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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Town and Country Financial Corporation Reports Record Earnings in 2019

February 7, 2020 GMT

SPRINGFIELD, Ill., Feb. 07, 2020 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the fourth quarter and the year ended December 31, 2019.

Key highlights included:

-- Return on equity of 12.11% for 2019, the highest level in sixteen years -- Record core net income of $7.6 million in 2019, up 20% from the previous record set in 2018 -- Commercial loan growth of nearly 11% in 2019 -- Continued strong mortgage banking results, exceeding a strong 2018 by 4%. -- Continued efficiency improvements, with an efficiency ratio of 67%. -- Strong credit quality, with nonperforming loans excluding government guarantees of 0.35% of total loans

Core net income was $2.1 million in the fourth quarter of 2019, compared to $1.9 million in the fourth quarter of 2018. Core net income was $7.6 million in the year ended December 31, 2019, compared to $6.3 million in the year ended December 31, 2018, an increase of 20%. 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 annual results.

Net income was $2.1 million ($0.72 per share) in the fourth quarter of 2019, compared to $1.8 million ($0.63 per share) in the fourth quarter of 2018. Net income was $7.7 million ($2.69 per share) in the year ended December 31, 2019, an increase of 19% compared to $6.4 million in the year ended December 31, 2018.

In announcing the financial results, President and Chief Executive Officer, Micah R. Bartlett said, “We are pleased to report another successful record-setting year. We continue to achieve growth in our balance sheet and in our revenue, while also realizing positive operating leverage through our reduced expenses and efficiency ratio. We produced a return on equity ratio in 2019 of over 12% - our highest in 16 years. Our book value per share grew nearly 15% for the year, and we were able to increase our quarterly dividend by 40% in the fourth quarter of 2019. All of this was made possible by our team of professional bankers who continue to execute for our clients while providing expertise that goes beyond traditional banking products and services.”

Total loans, excluding loans held for sale, were $594 million as of December 31, 2019, an increase of $40 million during the year ended December 31, 2019, compared to $554 million as of December 31, 2018. Commercial loan growth, including commercial real estate, was the primary reason for the increase. Commercial loans were $483 million as of December 31, 2019, an increase of $46 million (11%) compared to $437 million as of December 31, 2018.

Loan growth was funded with deposits, reallocations from the investment portfolio, and retained earnings. Deposits grew to $655 million as of December 31, 2019, compared to $625 million as of December 31, 2018. Borrowed money was $71 million as of December 31, 2019, compared to $79 million as of December 31, 2018. The investment portfolio declined $14 million during 2019, to $144 million, from $158 million as of December 31, 2018, and the funds were used to fund loan growth. Equity capital grew $8.7 million to $68.2 million as of December 31, 2019, compared to $59.5 million as of December 31, 2018.

Net interest income was $6.1 million in the fourth quarter of 2019 and $5.9 million in the fourth quarter of 2018. The net interest margin was 3.38% in the fourth quarter of 2019, and 3.51% in the fourth quarter of 2018. Net interest income increased to $24.4 million in the year ended December 31, 2019, compared to $23.0 million in the year ended December 31, 2018. The net interest margin was 3.44% in 2019, and 3.45% in 2018.

Noninterest income was $2.9 million in the fourth quarter of 2019, and $2.8 million in the fourth quarter of 2018. Noninterest income was $11.8 million in the year ended December 31, 2019, compared to $11.2 million in the year ended December 31, 2018. Mortgage banking fees were $1.3 million in the fourth quarter of 2019 and $1.2 million in the fourth quarter of 2018. Noninterest income was 32% of revenue in the fourth quarter of 2019, unchanged from the fourth quarter of 2018. Noninterest income was 32% of revenue in the year ended December 31, 2019, and 33% of revenue in the year ended December 31, 2018.

Noninterest expenses declined from $6.3 million in the fourth quarter of 2018 to $6.1 million in the fourth quarter of 2019. Noninterest expenses declined $440,000 to $25.1 million in the year ended December 31, 2019, compared to $25.6 million in the year ended December 31, 2018.

Nonperforming loans as a percent of total loans were 0.80% as of December 31, 2019, compared to 0.67% as of December 31, 2018. A portion of these loans has government guarantees. Excluding the guaranteed portion, the adjusted ratio was 0.35% as of December 31, 2019, and 0.48% as of December 31, 2018.

Town and Country Bank’s capital levels remained strong as of December 31, 2019, with a Tier 1 leverage ratio of 9.66% and a total risked-based ratio of 13.00%. These ratios compare to 9.28% and 12.85% a year earlier. Book value was $23.94 per share as of December 31, 2019, compared to $20.90 per share as of December 31, 2018, an increase of 14.6%.

