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Town and Country Financial Corporation Reports Record Third Quarter 2019 Financial Results; Increases Dividend 40%

SPRINGFIELD, Ill., Nov. 01, 2019 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the third quarter of 2019.

Key highlights included:

  • Record core net income of $2.1 million in the third quarter,
  • Core net income in the first nine months of 2019, 25% above the first nine months of 2018,
  • Portfolio loans exceeded $600 million for the first time,
  • Commercial loans, including commercial real estate, grew 15% in the twelve months ended September 30, 2019,
  • Mortgage banking fees reached a new high,
  • Reduced overhead in the first nine months of 2019, compared to the first nine months of 2018,
  • Strong credit quality, with nonperforming loans net of government guarantees of 0.53% as of September 30, 2019, and 0.55% as of September 30, 2018;

Core net income was $2.1 million in the third quarter of 2019, compared to $1.9 million in the third quarter of 2018. Core net income was $5.6 million in the nine months ended September 30, 2019, compared to $4.4 million in the nine months ended September 30, 2018, an increase of 25%. 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 nine-month results.

Net income was $2.1 million ($0.72 per share) in the third quarter of 2019, compared to $1.9 million ($0.65 per share) in the third quarter of 2018. Net income, including non-core items, increased $974,000 (21%) from the first nine months of 2018 to the first nine months of 2019. Net income was $5.6 million ($1.97 per share) in the first nine months of 2019, compared to $4.6 million ($1.61 per share) in the first nine months of 2018.

In announcing the financial results, President and Chief Executive Officer, Micah R. Bartlett said, “We are very pleased with our continued momentum in all major aspects of our performance. Our expertise in commercial lending and mortgage banking is clearly evident in the results. Solid commercial loan growth and a new high for mortgage banking income were the primary forces behind increased revenue. On top of that, reduced expenses and continued strong credit quality set a solid foundation on which to continue building value for our shareholders.”

Loans were $601 million as of September 30, 2019, an increase of $48 million during the nine months ended September 30, 2019, and an increase of $62 million compared to $539 million as of September 30, 2018. Commercial loan growth, including commercial real estate, was the primary reason for the increase. Commercial loans were $485 million as of September 30, 2019, an increase of $64 million (15%) compared to $420 million as of September 30, 2018.

Loan growth was funded with deposits, borrowed money, reallocations from the investment portfolio, and retained earnings. Deposits grew to $639 million as of September 30, 2019, compared to $625 million as of December 31, 2018, and $612 million as of September 30, 2018. Borrowed money was $104 million as of September 30, 2019, compared to $79 million as of December 31, 2018, and $81 million as of September 30, 2018. Investment portfolio reductions of $13 million in the first nine months of 2019, and $22 million compared to September 30, 2018, were also used to fund loan growth. Equity capital grew $7.8 million, to $65.7 million as of September 30, 2019, compared to September 30, 2018.

Net interest income was $6.3 million in the third quarter of 2019 and $5.9 million in the third quarter of 2018. The net interest margin was 3.38% in the third quarter of 2019, and 3.41% in the third quarter of 2018. Net interest income increased to $18.6 million in the first nine months of 2019, compared to $17.3 million in the first nine months of 2018. The net interest margin was 3.45% in the nine months ended September 30, 2019, compared to 3.43% in the nine months ended September 30, 2018.

Noninterest income was $3.3 million in the third quarter of 2019, compared to $3.1 million in the third quarter of 2018. Noninterest income was $8.6 million in the first nine months of 2019, compared to $8.2 million in the first nine months of 2018. Mortgage banking fees were $2.1 million in the third quarter of 2019 and $2.0 million in the third quarter of 2018. Noninterest income was 34% of revenue in the third quarter of 2019, and 35% of revenue in the third quarter of 2018. Noninterest income was 32% of revenue in the first nine months of 2019 and in the first nine months of 2018.

Noninterest expenses declined from $6.6 million in the third quarter of 2018 to $6.5 million in the third quarter of 2019. Noninterest expenses were $19.1 million in the first nine months of 2019, compared to $19.3 million in the first nine months of 2018.

Nonperforming loans as a percent of total loans were 0.76% as of September 30, 2019, compared to 0.67% as of December 31, 2018, and 0.72% as of September 30, 2018. A portion of these loans has government guarantees. Excluding the guaranteed portion, the adjusted ratio was 0.53%, 0.48%, and 0.55% as of September 30, 2019, December 31, 2018, and September 30, 2018, respectively.

Town and Country Bank’s capital levels remained strong at quarter-end, with a Tier 1 leverage ratio of 9.42% and a total risked-based ratio of 12.74%. These ratios compare to 9.14% and 13.03% a year earlier. Book value was $23.08 per share as of September 30, 2019, compared to $20.23 per share as of September 30, 2018, an increase of 14%.

