SPRINGFIELD, Ill., Nov. 01, 2019 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the third quarter of 2019.
Key highlights included:
- Record core net income of $2.1 million in the third quarter,
- Core net income in the first nine months of 2019, 25% above the first nine months of 2018,
- Portfolio loans exceeded $600 million for the first time,
- Commercial loans, including commercial real estate, grew 15% in the twelve months ended September 30, 2019,
- Mortgage banking fees reached a new high,
- Reduced overhead in the first nine months of 2019, compared to the first nine months of 2018,
- Strong credit quality, with nonperforming loans net of government guarantees of 0.53% as of September 30, 2019, and 0.55% as of September 30, 2018;
Core net income was $2.1 million in the third quarter of 2019, compared to $1.9 million in the third quarter of 2018. Core net income was $5.6 million in the nine months ended September 30, 2019, compared to $4.4 million in the nine months ended September 30, 2018, an increase of 25%. Core net income excludes securities gains and losses and other non-core items. Strong loan growth, solid noninterest income, and reduced expenses contributed to the increases in quarterly and nine-month results.
Net income was $2.1 million ($0.72 per share) in the third quarter of 2019, compared to $1.9 million ($0.65 per share) in the third quarter of 2018. Net income, including non-core items, increased $974,000 (21%) from the first nine months of 2018 to the first nine months of 2019. Net income was $5.6 million ($1.97 per share) in the first nine months of 2019, compared to $4.6 million ($1.61 per share) in the first nine months of 2018.
In announcing the financial results, President and Chief Executive Officer, Micah R. Bartlett said, “We are very pleased with our continued momentum in all major aspects of our performance. Our expertise in commercial lending and mortgage banking is clearly evident in the results. Solid commercial loan growth and a new high for mortgage banking income were the primary forces behind increased revenue. On top of that, reduced expenses and continued strong credit quality set a solid foundation on which to continue building value for our shareholders.”
Loans were $601 million as of September 30, 2019, an increase of $48 million during the nine months ended September 30, 2019, and an increase of $62 million compared to $539 million as of September 30, 2018. Commercial loan growth, including commercial real estate, was the primary reason for the increase. Commercial loans were $485 million as of September 30, 2019, an increase of $64 million (15%) compared to $420 million as of September 30, 2018.
Loan growth was funded with deposits, borrowed money, reallocations from the investment portfolio, and retained earnings. Deposits grew to $639 million as of September 30, 2019, compared to $625 million as of December 31, 2018, and $612 million as of September 30, 2018. Borrowed money was $104 million as of September 30, 2019, compared to $79 million as of December 31, 2018, and $81 million as of September 30, 2018. Investment portfolio reductions of $13 million in the first nine months of 2019, and $22 million compared to September 30, 2018, were also used to fund loan growth. Equity capital grew $7.8 million, to $65.7 million as of September 30, 2019, compared to September 30, 2018.
Net interest income was $6.3 million in the third quarter of 2019 and $5.9 million in the third quarter of 2018. The net interest margin was 3.38% in the third quarter of 2019, and 3.41% in the third quarter of 2018. Net interest income increased to $18.6 million in the first nine months of 2019, compared to $17.3 million in the first nine months of 2018. The net interest margin was 3.45% in the nine months ended September 30, 2019, compared to 3.43% in the nine months ended September 30, 2018.
Noninterest income was $3.3 million in the third quarter of 2019, compared to $3.1 million in the third quarter of 2018. Noninterest income was $8.6 million in the first nine months of 2019, compared to $8.2 million in the first nine months of 2018. Mortgage banking fees were $2.1 million in the third quarter of 2019 and $2.0 million in the third quarter of 2018. Noninterest income was 34% of revenue in the third quarter of 2019, and 35% of revenue in the third quarter of 2018. Noninterest income was 32% of revenue in the first nine months of 2019 and in the first nine months of 2018.
