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Town and Country Financial Corporation Reports Record Third Quarter 2019 Financial Results; Increases Dividend 40%

November 1, 2019

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, December 31, September 30, 2019 2018 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, December 31, September 30, 2019 2018 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 $ 709,379 $ 676,098 $ 671,024 000s) 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, September 30, 2019 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 ----------------------------------------------- - ----------- - ------------- - ----------- - - ----------- -