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Town and Country Financial Corporation Reports Second-Quarter Net Income

SPRINGFIELD, Ill., Aug. 01, 2016 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (OTC Pink:TWCF) reported second-quarter operating income of $1.2 million, or $0.42 per share, a 45% increase from $831 thousand, or $0.30 per share in the second-quarter of 2015.

The current quarter’s reported earnings were impacted by data processing conversion and other acquisition expenses related to recent bank and branch acquisitions. These one-time costs totaled $451 thousand after-tax, compared with no non-operating items of income or expense reported in the year-ago quarter. Reported net income including non-operating items was $754 thousand and net income available to common shareholders was $0.27 per share, compared with $0.29 per share in the year-ago period net of the dividend paid on preferred stock.

President and Chief Executive Officer, Micah R. Bartlett commented, “Town and Country delivered a strong second quarter performance, both financially and operationally. On June 17, we completed the acquisition and data processing conversion of the Fairview Heights, Illinois branch from Centrue Bank. And, one week later, we completed the data processing conversion of Premier Bank that was acquired on February 29, 2016. These events have greatly expanded our company, and we are tremendously proud of the accomplishments and hard work of team members who throughout this process kept the needs of the customer front and center.”

Operating income for the first-half of 2016 was $2.1 million, or $0.73 per share, compared with $1.6 million, or $0.56 per share in the first-half of 2016. First-half 2016 results were impacted by acquisition and conversion costs that totaled $601 thousand and security gains of $15 thousand, both after-tax. Reported net income including non-operating items was $1.5 million and net income available to common shareholders was $0.52 per share in the first-half of 2016 compared with $1.5 million and $0.55 per share in the first-half of 2015.

Bartlett added, “With key acquisitions completed during the first-half of this year, we are looking forward to the second-half and continuing to deepen relationships with our existing and new customers. We are proud to say that we are one small business helping other small businesses and individuals improve their financial well-being.”

Discussion of Second Quarter Results
Net revenue was $7.9 million, an increase of 35.7% compared with $5.8 million in 2015. Net interest income was up 34.2% over the year-ago quarter based on 6.9% average organic loan growth and the recent acquisitions. Non-interest income, excluding security gains, was $2.6 million and up $735 thousand from the prior year due to a 23.2% increase in mortgage originations, the first-quarter bank acquisition, and other account fees that were up 12.3%.

The tax equivalent net interest margin was 3.27% in the current quarter compared with 3.38% in the year-ago. The year-over-year change was primarily due to significant cash invested throughout the second-quarter resulting from the first-quarter bank acquisition.

Noninterest expense was $6.7 million, an increase of $2.3 million over the prior year’s second-quarter. Merger and conversion related costs totaled $740 thousand in the current quarter. Noninterest expense, adjusted to exclude these costs, was up $1.5 million, or 34.8%, primarily due to the acquisitions and secondarily due to costs that supported the substantial year-over-year increase in mortgage originations.

The provision for loan loss was $339 thousand compared to $215 thousand in the second-quarter of 2015. Net charge offs were $29 thousand, or 0.01% of average loans compared with net recoveries of $18 thousand in the prior year’s quarter.

Loans that were past due 30 days or more, including non-accrual loans, totaled 1.45% of loans outstanding at June 30, 2016 compared with 1.67% at December 31, 2015. The allowance for loan loss was 1.02% of total loans, excluding loans held for sale. When excluding purchased loans, the allowance is 1.20% compared with 1.18% at the prior year-end. There is no allowance for loans associated with the bank and branch acquisitions, as those purchased loans were recorded at their fair value.

At June 30, 2016, total assets were $739 million and total net loans were $472 million compared with $520 million and $365 million, respectively, at December 31, 2015. Total deposits were $583 million and common equity capital was $45 million. The reported book value was $15.90 per common share compared with $15.59 per share at December 31, 2015. Town and Country Financial Corporation is considered a small bank holding company and therefore Basel III capital standards do not apply. Town and Country Bank’s capital levels remained strong in the quarter under the Basel III transitional standardized approach with common equity tier 1 capital of $59 million, or 10.78%, and total regulatory capital of $64 million, or 11.72%, both stated as a percentage of risk-weighted assets.