Noninterest expenses declined from $6.6 million in the third quarter of 2018 to $6.5 million in the third quarter of 2019. Noninterest expenses were $19.1 million in the first nine months of 2019, compared to $19.3 million in the first nine months of 2018.
Nonperforming loans as a percent of total loans were 0.76% as of September 30, 2019, compared to 0.67% as of December 31, 2018, and 0.72% as of September 30, 2018. A portion of these loans has government guarantees. Excluding the guaranteed portion, the adjusted ratio was 0.53%, 0.48%, and 0.55% as of September 30, 2019, December 31, 2018, and September 30, 2018, respectively.
Town and Country Bank’s capital levels remained strong at quarter-end, with a Tier 1 leverage ratio of 9.42% and a total risked-based ratio of 12.74%. These ratios compare to 9.14% and 13.03% a year earlier. Book value was $23.08 per share as of September 30, 2019, compared to $20.23 per share as of September 30, 2018, an increase of 14%.
On October 31, 2019, the board of directors declared a $0.07 per share dividend payable Friday, December 13, 2019, to shareholders of record as of Monday, December 2, 2019. This represents a 40% increase from the prior dividend of $0.05 per share.
Town and Country Financial Corporation is the parent holding company for Town and Country Bank and Town and Country Banc Mortgage Services, Inc. with offices in Bloomington, Buffalo, Decatur, Edwardsville, Fairview Heights, Jacksonville, Lincoln, Mt. Zion, Springfield, and Quincy. The Quincy branch operates under the name of Peoples Prosperity Bank. Town and Country Financial Corporation shares are quoted under the symbol TWCF.
| Contact: | Doug Cheatham |
| Executive Vice President and Chief Financial Officer | |
| dcheatham@townandcountrybank.com | |
| (217) 321-3424 | |
| Financial Highlights | ||||||||||||
| (Unaudited) | ||||||||||||
| CONSOLIDATED STATEMENT OF CONDITION | ||||||||||||
| As of the dates indicated: | September 30, 2019 | December 31, 2018 | September 30, 2018 | |||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 29,113,729 | $ | 14,748,796 | $ | 9,799,978 | ||||||
| Investments | 144,199,896 | 157,664,916 | 166,271,027 | |||||||||
| Loans held for sale | 3,850,578 | 1,450,806 | 2,578,207 | |||||||||
| Loans | 600,953,373 | 553,402,968 | 538,738,963 | |||||||||
| Less: Allowance for loan losses | 6,310,185 | 5,355,387 | 5,752,048 | |||||||||
| Net loans | 594,643,188 | 548,047,581 | 532,986,915 | |||||||||
| Other assets | 55,251,851 | 61,993,515 | 57,854,826 | |||||||||
| Total assets | $ | 827,059,242 | $ | 783,905,614 | $ | 769,490,953 | ||||||
| LIABILITIES & EQUITY | ||||||||||||
| Deposits | $ | 639,448,862 | $ | 624,628,228 | $ | 612,024,688 | ||||||
| Borrowed money | 104,175,000 | 78,805,000 | 81,350,000 | |||||||||
| Other liabilities | 4,125,173 | 7,462,129 | 4,610,034 | |||||||||
| Total liabilities | $ | 747,749,035 | $ | 710,895,357 | $ | 697,984,722 | ||||||
| Trust preferred securities | 13,568,863 | 13,529,333 | 13,516,157 | |||||||||
| Equity capital | 65,741,344 | 59,480,924 | 57,990,074 | |||||||||
| Total liabilities & equity | $ | 827,059,242 | $ | 783,905,614 | $ | 769,490,953 | ||||||
