Town and Country Financial Corporation Reports First-Quarter 2017 Net Income and Dividend

SPRINGFIELD, Ill., April 27, 2017 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (OTC Pink:TWCF) reported first-quarter net income of $1.4 million, or $0.51 per share, a 93% increase from $744 thousand in the first-quarter of 2016. Net income available to common shareholders, after preferred dividends, was $735 thousand in 2016, or $0.26 per share. There were no preferred dividends in 2017.

The current quarter’s reported earnings were impacted by security gains that resulted in additional after-tax income of $228 thousand as compared to an after-tax loss of $79 thousand reported in the year-ago quarter due to security gains and conversion and acquisition costs. Core operating income excluding these items was $1.2 million, or $0.43 per share, as compared to $823 thousand, or $0.29 per share, in the year ago quarter.

President and Chief Executive Officer, Micah R. Bartlett commented, “The first quarter yielded positive financial and non-financial results, including a return on equity of 12.16% and a return on assets of 0.78%. In addition, asset quality improved as the level of non-performing loans was just 0.43% of total loans and total risk-based capital was strong at 12.39%.”

Discussion of First Quarter Results
Net revenue was $8.1 million, up 30% compared with $6.2 million in 2016. Net interest income was $5.3 million in the quarter, up $1.1 million over the year-ago quarter based upon 2016 bank and branch acquisitions and loan growth, particularly high cash flow residential mortgage loans. Non-interest income was $2.7 million and up $741 thousand from the prior year due to security gains that were $374 thousand in the current quarter compared with $25 thousand in the year ago, a 37% increase in mortgage banking revenue, and the acquisitions. Approximately two-thirds of the increase in mortgage revenue was due to slowing prepayment speeds on the serviced portfolio that resulted in a positive adjustment to the value of the mortgage servicing rights asset.

The tax equivalent net interest margin was 3.28% in the current quarter, up from 3.20% in the year-ago. The year-over-year change was due to the February 29, 2016 bank acquisition with loan yields that exceeded those of the acquiring organization, partially offset by higher-rate term deposits that have since repriced, and cash that was invested over the subsequent months in higher-yielding assets.

Noninterest expense was $6.0 million, an increase of $966 thousand, or 19%, over the year-ago quarter, the change primarily due to the acquisitions.

The provision for loan loss was $158 thousand compared to $160 thousand in the first-quarter of 2016. Net charge offs were $168 thousand, or 0.04% of average loans compared with net recoveries of $6 thousand in the first quarter of 2016.

Loans that were past due 30 days or more, including non-accrual loans, totaled 1.18% of loans outstanding compared with 1.02% at December 31, 2016. The allowance for loan loss was 1.09% of total loans, excluding loans held for sale, and this level was unchanged from the end of 2016. The level of nonperforming loans declined to 0.43% of total loans as of March 31, 2017.

Total assets were $739 million, generally unchanged from their total at year-end. Net loans were $475 million, down from $477 million at December 31, while total deposits were $600 million and common equity capital was $49 million. The reported book value was $17.35 per common share compared with $16.84 per share at December 31, 2016. 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 $64 million, or 11.4%, and total regulatory capital of $67 million, or 12.4%, both ratios stated as a percentage of estimated risk-weighted assets.

The parent holding company reported an investment in Town and Country Bank of $71 million at March 31, 2017, borrowings of $13.1 million and trust preferred securities of $13.9 million.

Bartlett added, “In addition to financial accomplishments, we were pleased that after significant outreach efforts, Town and Country Community Development Corporation, officially established in late 2016, completed its first financing with a housing rehabilitation project for a neighborhood association. We also made the difficult decision to close two branches whose business activity is no longer adequate to support their costs. In recognizing our customers’ increasing preference for electronic banking services, we also made additional investments in the quarter in those services for both individuals and businesses, including a new bank website and mobile banking options.”

The Board of Directors declared a $0.04 per share quarterly cash dividend payable on June 15, 2017 to stockholders of record June 1, 2017.

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. Quincy operates 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 MARCH 31 (UNAUDITED) 2017 2016
ASSETS
Cash and due from banks$ 12,378,358 $ 48,654,471
Investments 197,888,103 163,209,222
Loans, net 474,769,773 446,015,260
Other assets 54,015,574 46,453,578
Total assets$ 739,051,808 $ 704,332,531
LIABILITIES & EQUITY
Deposits$ 600,273,638 $ 588,467,860
Borrowed money 70,025,000 53,000,000
Other liabilities 5,945,135 4,619,601
Total liabilities$ 676,243,773 $ 646,087,461
Trust preferred securities 13,437,098 13,384,392
Equity capital 49,370,937 44,860,678
Total liabilities & equity$ 739,051,808 $ 704,332,531
THREE MONTH PERIOD ENDED MARCH 31 (UNAUDITED) 2017 2016
Interest income$ 6,238,014 $ 4,853,656
Interest expense 913,008 663,515
Net interest income$ 5,325,006 $ 4,190,141
Provision for loan losses 157,500 160,000
Noninterest income 2,355,139 1,962,799
Gain on sale of securities 374,067 25,285
Noninterest expense 5,964,433 4,998,678
Income before income taxes $ 1,932,279 $ 1,019,547
Income taxes 495,010 275,737
Net income$ 1,437,269 $ 743,810
Preferred dividend - 9,305
Net income available to common stockholders$ 1,437,269 $ 734,505
Selected Financial Comparison:
THREE MONTH PERIOD ENDED MARCH 31 (UNAUDITED) 2017 2016
Basic earnings per share$ 0.51 $ 0.26
Book value per common share$ 17.35 $ 15.77
Net charge offs to average loans less HFS 0.04% 0.00%
Net revenue (in 000s)$ 8,054 $ 6,178
Net interest margin 3.28% 3.20%
Fees from mortgage banking activities (in 000s)$ 1,365 $ 994
Return on common equity 12.16% 6.66%
Return on assets 0.78% 0.52%
(UNAUDITED) AS OF MARCH 31 2017 AS OF DECEMBER 31 2016
Tier 1 leverage ratio (TCB only per Basel III) 8.41% 8.45%
Total risk-based capital ratio (TCB only per Basel III) 12.39% 12.48%
Nonperforming loans 0.43% 0.62%
Delinquent loans, excluding nonperforming 0.75% 0.40%
Allowance for loan loss 1.09% 1.09%
Coverage ratio (allowance to NPLs) 254% 164%
Mortgage loans sold with servicing retained (in 000s)$ 592,605 $ 583,598
Trust assets under management (in 000s)$ 148,558 $ 144,517
HOLDING COMPANY ONLY
AS OF MARCH 31 (UNAUDITED) 2017 2016
ASSETS
Cash and other assets$ 5,777,099 $ 6,871,072
Investment in TCB 71,473,928 68,639,499
Total assets$ 77,251,027 $ 75,510,571
LIABILITIES & EQUITY
Other liabilities $ 1,342,993 $ 2,265,502
Borrowings 13,100,000 15,000,000
Trust preferred securities 13,437,098 13,384,392
SBLF preferred capital - -
Equity capital 49,370,937 44,860,677
Total liabilities & equity$ 77,251,027 $ 75,510,571

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

Source:Town and Country Financial Corporation