer may provide for an earlier Date of Termination, provided the Employer pays to the Executive the Salary that would have been earned during such notice period. Any payment in lieu of notice pursuant to this Section 4(d) shall be made in a single lump sum on the first payroll date following the Date of Termination.

5. Rights upon Termination . If either Party terminates t his Agreement and the Executive’s employment under this Agreement, the Executive’s right to benefits, if any, for periods after the Date of Termination shall be determined in accordance with this Section 5 :

(a) Accrued Obligations . If the Date of Termination occurs during the Term for any reason, the Executive shall be entitled to the Accrued Obligations, in addition to any other benefits to which the Executive may be entitled under the following provisions of this Section 5 or the express terms of any employee benefit plan or as required by law. Any benefits to be provided to the Executive pursuant to this Section 5(a) shall be provided within thirty (30) days after the Date of Termination; provided , however , that any benefits, incentives or awards payable as described in Section 5(e) shall be provided in accordance with the terms of the applicable plan, program or arrangement. Except as may expressly be provided to the contrary in this Agreement, nothing in this Agreement shall be construed as requiring the Executive to be treated as employed by the Employer following the Date of Termination for purposes of any plan, program or arrangement.

(b) Termination for Cause, Death, Disability, Voluntary Resignation without Good Reason, or Non-Renewal . If the Date of Termination occurs during the Term and is a result of a termination for Cause, the Executive’s Disability or death, or a termination by the Executive other than for Good Reason, or if this Agreement expires due to notice of non-renewal by either Party as provided under Section 1 or at the end of a Covered Period, then, other than the Accrued Obligations, the Executive shall have no right to benefits under this Agreement (and the Employer shall have no obligation to provide any such benefits) for periods after the Date of Termination. In the event of a termination due to the executive’s death or Disability, the Employer shall also provide the Executive, or Executive’s estate or beneficiary, a Pro Rata Bonus.

(c) Termination other than for Cause or Termination for Good Reason . If the Executive’s employment with the Employer is subject to a Termination, other than during a Covered Period, then, in addition to the Accrued Obligations, the Employer shall provide the Executive the following benefits:

(i) On the thirtieth (30th) day following the Date of Termination, the Executive shall commence receiving the Severance Amount (less any amount described in Section 5(c)(ii) , with such amount to be paid in substantially equal monthly installments, equal in number to the number of months utilized in determining the Severance Amount, but in no event more than twenty-four (24) months , with each successive payment being due on the first payroll date following the monthly anniversary of the Date of Termination.

(ii) To the extent any portion of the Severance Amount exceeds the “safe harbor” amount described in Treasury Regulation §1.409A-1(b)(9)(iii)(A), the Executive shall receive such portion of the Severance Amount that exceeds the “safe harbor” amount in a single lump sum payment payable on the thirtieth (30th) day following the Date of Termination.

(d) Termination upon a Change of Control . If the Executive’s employment with the Employer is subject to a Termination within a Covered Period, then, in addition to Accrued Obligations, the Employer shall provide the Executive the following benefits:

(i) On the thirtieth (30th) day following the Date of Termination, the Employer shall pay the Executive a lump sum payment in an amount equal to the Severance Amount.

(e) Other Benefits .

(i) The Executive’s rights following a termination of employment with the Employer for any reason with respect to any benefits, incentives or awards provided to the Executive pursuant to the terms of any plan, program or arrangement sponsored or maintained by the Employer, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program or arrangement and this Agreement shall have no effect upon such terms except as specifically provided herein.

(ii) Except as specifically provided herein, the Employer shall have no further obligations to the Executive under this Agreement following the Executive’s termination of employment for any reason.

(f) Continuing Obligations after Termination . If the Executive’s employment with the Employer terminates for any reason, the Employer’s obligations and the Executive’s obligations under Sections 5 through 25 shall continue after termination of the employment relationship.

6. Release . Notwithstanding any provision of this Agreement to the contrary, no benefits owed to the Executive under Section 5 (except for the Accrued Obligations) shall be provided to the Executive unless the Executive executes (without subsequent revocation) and delivers to the Employer a general release and waiver, in a form that is substantially similar to the release attached hereto as Exhibit A (the “ Release ”).

7. Excise Tax Limitation .

(a) It is the intention of the Employer and the Executive that no portion of any payment under this Agreement, or payments to or for the benefit of the Executive under any other agreement or plan, be deemed to be an “ Excess Parachute Payment ” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “ Code ”), or its successors. It is agreed that the present value of and payments to or for the benefit of the Executive in the nature of compensation, receipt of which is contingent on a Change of Control, and to which Section 280G of the Code applies (in the aggregate “ Total Payments ”) shall not exceed an amount equal to one dollar less than the maximum amount which the Employer may pay without loss of

deduction under Section 280G(a) of the Code. Present value for purposes of this Agreement shall be calculated in accordance with Section 280G(d)(4) of the Code. Within one hundred and twenty (120) days following the earlier of (A) the giving of the notice of termination or (B) the giving of notice by the Employer to the Executive of its belief that there is a payment or benefit due the Executive which will result in an Excess Parachute Payment, the Executive and the Employer, at the Employer’s expense, shall obtain the opinion of an Independent Advisor (as defined below), which opinion need not be unqualified, which sets forth (A) the Executive’s applicable Base Amount (as defined under Section 280G of the Code), (B) the present value of Total Payments and (C) the amount and present value of any Excess Parachute Payments. In the event that such opinion determines that there would be an Excess Parachute Payment, the payment hereunder or any other payment determined by such Independent Advisor to be includable in Total Payments shall be modified, reduced or eliminated as specified by the Parties shall reasonably determine, so that under the bases of calculation set forth in such opinions there will be no Excess Parachute Payment; provided that any such modification, reduction or elimination must be in accordance with Section 409A of the Code. The provisions of this Section 7 , including the calculations, notices and opinions provided for herein shall be based upon the conclusive presumption that (A) the compensation and benefits provided for in Section 5 hereof and (B) any other compensation earned by the Executive pursuant to the Employer’s compensation programs which would have been paid in any event, are reasonable compensation for services rendered, even though the timing of such payment is triggered by the Change of Control. In the event that the provisions of Sections 280G and 4999 of the Code are repealed without succession, this Section 7 shall be of no further force or effect.

(b) The Employer and the Executive hereby recognize that the Restrictive Covenants under Section 8 have value and that the value shall be recognized in the Section 280G calculations by an allocation of a portion of the termination benefits to the restrictive covenant provisions based on the fair market value of such restrictive covenant provisions. The Independent Advisor shall make the determination of the fair value to be allocated to the restrictive covenant provisions.

