Town and Country Financial Corporation Reports Record Third Quarter 2020 Financial Results

Town and Country Financial Corporation Reports Record Third Quarter 2020 Financial Results




Town and Country Financial Corporation Reports Record Third Quarter 2020 Financial Results

SPRINGFIELD, Ill., Nov. 05, 2020 (GLOBE NEWSWIRE) — Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the third quarter of 2020.

Key highlights included:

  • Record third quarter 2020 net income of $2.1 million, up slightly from third quarter 2019, and after a quarterly provision for loan losses of $1.5 million.
  • Record net revenue of $12.2 million, driven primarily by strong mortgage volumes in addition to continued growth in net interest income.
  • Mortgage banking fees were up $1.6 million (67%) in the third quarter of 2020 compared to the third quarter of 2019 and up $2.4 million (44%) year-to-date 2020 compared to year-to-date 2019.

Micah R. Bartlett, President and Chief Executive Officer, noted, “We continue to deliver solid results in our mortgage banking and commercial banking businesses. Our team of mortgage professionals—both sales and operations—continue to execute extremely well, providing great solutions to our customers and delivering strong financial results at the same time. In addition, our bankers across all business lines are engaging deeply with our customers to stay connected during the economic uncertainties. The health and well-being of our employees and customers remains our top priority.”

Bartlett continued, “We posted record revenue and profits in the third quarter, largely driven by record mortgage volumes in addition to continued growth in net interest income. We were also able to record another $1.5 million in provision for loan losses to further strengthen our balance sheet due to uncertainties brought on by the COVID-19 Pandemic. We continue to believe our business is well positioned for the opportunities and challenges present in the banking industry.”

The Company reported a record third quarter 2020 net income of $2.066 million ($0.73 per share), compared to $2.061 million ($0.72 per share) in the third quarter of 2019. Net income for the nine month period ending September 20, 2020 was $4.1 million, compared to $5.6 million in the nine month period ending September 30, 2019. The decrease in year-to-date net income was a result of increased provision for loan losses and the additional adjustment to mortgage servicing rights.

The Company recorded $1.5 million in provision for loan losses in the third quarter 2020 compared to $400 thousand in the third quarter 2019.  The additional provision increased the allowance for loan losses to $9.4 million as of September 30, 2020 and was in response to the possible impact of the economic environment surrounding the COVID-19 pandemic. For the nine months ending September 30, 2020, the provision for loan losses was $4.0 million, compared to $1.075 million for the same period in 2019. The carrying value of mortgage servicing rights was also reduced by $955,000 in the third quarter 2020, bringing the year-to-date 2020 total valuation adjustment to $2.9 million.

Reported total assets at September 30, 2020 were $873 million, up $42 million (5.0%), when compared to $831 million as of September 30, 2019. The increase was due to loan portfolio growth of $55 million (9.2%) over that period of time, driven by commercial and PPP loans.

Total deposits were $702 million at September 30, 2020, an increase of $62.4 million from September 30, 2019. The increase over that time period was driven by deposit growth in demand, money market and savings deposits, partially offset by reductions in time and brokered deposits. Borrowed funds decreased $32.5 million to $71.6 million at September 30, 2020 compared to $104.2 million as of September 30, 2019.

Net interest income was $6.6 million for the quarter ending September 30, 2020, compared to $6.2 million for the quarter ending September 30, 2019. Net interest income was $19.2 million for the year-to-date period ending September 30, 2020, up $861,000 (4.7%) when compared to $18.3 million for 2019. The net interest margin for the nine month period ending September 30, 2020 was 3.31% compared to 3.46% for the same time period ending September 30, 2019. The lower margin ratio was due to lower asset yields as a result of decreased interest rates.

Noninterest income was $5.5 million in the third quarter of 2020, an increase of $2.1 million (63%) compared to $3.4 million in the third quarter of 2019.   For the nine month period ending September 30, noninterest income increased $2.8 million (30.7%) between 2020 ($11.7 million) and 2019 ($8.9 million). The primary reason for this increase was higher mortgage revenue of $2.4 million. Due to the continual heavy mortgage loan volumes, noninterest expense also increased when comparing the third quarter and year-to-date numbers. As of September 30, 2020, the year-to-date noninterest expense was $21.6 million, up $2.6 million (13.6%), when compared to $19.0 million for the prior period. Third quarter 2020 noninterest expense was up $1.4 million, or 22.1%, when compared to third quarter 2019.

The Company’s nonperforming loans as of percentage of total loans were 0.99% as of September 30, 2020 compared to 0.76% as of September 30, 2019. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.63% as of September 30, 2020 and 0.53% as of September 30, 2019.

Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 9.22% and a total risk-based ratio of 13.25% as of September 30, 2020. The tier 1 leverage ratio was 9.66% as of December 31, 2019 and 9.42% as of September 30, 2019, and the total risked-based ratio was 13.00% as of December 31, 2019, and 12.74% as of September 30, 2019.

