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Third Century Bancorp Releases Unaudited Earnings for the Quarter and Six-months Ended June 30, 2022

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FRANKLIN, Ind., July 28, 2022--(BUSINESS WIRE)--(OTCPINK: TDCB)--Third Century Bancorp ("Company"), the holding company for Mutual Savings Bank ("Bank"), announced it recorded net income of $574,000 for the quarter ended June 30, 2022, or $0.50 per basic share and $0.49 per diluted share, compared to net income of $508,000 for the quarter ended June 30, 2021, or $0.43 per basic and diluted share.

David A. Coffey, President and CEO stated, "We often note that when one area of loan demand slows, other areas increase. This is what continued to occur during the last three months. Commercial loan activity was terrific." Coffey continued, "While we continue to see strong growth, our overall strong capital levels position us to continue to take advantage of opportunities in our market."

For the quarter ended June 30, 2022, net income increased $66,000, or 12.99%, to $574,000 as compared to $508,000 for the same period in the prior year. The increase in net income for the three-month period ended June 30, 2022 was driven primarily as a result of the $306,000, or 18.50%, increase in net interest income as compared to the same period in the prior year. The increase in net interest income was due primarily to a $386,000, or 20.73%, increase in interest income as compared to the same period in the prior year due to growth in average assets. The increase in interest income was partially offset by an $80,000, or 38.46%, increase in interest expense as compared to the same period in the prior year.

The increase in net income for the quarter ended June 30, 2022 was partially supported by the $45,000 decrease in the provision for loan losses compared to the same period in 2021. The decrease in provision expense was due to the improving economic conditions since the beginning of the COVID-19 pandemic. The Company had net charge-offs during the quarter ended June 30, 2022 of $2,000 and a net recovery during the quarter ended June 30, 2021 of $2,000.

For the six-months ended June 30, 2022, net income increased $19,000, or 2.06%, to $941,000 as compared to $922,000 for the six-months ended June 30, 2021. The increase in net income for the six-month period ended June 30, 2022 was driven primarily as a result of the $479,000, or 14.83%, increase in net interest income as compared to the same six-month period in the prior year. The increase in net interest income was driven primarily by a $542,000, or 14.82%, increase in interest income as compared to the same six-month period in the prior year due to growth in average assets. This was partially offset by a $63,000, or 14.75%, increase in interest expense as compared to the same six-month period in the prior year. The increase in net income for the six-month period ended June 30, 2022 was partially offset by a $302,000, or 22.16%, decrease in non-interest income as compared to the same six-month period ended in the prior year. The decrease in non-interest income was primarily due to a $285,000, or 42.40%, decrease in the gain on sale of one-to-four family mortgages sold to Freddie Mac, as compared to the same six-month period in the prior year. Net income was also impacted by a $264,000, or 7.55%, increase in non-interest expense as compared to the same six-month period in the prior year. In addition, the provision for loan losses decreased $90,000, or 100.00%, for the six-month period ended June 30, 2022 as compared to the same six-month period in the prior year due to improving economic conditions.

The increase in net income for the six-months ended June 30, 2022 was also partially supported by a $16,000 decrease in income tax expense as compared to the same period in the prior year. The decrease in income tax expense was due to a decrease in the effective income tax rate to 6.55% for the six-months ended June 30, 2022 from 8.14% for the same period in the prior year.

Total assets increased $31.1 million to $272.7 million at June 30, 2022 from $241.6 million at December 31, 2021, an increase of 12.90%. The increase was primarily due to a $22.2 million, or 15.42%, increase in loans held-for-investment to $166.1 million at June 30, 2022. This increase was primarily funded by a $21.5 million, or 10.06%, increase in total deposits, and the addition of $10.0 million in subordinated debt notes issued during the year. Total deposits were $236.2 million at June 30, 2022, up from $214.7 million as of December 31, 2021. Federal Home Loan Bank advances were $17.5 million at June 30, 2022 as compared to $5.0 million at December 31, 2021. At June 30, 2022, the weighted average rate of all Federal Home Loan Bank advances was 1.81% compared to 1.45% at December 31, 2021, and the weighted average maturity was 0.1 years at June 30, 2022 compared to 4.3 years at December 31, 2021.

The allowance for loan losses remained the same at $1.9 million at June 30, 2022 and at December 31, 2021. The allowance for loan losses totaled 1.13% of total loans as of June 30, 2022, as compared to 1.30% of total loans as of December 31, 2021. Nonperforming loans totaled $46,000, or 0.03%, of total loans as of June 30, 2022 as compared to $237,000 or 0.16%, of total loans as of December 31, 2021.

Stockholders’ equity was $8.7 million at June 30, 2022, down from $21.5 million at December 31, 2021. Stockholders’ equity decreased by $12.7 million during the six-months ended June 30, 2022 as a result of an increase in net unrealized loss of $13.5 million of available-for-sale securities due to the significant increase in market interest rates, partially offset by net income of $941,000. The decrease in stockholders’ equity was also impacted by repurchased stock of $176,000 and stock awards of $3,000. Equity as a percentage of assets decreased to 3.18% at June 30, 2022 compared to 8.91% at December 31, 2021.

During the quarter ended June 30, 2022, the Company repurchased 10,000 shares of common stock at an average cost of $17.51 per share pursuant to the Company’s stock repurchase program. At June 30, 2022, 24,422 shares of common stock have been repurchased by the Company through the stock repurchase program since its inception in January 2021.

Founded in 1890, Mutual Savings Bank is a full-service financial institution based in Johnson County, Indiana. In addition to its main office at 80 East Jefferson Street, Franklin, Indiana, the Bank operates branches in Franklin at 1124 North Main Street, Trafalgar and Greenwood, Indiana.