(c) For purposes of this Agreement, “ Independent Advisor ” shall mean an independent nationally recognized accounting firm approved by the Employer and the Executive, where such approval shall not be unreasonably withheld by either party.

8. Restrictive Covenants .

(a) Confidential Information . The Executive acknowledges that, as a result of the Executive’s employment with the Employer, the Executive has and will produce and access to confidential and/or proprietary, non‑public information concerning the Employer or its Affiliates, including marketing materials, financial and other information concerning customers and prospective customers, customer lists, records, data, trade secrets, proprietary business information, pricing and profitability information and policies, strategic planning, commitments, plans, procedures, litigation, pending litigation and other information not generally available to the public (collectively, “ Confidential Information ”). The Executive shall not directly or indirectly use, disclose, copy or make lists of Confidential Information for the benefit of anyone other than the Employer, either during the Executive’s employment with the Employer or for a period of five (5) years thereafter, except to the extent that such information is or thereafter becomes lawfully available from public sources, or such disclosure is authorized in writing by the Employer, required by law or any competent administrative agency or judicial authority, or otherwise as is reasonably necessary or appropriate in connection with the performance by the Executive of the Executive’s duties hereunder. Unless otherwise prohibited by law, if the Executive receives a subpoena or other court order or is otherwise required by law to provide information to a governmental authority or other person concerning the activities of the Employer or any of its Affiliates, or the Executive’s activities in connection with the business of the Employer or any of its Affiliates, the Executive shall immediately notify the Employer of such subpoena, court order or other requirement and deliver forthwith to the Employer a copy thereof and any attachments and non-privileged correspondence related thereto. The Executive shall take reasonable precautions to protect against the inadvertent disclosure of Confidential Information. The Executive shall abide by the Employer’s reasonable policies, as in effect from time to time, respecting avoidance of interests conflicting with those of the Employer

and its Affiliates. In this regard, the Executive shall not directly or indirectly render services to any person or entity where the Executive’s service would involve the use or disclosure of Confidential Information. The Executive shall not use any Confidential Information to guide the Executive in searching publications or other publicly available information, selecting a series of items of knowledge from unconnected sources and fitting them together to claim that the Executive did not violate any agreements set forth in this Agreement .

The Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Accordingly, the Executive has the right to disclose in confidence trade secrets to Federal, State, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The Executive also has the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Nothing in this Agreement shall be construed to authorize, or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means.

(b) Documents and Property .

(i) All records, files, documents and other materials or copies thereof relating to the business of the Employer or its Affiliates that the Executive prepares, receives, or uses, shall be and remain the sole property of the Employer and, other than in connection with the performance by the Executive of the Executive’s duties hereunder, shall not be removed from the premises of the Employer or any of its Affiliates without the Employer’s prior written consent, and shall be promptly returned to the Employer upon the Executive’s termination of employment for any reason, together with all copies (including copies or recordings in electronic form), abstracts, notes or reproductions of any kind made from or about the records, files, documents or other materials.

(ii) The Executive acknowledges that the Executive’s access to and permission to use the Employer’s and any Affiliate’s computer systems, networks and equipment, and all the Employer and Affiliate information contained therein, is restricted to legitimate business purposes on behalf of the Employer. Any other access to or use of such systems, network, equipment and information is without authorization and is prohibited. The restrictions contained in this Section 8 extend to any personal computers or other electronic devices of the Executive that are used for business purposes relating to the Employer or any Affiliate. The Executive shall not transfer any Employer or Affiliate information to any personal computer or other electronic device that is not otherwise used for any business purpose relating to the Employer. Upon the termination of the Executive’s employment with the Employer for any reason, the Executive’s authorization to access and permission to use the Employer’s and any Affiliate’s computer systems, networks and equipment, and any Employer and Affiliate information contained therein, shall cease.

(c) Non-Competition and Non-Solicitation . As an essential ingredient of, and in consideration of the substantial severance benefits provided pursuant to this Agreement in addition to the Executive’s employment, or continued employment, with the Employer, the Executive shall not, during the Restricted Period, directly or indirectly do any of the following:

(i) Engage or invest in, own, manage, operate, finance, control, participate in the ownership, management, operation, or control of, be employed by, associated with, or in any manner connected with, serve as a director, officer, or consultant to, lend the Executive’s name or any similar name to, lend the Executive’s credit to or render services or advice to, any Financial Institution with an office located, or to be located at an address identified in a filing with any

regulatory authority, within the Restricted Area; provided , however , that the ownership by the Executive of shares of the capital stock of any Financial Institution, which shares are listed on a securities exchange and that do not represent more than 1% of the institution’s outstanding capital stock, shall not violate any terms of this Agreement. For purposes of clarification and not limitation or expansion, it is the parties intent that the foregoing is not intended to limit Executive from performing services outside of the Restricted Area for a person or entity solely because the person or entity has a location within the Restricted Area, unless Executive’s services are directed towards activities on behalf of such person or entity within the Restricted Area;

(ii) (A) Hire, or induce or attempt to induce any employee of the Employer or its Affiliates (limited to all officer-level employees, Executive’s direct reports, or members of Executive’s department or area of responsibility) to leave the employ of the Employer or its Affiliates; (B) interfere with the relationship between the Employer or its Affiliates and any such employee of the Employer or its Affiliates; or (C) induce or attempt to induce any customer, supplier, licensee, or other business relation of the Employer or its Affiliates with whom the Executive had an ongoing business relationship while employed by the Employer or its Affiliates to cease doing business with the Employer or its Affiliates or interfere with the relationship between the Employer its Affiliates and their respective customers, suppliers, licensees, or other business relations with whom the Executive had an ongoing business relationship.

(iii) Solicit the business of any person or entity known to the Executive to be a customer of the Employer or its Affiliates, where the Executive, or any person reporting to the Executive, had accessed Confidential Information of, had an ongoing business relationship with while employed by the Employer of its Affiliates, or had made Substantial Business Efforts with respect to, such person or entity, with respect to products, activities, or services that compete in whole or in part with the products, activities, or services of the Employer its Affiliates.

