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CORRECTING and REPLACING - Town and Country Financial Corporation Reports Second Quarter 2019 Financial Results

SPRINGFIELD, Ill., Aug. 05, 2019 (GLOBE NEWSWIRE) -- In a release dated July 31, 2019 for Town and Country Financial Corporation (OTC Pink: TWCF), some numbers were reported incorrectly.  In the second bullet point, the number reported for end of quarter assets was changed from $800 million to $810 million.  In the consolidated statement of condition table, the December 31, 2018 other asset number was reported as $62,442,515 and should have been $61,993,515 and the Trust preferred securities were changed from $13,978,333 to $13,529,333.  These changes affected the total assets and total liabilities & equity numbers changing them from $784,354,614 to $783,905,614.  In the Holding Company only table, the December 31, 2018 Investment in TCB changed from $78,219,935 to $77,770,935 and Trust preferred securities changed from $13,978,333 to $13,529,333.  These changes affected total assets and total liability & equity numbers changing them from $83,591,337 to $83,142,337.  The following is the updated release.

Town and Country Financial Corporation (the “Company”), (OTC Pink: TWCF), today announced financial results for second quarter of 2019.

Key highlights included:

  • Record net income, growth of 40% from second quarter 2018 to second quarter 2019;
  • Total assets exceeded $800 million for the first time, ending the quarter at $810 million;
  • Commercial loan growth of $57 million (14%) from June 30, 2018 to June 30, 2019;
  • Deposits grew $25.6 million from June 30, 2018 to June 30, 2019;
  • Strong credit quality, with nonperforming loans net of government guarantees of 0.27% as of June 30, 2019, and 0.09% as of June 30, 2018;
  • Reduced overhead, with noninterest expenses declining by $165,000 from June 30, 2018 to June 30, 2019.

Core net income was $1.90 million in the second quarter of 2019, compared to $1.36 million in the second quarter of 2018, an increase of 40%. Core net income was $3.51 million in the first half of 2019, compared to $2.59 million in the first half of 2018, an increase of 35%. 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 year to date results.

Reported net income increased $531,000 (38.7%) from the second quarter of 2018 to the second quarter of 2019, to $1.90 million ($0.67 per share), from $1.37 million ($0.48 per share) in the second quarter of 2018. Reported net income was $3.55 million ($1.25 per share) in the first half of 2019, and increase of $768,000 (27.6%) from $2.78 million ($0.97 per share) in the first half of 2018.

In announcing the financial results, President and Chief Executive Officer, Micah R. Bartlett, said, “Our focus on doing what we do best is paying off, with great momentum in all major aspects of performance. Commercial loan growth and a very strong mortgage business are driving revenue to record levels. In the first half of this year, revenue growth of 8%, along with strong credit quality and a reduction in overhead, was leveraged into 35% growth in core net income.”

Loans were $594 million as of June 30, 2019 and $553 million as of December 31, 2018, reflecting an increase of $41 million in the first half of 2019. Compared to loans of $536 million as of June 30, 2018, loans grew $58 million, or 9.8%. Loan growth was driven by commercial lending, including commercial real estate. Commercial loans were $471 million as of June 30, 2019, compared to $437 million as of December 31, 2018, and $414 million as of June 30, 2018, reflecting $57 million (14%) year over year growth.

Loan growth was funded in part, by a reduction in the investment portfolio, resulting and a reallocation of earning assets. Deposits also contributed to funding loan growth, growing to $637 million as of June 30, 2019, from $625 million as of December 31, 2018, and $611 million as of June 30, 2018. Other sources of funding included borrowing and equity capital resulting from retained earnings. Borrowing grew $4.5 million from $86.7 million as of June 30, 2018, to 91.2 million as of June 30, 2019. Equity capital grew $7.3 million from $56.5 million as of June 30, 2018, to $63.8 million as of June 30, 2019.

The reallocation of assets to loans, which are generally higher yielding assets than investment securities, helped to maintain a stable net interest margin in a changing interest rate environment. The net interest margin was 3.48% for both the second quarter and the six months ended June 30, 2019, compared to 3.47% in the second quarter of 2018 and 3.44% in the six months ended June 30, 2018.

Noninterest income was $3.0 million in the second quarter of 2019, compared to $2.8 million in the second quarter of 2018. Noninterest income was $5.3 million in the first half of 2019, compared to $5.1 million in the first half of 2018. Mortgage banking fees, which accounted for over 60% of noninterest income in the second quarter of 2019, were $1.9 million in the second quarter of 2019, and $1.6 million in the second quarter of 2018.

Noninterest expenses were $6.5 million in the second quarter of 2019, unchanged from the second quarter of 2018. Noninterest expenses were $12.5 million in the first half of 2019, compared to $12.7 million in the first half of 2018. Maintaining stable or declining expenses while growing revenue contributed to core net income growth noted above.

Nonperforming loans as a percent of total loans were 0.61%, 0.67% and 0.90% as of June 30, 2019, December 31, 2018, and June 30, 2018, respectively. A portion of these loans have government guarantees. Excluding the guaranteed portion, the adjusted ratio was 0.33%, 0.48%, and 0.81% as of June 30, 2019, December 31, 2018, and June 30, 2018, respectively, as credit quality remained strong.