On October 30, 2020, the board of directors declared a $0.07 per share cash dividend payable December 15, 2020, to shareholders of record as of December 1, 2020.

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:   Denise Skiles, Vice President and Controller
    dskiles@townandcountrybank.com 
    217-321-3425
Financial Highlights
(Unaudited)
                 
CONSOLIDATED STATEMENT OF CONDITION              
As of the dates indicated:     September 30,
2020
December 31,
2019
September 30,
2019
ASSETS                
Cash and due from banks     $   17,631,717   $   16,789,844   $   30,008,457  
Investments         124,420,731       143,621,663       141,212,751  
Loans held for sale         21,644,574       6,353,640       3,850,578  
Loans         656,392,265       593,889,042       600,953,373  
Less: Allowance for loan losses         (9,373,033 )     (5,863,740 )     (6,310,185 )
Net loans         647,019,232       588,025,302       594,643,188  
Other assets         62,271,486       59,876,478       61,464,122  
Total assets     $   872,987,740   $   814,666,927   $   831,179,096  
                 
LIABILITIES & EQUITY                
Deposits     $   701,823,568   $   655,098,329   $   639,448,862  
Borrowed money         71,645,500       70,825,000       104,175,000  
Other liabilities         12,468,538       6,521,077       7,796,027  
Total liabilities         785,937,606       732,444,406       751,419,889  
Jr. subordinated debt of unconsolidated subsidiaries     14,070,568       14,031,039       14,017,863  
Equity capital         72,979,566       68,191,482       65,741,344  
Total liabilities & equity     $   872,987,740   $   814,666,927   $   831,179,096  
                 
                 
CONSOLIDATED INCOME STATEMENT    
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2020   2019       2020       2019  
Interest income $   7,774,076   $   8,226,201   $   23,516,418   $   23,989,333  
Interest expense     1,142,196       2,042,870       4,356,104       5,689,599  
Net interest income     6,631,880       6,183,331       19,160,314       18,299,734  
Provision for loan losses     1,500,000       400,000       4,000,000       1,075,000  
Noninterest income     5,526,110       3,390,440       11,660,581       8,923,018  
Noninterest expense     7,949,700       6,513,446       21,598,050       19,012,874  
Income before income taxes     2,708,290       2,660,325       5,222,845       7,134,878  
Income taxes     642,390       599,422       1,079,540       1,523,619  
Net income $   2,065,900   $   2,060,903   $   4,143,305   $   5,611,259  
                 
                 
                 
                 
Financial Highlights
(Unaudited)
                 
Selected Highlights:    
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2020   2019       2020       2019  
Basic earnings per share   $ 0.73     $ 0.72     $ 1.46     $ 1.97  
Net charge offs to average loans less HFS     0.00 %     0.02 %     0.08 %     0.09 %
Net revenue (in 000s)   $ 12,158     $ 9,574     $ 30,821     $ 27,223  
Net interest margin     3.35 %     3.48 %     3.31 %     3.46 %
Fees from mortgage banking activities (in 000s)   $ 4,084     $ 2,450     $ 7,727     $ 5,377  
Return on common equity     11.99 %     12.66 %     8.02 %     11.95 %
Return on assets     0.94 %     1.00 %     0.64 %     0.94 %
                 
                 
                 
Balance Sheet Ratios              
(Dollars in thousands, except per share data)
AS of the dates indicated:
  September 30,
2020
December 31,
2019
September 30,
2019
Book value per common share     $   25.67   $   23.94   $   23.08  
Tier 1 leverage ratio (Bank only)         9.22 %     9.66 %     9.42 %
Total risk-based capital ratio (Bank only)         13.25 %     13.00 %     12.74 %
Nonperforming loans, excluding government guarantee     0.63 %     0.35 %     0.53 %
Delinquent loans, excluding nonperforming         0.23 %     0.55 %     0.44 %
Allowance for loan loss         1.43 %     0.99 %     1.05 %
Coverage ratio (allowance to NPLs)         144 %     123 %     138 %
Mortgage loans sold with servicing retained (in 000s) $   807,226   $   725,207   $   709,379  
Trust assets under management (in 000s)     $   154,974   $   156,454   $   148,290  
                 
                 
                 
HOLDING COMPANY ONLY STATEMENT OF CONDITION            
As of the dates indicated:     September 30,
2020
December 31,
2019
September 30,
2019
ASSETS                
Cash and other assets     $   5,139,689   $   4,859,465   $   5,004,702  
Investment in Town and Country Bank         89,180,567       85,201,380       83,313,658  
Total assets     $   94,320,256   $   90,060,845   $   88,318,360  
                 
LIABILITIES & EQUITY                
Other liabilities     $   737,622   $   538,324   $   459,153  
Borrowings         6,532,500       7,300,000       8,100,000  
Jr. subordinated debt of unconsolidated subsidiaries     14,070,568       14,031,039       14,017,863  
Equity capital         72,979,566       68,191,482       65,741,344  
Total liabilities & equity     $   94,320,256   $   90,060,845   $   88,318,360