(d) Remedies for Breach of Restrictive Covenant . The Executive has reviewed the provisions of this Agreement with legal counsel, or has been given adequate opportunity to seek such counsel, and the Executive acknowledges that the covenants contained in this Section 8 are reasonable with respect to their duration, geographical area and scope. The Executive further acknowledges that the restrictions contained in this Section 8 are reasonable and necessary for the protection of the legitimate business interests of the Employer, that they create no undue hardships, that any violation of these restrictions would cause substantial injury to the Employer and such interests, and that such restrictions were a material inducement to the Employer to enter into this Agreement. In the event of any violation or threatened violation of these restrictions, the Employer, in addition to and not in limitation of, any other rights, remedies or damages available to the Employer under this Agreement or otherwise at law or in equity, shall be entitled to preliminary and permanent injunctive relief to prevent or restrain any such violation by the Executive and any and all persons directly or indirectly acting for or with the Executive, as the case may be. If the Executive violates the Restrictive Covenant and the Employer brings legal action for injunctive or other relief, the Employer shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of the Restrictive Covenant. Accordingly, the Restrictive Covenant shall be deemed to have the duration specified herein computed from the date the relief is granted but reduced by the time between the period when the Restrictive Period began to run and the date of the first violation of the Restrictive Covenant by the Executive. Notwithstanding anything contained in this Agreement to the contrary, in the event that the Executive’s employment is terminated without Cause or the Executive resigns for Good Reason and the Employer reasonably determines in good faith that the Executive has violated any provision of Section 8 , then the Employer shall be entitled to discontinue any payments or benefits that would otherwise be provided to the Executive under Sections 5(c) , and 5(d), and the Executive shall forfeit the Executive’s rights to the same.

(e) Other Agreements . In the event of the existence of another agreement between the Parties that (i) is in effect during the Restricted Period, and (ii) contains restrictive covenants that conflict with any of the provisions of Section 8 , then the more restrictive of such provisions from the two agreements shall

control for the period during which both agreements would otherwise be in effect.

9. Defense and Indemnification .

(a) The Employer agrees that if the Executive is made a party to or involved in, or is threatened to be made a party to or otherwise to be involved in, any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “ Proceeding ”), by reason of the fact that the Executive is or was a director, officer or employee of the Employer or is or was serving at the request of the Employer as a director, officer, member, employee or agent of another corporation, limited liability corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is the Executive’s alleged action in an official capacity while serving as a director, officer, member, employee or agent, the Executive shall be indemnified and held harmless by the Employer against any and all liabilities, losses, expenses, judgments, penalties, fines and amounts reasonably paid in settlement in connection therewith, and shall be advanced reasonable expenses (including reasonable attorneys’ fees) as and when incurred in connection therewith, to the fullest extent legally permitted or authorized by the Employer’s By-laws or, if greater, by the laws of the State of Wisconsin, as may be in effect from time to time, subject to receipt by the Employer of an undertaking by the Executive or on the Executive’s behalf to repay such amount if it shall ultimately be determined that the Executive is not entitled to be indemnified by the Employer. The rights conferred on the Executive by this Section 9 shall not be exclusive of any other rights which the Executive may have or hereafter acquire under any statute, the By-laws, agreement, vote of shareholders or disinterested directors, or otherwise. The indemnification and advancement of expenses provided for by this Section 9 shall continue as to the Executive after the Executive ceases to be a director, officer or employee and shall inure to the benefit of the Executive’s heirs, executors and administrators.

(b) During the Term and thereafter for the duration of any statute of limitations or other period during which a claim might be successfully brought against the Executive, the Executive shall be covered to the same extent as directors by any directors’ and officers’ liability insurance policy maintained by the Employer from time to time.

10. Regulatory Suspension and Termination .

(a) If the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Company’s and/or the Bank’s affairs by a notice served under Section 8(e)(3) (12 U.S.C. § 1818(e)(3)) or 8(g) (12 U.S.C. § 1818(g)) of the Federal Deposit Insurance Act, as amended, the Employer’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Employer shall: (i) pay the Executive all of the compensation withheld while their contract obligations were suspended, and; (ii) reinstate any of the obligations, which were suspended.

(b) If the Executive is removed and/or permanently prohibited from participating in the conduct of the Company’s and/or the Bank’s affairs by an order issued under Section 8(e) (12 U.S.C. § 1818(e)) or 8(g) (12 U.S.C. § 1818(g)) of the Federal Deposit Insurance Act, as amended, all obligations of the Employer under this contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

(c) If the Company and/or the Bank is in default as defined in Section 3(x) (12 U.S.C. § 1813(x)(1)) of the Federal Deposit Insurance Act, as amended, all obligations of the Employer under this contract shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

(d) Except to the extent the Federal Deposit Insurance Corporation (the “FDIC”) or the Board of Governors of the Federal Reserve System (each a “primary federal regulator”) determines that continuation of this contract is necessary for the continued operation of the Employer:

(e) All obligations of the Employer under this contract shall be terminated by or at the direction of a primary federal regulator at the time: (A) the FDIC enters into an agreement to provide assistance to or on behalf of the Employer under the authority contained in Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1823(c)); or (B) a primary federal regulator approves a supervisory acquisition to resolve problems related to the operation of the Employer; provided, however, that any rights of the parties that have already vested shall not be affected by such termination; and

(f) All obligations of the Employer under this contract shall be suspended by or at the direction of a primary federal regulator if such primary federal regulator determines that the Employer is in an unsafe or unsound condition for the period, and such suspension shall continue so long as such determination remains in effect.

(g) Any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) (12 U.S.C. §1828(k)) of the Federal Deposit Insurance Act as amended, and any regulations promulgated thereunder.

11. No Set-Off; No Mitigation . Except as provided herein, the Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense or other right which the Employer may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains other employment.

12. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the successors and assigns of the Employer.

13. Notices . All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or by recognized commercial delivery service or if mailed within the continental United States by first class certified mail, return receipt requested, postage prepaid, addressed as follows:

(a) If to the Employer, to :

County Bancorp, Inc.

PO Box 700

860 North Rapids Rd

Manitowoc, WI, 54221

Attention: Corporate Secretary

(b) If to the Executive, to :

The most recent address reflected in Employer records.

Such addresses may be changed by written notice sent to the other Party at the last recorded address of that Party.

14. Source of Funds . The Company and the Bank shall be jointly and severally liable for all payments and benefits to be provided pursuant to the terms of this Agreement. All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Company or the Bank; provided, however ,

that to the extent that any payments and benefits provided for in this Agreement are paid to or received by the Executive from either the Company or the Bank, such payments and benefits shall not also be an obligation of the other, with the intent that there not be any duplication of benefits.

15. Tax Withholding . The Employer shall provide for the withholding of any taxes required to be withheld by federal, state or local law with respect to any payment in cash, shares of stock and/or other property made by or on behalf of the Employer to or for the benefit of the Executive under this Agreement or otherwise. The Employer may, at its option: (a) withhold such taxes from any cash payments owing to the Executive hereunder, (b) require the Executive to pay to the Employer in cash such amount as may be required to satisfy such withholding obligations and/or (c) make other satisfactory arrangements with the Executive to satisfy such withholding obligations.