Town and Country Bank’s capital levels remained strong at quarter-end, with a Tier 1 leverage ratio of 9.36% and a total risked-based ratio of 12.76%. These ratios compare to 9.06% and 12.67% a year earlier. Consolidated equity capital grew to $63.8 million at June 30, 2019, from $57.5 million at June 30, 2018. Book value was $22.39 per share as of June 30, 2019, compared to $20.82 per share as of June 30, 2018, an increase of 7.6%.

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

 

 

CONSOLIDATED STATEMENT OF CONDITION        
    June 30, December 31, June 30, 
      2019     2018     2018   
Assets        
Cash and due from banks   $   12,485,140   $   14,748,796   $   9,461,448  
Investments       152,063,184       157,664,916       171,764,889  
Loans held for sale       1,389,059       1,450,806       4,343,990  
Loans       593,552,115       553,402,968       535,561,555  
Less: Allowance for loan losses       6,015,619       5,355,387       5,727,168  
Net loans       587,536,496       548,047,581       529,834,387  
Other assets       56,423,812       61,993,515       57,499,575  
Total assets   $   809,897,691   $   783,905,614   $   772,904,289  
         
Liabilities and Equity        
Deposits   $   637,132,312   $   624,628,228   $   611,483,002  
Borrowed money        91,225,000       78,805,000       86,700,000  
Other liabilities        4,201,979       7,462,129       4,726,046  
Total liabilities       732,559,291       710,895,357       702,909,048  
Trust preferred securities       13,555,686       13,529,333       13,502,980  
Equity capital       63,782,714       59,480,924       56,492,261  
Total liabilities & equity   $   809,897,691   $   783,905,614   $   772,904,289  
         
         
         
CONSOLIDATED INCOME STATEMENT Three Months Ended June 30, Six Months Ended June 30,
    2019     2018     2019     2018  
Interest income $     8,232,441   $     7,112,004   $     15,981,302   $     13,773,227  
Interest expense     1,946,369       1,236,390       3,662,440       2,332,496  
Net interest income     6,286,072       5,875,614       12,318,862       11,440,731  
Provision for loan losses     375,000       550,000       675,000       660,000  
Noninterest income     3,037,157       2,760,859       5,318,984       5,035,129  
Noninterest expense     6,549,369       6,478,142       12,549,294       12,715,003  
Income before income taxes      2,398,860       1,608,331       4,413,552       3,100,857  
Income taxes     494,720       246,391       906,735       510,423  
Core Net Income     1,904,140       1,361,940       3,506,817       2,590,434  
Non-Core items after tax     547       11,468       43,797       192,591  
Net income $     1,904,687   $     1,373,408   $     3,550,614   $     2,783,025  
         
         
SELECTED HIGHLIGHTS Three Months Ended June 30, Six Months Ended June 30,
(Dollars in thousands, except per share data)   2019     2018     2019     2018  
Basic earnings per share $     0.67   $     0.48   $     1.25   $     0.97  
Net charge offs to average loans less HFS   0.03 %   0.05 %   0.08 %   0.05 %
Net revenue $     9,323   $     8,636   $     17,699   $     16,742  
Net interest margin   3.48 %   3.47 %   3.48 %   3.44 %
Fees from mortgage banking activities $     1,851   $     1,597   $     2,926   $     2,848  
Return on common equity   12.35 %   9.85 %   11.58 %   10.03 %
Return on assets   0.95 %   0.72 %   0.89 %   0.74 %
         
         
BALANCE SHEET RATIOS      
As of the dates indicated:      June 30, December 31, June 30, 
(Dollars in thousands, except per share data)     2019     2018      2018   
Book value per common share   $     22.39   $     20.90   $     20.82  
Tier 1 leverage ratio (Bank only)     9.36 %   9.28 %   9.06 %
Total risk-based capital ratio (Bank only)     12.76 %   12.85 %   12.67 %
Nonperforming loans     0.61 %   0.67 %   0.90 %
Delinquent loans, excluding nonperforming     0.97 %   0.80 %   0.46 %
Allowance for loan loss     1.02 %   1.05 %   1.07 %
Coverage ratio (allowance to NPLs)     168 %   156 %   120 %
Mortgage loans sold with servicing retained (in 000s)   $     693,064   $     676,098   $     648,730  
Trust assets under management (in 000s)   $     161,378   $     147,804   $     164,547  
         
         
HOLDING COMPANY ONLY        
As of the dates indicated:      June 30, December 31, June 30, 
(In thousands)     2019     2018      2018   
Assets        
Cash and other assets   $     5,327,507   $     5,371,402   $     6,329,227  
Investment in TCB       81,771,321       77,770,935       75,573,837  
Total assets   $     87,098,828   $     83,142,337   $     81,903,064  
         
Liabilities and Equity        
Other liabilities    $     785,428   $     557,080   $     1,032,823  
Borrowings       8,975,000       9,575,000       10,875,000  
Trust preferred securities       13,555,686       13,529,333       13,502,980  
Equity capital       63,782,714       59,480,924       56,492,261  
Total liabilities & equity   $     87,098,828   $     83,142,337   $     81,903,064