This press release contains certain forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of the Company. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include the COVID-19 pandemic, changes in the interest rate environment, changes in general economic conditions, inflation, legislative and regulatory changes that adversely affect the business of the Company and the Bank, and changes in the securities markets. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements to reflect changes in belief, expectations or events.

Condensed Consolidated Statements of Income

(unaudited, except for periods ended on or before December 31, 2021)

In thousands, except per share data

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2022

2022

2021

2022

2021

Selected Consolidated Earnings Data:

Total Interest Income

$

2,248

$

1,951

$

1,862

$

4,199

$

3,657

Total Interest Expense

288

202

208

490

427

Net Interest Income

1,960

1,749

1,654

3,709

3,230

Provision for Losses on Loans

-

-

45

-

90

Net Interest Income after Provision for Losses on Loans

1,960

1,749

1,609

3,709

3,140

Non-interest Income

569

493

673

1,061

1,363

Non-interest Expense

1,907

1,856

1,738

3,763

3,499

Income Tax Expense

48

18

36

66

82

Net Income

$

574

$

367

$

508

$

941

$

922

Earnings per share - basic

$

0.50

$

0.31

$

0.43

$

0.81

$

0.78

Earnings per share - diluted

$

0.49

$

0.31

$

0.43

$

0.81

$

0.78

Condensed Consolidated Balance Sheet

(unaudited, except for periods ended on or before December 31, 2021)

In thousands, except per share data

June 30,

December 31,

June 30,

2022

2021

2021

Selected Consolidated Balance Sheet Data:

Assets

Cash and Due from Banks

$

6,849

$

4,857

$

3,784

Investment Securities, Available-for-sale, at fair value

85,353

84,661

76,920

Loans Held-for-Sale

237

738

1,360

Loans Held-for-Investment

166,117

143,927

141,845

Allowance for Loan Losses

1,879

1,881

1,885

Net Loans

164,475

142,784

141,321

Accrued Interest Receivable

617

760

794

Other Assets

15,428

8,499

7,757

Total Assets

$

272,722

$

241,561

$

230,576

Liabilities

Noninterest-bearing Deposits

$

44,662

$

40,988

$

35,826

Interest-bearing Deposits

191,583

173,666

167,446

Total Deposits

236,245

214,654

203,271

FHLB Advances

17,486

5,000

5,000

Subordinated Notes

9,717

-

-

Accrued Interest Payable

190

32

35

Accrued Expenses and Other Liabilities

408

342

1,151

Total Liabilities

264,046

220,028

209,458

Stockholders' Equity - Net

8,676

21,533

21,118

Total Liabilities and Stockholders' Equity

$

272,722

$

241,561

$

230,576

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2022

2022

2021

2022

2021

Selected Financial Ratios and Other Data:

Interest rate spread during period

2.80

%

2.73

%

2.81

%

2.77

%

2.83

%

Net yield on interest-earning assets

3.35

%

3.16

%

3.30

%

3.26

%

3.35

%

Non-interest expense, annualized, to average assets

2.81

%

2.92

%

3.03

%

2.86

%

3.14

%

Return on average assets, annualized

0.85

%

0.58

%

0.89

%

0.72

%

0.83

%

Return on average equity, annualized

11.31

%

7.23

%

9.84

%

9.09

%

8.91

%

Average equity to assets

7.48

%

7.98

%

9.00

%

7.86

%

9.27

%

Average Loans

$

160,977

$

146,384

$

143,396

$

153,721

$

142,105

Average Securities

98,897

87,430

73,687

93,195

66,438

Average Other Interest-Earning Assets

8,263

13,275

8,575

10,755

9,472

Total Average Interest-Earning Assets

268,137

247,089

225,658

257,671

218,015

Average Total Assets

271,358

254,402

229,379

263,206

223,246

Average Noninterest-bearing Deposits

$

41,023

$

43,889

$

36,542

$

42,448

$

36,244

Average Interest-bearing Deposits

193,410

178,946

164,399

186,218

156,095

Average Total Deposits

234,433

222,835

200,941

228,666

192,339

Average Wholesale Funding

16,068

9,171

6,757

12,639

7,413

Average Interest-Bearing Liabilities

209,478

188,117

171,156

198,857

163,509

Average Interest-Earnings Assets to Average Interest-Bearings Liabilities

128.00

%

131.35

%

131.84

%

129.58

%

133.34

%

Non-performing loans to total loans

0.03

%

0.04

%

0.07

%

0.03

%

0.07

%

Allowance for loan losses to total loans outstanding

1.13

%

1.24

%

1.32

%

1.13

%

1.32

%

Allowance for loan losses to non-performing loans

4084.78

%

3300.00

%

1791.27

%

4084.78

%

1791.27

%

Net loan chargeoffs/(recoveries) to average total loans outstanding

0.00

%

0.00

%

0.00

%

0.00

%

0.00

%

Effective income tax rate

7.72

%

4.68

%

6.57

%

6.55

%

8.14

%

Tangible book value per share

$

7.43

$

14.05

$

17.83

$

7.53

$

17.83

Market closing price at the end of quarter

$

13.92

$

17.55

$

15.01

$

13.92

$

15.01

Price-to-tangible book value

187.42

%

124.92

%

84.19

%

184.76

%

84.19

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20220728006038/en/

Contacts

David A. Coffey, President and CEO
Ryan W. Cook, Senior Vice President and CFO
Tel. 317-736-7151
Fax 317-736-1726