The parent holding company reported an investment in Town and Country Bank of $69.3 million at June 30, 2016, compared with $51.0 million at the end of 2015. Borrowings were $14.0 million and trust preferred securities were $14.5 million, as compared with no borrowed debt and trust preferred securities of $11.5 million at year-end, both changes a result of the acquisition.

The Board of Directors declared a $0.03 per share quarterly cash dividend payable on September 15, 2016 to stockholders of record September 1, 2016.

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 Buffalo, Decatur, Edwardsville, Fairview Heights, Jacksonville, Lincoln, Mt. Zion, Springfield, Waverly, White Hall and Quincy, that latter operating under the name of Peoples Prosperity Bank. Town and Country Financial Corporation shares are quoted under the symbol TWCF.


CONSOLIDATED STATEMENT OF CONDITION
AS OF JUNE 30 (UNAUDITED) 2016 2015
ASSETS
Cash and due from banks$ 10,469,312 $ 15,017,343
Investments 204,355,441 113,816,567
Loans, net 471,971,371 357,682,746
Other assets 51,735,524 29,324,429
Total assets$ 738,531,648 515,841,085
LIABILITIES & EQUITY
Deposits$ 583,484,502 $ 406,464,905
Borrowed money 92,550,000 44,850,000
Other liabilities 2,751,130 3,968,801
Total liabilities 678,785,632 455,283,706
Trust preferred securities 14,500,000 11,500,000
SBLF preferred capital - 5,000,000
Equity capital 45,246,016 44,057,379
Total liabilities & equity$ 738,531,648 $ 515,841,085
SIX MONTH PERIOD ENDED JUNE 30 (UNAUDITED) 2016 2015
Interest income$ 10,982,275 8,598,588
Interest expense 1,522,338 877,432
Net interest income$ 9,459,937 $ 7,721,156
Provision for loan losses 499,856 340,000
Noninterest income 4,597,494 3,545,826
Gain on sale of securities 25,285 -
Noninterest expense 11,674,883 8,620,848
Income before income taxes $ 1,907,977 $ 2,306,134
Income taxes 409,702 734,140
Net income 1,498,275 1,571,994
Preferred dividend 9,306 25,000
Net income available to common stockholders$ 1,488,969 $ 1,546,994
Selected Financial Comparison:
SIX MONTH PERIOD ENDED JUNE 30 (UNAUDITED) 2016 2015
Basic earnings per share$ 0.52 $ 0.55
Book value per common share$ 15.90 $ 15.78
Net charge offs to average loans less HFS 0.01% 0.00%
Net revenue (in 000s)$ 14,083 $ 11,267
Net interest margin 3.22% 3.33%
Fees from mortgage banking activities (in 000s)$ 2,635 $ 2,054
Return on common equity 6.43% 7.00%
Return on assets 0.46% 0.60%
(UNAUDITED) AS OF
JUNE 30
2016
AS OF
DECEMBER 31
2015
Tier 1 leverage ratio (TCB only per Basel III) 8.4% 9.3%
Total risk-based capital ratio (TCB only per Basel III) 11.7% 12.5%
Nonperforming loans 0.37% 0.60%
Delinquent loans, excluding nonperforming 1.20% 1.07%
Allowance for loan loss 1.02% 1.18%
Coverage ratio (allowance to NPLs) 275% 197%
Mortgage loans sold with servicing retained (in 000s)$ 556,252 $ 441,649
Trust assets under management (in 000s)$ 137,171 $ 127,711
HOLDING COMPANY ONLY
AS OF JUNE 30 (UNAUDITED) 2016 2015
ASSETS
Cash and other assets$ 5,165,457 $ 7,225,366
Investment in TCB 69,291,456 53,352,782
Total assets$ 74,456,912 $ 60,578,148
LIABILITIES & EQUITY
Other liabilities $ 710,897 $ 465,320
Borrowings 14,000,000 -
Trust preferred securities 14,500,000 11,500,000
SBLF preferred capital - 5,000,000
Equity capital 45,246,016 43,612,828
Total liabilities & equity$ 74,456,912 $ 60,578,148

Contact: Nancy Bahre (217) 787-3100 nbahre@townandcountrybank.com

Source:Town and Country Financial Corporation