16. Applicable Law . All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal laws of the State of Wisconsin applicable to agreements made and wholly to be performed in such state without regard to conflicts of law provisions of any jurisdiction.

17. Mandatory Arbitration . Except as provided in Section 8(d) , if any dispute or controversy arises under or in connection with this Agreement, and such dispute or controversy cannot be settled through negotiation, the Parties shall first try in good faith to settle the dispute or controversy by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures. If such mediation is not successful, the dispute or controversy shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. Notwithstanding the foregoing, the Company may resort to the applicable federal or state court, with proper jurisdiction, located in or nearest to Manitowoc, Wisconsin, for injunctive and such other relief as may be available in the event that the Employee engages in conduct, after termination of this Agreement, that amounts to a violation of the Wisconsin Uniform Trade Secrets Act or amounts to unlawful interference with the business expectations of the Company or its Affiliates. The FDIC may appear at any arbitration hearing but any decision made thereunder shall not be binding on the FDIC.

18. Service of Process . Each Party may be served with process in any manner permitted under State of Wisconsin law, or by United States registered or certified mail, return receipt requested.

19. Entire Agreement; Severability . This Agreement constitutes the entire agreement between the Executive and the Employer concerning the subject matter hereof, and supersedes all prior negotiations, undertakings, agreements and arrangements with respect thereto, whether written or oral. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement and all other provisions shall remain in full force and effect. The various covenants and provisions of this Agreement are intended to be severable and to constitute independent and distinct binding obligations. Without limiting the generality of the foregoing, if the scope of any covenant contained in this Agreement is too broad to permit enforcement to its full extent, such covenant shall be enforced to the maximum extent permitted by law, and the Parties hereby agree that such scope may be judicially modified accordingly.

20. No Assignment . The Executive’s rights to receive payments or benefits under this Agreement shall not be assignable or transferable whether by pledge, creation of a security interest or otherwise, other than a transfer by will or by the laws of descent or distribution. In the event of any attempted assignment or transfer contrary to this Section, the Employer shall have no liability to pay any amount so attempted to be assigned or transferred. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.

21. Successors . This Agreement shall be binding upon and inure to the benefit of the Employer, its successors and assigns (including, without limitation, any company into or with which the Employer may merge or consolidate). The Employer agrees that it will not affect the sale or other disposition of all or substantially all of its assets unless either (a) the person or entity acquiring the assets, or a substantial portion of the assets, shall expressly assume by an instrument in writing all duties and obligations of the Employer under this Agreement, or (b) the Employer shall provide, through the establishment of a separate reserve, for the payment in full of all amounts which are or may reasonably be expected to become payable to the Executive under this Agreement .

22. Execution in Counterparts . This Agreement may be executed by the Parties in two (2) or more counterparts, each of which shall be deemed to be an original, but all such counterparts shall constitute one (1) and the same instrument, and all signatures need not appear on any one (1) counterpart.

23. Prior Understandings . This Agreement embodies the entire understanding of the Parties and supersedes all other oral or written agreements or understandings between them regarding the subject matter hereof, including but not limited to the Prior Employment Agreement. No change, alteration or modification hereof may be made except in writing, signed by each of the Parties. The headings in this Agreement are for convenience of reference only and shall not be construed as part of this Agreement or to limit or otherwise affect the meaning hereof.

24. Code Section 409A .

(a) To the extent any provision of this Agreement or action by the Employer would subject the Executive to liability for interest or additional taxes under Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Employer. It is intended that this Agreement will comply with, or be exempt from, Code Section 409A, and this Agreement shall be administered accordingly and interpreted and construed on a basis consistent with such intent. Notwithstanding any provision of this Agreement to the contrary, no termination or similar payments or benefits shall be payable hereunder on account of the Executive’s termination of employment unless such termination constitutes a “separation from service” within the meaning of Code Section 409A. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments. To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Code Section 409A, such reimbursements and in-kind benefit payments shall be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv). This Agreement may be amended to the extent necessary (including retroactively) by the Employer to avoid the application of taxes or interest under Code Section 409A, while maintaining to the maximum extent practicable the original intent of this Agreement. This Section 24 shall not be construed as a guarantee of any particular tax effect for the Executive’s benefits under this Agreement and the Employer does not guarantee that any such benefits will satisfy the provisions of Code Section 409A.

(b) Notwithstanding any provision of this Agreement to the contrary, if Executive is determined to be a Specified Employee as of the Date of Termination, then, to the extent required pursuant to Code Section 409A, payments due under this Agreement that are deemed to be deferred compensation shall be subject to a six-month delay following the Date of Termination; and all delayed payments shall be accumulated and paid in a lump-sum payment as of the first day of the seventh month following the Date of Termination (or, if earlier, as of Executive’s death), with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period (based on the prime rate as reflected in the Wall Street Journal ). Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the Date of Termination shall be paid to Executive in accordance with the payment schedule established herein.

25. Amendment . This Agreement may not be amended or modified except by written agreement signed by the Executive and the Employer

26. Definitions . For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:

(a) “ Accrued Obligations ” shall mean, as of the Date of Termination, the sum of (i) the Executive’s Salary under Section 3(a) earned through the Date of Termination to the extent not theretofore paid, (ii) the amount of any Incentive Bonus earned for any completed performance periods (which is a calendar year performance period as of the Effective Date) to the extent not theretofore paid (iii) any accrued but unpaid vacation pay for the period ending on the Date of Termination, and (iv) any incurred but unreimbursed business expenses that are properly submitted prior to or within thirty (30) days of the Date of Termination. For the purpose of this Section 26(a) , dollar amounts shall be deemed to accrue ratably over the period during which they are earned, but no discretionary compensation shall be deemed earned or accrued unless it has been specifically approved by the Board in accordance with the applicable plan, program or policy.

(b) “ Average Incentive Bonus ” means the total Incentive Bonuses paid (or yet to be paid) for the 3 most recently completed performance periods divided by 3 (regardless of the number of years employed prior to the Date of Termination; provided, however , that in the event that the Date of Termination occurs during a Covered Period, the term “Average Incentive Bonus” shall mean the higher of: (i) the foregoing amount, or (ii) the Incentive Bonus paid (or yet to be paid) for the most recently completed performance period.