On October 31, 2019, the board of directors declared a $0.07 per share dividend payable Friday, December 13, 2019, to shareholders of record as of Monday, December 2, 2019. This represents a 40% increase from the prior dividend of $0.05 per share.

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:     September 30,
2019
December 31,
2018
September 30,
2018
ASSETS                
Cash and due from banks     $ 29,113,729   $ 14,748,796   $ 9,799,978  
Investments       144,199,896     157,664,916     166,271,027  
Loans held for sale       3,850,578     1,450,806     2,578,207  
Loans       600,953,373     553,402,968     538,738,963  
Less: Allowance for loan losses       6,310,185     5,355,387     5,752,048  
Net loans       594,643,188     548,047,581     532,986,915  
Other assets       55,251,851     61,993,515     57,854,826  
Total assets     $ 827,059,242   $ 783,905,614   $ 769,490,953  
                 
LIABILITIES & EQUITY                
Deposits     $ 639,448,862   $ 624,628,228   $ 612,024,688  
Borrowed money       104,175,000     78,805,000     81,350,000  
Other liabilities       4,125,173     7,462,129     4,610,034  
Total liabilities     $ 747,749,035   $ 710,895,357   $ 697,984,722  
Trust preferred securities       13,568,863     13,529,333     13,516,157  
Equity capital       65,741,344     59,480,924     57,990,074  
Total liabilities & equity     $ 827,059,242   $ 783,905,614   $ 769,490,953  
                 
                 
CONSOLIDATED INCOME STATEMENT    
  Three Months Ended Nine Months Ended
  September 30,  September 30,
  2019   2018     2019     2018  
Interest income $ 8,323,221   $ 7,360,485   $ 24,278,153   $ 21,133,712  
Interest expense   2,037,932     1,455,829     5,674,260     3,788,325  
Net interest income $ 6,285,289   $ 5,904,656   $ 18,603,893   $ 17,345,387  
Provision for loan losses   400,000     100,000     1,075,000     760,000  
Noninterest income   3,299,816     3,144,259     8,618,801     8,179,388  
Noninterest expense   6,531,052     6,604,136     19,080,346     19,319,139  
Income before income taxes $ 2,654,053   $ 2,344,779   $ 7,067,348   $ 5,445,636  
Income taxes   597,708     487,166     1,504,443     997,589  
Core Net Income   2,056,345     1,857,613     5,562,905     4,448,047  
Non-Core items after tax   4,300     (3,982 )   48,097     188,609  
Net income $ 2,060,645   $ 1,853,631   $ 5,611,002   $ 4,636,656  
                 
                 
Selected Highlights:    
  Three Months Ended Nine Months Ended
  September 30,  September 30,
  2019   2018     2019     2018  
Basic earnings per share $ 0.72   $ 0.65   $ 1.97   $ 1.61  
Net charge offs to average loans less HFS   0.02 %   0.01 %   0.09 %   0.07 %
Net revenue (in 000s) $ 9,585   $ 9,049   $ 27,223   $ 25,525  
Net interest margin   3.38 %   3.41 %   3.45 %   3.43 %
Fees from mortgage banking activities (in 000s) $ 2,065   $ 1,954   $ 4,991   $ 4,802  
Return on common equity   12.69 %   12.98 %   12.05 %   10.94 %
Return on assets   1.00 %   0.95 %   0.94 %   0.80 %
                 
                 
Balance Sheet Ratios                
As of the dates indicated:       September 30,
2019
  December 31,
2018
  September 30,
2018
Book value per common share     $ 23.08   $ 20.90   $ 20.23  
Tier 1 leverage ratio (Bank only)       9.42 %   9.28 %   9.14 %
Total risk-based capital ratio (Bank only)       12.74 %   12.85 %   13.03 %
Nonperforming loans       0.76 %   0.67 %   0.72 %
Delinquent loans, excluding nonperforming       0.44 %   0.80 %   0.56 %
Allowance for loan loss       1.05 %   1.05 %   1.07 %
Coverage ratio (allowance to NPLs)       138 %   156 %   148 %
Mortgage loans sold with servicing retained (in 000s)   $ 709,379   $ 676,098   $ 671,024  
Trust assets under management (in 000s)     $ 148,290   $ 147,804   $ 160,586  
                 
                 
HOLDING COMPANY ONLY STATEMENT OF CONDITION            
As of the dates indicated:           September 30,
2019
  September 30,
2018
ASSETS                
Cash and other assets         $ 5,004,702   $ 5,565,066  
Investment in Town and Country Bank           83,313,658     76,601,564  
Total assets         $ 88,318,360   $ 82,166,630  
                 
LIABILITIES & EQUITY                
Other liabilities         $ 908,153   $ 1,085,399  
Borrowings           8,100,000     9,575,000  
Trust preferred securities           13,568,863     13,516,157  
Equity capital           65,741,344     57,990,074  
Total liabilities & equity         $ 88,318,360   $ 82,166,630