| CONSOLIDATED INCOME STATEMENT | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Interest income | $ | 8,323,221 | $ | 7,360,485 | $ | 24,278,153 | $ | 21,133,712 | ||||
| Interest expense | 2,037,932 | 1,455,829 | 5,674,260 | 3,788,325 | ||||||||
| Net interest income | $ | 6,285,289 | $ | 5,904,656 | $ | 18,603,893 | $ | 17,345,387 | ||||
| Provision for loan losses | 400,000 | 100,000 | 1,075,000 | 760,000 | ||||||||
| Noninterest income | 3,299,816 | 3,144,259 | 8,618,801 | 8,179,388 | ||||||||
| Noninterest expense | 6,531,052 | 6,604,136 | 19,080,346 | 19,319,139 | ||||||||
| Income before income taxes | $ | 2,654,053 | $ | 2,344,779 | $ | 7,067,348 | $ | 5,445,636 | ||||
| Income taxes | 597,708 | 487,166 | 1,504,443 | 997,589 | ||||||||
| Core Net Income | 2,056,345 | 1,857,613 | 5,562,905 | 4,448,047 | ||||||||
| Non-Core items after tax | 4,300 | (3,982 | ) | 48,097 | 188,609 | |||||||
| Net income | $ | 2,060,645 | $ | 1,853,631 | $ | 5,611,002 | $ | 4,636,656 | ||||
| Selected Highlights: | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Basic earnings per share | $ | 0.72 | $ | 0.65 | $ | 1.97 | $ | 1.61 | ||||
| Net charge offs to average loans less HFS | 0.02 | % | 0.01 | % | 0.09 | % | 0.07 | % | ||||
| Net revenue (in 000s) | $ | 9,585 | $ | 9,049 | $ | 27,223 | $ | 25,525 | ||||
| Net interest margin | 3.38 | % | 3.41 | % | 3.45 | % | 3.43 | % | ||||
| Fees from mortgage banking activities (in 000s) | $ | 2,065 | $ | 1,954 | $ | 4,991 | $ | 4,802 | ||||
| Return on common equity | 12.69 | % | 12.98 | % | 12.05 | % | 10.94 | % | ||||
| Return on assets | 1.00 | % | 0.95 | % | 0.94 | % | 0.80 | % | ||||
| Balance Sheet Ratios | ||||||||||||
| As of the dates indicated: | September 30, 2019 | December 31, 2018 | September 30, 2018 | |||||||||
| Book value per common share | $ | 23.08 | $ | 20.90 | $ | 20.23 | ||||||
| Tier 1 leverage ratio (Bank only) | 9.42 | % | 9.28 | % | 9.14 | % | ||||||
| Total risk-based capital ratio (Bank only) | 12.74 | % | 12.85 | % | 13.03 | % | ||||||
| Nonperforming loans | 0.76 | % | 0.67 | % | 0.72 | % | ||||||
| Delinquent loans, excluding nonperforming | 0.44 | % | 0.80 | % | 0.56 | % | ||||||
| Allowance for loan loss | 1.05 | % | 1.05 | % | 1.07 | % | ||||||
| Coverage ratio (allowance to NPLs) | 138 | % | 156 | % | 148 | % | ||||||
| Mortgage loans sold with servicing retained (in 000s) | $ | 709,379 | $ | 676,098 | $ | 671,024 | ||||||
| Trust assets under management (in 000s) | $ | 148,290 | $ | 147,804 | $ | 160,586 | ||||||
| HOLDING COMPANY ONLY STATEMENT OF CONDITION | ||||||||||||
| As of the dates indicated: | September 30, 2019 | September 30, 2018 | ||||||||||
| ASSETS | ||||||||||||
| Cash and other assets | $ | 5,004,702 | $ | 5,565,066 | ||||||||
| Investment in Town and Country Bank | 83,313,658 | 76,601,564 | ||||||||||
| Total assets | $ | 88,318,360 | $ | 82,166,630 | ||||||||
| LIABILITIES & EQUITY | ||||||||||||
| Other liabilities | $ | 908,153 | $ | 1,085,399 | ||||||||
| Borrowings | 8,100,000 | 9,575,000 | ||||||||||
| Trust preferred securities | 13,568,863 | 13,516,157 | ||||||||||
| Equity capital | 65,741,344 | 57,990,074 | ||||||||||
| Total liabilities & equity | $ | 88,318,360 | $ | 82,166,630 | ||||||||