(i) the Executive’s willful and continued failure to substantially perform the Executive’s duties under this Agreement (other than as a result of physical or mental illness or injury);

(ii) the Executive’s conviction of, or the pleading of nolo contender to, embezzlement, fraud or a felony (as evidenced by binding and final judgment, order or decree of a court of competent jurisdiction, in effect after exhaustion of all rights of appeal) or such other crime or legal violation which disqualifies the Executive from serving as an executive officer or director of the Employer or otherwise substantially impairs the Executive’s ability to perform the Executive’s duties or responsibilities;

(iii) the Executive’s engagement in one or more unsafe or unsound banking practices that have a material adverse effect on the Employer;

(iv) the Executive’s removal or permanent suspension from banking pursuant to Section 8(e) of the FDIA or any other applicable state or federal law;

(v) the Executive’s breach of a fiduciary responsibility in connection with the Executive’s duties set forth in this Agreement;

(vi) an act or omission by the Executive that leads to a material harm (financial or reputational) to the Employer or an Affiliate in the community;

(vii) a material breach of Employer policies as may be in effect from time to time, provided such policies are uniformly applied and enforced;

(viii) the Executive’s material breach of this Agreement; or

(ix) the Executive’s knowing and material violation of any applicable material law or regulation respecting the business of the Employer that has had, or is reasonably expected to have, a material adverse effect upon the Employer, on a consolidated basis.

Any determination of a termination for Cause shall be made by resolution adopted by a two-thirds (2/3) vote of the outside members of the Board at a meeting called and held for that purpose. The

Executive shall be provided with reasonable notice of such meeting and shall be given the opportunity to be heard, with the presence of counsel, prior to the vote being taken by the Board.

For purposes of this Agreement, no act or failure to act, on the Executive’s part, shall be considered willful if it is done, or omitted to be done, by the Executive in good faith and with a reasonable belief that the Executive’s action or omission was in the best interests of the Employer.

Further, a termination for Cause shall be deemed to have occurred if, after the Termination, facts and circumstances arising during the course of such employment or engagement are discovered that would have warranted a termination for Cause.

Further, with respect to subsections (i), (vi), (vii), and (viii), the Executive shall be entitled to at least 30 days’ prior written notice of the Employer’s intention to terminate the Executive’s employment for Cause, which notice shall specify the grounds for the termination for Cause; and the Executive shall be provided a reasonable opportunity to cure any conduct or act, if curable, alleged as grounds for the termination for Cause.

(d) “ Change of Control ” shall mean the first to occur of the following:

(i) Individuals who, on the Effective Date, constitute the Board (the “ Incumbent Directors ”) cease during any 12 month period, for any reason, to constitute at least a majority of the Board; provided, that any person becoming a director subsequent to the Effective Date whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director;

(ii) Any Person is or becomes a “beneficial owner” (as defined in Exchange Act Rule 13d-3), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then Voting Securities; provided, that the event described in this paragraph (b) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (i) by the Company or any Subsidiary; (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; (iii) by any underwriter temporarily holding securities pursuant to an offering of such securities; or (iv) pursuant to a “Non-Qualifying Transaction” (as defined in paragraph (iii), below); or

(iii) The consummation of a merger, consolidation, statutory share exchange, sale of all or substantially all of the Company’s assets, a plan of liquidation or dissolution of the Company or similar form of corporate transaction involving the Company or any of its Subsidiaries that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “ Business Transaction ”), unless immediately following such Business Transaction: (i) 50% or more of the total voting power of (A) the corporation resulting from such Business Transaction (the “ Surviving Corporation ”), or (B) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of at least 95% of the voting securities eligible to elect directors of the Surviving Corporation (the “ Parent Corporation ”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Transaction (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Transaction), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Transaction; (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of more than 50% of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation

(or, if there is no Parent Corporation, the Surviving Corporation); and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Transaction were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Transaction (any Business Transaction that satisfies all of the criteria specified in (i), (iii) and (iii) above shall be deemed to be a “ Non-Qualifying Transaction ”).

(iv) Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of more than 50% of the Voting Securities as a result of the acquisition of Voting Securities by the Company which reduces the number of Voting Securities outstanding; provided, that if after such acquisition by the Company such person becomes the beneficial owner of additional Voting Securities that increases the percentage of outstanding Voting Securities beneficially owned by such Person, a Change in Control of the Company shall then occur.

(v) Further notwithstanding any provision in the foregoing definition of Change in Control to the contrary, in the event that any Award constitutes deferred compensation, and the settlement of, or distribution of benefits under such Award is to be triggered by a Change in Control, then such settlement or distribution shall be subject to the event constituting the Change in Control also constituting a “change in control event” under Code Section 409A.

(e) “ Covered Period ” shall mean the period beginning six (6) months prior to the effective date of the Change of Control and ending two (2) years following such date.

(f) “ Date of Termination ” shall mean (i) in the event of a discharge of the Executive by the Board for Cause, the date specified in such notice of termination, (ii) in the event of the Executive’s Disability, the date the Executive is determined to have incurred such Disability, (iii) in the event of the Executive’s death, the date of the Executive’s death, and (iv) in the case of any other termination of employment, the date specified in the written notice provided by the Employer or the Executive to the other. Applicable notice period requirements are determined in accordance with Section 4 .

(g) “ Disability ” shall mean means that (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Employer.

(h) “ Financial Institution ” shall mean any person, firm, partnership, corporation, trust or other entity that owns or operates, a bank, savings and loan association, credit union or similar financial institution.

(i) “ Good Reason ” shall mean any of the following:

(i) a material and adverse change in the nature or scope of the Executive’s duties and responsibilities (notwithstanding a change in title);

(ii) a material diminution in the Executive’s Salary or Incentive Bonus target, if applicable, without the Executive’s consent;

(iii) during a Covered Period, the removal of the Executive from, or failure to nominate the Executive to, the Board or the Bank Board; or

(iv) a change, without the Executive’s written consent, in the location of the Executive’s principal place of employment with the Employer by more than twenty ‑five (25) miles from the location of Employer’s main office as of the Effective Date which is not closer to the Executive’s principal residence at the time of relocation.

(j) “ Monthly Compensation ” shall mean one twelfth of the sum of (i) the Executive’s Salary, and (ii) the Average Incentive Bonus.

(k) “ Pro Rata Bonus ” means an Incentive Bonus for the year of termination, based upon the actual performance of the Employer for the year of termination and prorated based upon the number of days in the calendar year of termination preceding and including the date of termination, divided by 365; provided however, that in the event of a termination due to the Executive’s death or Disability, the term “Pro Rata Bonus” shall mean an amount determined based upon the amount accrued by the Employer as of the end of the month in which such termination occurs.

(l) “ Restricted Area ” means the area that encompasses a 25-mile radius from each banking or other office location of the Employer and its Affiliates for which the Executive has provided services during the 12-month period immediately preceding the executive’s termination; provided , however , that in the event of a Change in Control, the Restricted Area shall be determined as of the date immediately preceding the Change in Control.