On January 30, 2020, the board of directors declared a $0.07 per share dividend payable Friday, March 13, 2020, to shareholders of record as of Monday, March 2, 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: 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: December 31, December 31, 2019 2018 ------------------------------------------ - ------------- - ------------- ----------------- ----------------- ASSETS Cash and due from banks $ 16,789,844 $ 14,748,796 Investments 143,663,549 157,664,916 Loans held for sale 6,353,640 1,450,806 Loans 593,889,042 553,827,132 Less: Allowance for loan losses 5,863,740 5,779,551 ------------------------------------------ - ------------- - ------------- - - ----------- - Net loans 588,025,302 548,047,581 Other assets 59,834,592 62,442,515 Total assets $ 814,666,927 $ 784,354,614 ------------------------------------------ - ------------- - ------------- - - ----------- - - - ----------- - LIABILITIES & EQUITY Deposits $ 655,098,329 $ 624,628,228 Borrowed money 70,825,000 78,805,000 Other liabilities 6,521,077 7,462,129 ------------------------------------------ - ------------- - ------------- - - ----------- - - - ----------- - Total liabilities 732,444,406 710,895,357 Jr. subordinated debt of unconsolidated 14,031,039 13,978,333 subsidiaries Equity capital 68,191,482 59,480,924 Total liabilities & equity $ 814,666,927 $ 784,354,614 ------------------------------------------ - ------------- - ------------- - - ----------- - - - ----------- - CONSOLIDATED INCOME STATEMENT ------------------------------------------ ------------------------------- ----------------------------------- Three Months Ended Twelve Months Ended December 31, December 31, ------------------------------------------ ------------------------------- ----------------------------------- 2019 2018 2019 2018 ------------------------------------------ --------------- --------------- - ----------- - - - ----------- - Interest income $ 8,039,087 $ 7,548,857 $ 31,995,453 $ 28,381,528 Interest expense 1,891,268 1,614,974 7,547,900 5,410,801 ------------------------------------------ - - --------- - - - --------- - - - ----------- - - - ----------- - Net interest income 6,147,819 5,933,883 24,447,553 22,970,727 Provision for loan losses 300,000 150,000 1,375,000 910,000 Noninterest income 2,932,332 2,761,540 11,762,402 11,232,383 Noninterest expense 6,133,506 6,280,005 25,120,962 25,561,081 ------------------------------------------ - - --------- - - - --------- - - - ----------- - - - ----------- - Income before income taxes 2,646,645 2,265,418 9,713,993 7,732,029 Income taxes 594,109 392,864 2,098,552 1,395,538 ------------------------------------------ - - --------- - - - --------- - - - ----------- - - - ----------- - Core Net Income 2,052,536 1,872,554 7,615,441 6,336,491 Non-Core items after tax 100 (77,802 ) 48,197 94,917 Net income $ 2,052,636 $ 1,794,752 $ 7,663,638 $ 6,431,408 ------------------------------------------ - - --------- - - - --------- - - - ----------- - - - ----------- - Financial Highlights (Unaudited) Selected Highlights: ------------------------------------------ ------------------------------- ----------------------------------- Three Months Ended Twelve Months Ended December 31, December 31, ------------------------------------------ ------------------------------- ----------------------------------- 2019 2018 2019 2018 ------------------------------------------ --------------- --------------- - - ----------- - - - ----------- - Basic earnings per share $ 0.72 $ 0.63 $ 2.69 $ 2.25 Net charge offs to average loans less HFS 0.13 % 0.02 % 0.22 % 0.09 % Net revenue (in 000s) $ 9,080 $ 8,695 $ 36,210 $ 34,203 Net interest margin 3.38 % 3.51 % 3.44 % 3.45 % Fees from mortgage banking activities (in $ 1,254 $ 1,225 $ 6,245 $ 6,027 000s) Return on common equity 12.26 % 12.16 % 12.11 % 11.41 % Return on assets 1.00 % 0.92 % 0.95 % 0.84 % Balance Sheet Ratios As of the dates indicated: December 31, December 31, 2019 2018 ------------------------------------------ - ------------- - ------------- ----------------- ----------------- Book value per common share $ 23.94 $ 20.90 Tier 1 leverage ratio (Bank only) 9.66 % 9.28 % Total risk-based capital ratio (Bank only) 13.00 % 12.85 % Nonperforming loans 0.80 % 0.67 % Delinquent loans, excluding nonperforming 0.55 % 0.80 % Allowance for loan loss 0.99 % 1.05 % Coverage ratio (allowance to NPLs) 123 % 156 % Mortgage loans sold with servicing $ 725,207 $ 676,098 retained (in 000s) Trust assets under management (in 000s) $ 156,454 $ 147,804 HOLDING COMPANY ONLY STATEMENT OF CONDITION As of the dates indicated: December 31, December 31, 2019 2018 ------------------------------------------ - ------------- - ------------- ----------------- ----------------- ASSETS Cash and other assets $ 4,859,465 $ 5,371,401 Investment in Town and Country Bank 85,201,380 78,219,935 Total assets $ 90,060,845 $ 83,591,337 ------------------------------------------ - ------------- - ------------- - - ----------- - - - ----------- - LIABILITIES & EQUITY Other liabilities $ 538,324 $ 557,080 Borrowings 7,300,000 9,575,000 Jr. subordinated debt of unconsolidated 14,031,039 13,978,333 subsidiaries Equity capital 68,191,482 59,480,924 Total liabilities & equity $ 90,060,845 $ 83,591,337 ------------------------------------------ - ------------- - ------------- - - ----------- - - - ----------- -