(m) “ Restricted Period ” shall mean during the Executive’s employment with the Employer and for a period of twenty-four (24) months immediately following the termination of the Executive’s employment for any reason, whether such termination occurs during the Term or thereafter; provided, however , that in the event that the Date of Termination occurs during a Covered Period the “Restricted Period” shall be reduced to the twenty-four (24) month period immediately following the date of the Change in Control for purposes of Section 8(c) .

(n) “ Restrictive Covenants ” shall mean those restrictions individually and collectively set forth in Section 8 .

(o) “ Severance Amount ” means:

(i) For any Termination that occurs during the Term and not during a Covered Period shall be an amount equal to the sum of (i) twenty-four (24) times the Executive’s Monthly Compensation, plus (ii) a Pro Rata Bonus; or

(ii) For any Termination that occurs during a Covered Period, an amount equal to the sum of (i) thirty-six (36) times the Executive’s Monthly Compensation, plus (ii) a Pro Rata Bonus.

(p) “ Specified Employee ” means any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Company based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Executive is determined to be a key employee, Executive shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of the identification period. For purposes of determining whether Executive is a key employee, “compensation” means Executive’s W-2 compensation as reported by the Company for a particular calendar year.

visits (conducted alone or with other employees of the Employer or an Affiliate), where such activities would enjoy a reasonable prospect of success in the absence of any breach of this Agreement

(r) “ Termination ” shall mean termination of the Executive’s employment either:

(i) by the Employer or its successor, as the case may be, other than a termination for Cause or any termination as a result of the Executive’s Disability or death; or

(ii) by the Executive for Good Reason.

(s) “ Voting Securities ” shall mean any securities that ordinarily possess the power to vote in the election of directors without the happening of any precondition or contingency.

27. Construction . In this Agreement, unless otherwise stated, the following uses apply: (i) references to a statute shall refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (ii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (iii) references to a governmental or quasi-governmental agency, authority, or instrumentality shall also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (iv) indications of time of day shall be based upon the time applicable to the location of the principal headquarters of the Employer; (v) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (vi) a ll references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement ; (vii) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (viii) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (ix) all words used shall be construed to be of such gender or number as the circumstances and context require; (x) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (xi) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

In Witness Whereof , the Employer has caused this Agreement to be executed by its duly authorized officer and the Executive has signed this Agreement, effective as of the date first written above.

County Bancorp, Inc.By: /s/ William C. CenskyName: William C. CenskyTitle: Chairman of the Board

Investors Community bank

By: /s/ Mark A. Miller

Name: Mark A. Miller
Title: Secretary

EXECUTIVE

By: /s/Timothy J. Schneider

Timothy J. Schneider

EXHIBIT A

General Release and Waiver

This General Release and Waiver (“ Agreement ”) is made and entered into by and between County Bancorp, Inc. (the “ Company ”) and _______________ (the “ Executive ”).

Whereas , the Executive and the Company desire to settle fully and amicably all issues between them, including any issues arising out of the Executive’s employment with the Company and the termination of that employment; and

Whereas , the Executive and the Company are parties to that certain Employment Agreement, made and entered into as of ___________, (the “ Employment Agreement ”).

Now, therefore , for and in consideration of the mutual promises contained herein, and for other good and sufficient consideration, receipt of which is hereby acknowledged, the Executive and the Company (collectively, the “ Parties ” and, individually, each a “ Party ”), intending to be legally bound, hereby agree as follows:

1. Termination of Employment. The Executive’s employment with the Company shall terminate effective as of the close of business on _____________ (the “ Date of Termination ”).

2. Compensation and Benefits. Subject to the terms of this Agreement, the Company shall compensate the Executive under this Agreement as follows (collectively, the “ Severance Payments ”):

(a) Severance Payments . _______________.

(b) Accrued Salary and Paid Time Off (PTO) . The Executive shall be entitled to a lump sum payment in an amount equal to the Executive’s earned but unpaid annual base salary and PTO pay for the period ending on the Date of Termination, with such payment to be made on the first payroll date following the Date of Termination.

(c) Executive Acknowledgement . The Executive acknowledges that, subject to fulfillment of all obligations provided for herein, the Executive has been fully compensated by the Company, including under all applicable laws, and that nothing further is owed to the Executive with respect to wages, bonuses, severance, other compensation, or benefits. The Executive further acknowledges that the Severance Payments (other than (b) above) are consideration for the Executive’s promises contained in this Agreement, and that the Severance Payments are above and beyond any wages, bonuses, severance, other compensation, or benefits to which the Executive is entitled from the Company under the terms of the Executive’s employment or under any other contract or law that the Executive would be entitled to absent execution of this Agreement.

(d) Withholding . The Severance Payments shall be treated as wages and subject to all taxes and other payroll deductions required by law.

3. Termination of Benefits. Except as provided in Section 2 above or as may be required by law, the Executive’s participation in all employee benefit (pension and welfare) and compensation plans of the Company shall cease as of the Date of Termination. Nothing contained herein shall limit or otherwise impair the Executive’s right to receive pension or similar benefit payments that are vested as of the Date of Termination under any applicable tax-qualified pension or other plans, pursuant to the terms of the applicable plan.

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their directors, officers, trustees, employees, and agents, both in their individual and official capacities, and the current and former trustees and administrators of each retirement and other benefit plan applicable to the employees and former employees of the Company, both in their official and individual capacities (the “ Releasees ”) from all liability, claims, demands, and actions the Executive now has, may have had, or may ever have, whether currently known or unknown, as of or prior to the Executive’s execution of this Agreement (the “ Release ”), including liability claims, demands, and actions:

(a) Arising from or relating to the Executive’s employment or other association with the Company, or the termination of such employment,

(b) Relating to wages, bonuses, other compensation, or benefits,

(d) Relating to any employment law, including

(i) The United States and State of Wisconsin,

(ii) The Civil Rights Act of 1964,

(iii) The Civil Rights Act of 1991,

(iv) The Equal Pay Act,

(v) The Employee Retirement Income Security Act of 1974,

(vi) The Age Discrimination in Employment Act (the “ ADEA ”),

(vii) The Americans with Disabilities Act,

(viii) Executive Order 11246, and

(ix) Any other federal, state, or local statute, ordinance, or regulation relating to employment,

(e) Relating to any right of payment for disability,

(f) Relating to any statutory or contractual right of payment, and

(g) For relief on the basis of any alleged tort or breach of contract under the common laws of the State of Wisconsin, or any other state, including defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, and negligence.

The Executive acknowledges that the Executive is aware that statutes exist that render null and void releases and discharges of any claims, rights, demands, liabilities, actions, and causes of action that are unknown to the releasing or discharging party at the time of execution of the release and discharge. The Executive waives, surrenders, and shall forego any protection to which the Executive would otherwise be entitled by virtue of the existence of any such statutes in any jurisdiction, including the State of Wisconsin.

5. Exclusions from General Release. Excluded from the Release are any claims or rights (i) that cannot be waived by law, (ii) to indemnification from the Company pursuant to the Employment Agreement, the Company’s bylaws, or any charter provision, (iii) to coverage under any applicable directors’ and officers’ liability insurance coverage for the Company or any affiliate, or (iv) to file a charge with an administrative agency or participate in any agency investigation. The Executive is, however, waiving the right to recover any money in connection with a charge or investigation. The Executive is also waiving the right to recover any money in connection with a charge filed by any other individual or by the Equal Employment Opportunity Commission or any other federal or state agency.

6. Covenant Not to Sue.

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Besides waiving and releasing the claims covered by Section 4 above, the Executive shall never sue the Releasees in any forum for any reason covered by the Release. Notwithstanding this covenant not to sue, the Executive may bring a claim against the Company to enforce this Agreement, to challenge the validity of this Agreement under the ADEA or for any claim that arises after execution of this Agreement. If the Executive sues any of the Releasees in violation of this Agreement, the Executive shall be liable to them for their reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other litigation costs incurred in defending against the Executive’s suit.

(b) If the Executive has previously filed any lawsuit against any of the Releasees, the Executive shall immediately take all necessary steps and execute all necessary documents to withdraw or dismiss such lawsuit to the extent the Executive’s agreement to withdraw, dismiss, or not file a lawsuit would not be a violation of any applicable law or regulation.

7. Whistleblower Reporting and Recovery . Notwithstanding any provision in this Release to the contrary, Executive is not waiving the right to report possible securities law violations to the Securities and Exchange Commission or other governmental agencies or the right to receive any resulting whistleblower awards

8. Representations by Executive. The Executive warrants that the Executive is legally competent to execute this Agreement and that the Executive has not relied on any statements or explanations made by the Company or its attorneys. The Executive acknowledges that the Executive has been afforded the opportunity to be advised by legal counsel regarding the terms of this Agreement, including the Release. The Executive acknowledges that the Executive has been offered at least twenty-one 21 days to consider this Agreement. After being so advised, and without coercion of any kind, the Executive freely, knowingly, and voluntarily enters into this Agreement. The Executive acknowledges that the Executive may revoke this Agreement within seven (7) days after the Executive has signed this Agreement and acknowledges understanding that this Agreement shall not become effective or enforceable until seven (7) days after the Executive has signed this Agreement (the “Effective Date”), as evidenced by the date set forth below the Executive’s signature on the signature page hereto. Any revocation must be in writing and directed to the Chairman of the Board. If sent by mail, any revocation must be postmarked within the seven-day period described above and sent by certified mail, return receipt requested.

9. Restrictive Covenants. Section 8 of the Employment Agreement (entitled “Restrictive Covenants”) shall continue in full force and effect as if fully restated herein.

10. Non-Disparagement. The Parties shall not engage in any disparagement or vilification of the other Party, and shall refrain from making any false, negative, critical, or disparaging statements, implied or expressed, concerning the other Party, including regarding management style, methods of doing business, the quality of products and services, role in the community, or treatment of employees. The Parties shall do nothing that would damage the other Party’s business reputation or goodwill.

11. Company Property .

(a) The Executive shall return to the Company all information, property, and supplies belonging to the Company or any of its affiliates, including any confidential or proprietary information, Company autos, keys (for equipment or facilities), laptop computers and related equipment, cellular phones, smart phones or PDAs (including SIM cards), security cards, corporate credit cards, and the originals and all copies of all files, materials, and documents (whether in tangible or electronic form) containing confidential or proprietary information or relating to the business of the Company or any of its affiliates.

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affiliates. The Executive acknowledges that any such conduct by the Executive would be illegal and would subject the Executive to legal action by the Company, including claims for damages and/or appropriate injunctive relief.

12. No Admissions. The Company denies that the Company or any of its affiliates, or any of their employees or agents, has taken any improper action against the Executive, and this Agreement shall not be admissible in any proceeding as evidence of improper action by the Company or any of its affiliates or any of their employees or agents.

13. Confidentiality of Agreement. The Executive shall keep the existence and the terms of this Agreement confidential, except for The Executive’s immediate family members and the Executive’s legal and tax advisors in connection with services related hereto and except as may be required by law or in connection with the preparation of tax returns.

14. Non-Waiver. The Company’s waiver of a breach of this Agreement by the Executive shall not be construed or operate as a waiver of any subsequent breach by the Executive of the same or of any other provision of this Agreement.

15. Applicable Law; Mandatory Arbitration and Equitable Relief. All questions concerning the construction, validity, and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by Sections 16 and 17 of the Employment Agreement as if restated herein in their entirety.

16. Legal Fees . In the event that either Party commences mediation, arbitration, litigation, or any similar action to enforce or protect such Party’s rights in accordance with and under this Agreement, the prevailing Party in any such action shall be entitled to recover reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other costs relating to such action, in addition to all other entitled relief, including damages and injunctive relief.

17. Entire Agreement. This Agreement sets forth the entire agreement of the Parties regarding the subject matter hereof, and shall be final and binding as to all claims that have been or could have been advanced on behalf of the Executive pursuant to any claim arising out of or related in any way to the Executive’s employment with the Company and the termination of that employment.

18. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

19. Successors. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns.

20. Enforcement. The provisions of this Agreement shall be regarded as divisible and separable and if any provision should be declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remaining provisions shall not be affected thereby. If the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and the Executive hereby consents that any court of competent jurisdiction may so modify such scope in any proceeding brought to enforce such restriction or requirement.

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also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (d) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (e) a ll references to preambles, recitals, sections, and exhibits are to preambles, recitals, sections, and exhibits in or to this Agreement ; (f) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” (and the like) refer to this Agreement as a whole (including exhibits); (g) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (h) all words used shall be construed to be of such gender or number as the circumstances and context require; (i) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (j) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.

In witness whereof , the Parties have duly executed this Agreement as of the dates set forth below their respective signatures below.

County Bancorp, Inc.

By:
Name:
Title:

Executive

By:__________________________________

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Exhibit 10.3

County Bancorp, Inc.
Investors Community bank

Employment Agreement

This Employment Agreement (this “ Agreement ”) is made and entered into as of August 7 , 2017 (the “ Effective Date ”), by and between County Bancorp, Inc. (the “ Company ”), Investors Community Bank (the “ Bank ” and together with the Company, the “ Employer ”) and Mark R. Binversie (the “ Executive ,” and together with the Employer, the “ Parties ”).

A. The Company is the sole shareholder of the Bank.

C. The Employer desires to continue to employ the Executive pursuant to the terms of this Agreement and the Executive desires to continue such employment pursuant to the terms of this Agreement.

2. Duties . During the Term, the Executive shall devote the Executive’s full business time, energies and talents to serving as the Director of the Company and President of the Bank, at the direction of the Company’s Chief Executive Officer (“CEO”) . The Executive shall have such duties and responsibilities as may be assigned to the Executive from time to time by the CEO, which duties and responsibilities shall be commensurate with the Executive’s position, shall perform all duties assigned to the Executive faithfully and efficiently, subject to the direction of the CEO, and shall have such authorities and powers as are inherent to the undertakings applicable to the Executive’s position and necessary to carry out the responsibilities and duties

required of the Executive hereunder. Notwithstanding the foregoing provisions of this Section 2 , during the Term, the Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious or similar nature (including professional associations) to the extent such activities do not, in the reasonable judgment of the CEO , inhibit, prohibit, interfere with or conflict with the Executive’s duties under this Agreement or conflict in any material way with the business of the Employer or an Affiliate; provided, however, that the Executive shall not serve on the board of directors of any business (other than the Employer or an Affiliate) or hold any other position with any business without receiving the prior written consent of the CEO . For purposes of this Agreement, “ Affiliate ” means each company, corporation, partnership, Financial Institution or other entity that, directly or indirectly, is controlled by, controls, or is under common control with, the Employer, where “control” means (i) the ownership of fifty-one percent (51%) or more of the voting securities or other voting or equity interests of any corporation, partnership, joint venture or other business entity, or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, partnership, joint venture or other business entity.

3. Compensation and Benefits .

(a) Base Salary . For services performed by the Executive for the Employer pursuant to this Agreement during the Term, the Employer shall pay the Executive a base salary at the rate of Two Hundred Forty-Five Thousand Dollars ($245,000.00) per year, payable in substantially equal installments in accordance with the Employer’s regular payroll practices (“ Salary ”). Beginning on or about January 1, 2018, and on or about each January 1 thereafter, the Executive’s rate of Salary shall be reviewed by the Compensation Committee (the “ Committee ”) of the Board and, following such review, the Salary may be increased, but not decreased, with such adjusted amount then becoming the “Salary” for purposes of this Agreement.

(c) Long Term Incentive Program . The Executive shall be eligible to participate in the Employer’s long-term equity incentive program, as determined in the sole discretion of the Committee.

(i) On the thirtieth (30th) day following the Date of Termination, the Employer shall pay the Executive a lump sum payment in an amount equal to the Severance Amount.

(e) Other Benefits .

(ii) Except as specifically provided herein, the Employer shall have no further obligations to the Executive under this Agreement following the Executive’s termination of employment for any reason.

7. Excise Tax Limitation .

an amount equal to one dollar less than the maximum amount which the Employer may pay without loss of deduction under Section 280G(a) of the Code. Present value for purposes of this Agreement shall be calculated in accordance with Section 280G(d)(4) of the Code. Within one hundred and twenty (120) days following the earlier of (A) the giving of the notice of termination or (B) the giving of notice by the Employer to the Executive of its belief that there is a payment or benefit due the Executive which will result in an Excess Parachute Payment, the Executive and the Employer, at the Employer’s expense, shall obtain the opinion of an Independent Advisor (as defined below), which opinion need not be unqualified, which sets forth (A) the Executive’s applicable Base Amount (as defined under Section 280G of the Code), (B) the present value of Total Payments and (C) the amount and present value of any Excess Parachute Payments. In the event that such opinion determines that there would be an Excess Parachute Payment, the payment hereunder or any other payment determined by such Independent Advisor to be includable in Total Payments shall be modified, reduced or eliminated as specified by the Parties shall reasonably determine, so that under the bases of calculation set forth in such opinions there will be no Excess Parachute Payment; provided that any such modification, reduction or elimination must be in accordance with Section 409A of the Code. The provisions of this Section 7 , including the calculations, notices and opinions provided for herein shall be based upon the conclusive presumption that (A) the compensation and benefits provided for in Section 5 hereof and (B) any other compensation earned by the Executive pursuant to the Employer’s compensation programs which would have been paid in any event, are reasonable compensation for services rendered, even though the timing of such payment is triggered by the Change of Control. In the event that the provisions of Sections 280G and 4999 of the Code are repealed without succession, this Section 7 shall be of no further force or effect.

8. Restrictive Covenants .

policies, as in effect from time to time, respecting avoidance of interests conflicting with those of the Employer and its Affiliates. In this regard, the Executive shall not directly or indirectly render services to any person or entity where the Executive’s service would involve the use or disclosure of Confidential Information. The Executive shall not use any Confidential Information to guide the Executive in searching publications or other publicly available information, selecting a series of items of knowledge from unconnected sources and fitting them together to claim that the Executive did not violate any agreements set forth in this Agreement .

(b) Documents and Property .

Financial Institution with an office located, or to be located at an address identified in a filing with any regulatory authority, within the Restricted Area; provided , however , that the ownership by the Executive of shares of the capital stock of any Financial Institution, which shares are listed on a securities exchange and that do not represent more than 1% of the institution’s outstanding capital stock, shall not violate any terms of this Agreement. For purposes of clarification and not limitation or expansion, it is the parties intent that the foregoing is not intended to limit Executive from performing services outside of the Restricted Area for a person or entity solely because the person or entity has a location within the Restricted Area, unless Executive’s services are directed towards activities on behalf of such person or entity within the Restricted Area;

any of the provisions of Section 8 , then the more restrictive of such provisions from the two agreements shall control for the period during which both agreements would otherwise be in effect.

9. Defense and Indemnification .

10. Regulatory Suspension and Termination .

12. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the successors and assigns of the Employer.

(a) If to the Employer, to :

County Bancorp, Inc.

PO Box 700

860 North Rapids Rd

Manitowoc, WI, 54221

Attention: Corporate Secretary

(b) If to the Executive, to :

The most recent address reflected in Employer records.

Such addresses may be changed by written notice sent to the other Party at the last recorded address of that Party.

shall be timely paid in cash or check from the general funds of the Company or the Bank; provided, however , that to the extent that any payments and benefits provided for in this Agreement are paid to or received by the Executive from either the Company or the Bank, such payments and benefits shall not also be an obligation of the other, with the intent that there not be any duplication of benefits.